As Amazon Dominates Marketplace Sales, Online Retailers Express Some Concern Over Its Market Share

Amazon continues to dominate the marketplace landscape in terms of driving sales for retailers selling on marketplaces, particularly in the US. There are signs that dominance is also causing some concern among those retailers.

That’s according to a new survey from ChannelAdvisor on e-commerce trends. Sixty percent of the 200 online retailers polled in the US and UK said Amazon generates the greatest sales volume among the online marketplaces they sell on. In the US, 70 percent of retailers named Amazon as the marketplace the drives the most sales. In the UK, Amazon generates the greatest sales volume for half of the retailers polled.

Part of Amazon’s success is driven by Fulfillment By Amazon (FBA), Amazon’s inventory logistics and shipping service. Among US retailers, 60 percent use FBA to ship orders and reach more Amazon Prime subscribers. In the UK, 45 percent of respondents are using FBA. Overall, another 22 percent said they plan to use FBA in the near future.

That said, 48 percent of retailers also said they are “slightly” or “very” concerned about Amazon’s increasing market share in the e-commerce landscape.

Coming in a distant second, just 13 percent of respondents said eBay is their top-selling marketplace.

Marketplaces such as Amazon and eBay are used by 85 percent of the retailers polled. Of those, 32 percent said the marketplaces generate at least 31 percent of total revenue.

The survey also asked what retailers are doing to increase online sales and conversion rates and what other e-commerce tactics they are using.

• Forty percent said offering promotions is their top tactic for boosting conversion rates. A quarter said free shipping works best, and 18 percent said offering the lowest price is the most effective tactic for driving up conversion rates.
• Considering shipping speed, 28 percent of retailers offer same-day delivery. Next-day is offered by 63 percent of those polled, which is more than the percentage of retailers offering two-day (56 percent). In-store pickup is offered  by 14 percent of retailers (74 percent of those polled have at least one physical location).
• When it comes to online payment systems, PayPal is second only to credit/debit cards for 67 percent of retailers accepting payments on their own sites. Amazon Payments came in second, with 15 percent of retailers using the service in both the UK and US.

The survey also asked retailers about their social media strategies and performance by channel. The full report is available for download here.

About The Author

Ginny Marvin

As Third Door Media's paid media reporter, Ginny Marvin writes about paid online marketing topics including paid search, paid social, display and retargeting for Search Engine Land and Marketing Land. With more than 15 years of marketing experience, Ginny has held both in-house and agency management positions. She provides search marketing and demand generation advice for ecommerce companies and can be found on Twitter as @ginnymarvin.