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Analyst Notes Uptick in Amazon-Provided Inventory

About 90% of the physical products in Amazon’s catalog are listed by third-party sellers, according to Wall Street firm Baird Equity Research. However, the firm noted an increase in the portion of first-party inventory within most categories.

“Overall, Amazon-as-seller SKUs increased 26% Y/Y (+44% in non-media categories) with meaningful growth in Cell Phones/Accessories, Home & Kitchen, Appliances and Tools & Home Improvement. We believe these likely represent categories in which Amazon is moving to take greater share, and any shift to 1P from 3P would benefit revenue growth.”

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Amazon continues to add to item selection at a rapid pace, with analyst Colin Sebastian estimating a 19% increase year over year. He also estimated that items qualifying for Amazon Prime grew 34% Y/Y, accelerating from +19% in Q1, with 26.8 million items now eligible.

Sebastian sees Fulfillment By Amazon (FBA) as a key lever to drive category and Prime growth.

“Our survey indicates a high rate of FBA adoption among third party sellers, most notably in “Shoes,” “Beauty,” “Jewelry” and “Clothing and Accessories” categories,” he wrote. “Importantly, we see this creating a virtuous cycle of increasing Prime subscriptions, further category expansion and greater unit velocity.”

However, he noted that only 13% of all physical items are eligible for Prime shipping, including 24% of media products and just 9% of non-media products. He said that suggested a “meaningful opportunity” for Amazon and third-party sellers to further expand Prime.

He estimates the number of items listed for sale on Amazon.com at about 240 million, 18.7% higher year-over-year.

Analysts will be studying Amazon’s second quarter earnings carefully when the company releases its report next week.

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Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. Send news tips to ina@ecommercebytes.com.


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