Amazon Seller Retention

Half of the top Amazon.com sellers were also top sellers two years ago. Most of those are established sellers who have been selling for years. Despite the growing competition, increasing Amazon fees, and new trends like private label taking over the market, they are still at the top.

Top 10,000 sellers are considered in this since estimated 50% of sales on Amazon.com marketplace are by those sellers. And out of the confirmed 20,000 sellers worldwide with more than $1,000,000 in sales at least half are selling on Amazon.com in the US. Top sellers are ranked by feedback reviews. Each seller 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%.

Top 10,000 Amazon.com Sellers Presence in the Past

One year ago two thirds, approximately 66%, of the top sellers were also in the top. Two years ago 50% of the current top sellers were in the top. 35% of the top sellers were in the top close to three years ago in October 2015 too.

Less than 20% of the top sellers from two years ago are now considerably smaller, beyond the top 50,000 seller rank. And only 2.4% of the top sellers started selling during the past year. This reinforces how little the top of the marketplace churns - the thousands of new sellers joining Amazon every day do not affect the top sellers.

This highlights the apparent long-term sustainability of businesses relying on the Amazon marketplace and the relatively low churn rate. Churn rate, also known as the rate of attrition, is the percentage of sellers on a marketplace who stop selling within a given time period. Retention of top sellers is the opposite of churn.

Marketplaces are often faced with the “chicken or the egg” hurdle. They need customers to attract sellers, and also sellers to provide a selection of products to attract customers. Leading marketplaces like Amazon and eBay have built a balanced system by attracting both over the years. But as marketplaces grow the challenge changes to managing churn - if top sellers change often it over time slows the growth of the marketplace. Instead a well functioning marketplace enables sellers to continue to grow despite the increasing sellers pool and changing competition.

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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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