Amazon's eCommerce growth and profit margin is largely driven by the company’s marketplace strategy. More than 50% of the units ordered in Amazon’s retail business are from its third-party marketplace sellers. Those sales are virtually pure profit for sellers as Amazon does not stock the product, fulfill it (unless the seller pays for Fulfillment by Amazon or FBA) or service it. Rather, Amazon simply takes a commission in exchange for connecting buyer and seller. That being said, we can assume that the lion's share of Amazon's innovation dollars are funded by marketplace sales and Amazon Web Services (AWS), the company’s Infrastructure-as-a-Service (IaaS) business-- not its own retail business.
With the news that Amazon will acquire Wholefoods for $13.7 billion, industry pundits are weighing in on why the eCommerce giant would buy a chain of grocery stores. The theories are wide ranging:
At Mirakl, we get asked all the time: “what is the difference between dropship and marketplace?” Because the terms are often used interchangeably, there is an incredible amount of confusion about the important distinctions between dropship and marketplace. This post will clear up that confusion, succinctly outline the differences between the two models, and show how the models work together and why every retailer needs a marketplace (whether utilizing dropshipping or not).
Earlier this month, a colleague asked me what I was most excited about regarding the upcoming Marketplace Summit by Mirakl. I have been heads-down on planning and coordinating that it seems I hadn’t had a chance to really step back and look at the event as a whole and take in all of the topics that will be hit on. Viewing the full agenda makes me realize just how ambitious this event is. Not only will we examine the strategic nature of the marketplace model and how it powers some of the world’s most successful platform businesses, but we will also highlight the operational benefits that Mirakl customers gain from their marketplaces. The summit is a chance to learn not only why businesses should launch marketplaces, but how they should do it. This event is a “must-attend” show because, as one of our expert panelists – Marc Vicente of Cdiscount – said, “marketplace is not some trendy, fancy project – it is the next generation of eCommerce.”