Amazon Now Accounts For 49% Of Online Retail

Amazon will account for accounts for 49.1% of all online retail sales, up from 43% the year before, if they clear an expected $258 billion in sales this year.

The stunning figure provided by research firm eMarketer is tempered by the fact that Amazon's near-majority share of online sales accounts for just 5% of all retail sales. Amazon is set to rake in $258.22 billion in US retail sales in 2018, while annual growth has jumped 29.2% year-over-year, reports Tech Crunch.

Fueling Amazon's rise is a robust network of third-party sellers and a rapidly expanding range of goods from groceries to fashion - made all the more attractive for subscribers of their Prime services. 

Now, it is fast approaching a tipping point where more people will be spending money online with Amazon, than with all other retailers — combined. Amazon’s next-closest competitor, eBay, a very, very distant second at 6.6 percent, and Apple in third at 3.9 percent. Walmart, the world’s biggest retailer when counting physical stores, has yet to really hit the right note in e-commerce and comes in behind Apple with 3.7 percent of online sales in the US. -TC

Popular categories:

The most popular category on Amazon is consumer electronics and tech, with projected sales of $65.82 billion according to eMarketer; around a quarter of total turnover. Second in line is apparel and accessories, which should account for roughly $39.88 billion, followed by health, personal care and beauty with $16 billion. In last place is food and beverage trailing at $4.75 billion.

EMarketer arrives at their estimates "based on an analysis of quantitative and qualitative data from research firms, government agencies, media firms and public companies, plus interviews with top executives at publishers, ad buyers and agencies." 

What's more, Amazon is expected to drive over 80% of ecommerce growth this year.

Bread and butter

By in large Amazon's largest cash cow is their Marketplace - a third-party sales platform on which sellers can use Amazon's retail and logistics infrastructure to hawk their wares. It currently accounts for 68% of all retail sales - or around $176 billion. Direct sales from Amazon comprise the remainder. 

It’s no wonder that so many other online commerce businesses are chasing the marketplace model, which essentially creates transactions on two fronts for the platform operator, thereby improving margins that might be cut by not selling items directly. -TC

“The continued growth of Amazon’s Marketplace makes sense on a number of levels,” said Andrew Lipsman, eMarketer's principal analyst. “More buyers transacting more often on Amazon will naturally attract third-party sellers. But because third-party transactions are also more profitable, Amazon has every incentive to make the process as seamless as possible for those selling on the platform.”

Given that Amazon now accounts for roughly half of all online sales, one might think it's ripe for an antitrust investigation. That said, all of Amazon's sales only amount to five percent of all retail sales across the country

Comments

oDumbo Four Stop Thu, 07/19/2018 - 04:04 Permalink

Why is it that this never could have happened before odumbo?  Three companies controlling the entire internet, basically almost all of our “free speech”.  Search, social and commerce.  

Now look at the profile and special interests of the heads of this three headed snake.  Anyone wondering why the sky keeps getting darker in this country?   

In reply to by Four Stop

warsev Last of the Mi… Thu, 07/19/2018 - 09:09 Permalink

Something else always comes along. The new big thing replaces the last big thing. Walmart was the last big thing but is now being eaten alive by Amazon. It's so bad that Walmart is working on a partnership with Microsoft to try to catch up. MS to handle the online presence and front end; WMT to handle the backend and distribution.

But eventually, Amazon will become the last big thing and something else will eat it alive. If only I could know what that will be I'd get rich.

In reply to by Last of the Mi…

Endgame Napoleon Last of the Mi… Thu, 07/19/2018 - 11:13 Permalink

It said their biggest success is their third-party platform, which lets customers order from third parties online and then delivers the goods for the smaller businesses. They are like digital middle men. Except for the Whole Foods stuff that Amazon owns, they do not deliver their own goods, and grocery ordering / delivery is their lowest-performing category. 

In reply to by Last of the Mi…

Antifaschistische SixIsNinE Thu, 07/19/2018 - 09:43 Permalink

I was an early adopter of Amazon...back when it was a collection of millions of little guys selling their 'stuff' on the Amazon platform.   I still buy an occasional book from Amazon because these owner-operator publishers use Amazon as their only distribution mechanism.  That's fine.

However, in the past year, I have rarely bought anything on Amazon because the pricing and shipping terms are always better on other sites.   Is the current Amazon base just too lazy to look anywhere else?   Not that I care...sounds like the millennials are shinning through again.  I hear it at work, "I do ALL my shopping on Amazon".  My unspoken words are "you may as well tattoo 'sucker' on your forehead".

