Image default

Amazon’s 1st-party online sales drop to 42% of business as 3rd-party units hit new high

Amazon wants to expand long-term into areas such as a healthcare, self-driving taxis, and home robots, but two data points from its latest results reveal a more fundamental transformation already taking place in its core business.

1. The company’s first-party online store sales of $50.9 billion in the second quarter represented less than 42% of its overall net sales of $121.2 billion.

That’s a new percentage low, according to data tracked by GeekWire.

Five years ago, Amazon’s online store sales were about 60% of its overall sales.

Online store sales fell 4% in the latest quarter, from $53.2 billion a year ago, but the long-term shift results more from faster growth in other parts of Amazon’s business, including Amazon Web Services and third-party seller services. Speaking of which …

2. Third party sellers were responsible for 57% of units sold on Amazon in Q2.

That’s a record high, said Brian Olsavsky, Amazon’s chief financial officer, on a call with reporters after the earnings report Thursday afternoon.

In a related trend, Amazon’s revenue from third-party seller services topped $27 billion, a record for a non-holiday quarter. Third-party seller service include sales commissions collected by Amazon from third-party sellers, and fees the company receives for packing and shipping their orders.

Taking these two trends together — looking black and blue lines in the chart above, and considering the expansion of Prime and fulfillment beyond — it’s not hard to imagine a world in which Amazon makes more money offering services to third-party sellers than it does selling products directly to consumers on its own.

See our coverage of Amazon’s Q2 2022 earnings for more.


Related posts

Amazon is partnering with GNC, PacSun, other retailers to offer same-day delivery

Blake Goodwin

Mysterious company files patent suits vs. Seattle and Sacramento over parking payment technology

Blake Goodwin

Seattle startup Legalpad acquired by payroll and compliance giant Deel

Blake Goodwin

Leave a Comment