Sounds like Ticketmaster… actually Amazon. The e-shopping titan is charging fat fees to drum up fresh cash. Last year, Amazon took an average 50%+ cut from each third-party transaction, up from 40% in 2018. Third-party sellers are non-Amazon merchants who list on Amazon. They make up over half of Amazon’s sales, providing everything from beach umbrellas and sneakers to “gently used” TVs.
- Before: Sellers have been handing over more per transaction to Amazon for the past six years, but were able to stomach the higher cuts as sales on Amazon soared.
- After: Amazon’s coming off its slowest annual sales growth in history, and wants to leverage its nearly 2M small and midsize third-party sellers to fatten margins.
Not so prime… As the ecomm boom cools, third-party sellers have lured shoppers by ramping up discounts instead of spending more on Amazon’s #sponsored listings. As growth slows in its core business, Amazon’s looking for new ways to drum up fresh revenue. Last month the company launched a new "Buy with Prime" feature that allows Prime members to enjoy fast payment and delivery options on non-Amazon sites.
It’s hard to leave the world’s biggest showcase… While delisting from Amazon can be more financially efficient for some businesses, many feel like they can’t do without it. Amazon’s third-party sellers account for about a quarter of all online purchases in the US, and its fulfillment services (think: storage, delivery) can cost 30% less than competitors. The tide could be changing: 60% of Amazon sellers use at least one other e-comm platform, and half plan to add another this year.