In reply to by SixIsNinE

Straw Dog new game Thu, 07/19/2018 - 10:32 Permalink

Amazon Third Party Sellers list their items for sale on Amazons Marketplace.
They can also cross list the same items for sale on Ebay.
When you buy the item on Ebay the Third Party Seller has Amazon ship the product to you from Amazon stock.
Nothing fishy, just offering the item for sale on two different platforms and using Amazon for order fulfillment.
It's called Multi Channel Fulfillment in Amazon lingo.

In reply to by new game

Solosides css1971 Thu, 07/19/2018 - 03:04 Permalink

If you are vendor selling through Amazon, they are horrible at what they do. Imagine having a large chunk of your business be handled entirely by Pajeet in India who refuses to ever use a phone. And when the American Amazon employees contact you, after multiple angry emails to the Indians, it's to remind you "FUCK YOU, we're Amazon and we'll do whatever the fuck we want".

In reply to by css1971

DavidC css1971 Thu, 07/19/2018 - 06:05 Permalink

Yeah right. Try and set up a business competing with a company that doesn't make a profit because it's unercutting everything and everyone to get market dominance. As a smaller player you'll NEVER be able to compete, it's NOT cheap and easy.

 

Usng Amazon is like a turkey voting for Christmas. Everything is fine until there is no one else to use because they've been driven out of business and then wondering why your neck is being strangled.

 

DavidC

In reply to by css1971

Endgame Napoleon Solosides Thu, 07/19/2018 - 11:30 Permalink

If they are anything like other bigly American companies, they will soon automate the customer service process, and at that point, you will not know where the CSR is located. Is the chat agent outsourced? Who knows?

At some point, Amazon may notice the unintended consequences of displacing so many American workers, seeing their sales drop since so many Americans are underemployed. But....oh wait....it does not matter to any of these global companies since they sell across the globe.

Since government pays so many citizens & noncitizens to have sex, reproduce and work part time, staying under the income limits for monthly welfare programs that supplement their meager pay, global companies can just market to the welfare & refundable child-tax-credit consumers to get some of the American “market.”

The issue of whether or not Amazon is a monopoly, when they are really just an ordering / delivery platform for smaller retailers, is kind of complex, but the way that global corporations have defeated the nation state and, by extension, the US Constitution is another issue.

In workplaces and at the ballot box, American citizens have zero leverage anymore. Since these American-owned / global corporations have the whole world as their stage, American voters and consumers are mostly just puppets being played with.

In reply to by Solosides

Bollockinell shemite Thu, 07/19/2018 - 04:52 Permalink

" They are undercutting everyone elses prices while running at a loss. It will be great for customers until it isnt because of a lack of viable competition. "

I think you will find it is worse than that because, like the article says, 68% of their business comes from Amazon Marketplace. So, what happens is that resellers compete against each other with the only way of winning the business being to offer the lowest price. Amazon loses nothing because they have no money invested in the stock. On the contrary, here's a look at some of the income Amazon generates for itself via this technique:

1. Amazon store monthly fees (you pay whether or not you make any sales)
2. Freight By Amazon (FBA). This includes storage fees, shipping fees, packaging fees, and the list goes on... They even charge separately for packing tape!
3. A to Z guarantee (the customer is always right). Customer makes a complaint under this guarantee and almost always gets to keep the goods and have his purchase refunded. The seller takes it up the A*S every time!
4. Amazon's commission on each sale which varies according to the category you have choose for your offer to appear under.

I could go on, but the take home point here is that unless you have a niche market with zero competitors, your only way to make sales is to undercut everyone else and, as many a fool eventually realizes, this formula will put you out of business while Amazon continues smiling all the way to the bank...

In reply to by shemite

tangent css1971 Thu, 07/19/2018 - 09:20 Permalink

No, Amazon is popular first and foremost because they get free IP from customers posting reviews. Any break-up of Amazon should actually be splitting their review system into three different companies where Amazon buys the review data from one of them. Review revenues should go to customers as payment for reviewing. This would be a low-disruption way to end their dominance.

They are popular secondly because they temporarily lower prices to push out competitors and achieve the subsidy-level postal rates. I'm not impressed by Amazon because of how they got to top slot while earning basically no profits. It is temporary. They will be 5% of sales or less in 50 years because all of these things can be distributed over peer-to-peer networks that can and will eliminate middle-men.

In reply to by css1971

Skateboarder SuzerainGreyMole Thu, 07/19/2018 - 03:12 Permalink

I also support the last remaining brick-n-mortar electronics shop in town. The two dudes who own Halted Supply Company in Santa Clara had provided us all kinds of electrical, electronics, mechanical components, tools, and parts for years and years, and now they are approaching past retirement and gotta sell the shop.

Bought a soldering iron from em recently for $145+tax, when I could have bought the same thing on Amazon for $91 and no tax, free shipping.

Without customers, businesses close down.

