In the two decades since Amazon opened its platform to third-party sellers, this marketplace unit, as the division is called, has surpassed Amazon’s own physical product sales. Last year, it generated an estimated $300 billion in sales, according to research firm Marketplace Pulse. During the pandemic, Amazon’s own retail sales grew, but its third-party merchants grew even faster. Competitors such as Walmart and Target, not surprisingly, have recently opened their own platforms to outside sellers.
Aggregators would be wise to study up on the lessons learned by the direct-to-consumer darlings of the early 2010s. Warby Parker, Away, and others eventually realized the importance of diversifying their distribution channels; many now operate brick-and-mortar stores and partner with big-box retailers.
If one thing is certain, it is that not all of these aggregators will survive. “We’re already beginning to see some acquirers of Amazon businesses starting to struggle,” says Ryan Gnesin, CEO of Elevate Brands, which owns some two dozen Amazon sellers. “We’ve had several companies offer us their portfolio.”
Read the full article: Thrasio, Perch and others are betting $9 billion that the consumer-goods conglomerate of the future will be built on Amazon.
