E-commerce Sales Through Marketplaces Are on a Roller Coaster Ride

The wave that lifted sales through e-commerce marketplaces during the initial stages of the Covid-19 pandemic is losing energy, according to data from Extensiv, a provider of omnichannel fulfillment solutions.

Growth in average orders per merchant through Shopify Inc. has decreased 12% year to date, while other marketplaces—including eBay, Etsy, GoogleShopping, Wayfair, Walmart, Yahoo, and ZohoInventory—have decreased 27% year-to-date, according to Extensiv’s Market Insights index, which tracks orders through e-commerce platforms. Amazon is the lone marketplace to see its order volume rise. The e-commerce giant’s volume is up 10% year-to-date.

A provider of omnichannel fulfillment solutions, Extensiv, formerly 3PL Central, launched the index Tuesday in conjunction with a rebranding campaign for the company name. The index is compiled using data from 65 million e-commerce orders into which Extensiv has visibility.

While Extensiv has not surveyed merchants about the ebb and flow of their e-commerce sales, the company says it suspects the drop in average orders per merchant is due to a combination of more in-person shopping and more consumers responding to recent market volatility and rising inflation.

“There are also supply-chain disruptions. Some merchants don’t have inventory to ship right now,” Extensiv chief marketing officer Rachel Trindade says by email. “This is hitting all the big marketplaces. We know UPS is down 8% in Q1 shipments.”

Overall, the trend line for e-commerce volume through marketplaces looks like a saw blade, with weekly volumes rising and falling on a year-over-year basis. During a three-week period beginning the last week of April 2022 (weeks 18-20 of 2022), per-merchant order volume for Shopify Inc. , for example, was down 6% during the first week, up 17% the second week, and down 10% the third week. By comparison with the same period in 2021, Shopify’s volume was trending downward. During week 18 of 2021, the marketplace’s per-merchant volume was down 43%, and down 49% and 30% for weeks 19 and 20 of 2021, compared to the same period in 2020.

In comparison to other marktplaces, Amazon’s per-merchant volume remained flat during week 18 and rose 12% and 22% during weeks 19 and 20 of 2022.  The change is a welcome one compared to the same period in 2021 (weeks 18-20), when Amazon’s volume was down 70%, 73% and 66%, respectively, compared to the same period in 2020.

One explanation as to why Amazon is faring better than other marketplaces is that the strength of its brand helps shield it from volatility, according to Trindale. “Historically we’ve seen Amazon expand market share in e-commerce each year,” Trindale says. “Amazon’s increased market share is a normal dynamic. This increase may be in part because merchants are still expanding through Amazon.”

Given the up-and-down shifts in sales volumes merchants selling through marketplaces are seeing, Trindale says brands and marketplaces need to stay nimble and pay attention to their own businesses as well as monitor macro trends. “Q1 earnings for Shopify, Amazon, and UPS showed the volatility, and even Amazon let go of some warehouse space last week,” Trindale says.

Nevertheless, Trindale remains optimistic that the sawtooth trend line will eventually reverse itself. “E-commerce has experienced double-digit growth every year for the past few years. We expect a rebound, we just don’t know when that will be,” she says. Extensiv, which says it launched the Market Insights index to provide visibility into fluctuations in e-commerce sales so they can be tracked, will update the index weekly.