Amazon’s New Seller Promotions Underscore Small Business Ecosystem Buildout

Amazon’s evolution of its commerce ecosystem includes building brands for smaller businesses.

The latest promotional activity is, we note, a snapshot effort tracing back to the launch of the company’s third-party marketplace at the beginning of the millennium.

And as detailed by the company in an announcement on Friday (May 19), titled “23 cool small businesses to shop in Amazon’s store,” the eCommerce giant spotlighted a number of small to midsized businesses (SMBs) selling everything from candles to soy sauce.

Specifically, the storefront tools established by Amazon are designed to create individualized brand experiences housed on the Amazon platform, including advertisements, and where “Insights” offerings are designed to help those smaller businesses better understand customer traffic and sales.

The posting comes just a few weeks after Amazon noted in its most recent earnings report that third-party sellers and subscription lines of business have helped propel revenues even amid slowing eCommerce growth. Third-party seller services, as a segment, logged 20% gains, excluding the impact of foreign exchange, to $29.8 billion.

Chief Financial Officer Brian Olsavsky, in commentary on Amazon’s April earnings call, said that third-party sellers comprised 59% of overall unit sales in Q1, up from 55% in the first quarter of last year.

Olsavsky said, “advertising was a strong growth during the quarter at 23%, and that is continuing to hold up very well in an environment where perhaps the underlying sales of products is slowing.” The revenue contribution from advertising services grew to $9.5 billion in the most recent quarter from $7.9 billion last year.

PYMNTS has contacted Amazon for comment and further details on the program.

The Battle Vs. Walmart

The jockeying for seller loyalty — and, by extension, customer reach — is most readily crystallized in the ongoing competition between Amazon and Walmart. PYMNTS data has shown that Amazon and Walmart each have about 7% share of overall consumer retail spending and 3% of total consumer spending, respectively.

In one example, and in coverage earlier this year, Walmart began offering incentives for third-party merchants to sell on its Marketplace. Those incentives offered rate reductions on Walmart Fulfillment Services (WFS) and Walmart Connect Sponsored Search advertising. Walmart, for its part, reported in its own earnings results last week that U.S. eCommerce sales were up 27% year on year in the latest quarter. And within those results, Walmart disclosed that it had seen 40% growth in advertising with Walmart Connect. Management noted on the call that the number of 3P sellers utilizing the company’s ad capabilities had doubled over the previous 12 months.