Market Analysis: Amazon 3P Sellers and Manufacturers
Amazon has fundamentally changed the way people shop and the underlying value chain. Amazon accounts for nearly 38% of all online retail sales in the U.S. according to EMarketer Inc., the most widely cited source of U.S. online retail sales estimates. Today, eCommerce is just commerce.
We have seen firsthand how Amazon has changed the value chain. Traditional retailers are fighting to stay alive as distributors and wholesalers that sell 3P (third-party) on Amazon are experiencing a massive boon to their bottom line.
View the full report here:
https://friedlandenterprises.docsend.com/view/yhei7kq
Why we conducted the analysis
To give strategic decision-makers a better understanding of how distributors and wholesalers that sell 3P on Amazon are dramatically improving their margins, sometimes at the cost to manufacturers that fulfill the orders.
Key highlights
- Amazon has fundamentally disrupted the traditional value chain by giving distributors and wholesalers direct access to 300+ million consumers.
- Distributors and wholesalers are incentivized to sell on Amazon because of the easy access to consumers and dramatic improvement to their margin from bypassing the traditional retailer.
- Manufacturers are under increasing pressure to fulfill orders and provide quick drop-ship delivery to end consumers (Amazon has conditioned consumers by offering Prime and Prime Free Same-Day delivery).
- Manufacturers that don’t sell direct have a significant opportunity but they also face the greatest risks and opportunity costs if they don’t participate.
Manufacturers have a significant opportunity
For manufacturers that choose to evaluate the possibilities of selling 3P on Amazon, the opportunities are significant. Manufacturers can benefit in many ways, all of which are significant and can dramatically improve the business.
- Greatly improved gross margin
- Revenue stream diversification
- Closer contact to end consumers
- Access to 300+ million consumers on Amazon
- A better understanding of the online marketplace landscape
Want to sell on Amazon or improve your strategy?
We focus on digital transformation and helping manufacturers sell directly to consumers online, through their site(s) and marketplaces.
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