How Many Amazon Sellers Are There in 2024?
Amazon has revolutionized retail, providing independent sellers access to hundreds of millions of customers globally. The Amazon Marketplace now accounts for more than half of all units sold on Amazon worldwide. But exactly how many Amazon third-party sellers are operating today?
In this in-depth analysis, we’ll uncover the latest data and trends shaping the explosive growth of Amazon’s seller ecosystem.
Key Amazon Seller Statistics
Let‘s start by reviewing some top-level stats reflecting the current scale of Amazon‘s third-party marketplace:
- There are over 9 million active sellers globally on Amazon
- Over 1.5 million new sellers joined Amazon in 2022 alone
- 57% of all units sold on Amazon are from third-party seller
- The US comprises the largest base with over 2 million sellers
Already we can see that the population of businesses leveraging Amazon to reach customers is massive and expanding quickly each year. Next we‘ll analyze some of the key drivers fueling this growth.
Why Amazon is attracting record numbers of new sellers each year
There are several major reasons why entrepreneurs around the world are flocking to sell on Amazon Marketplace:
1. Instant access to over 300 million customers
As the largest ecommerce platform globally, Amazon provides instant access to more than 300 million customers worldwide. Given the vast buyer intent already active across Amazon’s properties, it offers a hyper-targeted base of buyers difficult and expensive for merchants to reach independently.
For context, that 300+ million customer base is larger than the entire population of the United States. This makes Amazon effectively the world‘s largest virtual mall for merchants to set up their digital shops in.
2. Higher sales conversion rates
Thanks to Amazon‘s world-class site design, UX research, and trust factor with consumers, sales conversion rates significantly exceed non-Amazon online stores. Sellers consistently report 2-3x higher conversion rates on Amazon compared to their independent web stores driving the same traffic.
Higher conversions translate directly into substantially greater revenue and profits – a key reason sellers are eager to tap into Amazon‘s marketplace.
3. Fulfillment and logistics infrastructure
Through Fulfilled By Amazon (FBA), merchants can leverage Amazon‘s unrivaled warehousing and logistics infrastructure to pick, pack and ship customer orders. This allows online sellers to scale rapidly without heavy upfront investments into their own supply chain operations.
In fact over 65% of units sold by 3rd party sellers on Amazon are now fulfilled via FBA, indicating just how critical this capability is.
The above 3 factors make Amazon an incredibly compelling channel and explain why more sellers continue to build their ecommerce presence on Amazon every day. Now let‘s analyze some more granular Amazon seller demographic trends.
Amazon Seller Demographics: Age, Gender and Location
Getting insight into the typical Amazon merchant can help us better understand trends in this community:
Age
The average age of Amazon sellers is 39 years old. This indicates a buyer group with significant business experience compared to very young entrepreneurs. The peak age demographic is sellers between 25-44 years old, which accounts for 58% of the total.
Gender
Roughly 64% of sellers on Amazon Marketplace are male, with women comprising the remaining 36%. While still skewed toward men, women represent a much higher percentage compared to tech entrepreneurship in general. This indicates one of Amazon‘s strengths is empowering a diverse founder group.
Geographic Location
Given its origin and headquarters in the US, it‘s no surprise that America is home to the largest seller group by far:
- United States – 2+ million active sellers
- China – 600,000+ sellers
- United Kingdom – 300,000+ active sellers
However growth is now being driven primarily by emerging economies like China and India, where entrepreneurship opportunities were previously more limited. This is reflected in the fact that over 50% of new sellers in 2022 came from China and India.
This indicates Amazon will likely see it‘s greatest growth outside the US going forward as developing nations continue rising up the economic ranks and internet/mobile penetration improves.
Now that we‘ve explored the scale and demographics of Amazon‘s booming seller ecosystem, let’s analyze performance and earnings data.
How Much Do Amazon Sellers Make?
Given the multi-billion dollar success of merchants like Anker and RAVPower, many entrepreneurs are attracted to Amazon‘s get rich potential. But what are realistic earnings for the typical Amazon seller?
While individual revenue can certainly reach 8+ figures for top brands, the overall distribution reflects a classic "long tail" effect much like app stores, YouTube etc. Here is a breakdown from Amazon:
- 22% earn less than $500
- 13% earn $501-$1000
- 13% earn $5,001-$10,000
- 10% earn $10,001-$25,000
- 8% earn $25,001-$50,000
- 4% earn $50,001-$100,000
So while over 50% of sellers do cross into 5-figure territory, 1 in 5 still remain below $500 in annual revenue.
At the very top end, aproximately 1% of sellers surpass $100k+ in earnings. This indicates that while achieving a full-time income level ($50k+) through Amazon is certainly feasible, ‘get rich‘ success still proves difficult and depends heavily on product selection, marketing skill and investment capital miners don‘t yet possess when starting out.
However, the research indicates there is still validity to Amazon‘s reputation as an income generator and springboard to 6+ figure ecommerce brands. Let‘s analyze why…
Most Sellers Profit Within Their First Year
A common myth is that new sellers shouldn‘t expect profits for multiple years as they learn the ropes and gradually scale over time.
