Dive Brief:

• Amazon on Thursday released its first "Small Business Impact Report," detailing its services to what it calls "millions of small- and medium-sized businesses that sell on Amazon." More than 20,000 small- and medium-sized businesses worldwide on Amazon surpassed $1 million in sales last year, according to the report. The top categories for U.S.-based small- and medium-sized businesses selling on Amazon are health and personal care, home, electronics, beauty, apparel, sports and toys, Amazon said.

• Since launching in 2000, businesses from all 50 states and more than 130 countries now serve customers in 189 countries, according to the report. More than 1 million are in the U.S. alone, and last year Amazon lent more than $1 billion to them. More than 300,000 U.S. small- and medium-sized sellers joined Amazon’s marketplace just last year.

• Meanwhile, Amazon (in a move previously presaged by One Click Retail earlier this year and in another report in 2017), announced its first private-label pet brand Wag, a pet food available exclusively to Amazon Prime members.

Dive Insight:

Amazon has had a fraught relationship with sellers as it not only consistently tweaks fulfillment policies, but also constantly keeps its focus on customer satisfaction rather than on the sellers.

Still, the e-commerce giant's locked-in Prime membership base of generally younger and wealthier shoppers, smooth fulfillment and wide global reach keeps sellers similarly locked in. The marketplace helps expand Amazon's assortment to an unprecedented level in just about any category and as a result, half of Amazon's sales are now derived from the platform.

The report released Thursday, 18 years after the debut of the marketplace, serves as a shot across the bow to retailers like Staples, Office Depot and even Sam's Club and BJ's Wholesale, which are all scrambling to cater to small to midsize businesses in order to shore up their retail sales. And it's also a pretty picture for Walmart to take in, considering how behind that retail giant is in attracting sellers to its own much younger, much smaller third-party enterprise. That's true even considering its acquisition of Jet, which appears to actually be moving away from the marketplace model. 

While Walmart doesn’t break out online sales between the marketplace and its own distribution, there's plenty of evidence that the marketplace, founded in 2009, has been picking up steam in recent months. Some 65% of sellers on Amazon’s Marketplace last year said they also sell on eBay, and two-fifths also sell on their own website. Less than 10% said they sell on Rakuten, Walmart or Jet, according to research from marketplace commerce platform Feedvisor. But for those looking to expand and diversify, Walmart's marketplace was the leading contender, with nearly 30% of sellers saying they'd add online sales there, while just 22% planned to expand to Jet.

"Amazon first invited small businesses to sell on Amazon nearly two decades ago, and today small businesses and entrepreneurs are a vital part of Amazon’s continued growth and commitment to customers." Jeff Wilke, Amazon​'s CEO of the worldwide consumer, said in a statement emailed to Retail Dive.

With its introduction of Wag, meanwhile, Amazon may also be angling to needle Walmart U.S. e-commerce chief Marc Lore, considering the source of the new label's moniker. (The name Wag is a nod to Amazon's Wag.com purchase from Quidsi in 2013, a brand developed by Lore and sold to Amazon in 2010.) But it also serves as a reminder that sellers on its marketplace could face competition from within in any category.

"They way Amazon entered Pet Food was predicted and makes complete sense," One Click Retail Founder Spencer Millerberg told Retail Dive in an email Thursday. "Pet products on Amazon grew over 40% last year and now make up over $2B in sales annually. Amazon has also selected the highest moving categories within pet. Pet food is a logical place to start, and we predict next Amazon will move to other fast moving categories such as pet treats, pet crates/habitats and pet health care products."