International sales by marketplace sellers at Amazon.com Inc. (NASDAQ: AMZN) accounted for more than a quarter of their revenue last year, up by 50% year over year, according to an exclusive report at Reuters.
That amounts to an estimated $50 billion to $75 billion in sales to foreign customers, based on a calculation using analysts’ estimates of Amazon’s gross merchandise sales. Amazon, of course, does not report gross merchandise sales.
To encourage more merchants to sell to foreign buyers, Amazon operates more than 150 warehouses in 13 global marketplaces in an effort to speed delivery to customers. That service is not free to merchants. When Amazon warehouses and fulfills an order for a marketplace seller, the e-commerce giant collects fees that added up to $32 billion in 2017 revenues.
Because sales to foreign customers is growing faster than overall net sales (which rose 31% last year), Amazon wants its marketplace partners to increase their efforts to raise cross-border sales. Amazon Vice-President Eric Broussard told Reuters: “The speed with which sellers have been selling globally has accelerated over time.”
Growing those cross-border sales will improve Amazon’s market position against the likes of eBay and Alibaba, which already have substantial sales across borders. Alibaba’s Tmall Global sells brands in 63 countries and regions according to the company.
One problem for Amazon — and all e-commerce marketplaces — is rooting out sales of counterfeit products. The inability to do that is the largest impediment to offering sales of luxury goods. Luxury brands simply will not allow their products to be sold unless the e-commerce site can guarantee brand protection, something they either cannot do or do not have the will to do.