Although Amazon registered strong sales growth last year, the percentage of sales resulting from Marketplace merchants failed to increase for the first time ever.
A new breakdown of the North American book market published by Morris Rosenthal shows that Amazon’s media sales exceeded those of brick-and-mortar giant Borders for the first time. Amazon’s sales of books, music and video rose 15 percent last year, while sales at most other retailers were flat.
Marketplace accounted for 28 percent of Amazon’s sales during 2006, the same as 2005.
Rosenthal estimates that because of Amazon’s overall growth, Marketplace sales rose about 15 percent compared to 2005. But the share of Marketplace third-party sales relative to Amazon’s sale of new items stalled, perhaps because of Amazon’s heavy promotion of its Super Saver and Prime shipping programs. Last year on Marketplace, Amazon began displaying listings for its own merchandise above better deals by third-party merchants — unless sellers undercut Amazon by more than the price of standard shipping.
An excerpt:
Amazon failed to grow sales through third party sellers for the first time in 2006, including those individuals and businesses selling through Amazon Marketplace, Merchants and other programs. Third party sales accounted for 28% of Amazon’s total unit sales in 2006, no change from 2005, but still more than one in 4 items sold. If you assume that the majority of the third party item sales are books, and that the non-book media vs book ratio continues around 1:2, this would imply that about 1 in 3 books sold at Amazon are actually sold by a third party without even taking the other Amazon merchandise into account.
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One Comment
I can only guess at the reasons for no growth from Market Place Sellers. Here are a few thoughts: 1) Look at the ratings of many of the sellers and ask yourself if you would buy from them. 2) As a highly rated seller I still don’t feel a part of the business. I can submit suggestions and ideas to the black hole, but can’t really communicate with anyone directly who has the power to institute change. When you “partner” in a business with someone, you like to feel you can talk to your partner. 3) Related to both 1 and 2, Amazon needs to make their rating system better with some way to remove frivolous, objectively wrong ratings. I have suggested automated methods to do that, but, of course, with no feed back and no institution of the methods. They also need a program to teach sellers how to operate so as to get good ratings. To simply allow someone to repeatedly provide a sub-par service reflects badly on Amazon and Market Place Sellers. 4) As a teaching tool, I could imagine an online video at Amazon where proper packing methods, proper email notification to buyers, use of Endicia or other online postage systems is described, and how to handle problems, etc., are shown, perhaps in modules. Basically this would be a course in being an ideal Amazon.com Market Place Seller. Then people who don’t perform to some reasonable standard as set by the course, shouldn’t be allowed to sell. And those who perform to the very highest standards should somehow be rewarded.