Report indicates Amazon taking over 50% of each sale from its sellers

To grapple with slowing sales growth and rising costs, Amazon is squeezing more money from its nearly 2 million small businesses that sell products on its online marketplace. According to a study by Marketplace Pulse, which sampled seller transactions going back to 2016, Amazon's average cut of each sale surpassed 50% in 2022 for the first time.

The research firm, while calculating the total cost of selling on Amazon, tallied the commission on each sale, fees for warehouse storage, packing and delivery, as well as money spent to advertise on a site where hundreds of millions of products jostle for attention. Paying Amazon for logistics services and advertising is optional, but most merchants consider these a necessary part of doing business.

Sellers have been paying Amazon more per transaction for six years in a row, but were able to absorb the increases because the company was attracting new customers and rapidly increasing sales.

But that abruptly changed after the pandemic lockdowns were eased and people began traveling and dining out again, resulting in a big loss for online shopping platforms. Last year, Amazon generated the slowest sales growth in its history.