In 2022, independent sellers often pay a commission percentage of more than 19 percent per product sold at Amazon. In addition to the 15 percent commission, they pay an average of about 4 percent in advertisements for their products. In 2017, advertising costs were less than half of this, barely 2 percent. This is shown by research by FiveX, provider of a business management tool for sellers on online marketplaces.
According to that report, spending continues to rise. Investments in, among other things, larger stocks and increasingly attractive product presentation have become necessary. This allows only the most efficient and more wealthy sellers to continue to offer their products successfully.
Advertising is an increasingly important part of the company’s revenue. Revenues increased by 500 percent between 2017 and 2021 and already amount to 2.56 to 6.42 percent of turnover. The income from commissions increased by ‘only’ more than 200 percent (with an almost stable commission percentage of around 15% per sale): from almost 18% of turnover to 22% of turnover.
In a search on the platform, Amazon first shows potential buyers advertising sellers. Those who do not advertise will notice this in their turnover.
More than 55 percent of online shoppers in the US now start their search on Amazon. These huge volumes keep platforms attractive. Amazon now has more than 2,000,000 sellers, Bol.com almost 50,000.
High competition, lower margins and higher costs place an even greater emphasis on effective inventory management, streamlined returns management, efficient customer service, up-to-date sales figures and competitor pricing data.