Dive Brief:
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Amazon took in $14.1 billion in 2013 from non-Amazon retailers offering their products on its site, a 53% increase over 2012, according to Internet Retailer. Some of those retailers say they expect even more revenue to come from their Amazon sales in 2014.
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On average, Amazon takes about a 10% cut of all third-party sales.
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Many smaller retailers say Amazon helps them advertise, sell, and deliver goods, but that the competition is stiff and fulfillment gets pricey.
Dive Insight:
The growth in sales for small retailers demonstrates the clear benefits of hitching a wagon to the retail giant’s massive star. But it’s not all that easy for these retailers, who have to compete with not only the usual competitors in their market who might also be found on Amazon.com, but with Amazon itself, which routinely stiff-arms everyone with its ridiculously low prices. This area is getting interesting, though, with increasing competition from more marketplace platforms. With sites like Square Marketplace, Shoprunner.com, and a new Alibaba marketplace called 11Main.com coming online soon, small retailers may have more choices in how they sell their wares online.