Amazon’s Market Share will Continue to Grow

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Amazon’s Market Share will Continue to Grow

The e-commerce market is about to hit its 30th birthday and has evolved significantly during the past three decades. According to Statista, e-commerce sales in the United States will exceed $800 billion in annual sales this year. Despite this substantial growth, online sales still account for less than 25 percent of all retail shopping in the U.S., and we expect more growth is on the horizon.

Since its launch in 1995, Amazon has dominated its competition to become the market leader in the e-commerce space, and current estimates suggest it holds between 35 and 45 percent market share. Walmart is a distant second with an estimated six percent, while Apple, eBay, Target, Home Depot and Best Buy account for around 2-4 percent each. In fact, the top ten online retailers combined account for roughly 65 percent of the total market share, with the remaining 35 percent mostly coming from smaller Shopify or BigCommerce types of websites.

Most reports take a top-down view of market share, but it’s equally important to look at it from the bottom up. If you are a brand selling online, you likely sell on your own website, on Amazon, and maybe through retailers who sell on their sites. For most of the brands we work with at Amify, Amazon and their website are the largest two sales channels. While the percentages vary dramatically from brand to brand, the combination of Amazon and their company website usually drive more than 80 percent of their e-commerce sales. Thus, brands should focus on getting those two channels right before moving on to other e-commerce pursuits. 

With Amazon’s aforementioned 35-plus percent market share, skeptics often predict that the platform only has room to go down. As a result, news reports often speculate about the next new company that wants to take on Amazon and potentially beat them at their own game. Anyone remember It’s easy to believe these rumors because they sound exciting, but we fully believe that Amazon is much more likely to add market share going forward as it continues to grow, scale, and differentiate itself from the competition.

No evidence of a peak for Amazon

150 million Prime members out of 124 million U.S. households

The vast majority of American households have an Amazon Prime membership. It’s more than just an indication of the value of free two-day shipping. These paid subscriptions demonstrate the loyalty of Amazon’s customers and their plan to continue shopping on the platform. How many people could name’s competing products to Amazon’s brands? Very few, if any, and most aren’t Walmart+ members – nor do they have plans to join another membership service. Once someone becomes a member of Prime, most continue to buy more and more on Amazon because of the convenience and customer satisfaction the company provides. There is little reason or incentive to go to a competing website when you already have your payment method pre-loaded and free shipping available to you in one click. 

Faster shipping is only getting faster

The practice of purchasing a product online, paying several dollars for shipping and then waiting up to 10 days for it to arrive no longer meets shopper expectations. With 110 warehouses in the U.S., Amazon has an unmatched fulfillment network that no other company can compete with. The massive scale of their logistics infrastructure allows them to deliver products faster and cheaper than any competitor on earth. In comparison, Shopify has less than 10 warehouses, a fraction of the volume and does not have last mile capabilities. As Amazon continues to build out its network, delivery times will continue to decrease. In a relatively short amount of time, we have gone from 10-day shipping to two-day shipping to one-day shipping. Once one-hour shipping becomes more common, the need to physically visit a store for items will be reduced even more. Currently, no one else in the industry has the scale or delivery capabilities to come close to competing. 

Amazon has an unlimited selection 

Many of Amazon’s biggest competitors are internet versions of brick-and-mortar retailers. For example,,,, and are primarily online extensions of their physical storefronts: If they have it in the store, they have it online. But Amazon is a different animal in that it has the largest and most diverse marketplace by far. It features millions of sellers and a virtually unlimited selection. This long-tail approach is exceptionally valuable for both Amazon and customers since it makes nearly everything available from one place rather than relying on multiple online retailers to complete a shopping list.  

More brands are launching on Amazon

Historically, many brands have tried to avoid selling their products on Amazon due to a perception that it was bad for their business. Many felt it would cannibalize their brick-and-mortar or website sales. The combination of COVID-19 and Amazon’s growing influence has caused many of these companies to rethink their strategy. As physical stores continue to struggle and more people turn to Amazon almost exclusively for their shopping needs, brands now realize if they are not on Amazon, they are losing out on millions of prospective customers. In our experience, it’s not unusual for a customer to visit Amazon in search of a product, not find it, and decide to purchase a competitor’s item via the site rather than buy from a different online store. Thanks to this behavior, more brands recognize they need to be where the customer wants to buy or risk losing them entirely. 

Amazon has lower prices

More and more, we are finding examples where Amazon’s price for a product is less than other retail sites and, in some cases, the manufacturer’s website. Loyal customers will often compare a price found elsewhere to Amazon before completing a transaction. The e-commerce leader’s emphasis on pricing and intense competition among sellers on the site have made it one of the leaders in value. Unsurprisingly, shoppers understand that to be the case and are more likely to start their shopping on Amazon whenever possible. 

Cookie Crackdown

A growing focus on consumer privacy is also having an impact on the ability to compete with Amazon. In the past, brands have tracked potential customers via cookie technology to target their digital advertising efforts better. Improved targeting translated to a lower cost of customer acquisition. However, Apple has recently limited the ability of companies to track user behavior across the internet on mobile devices, making it much harder for brands to target their ideal customers. The result has been increased costs to acquire customer data via Facebook and other platforms. As the price of targeting customers rises, the attractiveness of selling on Amazon will also grow since sellers there are not impacted by the same tracking issues. 

Customer trust in Amazon is improving

As the Amazon marketplace faced exponential growth during the past decade, monitoring all the products going through the network became difficult. This challenge led to a significant rise in counterfeit products and other poor-quality items. But, in the past two years, we have seen a massive shift in Amazon’s strategy to crack down on these issues, thus creating a much better customer experience. There are many reports that Amazon has shut down over one million fraudulent Amazon seller accounts and currently has a considerable team committed to policing these issues. 

Prepare for what lies ahead with Amify

Amazon has proven to be the clear winner among e-commerce companies since the industry began. At Amify, when we look forward, we remain convinced that Amazon will only continue to outperform its competitors and add to its current market share. Brands should be prepared for this likelihood and plan a thoughtful approach for the coming years of growth on the platform before it is too late. 

Take advantage of Amify’s decades of experience in Amazon, e-commerce and direct-to-consumer strategy to help your business do just that. A partnership with us places a team of experts by your side to analyze the data and build an optimization plan that best aligns with your budget, capabilities and goals. Start a conversation today to find out more.

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