Third-party Sellers’ Share in Amazon’s Q3 Earnings

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Third-party sellers on Amazon fuelled the financial growth of the eCommerce giant for the third fiscal quarter of this year.

Amazon’s total net sales of $32.7 billion for the quarter is a 29% increase from $25.36 billion for the same period in 2015.

Their profit increased dramatically to $252 million from $79 million a year ago.

Aside from the Electronics and Other General Merchandise (EGM) segment, which accounts for 32% of Amazon’s revenue growth, outside sellers were also a major contributor to Amazon’s financial success.

They sold 50% of units on Amazon marketplaces worldwide, the highest mark they’ve reached so far.

Well done Amazon sellers!

Continuous Expansion and Launches

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The last three months also saw Amazon working on a lot of expansions and new launches.

One of the things which they expanded was their Handmade category which was first launched in the US a year ago.

Handmade is now available in Amazon UK, Germany, France, Italy and Spain.

It won’t be long before it goes head-to-head with Etsy in the battle for the best marketplace for handcrafted items.

Amazon also expanded Alexa and Echo Dot into Germany and the UK following their release of the second generation Echo Dot.

In his official statement on his company’s third-quarter earnings, Amazon CEO Jeff Bezos said:

“Alexa may be Amazon’s most loved invention yet — literally — with over 250,000 marriage proposals from customers and counting. And she’s just getting better. Because Alexa’s brain is in the cloud, we can easily and continuously add to her capabilities and make her more useful — wait until you see some of the surprises the team is working on now.”

The total revenue of Amazon’s cloud computing services increased by 50.4% to $10.38 from $6.90 billion in the same period last year.

Plans for the Holidays

Amazon Fulfilment Centre

Amazon will hire for 120,000 seasonal jobs in their fulfilment centres and customer support department for the upcoming holiday season.

After last year’s holidays, they absorbed 14,000 of their seasonal employees for full-time roles.

According to the giant retailer, that is likely to happen again, except that they’re aiming for a bigger number this time around.

In connection with their fulfilment centres, Amazon has changed their FBA fee structure for the fourth quarter to be able to enhance their fulfilment capacity.

The company recalled how loaded their fulfilment centres were in last year’s holiday season, from November to December.

They said changing the FBA fee structure will prompt sellers to zero in on products which are likely to sell by the end of the year.

You may click here to see Amazon’s new FBA inventory storage and weight handling fees.

Amazon’s impressive financial growth in Q3 2016 seems to speak of what lies ahead for the company.

What is your forecast for the Amazon marketplace this fourth quarter?

Share your thoughts in the comments below.

To your continued success,

Dave & Matt

 

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