Research: Amazon revenue from third-party sellers will reach $121B in 2021, up from $60B in 2019, as seller fees reach 34%, up from 30% in 2018 and 19% in 2014
Amazon's dominance of online retail means that small businesses have little choice but to rely on its site to reach consumers.
Context & Ripple Effects
The Institute for Local Self-Reliance has been tracking this squeeze for years: its 2020 report already put Amazon's average cut of independent-seller sales at 30%, up from 19% five years earlier, with seller fees netting roughly $60B in 2019. The new projection doubles that figure to $121B for 2021 while pushing the take rate to 34%.
What makes the fee climb stick is Amazon's grip on demand — eMarketer estimated the company would capture nearly half of US online retail spend back in 2018, so sellers have few alternatives to absorbing the higher cut.
First-order effects
- Independent sellers see their per-sale costs rise again — from 19% in 2014 to 34% now — directly compressing margins on the $121B in sales flowing through Amazon's marketplace this year.
- Amazon converts that fee growth into a high-margin services revenue stream that grows faster than its first-party retail business.
Second-order effects
- Sellers facing a 34% take rate must either raise prices on Amazon, eroding the platform's price competitiveness, or push volume to their own sites and rival marketplaces.
- Rising fees make Amazon's own retail and private-label operations relatively cheaper within its own marketplace, sharpening the conflict-of-interest concerns already raised around its brand practices.
Third-order effects
- If Marketplace Pulse's later finding — an average cut reaching 51.8% in 2022 — holds as the trajectory, marketplace economics drift toward toll-booth models where the platform captures most of the value of third-party sales.
- Sustained take-rate increases on a channel sellers cannot leave strengthen the case for regulators to treat marketplace fees as a competition issue rather than ordinary pricing.
The trend: Marketplace platforms are converting seller dependency into steadily rising take rates, turning third-party merchants from customers into the primary profit engine.