Third-Party Sellers Talk Shop as Amazon and Walmart Put Marketplaces in Spotlight

In today’s hyper-competitive business landscape, small- to medium-sized businesses (SMBs) face challenges in standing out and reaching consumers.

The rise of eCommerce has transformed the way consumers shop, and retail giants like Amazon and Walmart have capitalized on the shift by providing third-party marketplace solutions. These platforms give SMBs access to an extensive customer base and equip them with a range of tools and insights to maximize their customer outreach.

The marketplaces also help Amazon and Walmart, two of the world’s largest retailers, diversify their product offerings and compete in the digital age.

While Walmart ventured into the third-party marketplace arena in 2009, it still lags behind Amazon.

Read also: Walmart Hopes Third-Party Marketplace Will Snag Holiday Spend From Amazon

What SMBs Say About Amazon

PYMNTS spoke with two of the three SMBs that received $50,000 grants from Amazon during Amazon Accelerate 2023. They discussed their experiences with the eCommerce giant and shared the ways they have been able to gain insights into their customer base.

“Our company mission is creating jobs for people with disabilities, and Amazon was a key partner in that right from the start,” said Kim Shanahan, founder of Gifts Fulfilled.

In the early stages of Gifts Fulfilled’s journey, the company recognized that its operational model would rely heavily on an assembly line-style production, Shanahan said.

By integrating with the Fulfilled by Amazon (FBA) program, Gifts Fulfilled was able to increase its product volume. Instead of fulfilling single customer orders directly, it sent its products to Amazon’s warehouses in case quantities, streamlining production processes.

Shanahan said the strategy allows the company to create a precise production schedule, and her team ensures that a specific number of units is sent to the Amazon warehouses each week. This level of predictability and control over inventory management helped the company scale.

Meanwhile, Justin Forsett, former NFL running back and CEO and co-founder of Hustle Clean, said Amazon helped his company grow after Hustle Clean established and nurtured its brand presence on the platform. Amazon’s tools aided the company in understanding how consumers use its products.

“Our hero product is a disposable washcloth designed to combat body odor,” Forsett said. “To hear reviews from individuals facing challenges such as cancer treatments, who bring our products to the hospital with them, to new mothers using our washcloths after delivering their babies and people with disabilities finding value in our product, it’s been really cool to see that we bring value.”

Accessing customer reviews on Amazon helped Hustle Clean gauge customer satisfaction.

“We encourage people to share their feedback, whether it’s regarding changes they’d like to see or aspects they were pleased or dissatisfied with,” Forsett said. “Your input is invaluable in helping us make the necessary adjustments.”

What Data Says About Amazon

PYMNTS Intelligence found a contrast in the market reach between Walmart and Amazon.

While Walmart’s primary focus is on the United States, Canada and Mexico, which restricts its international presence, Amazon has a seller network spanning 22 countries, encompassing key markets such as Australia, Germany, Japan and the United Arab Emirates. This geographical coverage provides Amazon with an advantage in terms of global market penetration.

In the second quarter of 2023, third-party sellers on Amazon accounted for 6 out of every 10 units sold. That proportion has grown in recent years and represents an increase of 7 percentage points compared to the first quarter of 2019.

Seventy-three percent of the total online sales value on Amazon is attributed to third-party sales.

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