Amazon ramps up resources for independent sellers

The news: Amazon launched Seller Wallet, which extends and consolidates the tools for independent third-party sellers on its platform, per a press release.

  • Seller Wallet’s account management tools let merchants hold and view funds as well as enabling transfers to bank accounts, among other functions.
  • It’s free for sellers to use, though Amazon will charge currency conversion fees if that’s an action merchants take.
  • The brand is rolling out the wallet on a limited basis and plans to refine the offering as it grows.

What it means: The tool can resolve small- and medium-sized businesses’ (SMBs’) pain points, improving Amazon’s relationship with its sellers.

  • SMBs always need fast access to cash, but never more so than in times of economic uncertainty. In January, 35.7% of PYMNTS respondents had less than 30 days of cash on hand, and 18% had none. A recession could intensify these challenges—adding to the appeal of fast access to funds earned from Amazon sales.
  • Cross-border transactions can also be a challenge. SMBs are likely to become more reliant on international shoppers as the number of cross-border buyers grows, and will benefit from simple, built-in currency conversion tools.

Amazon’s opportunity: Independent sellers are an increasingly important part of Amazon’s business: This year, Amazon’s marketplace is expected to generate $251.65 billion in sales—over two-thirds of its total. Amid a sales slowdown, these relationships may become even more integral, per PYMNTS, magnifying the importance of investing in functions tailored to their needs.

And with 50% to 70% of digital commerce set to take place on marketplaces by 2025, per McKinsey, Amazon’s relationships with sellers will be critical to its ability to outcompete other marketplaces for SMBs’ business.

A broader look: Growing its merchant-facing toolkit may be a harbinger of Amazon’s broader aims in the payments space.

  • In April, the etailer launched Buy with Prime, which lets merchants sell through Amazon on their own websites by placing Amazon-branded offerings on their checkout pages.
  • And the brand has been making moves in the point-of-sale (POS) segment with Amazon One, its palm-scanning terminal, and Project Santos, its rumored SMB POS initiative.

In light of these moves, Seller Wallet could signal broader merchant services ambitions—which would not only enhance the benefits we’ve mentioned, but also help the firm more directly compete with rivals like Shopify on the back-end in tandem with its front-facing marketplace.

Go deeper: Check out our Small-Business Payment Disruptors and Era of Uncertainty: Merchant Services Providers reports to learn more about small businesses’ needs, particularly in the current climate.