Amazon.com Inc. is on the move to invest $15 billion in infrastructure, programs and people to launch tools on its marketplace this year. Since the start of 2019, Amazon has launched 150 tools and services to help marketplace vendors grow their sales on Amazon, the ecommerce giant said.
Amazon continually makes investments in in its delivery network, data centers, AI research and robotics areas, said Jeff Wilke, CEO of Amazon Worldwide Consumer in Amazon’s 2019 SMB Impact Report.
Some of the recently released tools include initiatives such as Seller University, which is an online portal for sellers to learn how to better set up their Amazon marketplace pages, follow laws and regulations for certain products and how to grow their business using Amazon. Other recent additions to Amazon’s seller tool belt include fulfillment and inventory tools, app store and third-party tools, pricing management tools and business reports and analytics tools.
According to the 2019 Amazon SMB Impact Report, marketplace vendors on Amazon (No. 1 in the Internet Retailer 2019 Top 1000) accounted for 58% of Amazon sales in 2018. This comes as no shock as 52% of 165 retailers surveyed in a May 2019 Internet Retailer/Bizrate Insights study stated that their business was growing on Amazon, compared with only 23% who said they were growing on eBay Inc., and 22% on Walmart Inc’s marketplace.
Small and medium-sized business development is important to marketplaces, as 92% of consumers currently purchase items from marketplaces like Amazon and eBay, according to an April 2019 Internet Retailer/Bizrate Insights consumer survey of 1,209 respondents. A broader selection of products and a wider range of categories in a single site are in the top five reasons surveyed consumers are making purchases from a marketplace instead of going directly to a retailer, at 41% and 35% of consumers, respectively.
Recently, Amazon came under fire by the Wall Street Journal for its difficulties in policing its site. The Journal states that despite Amazon having automated tools to scan items and vendors to block the suspicious ones, its investigation found more than 4,000 items that various federal agencies have declared unsafe. While the tools and software Amazon is implementing are meant to be helpful, it can’t block every unsafe item or seller from using the marketplace, according to the Wall Street Journal.
The Wall Street Journal’s investigation highlights that a human touch is necessary to help identify problems with Amazon inventory, sellers or the marketplace itself. The human touch is certainly helpful for marketplace sellers trying to navigate Amazon, says Jared Ebrahimoff, co-founder and chief operating officer of Lavari Jewelers.
“Amazon called us and said, ‘We’ll walk you through the process of launching in the U.K.,'” Ebrahimoff says. “We had a rep literally holding our hands through the whole thing.”
Lavari Jewelers is a small ecommerce business that made roughly $400,000 in web sales in 2018—90% of those sales on Amazon.
But not all marketplaces vendors are on the Amazon bandwagon. Some retailers are always cognizant of Amazon potentially selling the same products and undercutting their prices.
The rest of this article contains charts and data on retailer marketplace use, consumer perceptions and intentions, and insights from small business owners.
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