Amazon’s third-party fulfillment business, in which big retailers like Gap or Eddie Bauer sell their goods on Amazon and use the site to warehouse and ship their products in return for a cut of the sale, has been growing briskly. The company doesn’t break out those revenues, but in its first-quarter results, Amazon said items shipped for sellers who used its third-party fulfillment services were up 300% from the prior year.
Many observers think success in this area is key to Amazon’s ability to stay dominant in the e-commerce space. So how much more growth can Amazon extract? Plenty, according to RBC Capital Markets analyst Stephen Ju. Ju pored over Amazon’s listings and contacted vendors, and says Amazon’s third-party numbers for the second quarter, which Amazon hasn’t released yet, will represent impressive growth, with international showing the most strength.
–U.S. third-party listings grew 5 percent to 10 percent in the second quarter 2009.
–U.K. third-party listings grew about 60 percent during the quarter, while Germany, Japan and France grew in the triple digits.
–Increased selection is also boosting Amazon results. The company added office supply items internationally and expanded its jewelry selection in Japan.
eBay (NSDQ: EBAY) remains well ahead of Amazon in selling goods for third parties–Piper Jaffray analyst Gene Munster estimates it sells 10 times as many third-party goods as Amazon (NSDQ: AMZN). But Amazon’s momentum in this area could put pressure on eBay, which has had some trouble retaining sellers recently.
{"source":"https:\/\/gigaom.com\/2009\/06\/08\/419-analyst-amazon-third-party-sales-driving-growth\/wijax\/49e8740702c6da9341d50357217fb629","varname":"wijax_f4135bc01434b1d1723622cbc98ab399","title_element":"header","title_class":"widget-title","title_before":"%3Cheader%20class%3D%22widget-title%22%3E","title_after":"%3C%2Fheader%3E"}