Global marketplace merchants sold $160 billion worth of goods in 2018 on Amazon.com Inc., the retail giant announced this week in its 2019 Small Business Impact Report.
That’s about 58% of the global sales on Amazon.com and its physical stores, up from 30% 10 years ago, Amazon says.
On average, U.S.-based marketplace merchants sold $90,000 worth of goods via Amazon in 2018, the giant says. Other global marketplace sales highlights include:
- More than 25,000 global merchants generated more than $1 million in sales via Amazon.
- More than 50,000 global merchants generated more than $500,000 in sales.
- Nearly 200,000 global merchants had more than $100,000 in sales.
Drew Kraemer, CEO of Consultancy Marketplace Strategy, which works with merchants that sell on Amazon, says this breakdown of sales makes sense. Small businesses give Amazon a large product selection and self-service tools, and Amazon provides the platform to sell to the masses, he says.
“With its infinite digital shelf space, marketing capabilities, FBA program and customer service support, Amazon provides the opportunity for small- and medium-sized businesses to reach a massive audience while having the ability to distribute products to customers all over the world,” Kraemer says. “There hasn’t been a better time in history for a small business to build a brand, acquire customers and take market share.”
The report also reveals that shoppers have purchased more than 100 million devices that work with its voice-activated software Alexa. Much of the innovation with Alexa devices is happening outside of Amazon headquarters, as Amazon says it built fewer than 10% of the Alexa-enabled devices that launched in 2018. The software has more than 90,000 skills, or voice-activated tasks, the software can do, such as turning on lights, playing music or facilitating shopping.
However, some analysts are growing skeptical of how widely used Alexa skills are since the technology is now four years old and has not experienced a surge in consumer adoption as rapidly as other similar, once-new technology, such as smartphone apps or wearable devices did.
“There are kind of a cluster of features people are coming to expect for voice: a daily news summary, weather, timers and a random fact,” said James Moar, an analyst at Juniper Research who tracks voice software. Beyond that? “People aren’t really experimenting that much.”
This is the second small business report Amazon has released, with the inaugural report released roughly a year ago.
The report also revealed:
- More than 1.9 million business, content creators (such as authors) and developers in the U.S. use Amazon products and services.
- Amazon estimates that it has created 1.6 million jobs because of small businesses selling via Amazon.
- Top-selling categories for marketplace merchants include health, personal care, home and beauty.
Less than a month ago, Amazon announced it is working on improving on its two-day free shipping promise for its Prime loyalty members—to offer one-day free shipping.
According to a report from global investment bank RBC Capital Markets LLC, Amazon is well on its way to that goal. Amazon already has the capability to deliver on the same or next day to 72% of the total U.S. population, RBC Capital Markets finds in a recent report. Amazon has focused its same-day and one-day capabilities on the most densely populated and highest-income areas in the U.S., according to RBC’s estimates.
Amazon began its same-day and next-day delivery in 2014 and its one-hour delivery service in 2015 in select markets for a fee. To accommodate this, Amazon nearly tripled its North American fulfillment capacity in the last four years to approximately 148 million square feet in 2018, up from 56 million square feet in 2014, according to the report.
Amazon is No. 1 in the Internet Retailer 2019 Top 1000.Favorite