ChannelAdvisor says its clients use the Fulfillment by Amazon service for nearly 40% of orders on marketplaces. Amazon Prime is helping Amazon in more ways than just creating shopper loyalty—it’s also pushing more retail sellers on Amazon Marketplace to use Fulfillment by Amazon. With that service, Marketplace sellers pay Amazon to store inventory and pick, pack and ship orders. 37.8% of the value of goods sold on Amazon’s marketplace by ChannelAdvisor Corp. clients was handled through Fulfillment by Amazon in January, up a fifth from 32.9% a year ago. ChannelAdvisor, which helps retailers sell on multiple marketplaces, produces monthly reports that compare merchant clients’ sales through online marketplaces and marketing channels, including Amazon.com Inc., eBay Inc. and Google Shopping. The percentage of goods sold on Amazon that was handled through Fulfillment by Amazon is the highest it has been in January since ChannelAdvisor began tracking Amazon metrics in June 2013. In January 2013 and 2014, 32% of sales on Amazon were shipped using Fulfillment by Amazon. “Our data indicates that more retailers are adopting Fulfillment by Amazon for shipping and handling to stay in front of the Prime consumer,” Scot Wingo, executive chairman of ChannelAdvisor, says. “If you're not using FBA, you're likely losing share." Some retailers use Fulfillment by Amazon when selling on other marketplace platforms as well. On marketplaces other than Amazon’s, 2.5% of gross merchandise value was fulfilled through the service, up from 1.8% of the value of goods in January 2015. Other marketplaces that ChannelAdvisor supports include those operated by Sears Holdings Corp., Best Buy Co., Newegg Inc., Japan-based Rakuten Inc. and U.K.-based Tesco PLC. Sales on Amazon’s marketplace for ChannelAdvisor clients jumped 17.8% in January compared with January 2015. Sales through eBay were up 4% in January compared with the same period a year ago, weighed down by its auction sales. EBay’s auction sales declined 26.6% year over year consistent with the 27% year-over-year decline in December. Sales of fixed-price goods for January increased 3.4% year over year. EBay Motors Parts and Accessories was a bright spot for eBay, increasing 12.2% in January. Sales on marketplaces that aren’t Amazon or eBay increased 24.1% in January from a year earlier, ChannelAdvisor reports. The big jump is partly a result of chain retailers, such as Sears and Best Buy becoming more serious about promoting and growing their marketplaces, Wingo says. January same-store sales for ChannelAdvisor clients selling through comparison shopping engines increased 6.3% from the year-ago period. This increase was largely due to the strong performance of Google Shopping sales, Wingo says. Google Shopping sales—mostly resulting from the Product Listing Ads that include images and appear prominently on Google search results pages—increased 32.9%. Conversion rates on Google search ads increased 3.12% in January compared with the previous year, and customers spent on average $147.40 in January 2016, 3.1% more than the average $143.03 a year ago. Conversion rates for Google Product Listing Ads on Google were down year over year to 1.32% from 2.04% in January 2015. Customers spent 2.9% more in January at $110.06 compared with $107 a year ago. Google has been ”turning the dials” on Product Listing Ads, such as increasing the frequency of showing Product Listing Ads in searches, which is partly why sales on Product Listing Ads were up year over year, but conversion rates were down, Wingo says. Google has made adjustments to the Product Listing Ads widget by showing more items in the widget as well as showing the widget at the top of the page, he says. "When the supply increases like this, what you have is that the gross merchandise value driven goes up, but the conversion rate metrics tend to be under pressure because when consumers have more choices, they click around more," Wingo says.
February 12, 2016 by
Marketplace sellers piggyback on Amazon Prime’s popularity
this article appeared in Internet Retailer