However the data actually reveals most merchants experience positive ROI much quicker. Per Amazon, 68% of sellers were profitable within their first year of opening their online business.
This is driven by a few key factors:
1. Low Barrier to Entry
The startup costs for new sellers on Amazon is extremely low compared to traditional brick & mortar retail, with 25% investing less than $1,000 initially. The days of needing $100k+ just to secure retail space and launch inventory are over.
2. Higher Margins
Without fixed overhead expenses, online sellers enjoy much healthier profit margins. Combined with Amazon‘s world-class fulfillment services, achieving 30-50%+ net margins is common.
3. Sales Velocity
We highlighted earlier the enormous buyer demand already active across Amazon. This enables new products to gain traction much quicker compared to independently having to build an audience completely from scratch.
While success is never guaranteed, the above factors working in unison make profitability within 12 months a very realistic outcome for savvy entrepreneurs.
Now that we’ve covered performance data, let‘s analyze some broader trends…
FBA Emerges as Leading Fulfillment Model
When assessing options to sell on Amazon, merchants have two core business models to choose from:
- Fulfilled By Merchant (FBM) – seller ships orders directly from their own warehouse
- Fulfilled By Amazon (FBA) – seller stores inventory in Amazon‘s warehouses and leverages their logistics network
In the early days of Amazon opening 3P selling, FBM dominated as sellers initially tested demand before offloading fulfillment responsibility.
However as Amazon rolled out two-day Prime shipping and their fulfillment network expanded into millions of square feet of warehouse space, FBA quickly emerged as the default option.
The data confirms this – as of 2022 over 65% of Amazon 3P units are now fulfilled via FBA. And new sellers display an even greater leaning towards FBA, which fuels 72% of first-year merchant sales.
The reason is simple – leveraging FBA provides new sellers instant access to Prime-qualified listings and Free Two-Day shipping eligibility. This in turn boosts merchandising placement, conversion rates and ultimately sales velocity.
As Amazon continue expanding their US logistics footprint with growing air/ground transport capacity, we expect the FBA adoption curve to increase further still.
Which Product Categories Present Biggest Opportunities?
With hundreds of product categories to choose from when determining what to sell online, how do sellers identify opportunities poised for growth?
While demand certainly varies year-to-year, well-established categories that have sustained momentum and sellers for many years include:
Electronics – phones, laptops, TV‘s, smart home gear etc. Complex high ASP products.
Home & Kitchen – furniture, cookware, home decor, appliances
Toys & Games – toys, board games, video games
Beauty & Health – cosmetics, makeup tools, supplements
Sports & Outdoors – fitness gear, hunting/camping equipment
However, nimble sellers should also monitor emerging trends and seasonal shifts for new openings. For example interactive toys, craft supplies and backyard/gardening products all broke out during peak COVID lockdowns.
There also remain underserved niche segments within established departments – think premium kitchen knives or gaming laptop specialist stores on Amazon successfully catering to enthusiasts despite facing broad competition as well.
The takeaway is that opportunities do exist both in mature categories where critical mass of demand already exists as well as targeting specialized subsets of buyers craving deeper product selection and expertise.
The Future of Amazon Marketplace
Given the trajectory we’ve explored within this report – from millions of active sellers already to 20%+ annual growth rates – what is the outlook for Amazon‘s third-party marketplace over the next 5 years?
Here are two predictions grounded in current trends:
Prediction #1: International sellers will represent the majority
Fueled by expansion in APAC especially, the % of Amazon sellers located outside the US will likely exceed domestic counterparts within a few years. The key drivers are rising international mobile/internet adoption and economic advancement unlocking a new generation of entrepreneurs in countries like India and Latin America.
Prediction #2: Amazon retail sales achieve 75%+ 3P mix
Remarkably, 3P sellers drove more than 65% of Amazon’s unit sales in 2022, yet contributed just 57% of dollar sales. This indicates 3P items likely skew slightly lower in average price points currently.
However as more sellers migrate high ticket-items like electronics from D2C websites over to FBA, we foresee the retail sales mix easily crossing 75% and likely approaching 85%+ over time.
For existing and aspiring sellers, this is excellent news – it means Amazon management will remain hyper focused on improving the marketplace experience to fuel this growth that is so vital to their ecommerce leadership.
Final Thoughts
Amazon revolutionized ecommerce fundamentally by allowing independent merchants to tap into their world-leading traffic, infrastructure and brand equity to rapidly scale sales.
This win-win arrangement kickstarted a virtuous cycle over 25 years ago that now sees over 9 million sellers serving hundreds of millions of customers globally via Amazon‘s marketplace.
The statistics we explored confirm both the staggering scale already achieved and huge runway yet ahead as developing nations come online and increasingly look to Amazon as their go-to destination for convenience and value.
For entrepreneurs and small businesses, Amazon presents an unrivaled path today to reach relevant buyers almost instantaneously with minimal upfront investment. Combined with shifting consumer preference toward online purchasing models – especially post-COVID – the opportunity for sellers remains brighter than ever.
