JungleScout released its 2023 State of the Amazon Seller report, and I thought one of their first points made for an exciting discussion.

The number of Amazon SMB sellers exploring other platforms is up to 52% from 30% the previous year. When asked to list which platforms they were exploring, here they are (in the image too):

eBay is top at 24%, but declining interest down 14% y/y. eBay has a huge historical head start.

Shopify 16% , grew 6% y/y

Walmart 15% growing fastest, grew 28% y/y

While it's not surprising eBay is declining, Walmart growing so fast is interesting. Of all the US Marketplaces, Walmart is the most like Amazon, meaning it's easiest for sellers to try.

In 2021, MarketplacePulse mentioned about 6 million Amazon sellers, with 3 million in North America. In the same year, only 60,000 were over $1M in sales.

This 2.4 million under $1M in sales overlaps almost 100% with the JungleScout group (they polled 2,000 brands under $2M in sales).

There are a few interesting points from this analysis:

1 - 40% of Amazon sellers are not trying other channels. That is a strong group, particularly since being on multiple channels reduces risk.

2 - By any metric, Shopify would want to attract a greater percentage of those 2.4 million merchants. Many are not large sellers: in theory, Shopify's sweet spot.

The problem with attracting these merchants is traffic. Shopify cannot offer this to merchants, and Amazon can. Not to mention Prime fulfillment.

2 - You could look at the Shopify numbers another way. Of the 60% exploring other channels, only 16% look to Shopify, but only flat to slightly up (growing less than eCommerce). This speaks to the fact that the overlap between Shopify and Amazon is not as strong as you might think.

Which goes back to Tobi's original point when Amazon Buy With Prime was announced he said "I don't think there is as much overlap as people think." He wasn't wrong.

But is that Shopify's "fault" or "opportunity"?

3 - If Shopify does want to create a home for "multichannel-curious" Amazon sellers, it's not doing a good job. It has flexed on Buy With Prime, and this after Shopify retired its own Amazon Connector in 2021.

Wouldn't you want to capture GMV faster than Walmart, eBay and Etsy from Amazon sellers as the next best option? It could point to an opening for collaboration.

4 - If you consider Shopify's growth opportunities, they are 3.

a: Growing GMV attach rate (POS, payments, fulfillment)

b: Expanding TAM (more full-featured Plus, and Commerce Components)

c: Shop App, whatever you want to call this that's not the "M Word".

Wouldn't Amazon sellers be another nice slice of TAM? They could need Amazon's help on that integration. Part of the BWP deal?

5 - This also speaks to the progress of Walmart Marketplace in the past few years that interest is rising so quickly.

If you think that there is a big group of sellers which are on Shopify but have not yet explored Amazon, AND there is a big group of Amazon sellers which have not yet explored Shopify, which do you feel has the bigger moat?

Which has the highest likelihood of attracting the other?

In one sense, you would think an Amazon sellers want a multichannel home in Shopify, but historically that has been the domain of solutions like ChannelAdvisor, SellerCloud, Linnworks, etc.

In truth many small sellers do have a basic eCommerce store; they just don't focus on it.

In another sense Shopify sellers going to Amazon could greatly improve a merchant's sales, although it greatly reduces the amount of services Shopify offers these sellers -- except as a place to hold non-FBA inventory and capture orders. In theory if Shoipfy is on the side of merchants, it would welcome more sales from Amazon that flow into a Shopify back-end.

But corporate politics does not always work that way........

unless some kind of deal is struck.