Amazon's ongoing expansion of logistical capabilities is one key to pleasing its small- and medium-business sellers.
Small- and medium-sized merchants in the United States sold more than 3.4 billion products on Amazon in the 12 months ending May 31, a 26% increase from the previous year. That’s according to the Seattle-based company’s new "2020 Small and Medium Business (SMB) Impact Report."
Those SMB sellers, on average, had sales of about $160,000, up from $100,000 in the previous year, an increase of 60%.
Not only that, but the number of Amazon SMB sellers with more than $1 million in annual sales increased by more than 20% — with 3,700 sellers achieving that mark for the first time during the reporting period.
Business-to-business sales by SMB also brought in big business during the 12 months ending May 31, with those sales exceeding $7 billion, Amazon said. The e-commerce operator estimated that SMBs selling on Amazon support 1.1 million U.S. jobs, up from 830,000 in 2019, an increase nearly 33%.
“At Amazon, supporting small and medium-sized businesses is a fundamental part of our work and an extension of our customer-centric culture. Our success depends on their success,” said Jeff Wilke, CEO, AmazonWorldwide Consumer. “COVID-19 has changed the way we live and work and has created daunting challenges for small businesses around the world. Yet smaller companies have continued to grow with Amazon, despite the crisis. Third-party sellers have seen record sales in our stores and continue to outpace our first-party sales."
State SMB Rankings
Amazon also detailed the states with the most SMBs selling on Amazon per capita:
Iowa – with nearly 10,000 SMB sellers
Delaware – with over 3,000 SMB sellers
California – with over 100,000 SMB sellers
Wyoming – with over 1,000 SMB sellers
New Jersey – with over 20,000 SMB sellers
Vermont – with over 1,000 SMB sellers
New York – with nearly 50,000 SMB sellers
Utah – with over 7,000 SMB sellers
New Hampshire – with over 3,000 SMB sellers
Florida – with over 50,000 SMB sellers
The top 10 states with the fastest year-over-year growth by digital entrepreneurs:
Iowa – 57% growth
Washington – 56% growth
Alabama – 53% growth
Virginia – 50% growth
Louisiana – 49% growth
Georgia – 45% growth
West Virginia – 45% growth
South Dakota – 45% growth
Rhode Island – 40% growth
Alaska – 38% growth
Amazon on Wednesday also provided an update on how it's using Amazon Web Services (AWS) to help SMBs perform better on the e-commerce platform.
“Since June 2019, Amazon has provided more than $1 billion in AWS credits to help startups accelerate their growth and development, up from $500 million in 2018,” the company said. “AWS Activate has provided hundreds of thousands of startups with a host of benefits, including AWS credits, technical support and training.”
Amazon’s new report on SMB sales also came with other statistics that help paint a picture of ongoing e-commerce trends and related issues. That includes delivery and logistics. Amazon said that it now works with more than 1,000 Amazon Delivery Service partner businesses in the United States, and that those partners employ more than 82,000 drivers. Additionally, U.S. line-haul service providers that move Amazon packages between fulfillment centers and to and from air hubs employ more than 13,000 drivers, up from 3,700 in 2018.
Amazon, of course, continues to build out its logistical capabilities, most recently via the debut of larger delivery trucks. The company is also investing in the speed of its supply chain by leasing an additional 12 Boeing 767-300 aircraft ahead of next year’s opening of the Amazon Air Hub near Cincinnati. The new Air Hub also promises to make for more crowded skies above southern Ohio and northern Kentucky, as the massive UPS Worldport air facility is only two hours away, in Louisville.
Amazon is scheduled to report its second quarter results on July 30 after the market close.