Amazon has been adding about 3,700 new independent sellers on its platform each day in 2021. According to research firm Finbold, this year alone the e-commerce giant has added 295,000 sellers on its platform, an equivalent of up to 155 for every single hour. Finbold notes that if current trends hold, it is likely that Amazon will have signed up more than 1.4 million sellers on its platform by the end of the year 2021.
The data also shows that independent merchants are spread all over the world. The US accounts, however, for up to 26% of all sellers. This current surge has largely been driven by the expansion of e-commerce in the wake of the COVID-19 pandemic.
As people stay in to avoid infections, online shopping has increased massively. Many independent sellers see this as the perfect opportunity to join the digital retail world and there’s no better way to do it than leveraging Amazon’s brand and superior e-commerce technology. Nonetheless, Amazon has been putting in a lot of effort in encouraging independent sellers to join its platform.
Between 2019 and 2020, it’s estimated that the e-commerce giant spent a whopping $30 billion towards these efforts. It’s a clear sign that the company sees independent sellers as an integral part of its future strategy.
But Amazon has already benefited massively from independent sellers. For instance, in 2020, independent sellers accounted for nearly 54% of the $386 billion in revenue posted by the company. Top third-party merchants on the platform have also sold their brands for nearly $30 billion so far this year as the pandemic continues to boost online sales.
Many experts believe that Amazon's success with independent merchants is a huge competitive advantage that will likely play a key role in cementing the company's position as the most dominant force in e-commerce. Just recently, Walmart, one of Amazon's US competitors, announced that it was planning to open up its marketplace to third-party sellers outside the US. But so far, Amazon has a huge edge.
Even if Walmart can convince sellers outside the US to join its marketplace, it will still be way behind Amazon. Besides, it’s clear that the Bezos-lead tech giant already has a long-term strategy to bring in as many independent sellers as possible. Amazon is pouring billions of dollars towards logistics support for independent merchants.
The e-commerce giant is also spending money building merchant capacity to sell on its platform. Based on this, it’s obvious that a lot of third-party sellers would view Amazon as perhaps the best option as opposed to Walmart and other competitors.
Besides, Amazon has seen a huge jump in revenue since the COVID-19 pandemic started. Bringing in more third-party sellers could play a key role in helping the e-commerce giant keep up with this trend.