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Third Party Merchants Drive Amazon Growth

A new report shows how much Amazon relies on third-party merchants for selection and for growth. RW Baird’s 11th quarterly “Amazon Selection Survey” covered the company’s third-quarter. It estimates that overall, there are 391 million items listed for sale on Amazon.com, a 43% increase year-over-year adjusted for anomalies. Of those, 36 million items are now eligible for Prime shipping.

“Third-party unit momentum continues,” the Baird report stated. “As expected, third-party unit growth continues to outpace first-party units. In our survey, Amazon-as-seller SKUs grew 25% Y/Y (+18% ex-Media), vs. 43% adjusted unit growth, indicating continued 3P momentum.”

And not surprising RW Baird found that Fulfillment By Amazon adoption was a key lever to driving growth in the third quarter.

FBA allows Amazon to better manage the customer experience and increase the range of products eligible for Amazon Prime, according to Baird analyst Colin Sebastian. “We see this as creating a virtuous cycle of increasing Prime subscriptions, further category expansion and greater unit velocity.”

The survey also found:

  • There’s steady growth in FBA adoption in the majority of product categories.
  • Home & Kitchen and Apparel categories dominate SKU growth;
  • There are 119,000 SKUs available in Amazon’s new Handmade store.

Sebastian said the survey suggests sellers in the Video Games, Toys & Games, and Grocery & Gourmet Foods categories are adopting FBA at the fastest rate.

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Ina Steiner
Ina Steiner
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 ina@ecommercebytes.com.