May, 16th 2017 | 5 min read

facts about the Amazon Marketplace header

Introduction:

Amazon Marketplace is an international e-commerce platform that offers a multitude of products and services. This is a place where the user base is counted in millions and yearly orders are counted in billions. Such is the power of Amazon, the leading e-retailer around the globe. Apart from its global scope and reach, Amazon is also considered one of the most valuable brands in the world. 

So what or how exactly does Amazon tick all the boxes in the customer’s checklist? This post will try to find out and uncover some interesting facts you may or may not know about the online retailer.

AMAZON MARKETPLACE -  HISTORY 

The name

Amazon was almost called Cadabra as in "abracadabra", the famous “magic” spell.  Founder Jeff Bezos quickly redefined the name when his lawyer on one occasion misheard the word as "cadaver" (a right move, in our minds). Instead, Bezos named the business  Amazon  after the river on two principal reasons: 

  1. To suggest scale ("Earth's biggest bookstore" was the tagline at the launch, as the river is the largest in the world);
  2. To have a better website listing (back in the mid 90’s, website listings were often arranged alphabetically).

 

Click me

 

The logo

After undergoing a few aesthetic changes (the first version depicted the Amazon flow), the logo we know today was introduced in 2000 and features a arrow that begins under the letter a and ending under the letter z. This turns the logo into a smile, sort of, emphasizing that the company happily offers anything, from A to Z.

amazon logo

 

 

Source: Wikimedia Commons

SELLING ON AMAZON MARKETPLACE

Listings are free, selling plans are not

There is no cost to list a product, meaning you can have 4,562 items listed if you like. You do, however, have to pay a $0.99 per item fee for each item that sells if you are on the Individual selling plan. On the other hand, Professional sellers pay a monthly subscription fee of $39.99 and enjoy access to additional tools for listing inventory and managing orders. As a rule of thumb, those that have 40 or more sales per month are better off with a Professional selling plan as it saves money (40 x $0.99 fixed closing fee = $39.60). 

Last year saw a 27% revenue increase

Yes, you read that correctly - 27%. In its annual report for 2016, Amazon saw its revenue increase by 27 percent last year, which translates to almost 136 billion dollars.

amazon 2016 report

Source: Amazon 2016 report 

On a similar note… 

Germany accounts for more than 10% of Amazon’s total revenue

Next to North American market, Amazon EU market is the second largest Amazon regional market in the world. It offers a lot of potential and opportunities for growing your business and it seems that experienced online sellers recognize that. In particular, the German market stands out as the annual report also shows a 20 percent increase compared to 2015, or 14,1 million dollars. That’s 10.4% of Amazon’s total revenue by Germany alone. 

On a similar note, once more… 

More than 10% of EU sellers sell on all EU marketplaces

According to BQool’s research, more than 10% of Amazon EU sellers have sold at least one item in a month on each EU marketplace. Also, more than half of Amazon EU sellers branch out their offerings and sell in more than one marketplace. In both cases, the numbers are expected to rise rapidly as Amazon EU is still fairly new and unsaturated compared to its US counterpart.

FULFILLMENT BY AMAZON (FBA) - YOUR FOUR IN ONE SOLUTION

Amazon’s fulfillment networks are a smash hit among many online store owners because they simplify the process. As an e-seller, you store your products in Amazon's fulfillment centers and the company does the rest - pick, pack, ship, and provide customer service for your products. FBA effectively helps in scaling the business and reaching more customers as it is seen as a sign of quality service. 

 

 

How FBA works

Nevertheless, the service is rather costly for the online retailer. Even though Amazon lost nearly 7.2 billion dollars on shipping (the annual report shows shipping revenue was worth 8.97 billion dollars last year, while the shipping costs were worth 16.17 billion dollars), that doesn’t stop the retail giant from expanding its infrastructure. Reportedly, Amazon is looking for a 1,300 warehouse units in EU to fulfil its commitments for its one-hour Prime Now delivery service. Either someone is lousy at math in Amazon headquarters or the service is that much of a customer draw that it ultimately pays off in different ways. 

Amazon Prime connection

Super-fast delivery is the next big thing today as consumers are becoming increasingly demanding regarding shorter delivery times. That is the main reason why the number of Amazon Prime users is constantly rising. Although the company is shush on the exact number, latest estimates suggest there are about 65 million Prime members worldwide. Just a quick reminder - Amazon Prime is a membership program that gives customers access to a variety of services and deals, as well as free two-day shipping. Prime is one of the most important parts of Amazon's business because Prime members usually spend more on Amazon's online shopping platform 

Why are we mentioning this? Because with FBA, your products are eligible for Amazon Prime free two-day shipping and free shipping, not to mention other benefits like multi-channel fulfillment (fulfilling orders from other sales channels using your inventory stored in Amazon’s fulfillment centers) and others. 

Conclusion

While Amazon is keeping tight on the overall number of registered sellers, it is estimated that there is close to a three million small businesses, world-class retail brands and individual sellers that cater to millions of customers via Amazon. The numbers are projected to grow as e-commerce growth continues and so does Amazon’s platform. It’s easy to see why - there are numerous benefits with selling through Amazon Marketplace. 

Apart from the extended range of their offerings, probably the biggest advantage for e-sellers is the ability to leverage Amazon’s existing infrastructure to handle basic operations. This allows to focus time and resources on growing the business while the retail giant handles the routine, day-to-day aspects of selling your products online. It’s a pretty sweet deal and, evidently, it works for millions.

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