Amazon Share of Market Ceded to “Third Party Sellers”

Jeff Bezos

Amazon is big, but it’s not omnipotent, and new reports this morning show that one of America’s most beloved brands still has to contend with some amount of internal competition.

Reports from Business Insider show that with a market capitalization nearing $1 trillion, Amazon has nevertheless received a trimmed market share rating from observer eMarketer which downgraded Amazon’s percentage of 2019 e-commerce sales from 47% to 37.7%.

The competition, though, is coming from a rather strange place – not from any outside platform competition, but from Amazon’s third-party sellers – parties using the platform to market new, used, collectible or refurbished goods.

In an intern a letter to shareholders, Jeff Bezos recently said that 58% of the merchandise sold on Amazon comes from third-party sellers and proclaimed that “third-party sellers are kicking our first party butt.”

Analysts point out that if there’s a silver lining to this news, it’s that Amazon could conceivably use that lower market share to downplay its market dominance as U.S. regulators get ready for an antitrust probe into the tech sector.

“The House Judiciary Committee unveiled a sweeping “top-to-bottom’ review of unnamed tech companies late Monday, the first such probe by Congressional lawmakers, as reports of a dual effort from the DoJ and the Federal Trade Commission to tackle the perceived dominance and potential abuses of tech giants such as Apple , Facebook , Alphabet and Amazon,” wrote Martin Baccardax at June 4, quoting U.S. Antitrust Subcommittee chair David Cicilline (D- RI):

“The growth of monopoly power across our economy is one of the most pressing economic and political challenges we face today…market power in digital markets presents a whole new set of dangers.”

Changes in Amazon’s reporting can move markets in a big way. Any retail plays benefit from close due diligence of how e-commerce stores are cutting market share from brick and mortar businesses – and who’s collecting those dollars.