Amazon: 100M Prime Members, More than 300K SMBs Selling on Platform
April 20, 2018 | Contributed by: Greg Sterling
Now widely reported, Amazon for the first time disclosed how many Prime members it has around the world — more than 100 million. It didn’t provide a regional breakdown but third party estimates suggest the bulk of Prime subscribers are in North America.
The number was presented in a shareholder letter (.pdf) filed with the Securities and Exchange Commission:
Prime – 13 years post-launch, we have exceeded 100 million paid Prime members globally. In 2017 Amazon shipped more than five billion items with Prime worldwide, and more new members joined Prime than in any previous year – both worldwide and in the U.S. Members in the U.S. now receive unlimited free two-day shipping on over 100 million different items. We expanded Prime to Mexico, Singapore, the Netherlands, and Luxembourg, and introduced Business Prime Shipping in the U.S. and Germany. We keep making Prime shipping faster as well, with Prime Free Same-Day and Prime Free One-Day delivery now in more than 8,000 cities and towns. Prime Now is available in more than 50 cities worldwide across nine countries.
Prime may be the most successful loyalty program ever devised. It has resulted in higher spending and greater shopping frequency among members. It’s even helped boost sales of Alexa devices. That has in turn created a “virtuous cycle” for Amazon.
Based on a survey of 2,000 US Amazon shoppers in late 2017, Consumer Intelligence Research Partners estimated that annual spending for all Amazon customers is roughly $1,000, with Prime members spending roughly $1,300. Higher still, Echo owners spend around $1,700 annually.
Estimated Average Annual Spending on Amazon.com (2017)
If these spending figures are correct, it would mean that Amazon is seeing at least $130 billion in annual gross revenues from Prime subscribers.
Another very interesting piece of information revealed in the letter is that more than 50% of merchandise on Amazon is now from third parties, including SMBs. The company added that there are more than 300,000 US-based SMBs selling on Amazon. Nearly half (140,000) had more than $100,000 in annual sales. (No wonder a majority of SMB retailers don’t see Amazon as a threat; it’s an important channel for them.)
An LSA survey of 265 U.S. SMBs last year reflected that 71% were members of Amazon Prime. Almost three-fourths (72%) of this group use Amazon and Prime for business-related purchases, including supplies. And 60% of these business owners said they were using traditional suppliers less often because of Prime membership.
In addition to being a commerce giant, Amazon has become a disruptor in a number of industry segments with more surely to follow.
At LSA18 we’ll hear from two members of the Alexa team about virtual assistants and the future of (local) search.