This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Amazon Marketplace Grows, Taking Small Businesses Along

Stocks in this article: AMZN EBAY GOOGL

NEW YORK (TheStreet) -- Amazon (AMZN) is in the business of selling virtually everything. If there is something it does not sell, odds are it will eventually. The online behemoth has been blasted as a killer of small businesses because its low margins are usually unmatchable by most mom & pop retailers.

Well, guess what: Amazon is helping small businesses, too.

The Amazon Marketplace is now in excess of two million sellers who shipped more than a billion units worldwide in 2013, a growth of 65% year-over-year. According to ChannelAdvisor, sales by outside merchants on Amazon were up 34.4% in June year-over-year.

By paying a fee to store and fulfill orders, small businesses on the Amazon Marketplace are able to offer fast shipping and gain huge exposure on the Amazon Web site, two things out of reach for most small sellers. For this added convenience Amazon takes a commission that has now grown to represent over 20% of its annual revenue. The huge popularity of Amazon Prime, and the benefits that come with it, actually help these businesses succeed.

IBM, Apple Just Made an Historic Announcement for its Business Customers

Yahoo! Deal With Alibaba May Be Sign of Stability

Before Amazon Marketplace, many of these businesses would sell their goods on their own Web sites, pay for online advertising if they could afford it or list their goods on eBay (EBAY) and hope for the best. Small businesses that have embraced Amazon Marketplace have found both success and growing sales.

One such beneficiary of Amazon Marketplace and Amazon Prime is Wagner Concepts and its drinking board game called Drink-A-Palooza. We spoke with Dave Wagner, CEO of Wagner Concepts recently to learn how Amazon has changed his business for the better.

"If it wasn't for Amazon I don't know where my business would be right now," he said. "Thanks to the Amazon program I can pass on my savings to my customers and offer them reduced or even free shipping now. I have only positive things to say about them."

Before using Amazon Marketplace Wagner was forced to charge his customers $15 per order for shipping, over 50% of what his actual product cost. This turned many potential customers away. Now prospective customers can buy his product for $27.99 and get free shipping under the Amazon Prime program.

Before listing on Amazon Marketplace, Wagner was selling a handful of games a month. In the last few months, since listing his product there, his sales have exploded to hundreds of units per month. After spending thousands of dollars on advertising on Google (GOOGL) to get ranked 20th, Wagner now finds himself ranked #4 on Amazon. This added exposure, for his unique leisure product, has helped to increase his sales dramatically.

Not everyone is so enthused with Amazon Marketplace. A local San Diego small business owner who sells her own beer-infused bakery goods stated she was hesitant to sell her products on Amazon. The reason the owner of gave us was a fear that Amazon, or other companies, would copy her product and sell it for less.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs