Amazon.com Inc.’s midsummer shopping event generated nearly $3 billion for the retailer, by Internet Retailer estimates, and Amazon says its overall sales grew 60% over Prime Day last year.
But more than half of Amazon’s total gross value of goods comes from merchants that sell on its marketplace, and data shows those sellers shared a piece of the Prime Day success.
Marketplace merchants’ sales grew 80% on Prime Day (July 11) compared with an average day for Skubana retail clients, according to data from the technology vendor that helps retailers and brands sell on marketplaces like those operated by Amazon and eBay Inc. Skubana doesn’t disclose how many clients it has, but CEO and co-founder Chad Rubin says the company has almost 1,000 customers.
Comparatively, marketplace sellers in 2016 that were Skubana clients experienced a 98% increase in sales on Prime Day versus an average day, Rubin says.
This year’s slower Prime Day growth may be a result of Amazon’s focus to promote and sell its own inventory even more this year, such as its Amazon Basics products or its Alexa-enabled devices, Rubin says. That may also be why marketplace sellers’ sales accounted for a lower-than-normal share of the $2.88 billion worth of goods sold, according to Internet Retailer’s analysis. On a typical day, marketplace sellers account for 65% of Amazon sales worldwide, but because Amazon offers so many popular deals of its own on Prime Day, marketplace sellers likely accounted for roughly one-third of sales during the July event.
Having said that, data shows marketplace sellers had deeper discounts than Amazon’s first-party inventory. Shoppers who bought from third-party sellers on Amazon on Prime Day got better deals than those who bought directly from Amazon, according to data from analytics firm Boomerang Commerce. Marketplace sellers offered an average discount of 45%, compared with 35% for products sold directly by Amazon.
It’s clear why Amazon sellers had a jump in sales compared to a typical day: Web traffic. Traffic on July 11 was 69% higher than on an average day in June this year, and 5% higher than traffic to Amazon.com on Prime Day 2016, SimilarWeb finds.
Compared with Prime Day 2016, sales grew 44% year over year for retail clients of e-commerce platform provider Volusion that sold on Amazon on Prime Day 2016 and 2017. Even Volusion’s retail customers that don’t sell on Amazon experienced sales growth of 8% on their own websites as well as marketplaces other than Amazon, Volusion says.
“If a seller didn’t see a big spike [in sales on Prime Day], then they did it wrong,” says Rubin, who also has been an Amazon seller for eight years. “Sellers should have increased their keyword bids and sponsored advertising spend on Prime Day. And they should have made sure that their Fulfillment by Amazon stock was available.”
Shoe e-retailer Street Moda saw an even bigger increase on Prime Day, CEO Matt Kubancik says. The retailer’s sales on Amazon on Prime Day were 300% higher than an average day in June and July. Compared with Prime Day 2016, sales increased 20%, Kubancik says. The difference between this year and last for Street Moda is that it used Amazon’s Seller Fulfilled Prime service instead of Fulfillment by Amazon, which allows sellers to handle warehousing and delivery and still flag their products as Prime.
“This year we were able to utilize Seller Fulfilled Prime and due to that we didn’t have to risk sending a lot of merchandise to FBA only for the products not to sell and then pay lofty storage fees,” Kubancik says. “Utilizing our own distribution strategy, technology to help us in our warehouse, such as ChannelAdvisor, SkuVault and Shipworks, negotiated rates with partners like FedEx and UPS, and merchandising what products can be offered to what regions in the U.S. led to this increase.”
What’s interesting is that Street Moda saw an 85% increase in sales the day after Prime Day compared with the 39 days leading up to Prime Day. “We saw a nice halo effect after Prime Day,” Kubancik says.
Mobile accessories e-retailer Tech Armor also anticipates some spillover of increased sales from Prime Day. In addition to its Prime Day deals, it also ran a deal on Amazon until Sunday, July 16, to capture more traffic from Prime Day.
Amazon’s deal submission process was open to more products than last year, but the approval process was more selective, Nico Cabral, product marketing manager at Tech Armor, says. When certain products Tech Armor submitted were rejected for Prime Day, Amazon told the retailer that it could be included in what Amazon termed “Prime Week,” which is new from last year, Cabral says.
“It’s hard to say if these deals will perform better than other weekly deals, but Amazon does expect spillover traffic from Prime Day. That was their reasoning for offering us these deals in the first place,” Cabral says. “When the deals were submitted to Amazon in May, they were all submitted as a group, and Amazon was clear in their messaging that not all deals would run on Prime Day. Their message verbatim: ‘All other deals will be considered to run in the Prime Week, which will take place around the date of Prime Day.’”
Tech Armor sales jumped 100% on Prime Day versus their daily average. It does not have results from “Prime Week” yet.