Kenneth Vincent
1y ago
In 2019 Jeff Bezos said that third-party Amazon sellers were “Kicking our butt.” 🧵
Here is why he’s right.
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Kenneth Vincent
1y ago
Kicking our Butt Full Quote
From an annual shareholder letter in 2019:
“Something strange and remarkable has happened over the last 20 years. Third-party sales have grown from 3% of the total to 58%. To put it bluntly: Third-party sellers are kicking our first-party butt.”
2/7
Kenneth Vincent
1y ago
Rapidly Growing
According to Statista:
Third-party sellers accounted for 61% of Amazon’s sales in 2023 Q4, up 35% compared with their earliest data at 26% in 2007.
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Kenneth Vincent
1y ago
Big Brands as Vendors
Amazon has historically traded big national brands as vendor rather than sellers.
Meaning they sell to Amazon and not directly to the consumer.
This helps the third party players because we have more options and control than the big brands do.
4/7
Kenneth Vincent
1y ago
Many brands
“There are close to two million different brands on Amazon, according to Marketplace Pulse research.”
The majority of these brands are going to be marketplace sellers rather than vendors.
From marketplacepulse.com
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Kenneth Vincent
1y ago
Amazon’s fee structure.
Yes we all can agree that Amazon’s fees are high and are a pain.
But, because they are making money on all of your sales Amazon wants you to do well.
Their fees actually align your goals and theirs: get more sales on Amazon.
6/7
Kenneth Vincent
1y ago
TLDR: Amazon Third Party Sellers are outperforming Amazon for a variety of reasons:
• Rapidly Growing percentage of sales.
• Big Brands treated as vendors.
• Their sheer numbers.
• Amazon’s fee structure.
7/7