Turning Point - 50% of Amazon Sales Are from Marketplace Sellers

Just like we predicted when we looked at Amazon’s Q2 results, by the end of the year marketplace sellers will finally be generating the majority of sales for Amazon. The marketplace share has been rising by 1% every quarter and in Q3 2016 it has reached 50%.

This is a key turning point event because in 2017 marketplace sellers will be generating more sales than Amazon itself. We are looking forward to see how this will influence Amazon Retail operations and if the current top marketplace will continue to grow bigger or allow new sellers.

Today Amazon reported Q3 2016 results and there is a lot to be excited about. Amazon USA sales were up by 26% at $18.8 billion, well above the 15% average ecommerce growth rate in the US. While international sales were up by 28% at $10.6 billion.

Because of international marketplaces investments earnings were lower than most analysts expected. However we think this is shortsighted.

International expansion is costing a lot, so while Amazon USA reported $255 million profit, international had a -$541 million loss. Nonetheless with Amazon investing billions into India expansion the profits will come in the future. Keep in mind, Amazon was not profitable for a very long time while it was investing in expansion.

Overall Amazon has posted a yet another strong quarter in 2016, and we think that the last few months left in the year with Black Friday, Cyber Monday and Christmas buying coming soon are going to offer great opportunities for marketplace sellers.

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Juozas Kaziuk─Śnas

Founder of Marketplace Pulse, Juozas 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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