Third-party merchants that sell goods on Amazon are riding high on Amazon’s success — at least for now.
A fifth of professional Amazon merchants sell more than $1 million a year — double the share from last year
Nineteen percent of these merchants grossed more than $1 million in sales, up from 10 percent last year.
This year, 19 percent of Amazon professional merchants brought in more than $1 million in sales, according to a new survey by Feedvisor, an e-commerce company that helps merchants price goods on Amazon and other online marketplaces. That’s up from 10 percent in 2017. Professional sellers on Amazon typically sell more than 40 items a month and are required to pay a monthly subscription fee.
Three percent of these merchants made more than $10 million, up from 1 percent last year. That means more professional merchants are becoming high-volume sellers on Amazon.
Growth of its third-party merchants is good news for Amazon, too. Amazon itself brought in $9.3 billion in revenue from them in Q1 — from commissions, fulfillment and shipping fees, and other third-party seller services — up from $6.4 billion in the same quarter last year.
These merchants also play another important role: They supply Amazon with an almost limitless assortment of goods that make it the everything store — more than 100 million items in the U.S. are now eligible for two-day shipping under Amazon Prime. And more than half of all items sold on Amazon last quarter came from third-party businesses.
Of course, Amazon’s marketplace is constantly changing and its merchants run the risk of competing with Amazon itself and its increasing number of private-label brands. In fact, the biggest concern among Amazon professional sellers this year was competition from Amazon, with 38 percent of respondents citing it as their No. 1 worry.
As such, 80 percent of Amazon merchants also sell their goods on other channels. Where else they choose to sell provides insight about where Amazon will have to compete in the future. EBay is losing its lead as the most common alternate marketplace for Amazon merchants. This year, 52 percent of sellers said they also used eBay, down from 65 precent last year.
Walmart, on the other hand, is becoming a bigger competitor. Seventeen percent of professional merchants also sell on Walmart, up from 9 percent last year.
Walmart’s growth as a venue for Amazon merchants is likely to continue. Some 36 percent of merchants this year said they plan to expand their sales to Walmart this year.
Feedvisor surveyed 1,200 professional Amazon sellers this year and 1,600 last year. The survey was distributed to the same set of sellers both years.
Clarification: This story has been updated to differentiate between Amazon professional sellers and lower-volume sellers.
This article originally appeared on Recode.net.
