In further proof of just how massive a footprint Amazon (AMZN) has in online transactions, a new report shows that Amazon Marketplace accounts for about 25% of all online spending in America, according to Marketplace Pulse.
In other words, a quarter out of every dollar spent online goes to the marketplace, a dominance no other company, not even Amazon’s traditional retail platform, can claim. Though that retail platform still does better than anyone else.
To Market, To Market
Launched in 2000, Amazon Marketplace allows for third-party transactions between buyers and sellers, so if you’ve bought or sold a used DVD through the service, you’ve taken part in the Amazon Marketplace. The platform is so popular that in the third quarter of 2021, 56% paid units on Amazon were sold by third-party sellers, according to Statista.
But since it’s introduction, Amazon Marketplace has grown from what was initially viewed by some as the service’s answer to similar buyer-to-seller websites such as eBay and Craigslist, which it far exceeds because of the built-in name value and customer base of Amazon, to its own entire online ecosystem.
To put it in perspective, if it were a completely separate company, Amazon Marketplace would still count as the largest online retailer in the country.
More than 300 million people and small-to-medium businesses sell through Amazon Marketplace, or the businesses will sell through the marketplace in addition to selling directly through their website platform.
But there’s a tight correlation between the two branches of Amazon. When Amazon the company changes its various fees, the marketplace is affected, and when Amazon introduced advertising for its third-party sellers, Marketplace Pulse notes that “over time it became a requirement because as some sellers opted-in, others had no choice but to follow.”
Amazon Dominates E-Commerce
Amazon Marketplace accounts for 25% of all online sales. Even if you took it out of the equation completely, the regular Amazon store would still dominate the online marketplace, accounting for 17% of all sales. Its next nearest competitor would be Walmart, which is less than half of the size of Amazon.
Amazon is so dominant that Marketplace Pulse reports that it would take combining the next five mass-market retailers, Walmart, eBay, Apple, The Home Depot and Target, to equal its size.
Shopify At Number Three, Sort Of
The Marketplace Pulse list doesn’t account for stores than run on Shopify, an online service that helps people create and maintain an online business.
But if all Shopify merchants counted as one retailer, it would constitute a roughly 10% market share, making it the third-largest in the U.S. That’s not enough to challenge Amazon’s dominance, and many of the stores with an online platform also use the Amazon Marketplace, but for anyone who complains that Amazon has too much control over online sales, it’s at least a small alternative.
