‘Third-party sellers are kicking our first party butt, badly’ Amazon CEO

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Third-party sellers are kicking our first party butt, badly,’ is how the Amazon CEO Jeff Bezos describes Amazon sellers’ sale growth which have eclipsed the marketplace’s own first party retail sales revenue.

In a 2018 letter to shareholders released today, Jeff Bezos considers the rise of third-party sales over the 20 years. He says that independent small and medium-sized businesses (SMBs) have grown from 3% since 1999 to 58% in 2018.

Year Percentage Year Percentage 1999 3% 2009 31% 2000 3% 2010 34% 2001 6% 2011 38% 2002 17% 2012 42% 2003 22% 2013 46% 2004 25% 2014 49% 2005 28% 2015 51% 2006 28% 2016 54% 2007 29% 2017 56% 2008 30% 2018 58%

 
Jeff points to Amazon’s first-party business which has also grown significantly over two decades. Amazon saw $1.6bn (£1.2bn) in 1999 soar up to $117bn (£89bn) this past year. The compound annual growth rate for Amazon’s first-party business in that time period is 25%. However, in that same time, third-party sales have grown from $0.1bn (£0.076m) to $160bn (£122bn) – a compound annual growth rate of 52%. To provide an external benchmark, Amazon compare eBay’s gross merchandise sales


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