Started for third-party sellers in 2000, Amazon Marketplace accounted for 5% of units sold on Amazon within a year. By the end of 2005, analysts estimated that Amazon listed products from more than 1 million third-party retailers. In 2006, Amazon launched a service to stock and fulfill orders for Marketplace users called Fulfillment by Amazon (FBA), which proved popular. FBA products were usually eligible for Prime free two-day shipping. According to an Amazon survey, 71% of FBA members reported that unit sales increased by more than 20% after they joined. By 2009, there were 1.9 million active sellers on Amazon Marketplace, and they accounted for 30% of all units sold. By 2014, this figure had risen to more than 40% of all units sold, over 2 billion during the year. In 2015, Amazon began offering loans to help sellers grow. In 2017, Marketplace units exceeded 50% of all unit sales on Amazon for the first time.
According to some analysts, Amazon’s profit margins on third-party sales were higher than on its own sales. Upstream Commerce, a research company, claimed that Amazon monitored third-party sales and used the information to sell popular products and undercut sellers.
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