When the Amazon marketplace launched in November 2000, Books was the biggest business at Amazon.com. Electronics was second, followed by Music. The role the marketplace played in the overall ecosystem was very different compared to now. Even the words the company used to describe it sound foreign today.
“There’s always been a huge desire among customers to buy used, rare and collectible merchandise, and we’re only beginning to understand how Amazon Marketplace can channel that demand to benefit customers, manufacturers, publishers, artists and the industry as a whole.”
– Jeff Bezos, CEO of Amazon
This description from 2001 fits eBay or Etsy more than it does Amazon. But at the time Amazon was very different from Amazon today. It wasn’t until 2003-2006 when more categories got added like toys, jewelry, electronics, etc. and Amazon started to gain strength in retail as whole.
When Amazon started to focus more on retail, books got pushed down the priority list. Especially books sold by the marketplace. Books sales are growing, but their share of the total sales on Amazon is decreasing. According to our research, the top 10,000 books sellers accounted for 7.5% of the marketplace volume in 2016, down to 7% in 2017, and only 6.5% this year in 2018.
Every year there is a drop in marketshare right after Christmas, caused by other products taking off during the holidays. These estimates are based on the share of total seller feedback on Amazon.com by sellers focused on books. Each seller on Amazon receives seller feedback reviews from customers after a purchase. Providing feedback is optional for customers, the percentage of customers who leave a seller review is anywhere in the range of 1-5%.
No Amazon seller today would describe the marketplace as a place for “used, rare and collectible merchandise.” Many used books still get sold on Amazon, as many of the first-wave Amazon sellers are still around, but the opportunity is shrinking. For example, in March 2017 Amazon changed fees for books. This mostly affected sellers selling low price books, commonly known as penny books.
Before many used books were sold at $0.01 plus $3.99 for shipping, but since March the price had to increase to offset the rise in fees. Many of these books are now priced at $6.00 or more, a $2.00 increase. While a small increase in terms of dollar value, the increased price was noticed by customers who went looking elsewhere for better deals, bought Kindle books, or picked a new book from Amazon instead.
There is also the fact that few books sellers offer Prime, since their catalogs are vast, but each SKU only has a few units in stock. Using Fulfillment by Amazon (FBA) for that is virtually impossible. Thus the tens of millions of books offered by books sellers don’t fit the modern Amazon model including Prime.
Amazon, then, has simply grown past selling books.