Amazon reported on Monday that third-party sellers on its site sold a record-breaking 2 billion items in 2014, and their adoption of Amazon’s fulfillment services also grew 65% year-over-year. The numbers are significant because third-party sellers are a high-margin part of Amazon’s business, as the company is able to take a cut of every sale, plus charge extra fees for storing items, and handling the logistics. According to Amazon, there are now over 2 million sellers worldwide, which account for over 40% of the total units sold on Amazon.
While the number of items sold by third parties may have reached record volumes in the past year, that doesn’t necessarily indicate that it was due to a large increase in the number of sellers turning to Amazon. It could be just reflective of the ongoing overall shift to e-commerce that retailers are seeing now in general. It’s worth pointing out that back in early 2013, Amazon was also then claiming 2 million sellers. Now it’s “over 2 million,” but not large enough an increase to warrant updating the figures to be more exact, apparently.
To put the “2 billion items” unit in perspective, this time last year, Amazon said its third-party marketplace sales were up 40% year-over-year to reach 1 billion items. So the jump from that to 2 billion is notable. (Also of note – if the 2 billion items represented 40% of Amazon’s total items sold, that implies Amazon’s sales in 2014 included 5 billion items.)
The company says that FBA (Fulfillment by Amazon) units grew more than 50% during the 2014 holidays, and that deals offers by sellers grew more than 250% – indicating Amazon’s sellers have become more savvy about reaching holiday shoppers online with attractive sales that tap into online trends like Cyber Monday. This Cyber Monday, in fact, more than 16 million units were orders from the third-party sellers, and orders processed through Amazon Payments grew over 60% year-over-year.
There are now sellers in over 100 countries, Amazon says, with China and Hong Kong-based sellers growing 80% year-over-year.
Amazon Sellers have not always been happy with Amazon’s service – fee hikes in 2013 saw some sellers threatening to defect. This December, Amazon angered some sellers again when it refused to compensate them for a pricing glitch caused by third-party software, which saw one seller even losing £10,000 as a result. And in fall 2014, a research report stated that Amazon was using data on third-party sales to undercut its sellers’ pricing on competing items.
Correction: updated number of items sold in 2013 by third parties, based on figures reported here.