money Amazon Plans to Spend $18B to Help Indie Sellers
Amazon would rather be known as a champion of brands and small businesses, rather than an e-commerce overlord that treats the sellers in its retail fiefdom unfairly.
So its latest announcement seems tailor-made to fit into that narrative: On Tuesday, the e-commerce titan said it’s on the way to spending $18 billion this year to help independent businesses sell to shoppers. According to the company, the investments span “logistics, tools, services, programs and people,” with the company releasing more than 135 free tools since the start of the year.
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This year the e-tailer projects adding another 100,000 American businesses to its platform, which already covers more than 500,000 small and medium-sized businesses in the U.S.
Of course, beefing up third-party efforts helps Amazon, too. Third-party sellers bring in more than half of its marketplace sales, and even through the coronavirus pandemic, these sales grew faster than the company’s own. Amazon noted that, over the year ending in May, sales from U.S.-based SMBs grew from 2.7 billion products to more than 3.4 billion, and with average sales jumping from roughly $100,000 to $160,000.
Jeff Wilke, chief executive officer of Amazon’s worldwide consumer division, summed it up in a prepared statement, saying the company’s “success is directly tied to the success of independent businesses across the U.S.”
Amazon addressed the announcements at its Accelerate virtual summit for merchants. It also revealed that, beyond the U.S., it plans to spend an additional $100 million to help small businesses around the world boost their sales and draw new customers on Prime Day and throughout the holidays.
In July, the company decided to postpone Prime Day from its typical summer timeframe to mid-October. The shift has some retailers worried it will eat into the all-important holiday sales period, which has become even more crucial after a brutal year for stores.
Last year Prime Day raked in more than $2 billion for third-party sellers worldwide. This year, it’s hard to know what to expect. If the economic downturn worsens, people will have less disposable income. But if early holiday shopping sparks Prime Day sales, as feared, the combo could be hard to beat — and that could leave non-Amazon merchants scrambling to drive sales.
