Amazon third-party sellers see record coronavirus sales

Small- and medium-size businesses that partner with Amazon sold more than 3.4 billion products in the last year, tech giant says

U.S. third-party sellers on Amazon made an average of $160,000 in sales in the 12 months ending on May 31, according to the tech giant's SMB Impact Report.

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American small- and medium-sized businesses on the site also added 1.1 million jobs in those 12 months, four of which were rocked by the coronavirus pandemic.

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"Since the pandemic hit, third-party sellers have had record sales," Amazon Worldwide Consumer CEO Jeff Wilke said in a statement. "Their products continue to account for more than 50 [percent] of all units sold in our online stores, and their sales continue to outpace our first-party sales."

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One percent of U.S. small businesses are permanently closed as a result of COVID-19, and 19 percent are temporarily closed, according to a June 3 report from the Chamber of Commerce.

American SMBs that partner with Amazon sold more than 3.4 billion products in the last year, or 6,500 products per minute, according to the report.

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Sarah Ribner, CEO of natural deodorant company PiperWai, said in a statement that her business's sales grew by more than 70 percent "after the first year" it joined Amazon.

Woman searches Amazon website for Kindle tablet / iStock

"Amazon added a layer of credibility for us as a small business and helped us bring in new customers we wouldn’t have reached otherwise," Ribner said. "During COVID, Amazon has provided stable income and allowed us to continue our give-back campaign supporting food security in NYC and hand sanitizer donations to local hospitals."

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Additionally, 3,700 SMBs surpassed $1 million in sales for the first time, the report found, highlighting SMBs' reliance on e-commerce during the pandemic to keep sales strong in-person stores close due to slow business and people stay home amid local lockdown restrictions.

Woman making organic skincare products in her studio (Amazon.com)

General e-commerce sales made up 22 percent of all retail sales in April and May, reaching $53 billion, according to a Mastercard recovery report. E-commerce sales increased 92.7 percent in May, the report notes.

Some small-business owners have criticized Amazon for having a counterfeit problem and apparently listing some of its own items before third-party seller items since it operates as both a platform for third-party sellers and its own online retail store.

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A 2018 U.S. Government Accountability Office report found that 20 out of 47 items purchased from third-party sellers on popular e-commerce websites including Amazon.com, Walmart.com, Sears Marketplace, Newegg.com and eBay.com were counterfeit.

While Amazon has stepped up its efforts to block counterfeiters and says it does not allow counterfeit products on its website, small businesses and high-profile companies alike, including designer clothing brand Valentino and mask maker 3M, have fallen victim to these scammers. Both companies have partnered with Amazon to catch the counterfeiters.

Last year, The Wall Street Journal found that more than 4,000 items listed on Amazon were mislabeled, banned or unsafe under federal guidelines. Amazon said it quickly removed the listings.

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Employees working for the company's private label also told the Journal in April that the e-commerce giant collected data from third-party sellers to help design and price its own products. Amazon has denied the practice in Congress and elsewhere, according to the report.

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CEOs representing Amazon, Apple, Facebook and Google are expected to testify before the House Judiciary Committee on July 27 as part of the Committee’s ongoing antitrust investigations into the tech giants.

This article originally stated that there are 2 million U.S. third-party sellers on Amazon. There are more than 2 million U.S. independent businesses, service providers, and creators on Amazon.