During Q2 2017, For the first time in Amazon’s history the percent of units sold by marketplace sellers exceeds that of Amazon itself. This is the first quarter where marketplace sellers had more sales than Amazon, while Amazon sold $23.8 billion worth of products in the quarter, up from $20.4 billion last year. But this 18 percent growth in retail sales is less as compared to 22% during last year.
Amazon is continuously evoloving into a services company with its major offering ranging from Amazon Web Services (AWS) cloud hosting, to Fulfillment by Amazon (FBA), Amazon Payments, Seller Loans, and Amazon Associates Advertising. All in all, Amazon generated $37.95 billion in sales in Q2, and for the first time passed $150 billion in sales for the trailing 12 months.
Major chunk of Third-Party Seller (3P Sellers) Services include order commissions, related fulfillment and shipping fees, and other marketplace seller services, most important of which is Advertising known as Sponsored Product Ads. This is used by brands and sellers to increase their sales. The product advertising reached $945 million in Q2, as brands fight to get a sale. This area is expected to grow even higher with more large consumer product companies joining the marketplace. Amazon is taking away revenue from Google by solidifying as the default place to start retail search, and providing opportunities for brands to advertise there.
While Amazon posted a profit for the 9th straight quarter it has failed to meet analysts expectations. The profit was much lower than expected as Amazon continues to invest into international expansion, with India being one of the major areas of focus while upcoming expansion into Australia is already underway. Losses reached -$724 million for the segment, eroding the profit from AWS and North America.
To get ready for impending Amazon Australia Launch, check out our take on this opportunity for sellers to start or grow their existing business.
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