Amazon Seller Retention
Half of the top Amazon.com sellers were also top sellers two years ago. Despite the growing competition, increasing Amazon fees, and new trends like private label taking over the market, they are still at the top.
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Half of the top Amazon.com sellers were also top sellers two years ago. Despite the growing competition, increasing Amazon fees, and new trends like private label taking over the market, they are still at the top.
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Amazon is an aggregator who aggregates sellers - which they pay for except for the fees - to customers with whom they have an exclusive relationship at scale.
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Retail didn’t change. But now everyone can be in it. Becoming a retailer is a matter of creating a Shopify store or joining the Amazon marketplace. Becoming a brand is a matter of finding the right product on AliExpress.
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Amazon is not ignorant or evil, it is economical. It built a shopping experience fit for most people and for most products.
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One year ago Etsy appointed Josh Silverman as new CEO. At the time the company reported lowest ever Gross Merchandise Volume (GMV) growth. The company has crafted a turnaround since.
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Instead of paying rent to a landlord or letting a third-party retailer mark up the price brands have to pay Amazon to be on the marketplace. Paying Amazon is the new rent.
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Amazon has confirmed that more than 20,000 Amazon marketplace sellers worldwide surpassed $1 million in sales in 2017. Despite the millions of sellers only 20,000 were able to build a business.
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The growth of the internet and Amazon is fundamentally changing retail. The mechanics of retail of the past are no longer the monopoly - consumers have flocked online because it showed a different way of shopping. That way is making brands listen, and retailers compete with each other.
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On Thursday Amazon reported their latest earnings sending the stock to all-time highs after beating analyst estimates for both revenue and profit. But what looks like unstoppable dominance today is instead a decade of investing and execution.
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With every 10x increase in sales volume there are 10x less sellers who have achieved that. It gets increasingly harder to scale a marketplace seller business as sales grow.
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