Is Amazon a Wholesaler or Retailer in 2024? The Surprising Answer

ByCharles Scott Last Update on

I‘ve been an ecommerce seller for over 8 years, first starting out on eBay before expanding to Amazon and various importer/wholesaler platforms. Across all these marketplaces, Amazon stands in a league of its own based on its ubiquitous brand recognition and marketing machine.

However, behind the scenes, Amazon has also quietly nurtured a growing wholesale distribution business. This begs the question – is the Everything Store positioning itself more as a wholesaler or sticking to its retail roots in 2024?

Let‘s analyze the numbers and Amazon‘s strategic bets to reveal the answer.

Retail vs. Wholesale Business Models

Before evaluating where Amazon fits, it‘s important to level-set on the core differences between retail and wholesale business models:

Retail

  • Sells goods individually direct to end consumers
  • Higher profit margins
  • Builds direct consumer brand relationships

Wholesale

  • Sells in bulk quantities to business buyers
  • Serves as intermediary between manufacturers and retailers
  • Operates on razor thin margins made up in volume

Amazon utilizes both models, but weighs significantly heavier on the retail side for now.

The Retail Giant: By the Numbers

Amazon‘s empire was built on revolutionizing retail for the digital era. Despite expanding its ecosystem over 30+ years, consumer sales still dominate in terms of revenue and strategic bets.

To showcase Amazon‘s sheer dominance in ecommerce today:

  • Over 200 million Prime subscribers as of Sept 2022
  • #1 retailer in the US ecommerce market with 41.4% market share
  • 387 billion in North American retail sales in 2021
  • 67% of buyers have purchased consumer goods from Amazon in the past 6 months
  • #3 in overall US retail sales behind Walmart & Costco

With numbers like these, Amazon has unprecedented scale and data around individual shoppers‘ preferences and behaviors. This fuels Amazon‘s consumer-obsessed ethos and flywheel around Prime driving further retail growth.

Meanwhile, its B2B marketplace, while growing, still flies more under the radar.

Amazon Business Levels Up on Wholesale

Back in 2015, Amazon officially announced Amazon Business. This created a centralized hub for companies to access exclusive discounts and business-tailored ecommerce features like volume pricing and analytics.

The wholesale opportunity is massive – B2B ecommerce is projected to hit $1.8 trillion globally by 2023 according to Forrester.

And Amazon wants a piece of this enterprise pie, leveraging the existing relationships with suppliers via its leading retail marketplace. Some key growth metrics:

  • Over 5 million business customers in Amazon Business today
  • Product selection expanded from 30 categories to over 300 since launch
  • Popular categories include office supplies, medical supplies, and jan & san items bought in bulk

That said, Amazon Business represents only a tiny fraction of Amazon‘s overall business. Recent estimates peg it driving just around $25 billion in gross merchandise volume vs $600 billion across Amazon‘s general retail platforms.

So while growing at a healthy clip -particularly through the pandemic as companies signed up for supplies – wholesale remains just 3-4% of total sales.

Why Retail Still Reigns Supreme

In 2024, Amazon is definitively still prioritizing retail over going all-in on wholesale for several strategic reasons:

Higher Margins

Grocery, fashion, and consumer electronics yield much higher profit margins for Amazon than business staples. And Amazon‘s top line has been driven by aggressive expansion into these verticals.

Consumer Relationships

Individual buyer data and ownership of customer journeys far outweighs sporadic, bulk B2B purchases in Amazon‘s playbook.

Brand Equity

Amazon has nurtured brand loyalty amongst consumers over years. While still an ecommerce leader for businesses, it doesn‘t have the same brand cachet as a Sysco or Costco on that side.

There‘s also the reality that businesses already have existing relationships with distributors before they consider Amazon Business.

Focus

Quite simply, introducing millions more SKUs or building Enterprise capabilities would distract from Amazon‘s current retail-focused growth. It‘s "staying heads down" to defend its territory.

Trust me, as a seller heavily reliant on Amazon, I‘ve watched it keep retail firmly ahead of other initiatives year after year.

So for these reasons and more, I believe Amazon chooses to remain a retailer first, wholesaler second in 2024.

That said, no company has shown more dexterity adapting to seize opportunities in new sectors. As I‘ll explore next, the B2B opportunity still remains ripe for the taking even if not yet a strategic priority.

Does the Future Hold a Bigger Wholesale Play?

Despite retail maintaining pole position for Amazon looking out through 2023, it would still be unwise to ever fully count them out of a $9 trillion B2B ecommerce sector.

Here are some signs to monitor for Amazon gearing up to capture more wholesale market share down the road:

  • Expanded Business Products – Adding specialized vertical catalogs tailored to business needs
  • Enterprise Partnerships – Deeper ties and co-selling with B2B sales platform leaders like Salesforce, Marketo, Hubspot.
  • Physical Infrastructure – Investments in large distribution centers equipped for palleted goods vs. smaller boxes, refrigeration capabilities
  • Executive Leadership – If Amazon were to appoint a new executive to lead B2B Marketplace initiatives
  • Accelerated Hiring – Ramp up of roles across account management, business procurement specialists

Some or all of these indicators would signal that Amazon is clearing the runway to take business buying even more seriously at an enterprise level.

For now, outside fluctuations in supply chains that increased demand for bulk orders during COVID, Amazon seems content growing Amazon Business "experimentally" vs. chasing maximum B2B market share.

But history dictates that when Amazon puts its mind to entering a category, they eventually force their way into the big leagues.

The Verdict: Retail Reigns…For Now

  • Amazon prioritizes serving hundreds of millions of consumer shoppers
  • But wholesale offerings continue growing through Amazon Business
  • Retail drives 4X the GMV of wholesale currently
  • But B2B remains a $9 trillion opportunity still early in going digital
  • If Amazon fully commits to enterprise distribution down the road, they have the resources and infrastructure to gain share

So in my experience selling B2B and B2C across platforms, Amazon still positions itself first as a consumer brand even as it dabbles further into digital transformation for business procurement behind the scenes.

Wholesale offerings help it think more holistically as an "everything company" for all types of customers. But based on where investments and decisions are focused in 2024, retail remains undisputedly the king.

I hope this glimpse into Amazon‘s operations helps clarify if they currently identify more as a wholesale distributor vs. the customer-obsessed retailer they‘re universally known as! Let me know what other Amazon topics you want explored in the comments.

Charles Scott is a dynamic professional whose academic and career achievements demonstrate a strong commitment to excellence in the retail and consumer service industry. Graduating with an MBA from New York University in 2013, Charles has built a diverse and impressive career portfolio. He has held significant roles as a manager, advisor, and marketer, showcasing his multifaceted skills and deep understanding of the industry.

Beyond his direct professional engagements, Charles has made a notable mark as the head writer and founder of ExpertBeacon.com. This platform stands as a testament to his dedication to consumer empowerment and education. ExpertBeacon.com is a resource designed to assist consumers in addressing their persistent questions about products, services, and companies. Under Charles's leadership, the site provides in-depth, well-researched, and accurate information, all structured in easy-to-follow guides and articles. His work here not only highlights his expertise in the field but also his commitment to providing valuable, actionable information to the public.

Charles's approach is centered on a keen understanding of consumer needs and market dynamics, making him a respected voice in the industry. His contributions through ExpertBeacon.com and his professional roles reflect a blend of strategic thinking, practical knowledge, and a genuine desire to enhance consumer experiences in the retail and consumer service sectors.

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