Amazon Spurs Growth of Third Party Seller Ecosystem

“A great company starts with a great product and ends with a great product.” – Tobi Lutke

Throughout the 21st century, Amazon (AMZN) has grown to be one of the largest and most popular companies in the world. But it wasn’t until November of 2000 that Jeff Bezos launched Amazon Marketplace inviting third-party sellers to join the platform.

The result was an explosion in SKUs and gross merchandise volume, which continues to grow today.

Today, Amazon supports an ecosystem of hundreds of thousands of third-party sellers. Most are small to mid-sized businesses although it’s remarkable to see over 20,000 sellers generating over $1 million in annual sales, with a handful of sellers above the $50 million mark

amazon third party seller revenue breakdown year 2020

A Thriving Ecosystem

Earlier this week, we released our interview with Yaniv Sarig, CEO and co-founder at Mohawk Group, one of the leading companies operating in the third-party ecosystem.

Private companies like Heyday and SellerX are active in the space as well, alongside Thrasio which raised money earlier this year at over $1 billion valuation.

Today, third-party sellers collectively generate over $200 billion in annual sales. Despite the size, the pie continues to see double-digit growth rates and is expected to more than double in the next several years. It’s interesting to think about how far the space has come, and the opportunity that lies ahead.

Twitter:  @_SeanDavid

The author or his firm have positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

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