In reply to by SuzerainGreyMole

prmths2 Skateboarder Thu, 07/19/2018 - 04:09 Permalink

About 25 years ago I bought a nonfunctional used HP instrument from Halted and remarked that I was just buying it for the case since it was a better deal than any new case that was available. I was never able to get another bargain like that on a used instrument, although I looked on a regular basis since I worked within walking distance. The case is still in use.

In reply to by Skateboarder

TheMexican Thu, 07/19/2018 - 03:20 Permalink

You know whats fucked up?  I just purchased a DELL laptop. I tried to purchased directly from DELL but they made it so difficult.  They wanted to verify who I was after the credit card verification.. I spent closet to 2 hours on hold with them and sent them screen shots trying to get through to the verification dept.. anyway I hung up because of time. I went Amazon and found the same laptop and made the purchase with zero problems.  The order shipped the same day I ordered it.  

Three days later I received an email from DELL apologizing and asking for my order.  LOL  I told them to fuck off.

Dell makes good computers.  I like that they went private.  My brother loves them.

WTF is going on?

chubbar css1971 Thu, 07/19/2018 - 07:21 Permalink

Sort of unrelated but along the same line. My buddy has a mid-sized construction company, had the contract for several of the trades on a decent sized hotel being built. The supervisor botched the job so badly that just his work had overruns of almost half a million. Really stupid shit that would have been picked up by most anyone reading the blueprints with more than a passing interest.

Many of his construction friends, some with large companies, have started commenting that the new guys in supervisory positions are really borderline incompetent. Not all, but so many that it's being noticed. This in the New England area.

In reply to by css1971

Jack's Raging … chubbar Thu, 07/19/2018 - 10:24 Permalink

I work in construction and manufacturing. The problem in industry right now is that many of the project managers and engineers are fresh college graduates with "Construction Management" degrees. We're just at that point in history where the old guard is rapidly retiring. Companies also like replacing their staff with cheap degreed labor.

The problem up top is that people lack experience, and actual first-hand knowledge on the skills of the trades that they oversee. Simultaneously though, construction/manufacturing methods, materials, and standards have become significantly more complex, and evolve rapidly. More advanced and specialized skill sets are needed than ever. Many people in the trades are poorly educated and are not up to task for these demands. This would be less of a problem, if pay would be improved.

I make my money by existing in both worlds and providing expertise to both classes. I help the people upstairs get things done, and I help the people downstairs get things done right. A huge problem with relying on people like me though, is that I can't be everywhere at once.

In reply to by chubbar

Wahooo TheMexican Thu, 07/19/2018 - 06:32 Permalink

Amazon is a distribution company, not a retailer and they've revolutionized distribution. That's why they can do what they do. Most retailers are having a hard time integrating online order entry to distribution and logistics. Sound simple, it's not, especially when you're traditionally and brick and mortar business and mindset. Dell of course is neither a distributor nor a retailer, little DNA there for an effective retailing experience.

In reply to by TheMexican

brooklinite8 Thu, 07/19/2018 - 03:28 Permalink

Amazon is really good at what they are doing. They are atleast 10 yrs ahead of their peers. Bezos is a genius to keep this Ponzi ship together. Exceptionally well.

Talking from consumer perspective the whole process is seamless. Other sites are having issues. It's amazing that the next best thing to Amazon is not even relevant. Bezos will bring in trillions in revenue. As far as earnings go he might have to make that on volume. Razor thin business operated by the sharpest mind.

Local business, Capitalism, Lobbying are  different arguments for another day. As far as efficiency goes amzn is the gold standard.

To Hell In A H… Thu, 07/19/2018 - 03:28 Permalink

I would dearly love to slander and castigate the Kikes and Jeff Bezos over Amazon, but I simply can't. Yes they pay low wages to their generic staff, but what Amazon offer is a service. It is not compulsory. No guns are pointed at any heads.

The unlimited credit line Amazon recieved given to it by Jewish Banksters, I would argue is exclusively reserved for fellow Jews, with extremely good business plans so they can succeed, but given its business plan to smash all competitors and corner a large chunk of the market, it was extremely successful and turned out to be accurate.

Can I resent a man, irrespective of race, colour and religion for being this successful? I would have to be a biggoted Trumptard to do that. I have purchased from Amazon UK. I can collect the items from my local Newsagent/One stop shop in 2 days between 7am an and 11pm. Amazon has everything electronic I could ask for and some more on top of that.

I simply can't complain, or pull the anti-Jew card on this one and I'm very anti-Jewish when it comes to Zionism, Israeli-Jewish wars and Central Bank FIAT scam, Goldman Sachs style Banksterism.

Hats off and well done.

pitz Thu, 07/19/2018 - 03:37 Permalink

All that market share.  Still can't earn a meaningful GAAP-compliant profit.

How much longer will investors accept the ruse?