Independent Sellers Are About To Experience Explosive Growth

As online sales boom, the number of third-party sellers on Walmart and Amazon continues to grow.

The growth rate of independent sellers on the market isn’t slowing down anytime soon. Independent or third-party sellers as a segment are expected to grow by triple digits next year, driven by strong online sales. However, anyone looking to join the game will need a clear strategy and understanding of the challenges they face.

According to Amazon's financial report released last February, the online giant generated $4.8 billion in sales from independent sellers alone during the start of the 2020 holiday shopping season, the four-day period between Black Friday and Cyber ​​Monday. . In data provided to Reuters by Marketplace Pulse, Walmart's marketplace swelled to 70,000 unique sellers last year and is expected to grow 146% by the end of next year.

Michael Bennett, co-founder and managing director of Envoy, said Amazon’s third-party marketplace has “provided business owners with an incredible opportunity for many years to reach millions of online shoppers around the world and increase brand awareness.”

"Business owners and individuals new to the world of e-commerce are scrambling to set up their accounts to private label or move their online or brick-and-mortar stores to Amazon," Bennett said. There are more than 6 million third-party sellers on Amazon. , more than half of which are sold in North America. Amazon is rapidly expanding its presence internationally and will soon see additional surge in other markets."

While the opportunity is ripe, anyone who wants to become a third-party seller needs a sound business plan and a clear strategy.

Entrants to the independent sales segment of the market must also be aware of these challenges. “Ecommerce sellers on Amazon and Walmart are often caught off guard when faced with the policies, fees, and approval processes enforced by these platforms,” Bennet explains. “Before diving in, you must research the category you are selling and dial in your costs and bottom line numbers, and be prepared to pay per click. "

Mousumi Behari, head of digital strategy practice at Avionos, said the third-party seller market is growing rapidly. “On Amazon alone, the market generated $25 billion to $39 billion in profits in 2020. The initial growth was driven by online shopping driven by the COVID-19 epidemic. Boom-driven; however, the current market will continue to grow as consumers become more reliant on the convenience of e-commerce."

Regarding other challenges, Behari said one of the biggest obstacles facing third-party sellers "is standing out from the competition. Amazon has more than 2.5 million sellers, a number that can be daunting for people who want to make money."

The market prospects are good, and independent sellers are about to experience explosive growth, but there is still a long way to go to become an excellent independent seller.