October is all about Halloween. 7 out of the TOP 10 sellers are selling costumes. Compared to last October we are seeing a big shift in selling. Last year big sellers were able to participate in Halloween sales, however this year it is all about smaller sellers. The marketplace is shifting from massive retailers selling every brand possible, to small sellers focused on a few brands or manufacturers selling their own products.
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Just like we predicted when we looked at Amazon's Q2 results, by the end of the year marketplace sellers will finally be generating the majority of sales for Amazon. The marketplace share has been rising by 1% every quarter and in Q3 2016 it has reached 50%. This is a key turning point event because in 2017 marketplace sellers will be generating more sales than Amazon itself.
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Since including Etsy data in August we have been working hard on understanding how this marketplace functions and what insights we could uncover. Starting today we have enabled everyone to see how many products a seller has sold and how much feedback ratings they have received during the last month. More than 400,000 shops have sold at least one product in a month, while over 1.7 million have lifetime sales.
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Amazon recently sent out emails to marketplace sellers with the following message: We recently updated our policies to prohibit incentivize reviews, including those posted in exchange for a free or discounted copy of the product. You are receiving this email because products you sell have received incentivize reviews in the past. If you attempt to acquire incentivize reviews going forward, your Amazon privileges will be suspended or terminated.
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Recently Amazon changed their policy on sellers giving free or discounted products in exchange for reviews, banning this activity. Previously many sellers used various online services to get reviews. With Amazon no longer permitting this practice, reviews' providers are left having to figure out what to do next. We looked at their web traffic and found that it has started to drop drastically
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eBay reported Q3 2016 financial results this week. Gross Merchandise Volume (GMV) grew to $18.9 billion, up from $18.6 billion last year, but only by 4%. In comparison eBay did $19.7 billion in sales in Q2 up by 5% from the year before. Overall, the results are not promising. Furthermore eBay active buyers growth is slowing down. In Q3 eBay had 165 million buyers, up by 3% from last year.
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Recently we saw multiple articles calling the Amazon's Buy Box algorithm unfair. We do not agree with this view. Amazon marketplace is built on delivering the best customer experience. Customer experience includes things beyond price - things like shipping price, likelihood of a seller being reliable, customer support quality etc.
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Today Trans World Entertainment has acquired etailz for $75 million in cash and stock. Founded in 2008 etailz has become one of the largest Amazon marketplace sellers, consistently in the TOP 10. It was reported that over the 12-month period ended September 2016, etailz generated $116 million in revenue. And from 2013 to 2015, sales grew from $27 million to $93 million. Getting beyond the $100 million revenue threshold is a rare achievement and very few sellers have ever went there.
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Since we looked at the Walmart Marketplace in August 1,000 new sellers have been joining the marketplace every month. Since August the marketplace has doubled in size to now have more than 4,000 sellers. Not only that, but since August active sellers - sellers who went beyond joining the marketplace and had sales - have doubled too. There are 1,000 active sellers on the Walmart marketplace already.
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We estimate that more than 30% of all active Amazon.com sellers carry less than 10 products and 2 or less brands. Many of those sellers could have boosted their sales by using incentivized reviews, however last week Amazon put a stop to this practice. While many of the biggest Amazon sellers are carrying dozens of brands, a growing amount of sellers are manufacturers selling their own brand or new sellers building a brand. This is why we think incentivized reviews were so used by smaller sellers as that allowed them to have drastic increase in sales.
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