Amazon Sellers Chasing $1 Billion in Sales

Amazon has confirmed that there are 140,000 sellers with more than $100,000 sales a year as of last year. By most estimates the worldwide marketplace GMV last year was north of $135 billion. But there is little detail available beyond that.

In the most recent annual shareholder letter from Amazon.com Inc. CEO Jeff Bezos wrote that 300,000 US-based businesses started selling on the Amazon.com marketplace last year. But as Bloomberg put it - Amazon baffled investors with meaningless numbers. There are 3,000 sellers joining on Amazon marketplaces every day, and yet as a metric it doesn’t answer many questions. A much more meaningful metric would be how many of those 300,000 new US-based sellers reached $1 million in sales, which given the retail margins is probably the first step of building a business.

According to our research there are roughly 15,000 sellers worlwide with sales over $1 million, 500 sellers with sales over $10 million, and 10 sellers with sales over $100 million. While they don’t appear in the chart there are also a few $1 billion sellers.

With every 10x increase in sales volume there are 10x less sellers who have achieved it.

These estimates are based on the distribution of the 100 million feedback reviews. 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%.

However the assumption is that across the millions of sellers the varying percentages of customers leaving a review averages out. Combined with the estimates for the marketplace GMV and thus also taking in all Amazon thirteen marketplaces worldwide, the final estimate is calculated by arriving at a per-review dollar value.

While a rudimentary method it confirms the broader insight - marketplaces are top-heavy. Most sellers contribute to the long-tail, while a relatively small percent drive the majority of the volume. On Amazon.com 25% of sales is through 1,000 sellers and the top 10,000 sellers account for more than half of the total GMV. It gets harder to scale a marketplace seller business as sales grow. Growing from $100,000 to $1 million has many proven and documented methods, yet crossing $100 million is rare.

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Juozas "Joe" Kaziuk─Śnas

Founder of Marketplace Pulse, Joe wears multiple hats in the management of Marketplace Pulse, including writing most of the articles. Based in New York City. Advisor to other startups and entrepreneurs. Occasional speaker at conferences.

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