Amazon Says Third-Party Sellers Drive 60% of eCommerce Sales

Amazon says small, independent businesses now account for a bulk of its eCommerce sales.

The company’s annual U.S. Small Business Empowerment Report, issued Tuesday (May 23), shows that 60% of sales on Amazon’s stores come from independent sellers, most of which are small and medium-sized businesses (SMBs).

The report showed that these sellers sold 4.1 billion products last year, with sellers in rural areas seeing more than 40% year-over-year sales growth.

“Small businesses are the heart of our local communities and the backbone of the U.S. economy,” Amazon Vice President of Worldwide Selling Partner Services Dharmesh Mehta said in a news release.

“Amazon invests billions of dollars annually to provide entrepreneurs with a constantly improving set of valuable tools and resources to help them gain access to capital, quickly launch in our store, build their brands, and rapidly scale and reach more customers.”

Among those investments includes building brands for smaller businesses, as PYMNTS wrote recently, saying this latest promotional activity is “a snapshot effort tracing back to the launch of the company’s third-party marketplace at the beginning of the millennium.”

A recent company announcement highlighted several SMBs selling everything from candles to soy sauce. To help these companies, Amazon set up storefronts to create individualized brand experiences on the Amazon platform, including advertisements, as well as “Insights” offerings designed to help those businesses better understand customer traffic and sales.

Earlier this month, Amazon released its most recent earnings report, showing that third-party sellers and subscription lines of business have helped drive revenues even as eCommerce slows in growth.

The company said is third-party seller services enjoyed 20% gains, excluding the impact of foreign exchange, to $29.8 billion.

Chief Financial Officer Brian Olsavsky, speaking to investors during Amazon’s April earnings call, said that third-party sellers comprised 59% of overall unit sales in Q1, compared 55% in the first quarter of 2022.

He added that “advertising was a strong growth during the quarter at 23%, and that is continuing to hold up very well in an environment where perhaps the underlying sales of products is slowing.” The revenue contribution from advertising services grew to $9.5 billion in the most recent quarter from $7.9 billion last year.