Amazon continues to see rapid growth in product selection in key categories in large part due to third-party merchants, according to a new report from Wall Street firm RW Baird, which completed its 13th Amazon selection survey of Amazon.com (not globally).
The author of the report views the rapid growth of product selection “as one of the fundamental drivers of unit sales growth” for Amazon.
The first three months of 2016 saw a 70% growth in selection in Clothing & Accessories year over year; a 66% growth in selection in Toys & Games; 111% growth in Baby, and 60% growth in Home & Kitchen.
The report also provides some insight into seller adoption of its new store, Amazon Handmade: Baird reported there are approximately 390,000 SKUs available on Amazon Handmade.
Analyst Colin Sebastian wrote that Amazon now has 40 million items that are now eligible for Prime shipping, and said Amazon has seen steady growth in FBA adoption across all indexed product categories.
Sebastian also noted that third-party unit selection continued to outpace 1P growth (Amazon’s own inventory) in the first quarter, at 60.5% versus 28%, respectively.
“We continue to expect Amazon to leverage its ongoing fulfillment capacity build-out to convert a larger portion of third-party sellers to FBA, which allows Amazon to better manage the customer experience and increase the range of products eligible for Amazon Prime.”
One interesting statement that may stand out for Amazon merchants: Sebastian noted, “Amazon tends to take inventory on some of the most popular products.”
Clearly Amazon’s hybrid model of being both retailer and marketplace allows it to offer an incredible selection of goods, allowing it to maintain a level of control over inventory without having to carry all of the risk.
Amazon will report its first quarter results on April 28th.
