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Third-Party Sellers on Amazon Are Outselling Amazon

Don't feel bad for Amazon, though, because the company makes huge amounts of money regardless.

By Chandra Steele
July 24, 2019
why axis chart third party amazon sellers

Any reality-TV contestant will tell you that being too good at something is going to make you massively unpopular. Downplaying your wins is the way to go if you want to mitigate the chances that a target will be placed on your back.

The Why Axis Bug Amazon seems fully aware of this tactic with Jeff Bezos' most recent shareholder letter, which stated: ""Third-party sellers are kicking our first-party butt. Badly." The company just doesn't seem to know it's already the villain of the retail show.

Amazon's deflection to look at third-party sales, which have grown from $0.1 billion in 1999 to $160 billion in 2018 according to the numbers Bezos released, doesn't tell the whole story. The company makes more money when it relies on third-party sellers than it does when it makes its own sales.

In the shareholder letter, Bezos touches on some of the ways Amazon is assisting third-party sellers ("tools that help sellers manage inventory, process payments, track shipments, create reports, and sell across borders") but its help goes far beyond that.

There's a new Marketplace Growth program that gives sellers an account rep who advises them on all aspects of business. The company also lets sellers participate in Fulfillment by Amazon, which doubled sales for small to medium businesses on the site in 2018. Amazon also lends money to third-party sellers.

So don't believe what Amazon says so much as what it does when it comes to figuring out who's really winning this game.

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About Chandra Steele

Senior Features Writer

My title is Senior Features Writer, which is a license to write about absolutely anything if I can connect it to technology (I can). I’ve been at PCMag since 2011 and have covered the surveillance state, vaccination cards, ghost guns, voting, ISIS, art, fashion, film, design, gender bias, and more. You might have seen me on TV talking about these topics or heard me on your commute home on the radio or a podcast. Or maybe you’ve just seen my Bernie meme

I strive to explain topics that you might come across in the news but not fully understand, such as NFTs and meme stocks. I’ve had the pleasure of talking tech with Jeff Goldblum, Ang Lee, and other celebrities who have brought a different perspective to it. I put great care into writing gift guides and am always touched by the notes I get from people who’ve used them to choose presents that have been well-received. Though I love that I get to write about the tech industry every day, it’s touched by gender, racial, and socioeconomic inequality and I try to bring these topics to light. 

Outside of PCMag, I write fiction, poetry, humor, and essays on culture.

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