Amazon says third-party sellers generate 60% of e-commerce sales

Amazon says the majority of e-commerce sales today are by small, independent businesses.

The company’s annual U.S. Small Business Empowerment Report, released Tuesday (May 23), found that 60% of Amazon’s store sales come from independent sellers, the majority of which are small and medium-sized enterprises (SMEs).

The report found that these retailers sold 4.1 billion products last year, with rural retailers seeing more than a 40 percent increase in sales compared to the previous year.

“Small businesses are the heart of our communities and the backbone of the American economy,” Dharmesh Mehta, vice president of Worldwide Selling Partner Services at Amazon, said in a press release.

“Amazon invests billions of dollars a year to provide entrepreneurs with an ever-evolving set of valuable tools and resources that help them access capital, launch our store quickly, build their brand, and scale quickly and reach more customers.”

As PYMNTS recently wrote, those investments include building brands for smaller businesses, saying the latest promotional activity is “a snapshot of activity dating back to the company’s launch of its third-party marketplace in the early 2000s.”

The company’s recent announcement put a spotlight on several small and medium-sized businesses selling everything from candles to soy sauce. To help these businesses, Amazon created storefronts to create personalized brand experiences on the Amazon platform, including ads as well as “Insights” offerings designed to help these businesses better understand customer traffic and sales.

Earlier this month, Amazon released its latest earnings report, which showed that third-party sellers and subscription-based business lines helped boost revenue even as e-commerce growth slowed.

The company said third-party seller services grew 20 percent (excluding the impact of currency) to $29.8 billion.

CFO Brian Olsavsky, speaking to investors during Amazon’s earnings conference call in April, said third-party sellers accounted for 59% of total unit sales in the first quarter, up from 55% in the first quarter of 2022.

He added that “advertising grew strongly in the quarter at 23% and continues to perform very well in an environment where perhaps core product sales are slowing.” The contribution from advertising revenue rose to $9.5 billion in the latest quarter from $7.9 billion a year ago.