Amazon Facts You Need to Know as a 3P Seller

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Did you know that the 3P marketplace is the biggest and fastest-growing part of the $600B Amazon marketplace? With constant changes in the digital marketplace, you need to stay updated in order to craft a solid sales strategy. Third-party (3P) sellers on Amazon are a huge part of the growth of the retail behemoth. To stay ahead of the crowd, it’s important to understand the current Amazon landscape and how it impacts your store.

Things have changed a lot since the beginning of Amazon when Jeff Bezos, the then MacKenzie Bezos, and Amazon’s first employee Shel Kaphan would hold company meetings at their local Barnes & Noble. It is now worth more than $1 trillion with pioneering, cutting-edge technology like drone package delivery and checkout-free convenience stores. 

 

 

More sellers are coming…

Let’s take a look at some data about 3P sellers on Amazon:

  • 97% of brands on Amazon and 84% of brands that are not on the site believe that by selling on the platform, they would get new customers.
  • 44% of companies selling on Amazon earn more than half of their total eCommerce sales on the site.32% of brands on the platform report that sales on the site make up about 75% of their total online sales. 
  • Feedvisor predicts that 72% of brands will be selling on Amazon by 2024.

Taken as a whole, you can see that Amazon is a massive sales engine for the brands already selling there and other brands are taking notice. As more and more brands expand their eCommerce sales channels to include Amazon, competition will get stiffer and stiffer. It will be important to be able to differentiate yourself from competitors in your category and working with an expert 3P partner can be the difference between profit and loss.

 

Amazon AI is best-in-class…

Do you find yourself automatically opening your Amazon app or website when you need something? This is an impulse that has been carefully cultivated by Amazon in their customers. “How can that be?”, you may be asking. 

Amazon is one of the best, if not the best, at gathering, interpreting, and acting on consumer behavior data. This allows Amazon to make some of the best product recommendations and predictions for consumers. They are also known for their ability to leverage new technologies to create better customer experiences and improve delivery efficiency. All of this has made them the go-to marketplace for many consumers. 

 

The digital ad landscape is changing…

Facebook and Google currently act as middlemen connecting consumers to products and services. Their revenue structure points to how critical this role is to their continued profitability: both get more than 80% of their yearly revenue from ads bought by brands to get their product in front of their customers. 

This is changing. For one thing, consumers are increasingly using Amazon as a search engine for products, completely bypassing Google and Facebook. (In fact, in 2021 Amazon (not a search engine) ranked as the third-largest search engine on the internet by Search Engine Journal.) 

In line with Amazon’s ability to capitalize on technology trends, they are taking advantage of this shift in consumer behavior and have been rolling out some self-serve ad features to 3P sellers, completely cutting out ad agencies. 

One guaranteed way to stay on top of all these changes is to work with a 3P partner. At Phelps UNITED, we strive to help 3P sellers on Amazon succeed. It’s our job to manage all these changes and understand how they will impact you and your success. We can help you stay organized as an Amazon seller and become more profitable than ever. 


 

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