Amazon.com, Inc. (NASDAQ:AMZN)’s Fulfillment Service Thriving In the Background

Amazon continues to affirm their e-commerce with their fulfillment service. Unlike other businesses such as Amazon Web Services that are closely followed, the fulfillment service continues to thrive in the background away from the public limelight. The business is notable for helping third party businesses sell goods on the online portal, from which the e-commerce giant generates extra fees.

Amazon.com, Inc. (NASDAQ:AMZN)

Fulfillment Service Growing Shipments

It is emerging that the lesser known business handled 1 billion items last year with the momentum looking solid more than ever. The business adds the number of products that customers can shop in addition to what Amazon sells directly.

 Over the past two years, the fulfillment program has registered impressive growth momentum as more merchants sign up. Last year the number of merchants grew by more than 50%. The e-commerce giant is, however, reluctant to share the actual number of merchants subscribed to the service.

International sales for third party merchants continue to gain steam, transactions having doubled over the past year. Cross-border trade, which involves traders from more than 100 countries now sends packages to more than countries. The allure of the service is down to merchants looking to leverage the more than 50 million people subscribed to Amazon Prime service

Prime Service Impact on Fulfillment Business

 Prime service is one of the initiatives that has panned out well for Amazon since inception. For just $99 annually, subscribers get a chance to have anything from toilet papers to books delivered to their doorstep in less than two days. With the growth in Prime subscribers so is the fulfillment service thriving as merchants move to leverage the huge customer base at their disposal.

Outside sellers now account for 45% of the total items listed on Amazon, representing a 5% increase over the past year. The fulfillment business, however, comes with its challenges. The e-commerce giant is being forced to contend with an increase in fulfillment expenses that soared by 22% to $3.2 billion over the past year.

Ben Myers

Ben began his long career in international finance and investing after graduating with a degree in Finance & Accounting. Prior to founding a financial advisory firm he worked with multi-national institutions including HSBC and Bank of Ireland. After several stints as a chief analyst at forex/binary options companies Ben still remains a keen trader and featured contributor on numerous financial sites.