09/02/2020

Amazon Details $18B Marketplace Investment Plan

Third-party sellers continue to account for more than half of all units sold in Amazon’s store.

Amazon said that it’s on course to invest $18 billion in 2020 to help independent businesses sell to customers, including investments in logistics, tools, services, programs, and people. This announcement is the latest move by Amazon to put its marketplace practices into a positive light amid increasing pressure for regulation.

Since the beginning of the year, Amazon said, it has launched more than 135 free tools and services to help sellers grow their sales in Amazon’s store. In the next 12 months, the company will provide more than 500,000 U.S. small and medium-sized businesses (SMBs) currently selling on Amazon with online selling guidance, education, and support, and the company plans to onboard an additional 100,000 U.S. businesses as new sellers in its store.

The announcements were made at AmazonAccelerate – a three-day virtual summit for U.S. SMBs that are currently selling in Amazon’s store or interested in doing so.

Amazon Accelerate is the company’s largest-ever U.S. event focused on providing existing and aspiring sellers with insights and ideas for how small businesses can thrive in Amazon’s store. Despite the impact COVID-19 has had on small businesses, many American SMBs selling through Amazon have experienced continued growth. Third-party sellers continue to account for more than half of all units sold in Amazon’s store, and even during the pandemic, third-party sales continued to grow faster than Amazon’s first-party sales. In the twelve-month period ending in May, American SMB sellers sold more than 3.4 billion products, up from 2.7 billion year-over-year, and averaged $160,000 in sales, up from approximately $100,000 a year prior.

“At Amazon, our mission is to be Earth’s most customer-centric company, and part of fulfilling that mission is connecting small businesses with customers,” says Jeff Wilke, CEO Worldwide Consumer at Amazon, who opened the event with a fireside chat with Dharmesh Mehta, Vice President, Customer Trust & Partner Support at Amazon. “Amazon’s success is directly tied to the success of independent businesses across the U.S. We are passionate about supporting small businesses, investing and inventing on their behalf to help them be resilient through COVID-19 and beyond.”

Amazon also said it will invest $100 million to help small businesses around the world increase their sales and reach new customers this Prime Day and throughout the holiday season.

Last year during Prime Day, third-party sellers – mostly SMBs – exceeded $2 billion in global sales. This new investment will go toward putting a spotlight on the diversity of small businesses selling in Amazon’s store, positioning them for increased sales during Prime Day and throughout Q4. Further details will be announced closer to Prime Day.

Amazon has launched 135 free tools this year for sellers to help them gain insights, protect and build their brands, and delight customers. For example, “Repeat Purchase Behavior” provides insights that let sellers leverage data on how customers engage with brands. “Brand Follow” represents Amazon’s investment in customer relationship management tools, allowing sellers to connect with customers who have shown an interest in the brand through features like personalized posts on the homepage.