EcommerceBytes-NewsFlash, Number 2990 - January 30, 2013     1 of 6

Amazon Sellers Achieve 40 Percent Unit Growth in Q4 2012

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Amazon had a good fourth quarter in 2012, with net sales growing 22% year-over-year to $21.268 billion. The company ended Q4 2012 with over 200 million active customer accounts, up from 188 million active customer accounts at the end of Q3 2012 and up 22% year-over-year.

Industry observers were impressed by Amazon's ability to reach customers faster thanks to its Fulfillment Centers. "Profits were boosted by a major investment in 20 new distribution centres last year, three of them in the UK, allowing the retailer to reduce transport costs," noted UK newspaper the Guardian.

Amazon Metrics Q4 Comparisons

Amazon Metrics Q4-2011 Q4-2012
Active customer accounts 164 million (up 26%) 200 million (up 22%)
Worldwide active seller accounts 2+ million 2+ million
Seller units as a percentage of total units 36% 39%
Worldwide unit growth 46% 32%
Third-party sellers' unit growth 65% over 40%
Net Sales Increased 35% to $17.43 billion Increased 22% to $21.268 billion
Source:, compiled by

Amazon CEO Tom Szkutak told analysts in a post-earnings conference call that the growing footprint of its fulfillment network allowed it to offer a broader selection to customers. "Last year, we opened up 20 new fulfillment centers, and so we saw in a very rapid growth in fulfillment capacity last year."

Over the past few weeks alone, announced plans to open another new fulfillment center in New Jersey as well as in California and Washington. But Szkutak did not reveal any further plans. "Stay tuned and we'll let you know more as the year progresses."

Third-Party Sellers See Growth
Worldwide active seller growths remained at over 2 million. Seller units as a percentage of total units rose from 36% in Q4 2011 to 39% in Q4 2012, but down from 41% in the third quarter of 2012, the highest it had ever reached.

Last year, founder and CEO Jeff Bezos made a point of stating in the earnings press release that third-party sellers had had a tremendous holiday season in the fourth quarter of 2011, experiencing 65% unit growth. In the fourth quarter of 2012, 3P sellers experienced in excess of 40% growth - a slower rate than a year ago, but still very strong. Amazon's total worldwide unit growth rate slowed from 46% to 32% in the fourth quarter, 2012.

In a question about margins for third-party versus Amazon sales, Szkutak said there was some variation by business, but "we attempt to do is, from a pricing standpoint is to try to be agnostic, that's certainly how we run the business. Again this is on a third-party versus retail." He said the cost of expanding fulfillment capacity puts cost pressure on its overall cost structure on a per-unit basis. But on a product basis, they are attempting to be roughly agnostic.

But Booksellers Beware
Booksellers paved the way for other online sellers on Amazon, but thanks to the popularity of ebook readers such as the Amazon Kindle and Barnes & Noble Nook, the growth of physical book sales is slowing.

"We're now seeing the transition we've been expecting, said Jeff Bezos, founder and CEO of "After 5 years, eBooks is a multi-billion dollar category for us and growing fast - up approximately 70% last year. In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5%. We're excited and very grateful to our customers for their response to Kindle and our ever expanding ecosystem and selection."

Price Softness in Some Categories
Szkutak said there were some softer prices in some higher ASP (average selling price) items, particularly the items greater than $1,000 - in consumer electronics subcategories such as TVs, MP3 players and digital cameras. He also noted that Amazon could not keep up with demand for its Paperwhite Kindle in the fourth quarter, and they "could have sold more in Q4" if they had supply.

Living Social and Amazon Local
With regard to Amazon's investment in Groupon-clone Living Social and its own Amazon Local business, Szkutak called local was a very interesting, long term opportunity. He called it a long term horizon and said it's very early there.

Recap of Stats of Interest to Sellers

  • Third-party seller units represented 39% of paid units (from 36% in Q4 2011, but down from 41% in Q3-2012).
  • Worldwide paid unit growth was 32%.
  • Active customer accounts exceeded 200 million.
  • Worldwide active seller accounts were more than 2 million.
  • Net sales (revenue) were up 22% year-over-year to $21.268 billion in the 4th quarter 2012 (or 23% ex-FX).
  • Net sales (revenue) grew 23% year-over-year to $12.175 billion in North America
  • Net sales (revenue) grew 21% year-over-year internationally to $9.093 billion (or 23% ex-FX)
  • Net income (profit) was down 45% year-over-year in the 4th quarter to $97 million.

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About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to

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