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Amazon Depends More And More On Marketplace Merchants

Amazon is increasingly depending on its millions of Marketplace sellers to fuel its growth, the Wall Street Journal reported on Monday (Jan. 5).

The e-commerce giant said Monday that third-party merchants were responsible for 2 billion items sold last year, twice as many as in 2013, even though the actual number of Marketplace merchants held roughly steady compared with the prior period at “more than 2 million.”

Those merchants sold more than 40 percent of the items sold by or through Amazon last year, according to the statement. That suggests a total of at least 5 billion items sold. (The guesswork is necessary because while Amazon used to regularly disclose what percentage of items it sold came from third parties — that number was 39 percent in 2012 — it has suspended the practice.)

Some analysts say third-party sales typically have higher margins. Amazon profits from them by taking a percentage commission when their goods are sold, and also gets fees from other services such as warehousing and shipping orders on behalf of the third-party merchants through its Fulfillment by Amazon program.

Amazon said Monday that the number of merchants using Fulfillment by Amazon services grew by 65 percent for the second year in a row, meaning the program almost tripled in size in two years. However, Amazon didn’t disclose the actual number of merchants using the service.

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