New research published today in the 2016 Top 500 Guide reveals how marketplaces have given smaller web merchants a tool for impressive growth.

Online marketplaces, or online shopping malls where consumers can purchase from a variety of merchants on one website, have become big business—both for e-retailers selling on online shopping portals and for the online marketplaces themselves.

Sales by sellers on the two biggest marketplaces—those of Inc. and eBay Inc.—accounted for about 27% of North American online retail sales in 2015, based on an Internet Retailer analysis of data from eBay, Amazon and ChannelAdvisor Corp., a marketing firm that helps retailers sell on web marketplaces.

While many merchants selling on marketplaces are small companies not ranked in the Top 500, some Top 500 retailers, too, are selling on websites like and in addition to their own e-commerce sites.

Data gathered for the just-released Internet Retailer 2016 Top 500 Guide shows that, collectively, the 26 retailers that disclosed their sales from online marketplaces brought in $455.5 million, or 14.4% of their total $3.17 billion in sales in 2015, Internet Retailer estimates. That’s up 42.9% from $318.8 million worth of goods sold through marketplaces in 2014 for the same 26 retailers.

The opportunities have become greater in recent years, as it’s no longer just Amazon and eBay providing platforms where other merchants can sell. Several of the biggest retailers have opened their own e-commerce sites to outside sellers, including Wal-Mart Stores Inc. and Sears Holdings Corp., seeking to expand their product selections to consumers. The 2016 Internet Retailer Top 500 Guide has more details on those opportunities and sales channels.


Additionally, startups are creating marketplaces that serve specific categories—from gourmet foods to luxury Italian products—as a way to offer a broad selection to consumers seeking such merchandise. These new sales channels forces retailers and brands to evaluate the risks and rewards of selling their products on online marketplaces, both of which are biggest on Amazon.

Amazon’s growing dominance of U.S. online retailing is making a crucial sales channel for some Top 500 retailers. Among them is Pharmapacks LLC, No. 325 in the 2016 Top 500 Guide, which received 56% of its total sales from Amazon in 2015, up from 35% in 2014.

“Marketplaces are more profitable for us,” Andrew Vagenas, co-founder and CEO of Pharmapacks, says. “Acquiring a customer through our own site costs more than paying a commission on Amazon.” Amazon’s commission, or the percentage Amazon takes from each retailer on sales of their products on, typically ranges between 6% and 15%, although in a few categories it can rise to as much as 25%. Vagenas declined to disclose Pharmapacks’ customer acquisition costs.

Nearly 90% of Pharmapacks’ sales in 2015 were through online marketplaces. In addition to Amazon’s marketplace, Pharmapacks sells on, eBay and


The growth of the marketplaces also means there is more competition from many sellers. This means every merchant must work hard to show up high in search results on each shopping portal and to continually adjust prices to gain sales. Many retailers rely on companies like ChannelAdvisor and CommerceHub to feed product data to marketplaces and adjust prices, while others do it themselves.

Pharmapacks developed its own software to manage the prices for each of the 25,000 SKUs it sells on marketplaces. The technology automatically changes prices about once an hour on average, based on competitor prices, so that Pharmapacks products show up high in marketplaces’ search results.

To learn more about how retailers are growing—and the risks associated—on online marketplaces, see the latest edition of the Top 500 Guide, now in its 13th edition, which includes a feature on online marketplaces. Details on the largest marketplaces in the U.S., such as Amazon, and, are included in the story.

Included in the print, digital and database versions of the Top 500 Guide are the following:

  • Rankings and date-filled profiles of the largest 500 online retailers in North America, including operational data on conversion rates, average order values, e-commerce executive contact names and technology vendors used
  • For the first time ever, an Internet Retailer Performance Score, which rates all merchants by the success of their online strategy in comparison to their peers and the market as a whole.
  • Three-year web sales figures (dollar amounts included in the database version only)
  • In-depth analysis of the key trends in the market, and strategic success stories of some of the web’s most innovative retailers
  • Feature story on the growing influence of online marketplaces such as Amazon, eBay, Newegg, Rakuten, and others
  • Multiple charts and graphs, including a list of the fastest-growing e-retailers, a comparison of web sales versus store sales for some of the largest chains, and rankings by product category.