The cost of selling on Amazon has continued to increase, according to a new study from Marketplace Pulse.
What percentage of items sold on Amazon’s platforms go to Amazon? Well, the answer is just half for more than 2 million third-party vendors. Literally. The e-commerce giant is already collecting an average of slightly over 50% between commission, fulfilment services, and other expenses.
What percentage of items sold on Amazon’s platforms go to Amazon? Well, the answer is just half for more than 2 million third-party vendors. Literally.
According to a recent report from Marketplace Pulse, the e-commerce behemoth is now capturing an average of just over 50% of sales from small businesses that sell their products on the enormous online shop between commission, fulfilment services, and other costs. The increase may not be a coincidence.
The Penalty Is Suitably Prime
Final sale commissions, which can vary significantly depending on the type of product, as well as logistics services like warehouse storage, shipping, and advertisement costs to prevent their products from being buried in pages and pages of search results are all taken into account in the study’s calculations. Although the last two are theoretically optional, most firms deem them necessary or inevitable (and Amazon itself claims that its logistics services cost 30% less on average than rivals).
Since at least 2016, Amazon has increased its proportion of final purchases, a pattern that may continue as the company attempts to adjust to life after e-pandemic commerce’s boom: “Selling on Amazon has long been considered as good business for small businesses.”
- According to the analysis, Amazon’s final cut increased progressively from 35% in 2016 to around 52% in 2022.
- For vendors who are seeing sluggish online sales, the tradeoff might be getting harder to accept. Sales of e-commerce decreased by 2% in the most recent quarter and by 0.3% year over year in 2022. Amazon experienced a net loss of $2.7 billion last year, which would have been over $10 billion in the absence of Amazon Web Services, when combined with high spending.
Amazon would be inclined to keep raising fees given their predicament, but you need to find some sort of balance, according to Juozas Kaziukenas, founder and CEO of Marketplace Pulse, who spoke with Bloomberg. If you’re an Amazon customer who is still upset with the company’s decision to raise the price of Prime membership to $139 for the year last year, you can now at least find comfort in the knowledge that it is putting pressure on everyone.