Amazon

Amazon’s Marketplace Boast Falls Flat On Specifics

Amazon loves to brag about when it has a stellar sales period, but there are important elements the eCommerce giant loves to leave out.

Namely, context and specifics to just what its statistics mean.

While it boasted some impressive figures in its latest PR push — like the 23 million items that were ordered on Cyber Monday, that Fulfillment by Amazon delivered more than 1 billion items worldwide in 2015 and that sponsored products adoption grew by more than 100 percent in 2015 — Amazon was still mum on specifics as to what that growth really means for the company.

What Amazon did say is that its Cyber Monday was a more than 40 percent increase from 2014’s figures, but there was no specifics on how many sales resulted from those 23 million items. Amazon also said that its holiday season allowed individuals and businesses selling on Amazon to sell to more than 80 percent of Amazon customers worldwide who ordered a physical item. Fulfillment By Amazon items that shipped worldwide also grew more than 60 percent YOY during the holiday season.

“It’s never been easier for sellers, local merchants and artisans to grow their businesses on Amazon. With targeted advertising tools like Sponsored Products, access to Amazon’s fulfillment and customer service expertise through FBA and new marketplaces like Handmade at Amazon and Amazon Home Services, businesses of all sizes can easily reach millions of customers around the world,” said Peter Faricy, VP for Amazon Marketplace. “2015 was a big year for sellers on Amazon. In fact, sellers added more new selection and shipped more items than in any previous year. We’re excited to build on that momentum as we continue to innovate on behalf of sellers and customers.”

Amazon also rattled off its other accomplishments in 2015, like the launch of its new marketplaces, Handmade at Amazon, Amazon Home Services, Amazon Business and Amazon Exclusives. It touted its international expansion, along with new seller tools and services.

But, perhaps as Amazon should have expected, that’s not exactly what the mainstream media cared about most — i.e., specifics. Amazon has a bit of a reputation for touting its success without giving quite enough context to say just how major that success is. Sure, 40 percent growth is a big figure, but without knowing what to pit it against, it’s hard to say just how much Amazon’s holiday sales actually grew.

Last week, Amazon reported its annual holiday postmortem, when we learned that at least 3 million new members were added to Amazon Prime’s rolls this holiday season (in just a one-week period). Shockingly, Amazon did not disclose a specific number for total Amazon Prime membership, though the release does note it being in the “tens of millions” — a figure that would accurately describe any number of members between 20 million and 90 million. The current going high-side estimate, care of Mark Mahaney of RBC Capital, pegs the global figure at around 80 million, with 50 million U.S. subscribers. Lower-end estimates peg U.S. enrollment in Prime at around 44 million (as of fall 2015).

Amazon’s latest release also showed it added 500,000 products to Prime’s catalog that already has 20 million items through the Fulfillment by Amazon program. That boost can likely be attributed to Amazon allowing third-party merchants to be part of Prime but still use their own warehouses. Previously, those merchants had to store goods in Amazon’s warehouses, which deterred some.

Sure, what we can conclude is that Amazon had a killer holiday season, but what everyone really wants to know is just how killer it really was. As a Wall Street Journal article points to, “missing from the 2015 figures was what Amazon described as ‘record-setting’ in the prior two annual releases: the number of items sold by outside sellers for the year. Impressively, that figure doubled to 2 billion from 2013 to 2014, but for 2015, Amazon simply didn’t disclose the number. Could that mean such unit sales growth has slowed?”

Fair point.

Without Amazon disclosing a bit more about its sales, there’s plenty of room for everyone to speculate (a favorite pastime of many who follow Amazon).

But as Amazon’s earnings are set to be reported later this month, we may soon learn just where Amazon’s holiday sales figures actually stack up compared to previous years.

Until then, we’ll have to wait (and speculate some more, perhaps).

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