The U.S. e-commerce landscape remains dominated by a handful of major players, with Amazon commanding nearly 40% of all online retail sales. For Amazon sellers evaluating marketplace diversification or sourcing companies identifying where to allocate inventory, understanding the competitive dynamics among top online retailers provides strategic context for expansion decisions.
This analysis examines current market share data, consumer shopping preferences, and platform-specific trends that directly impact sourcing strategy and channel selection for FBA businesses.
The Scale of Online Retail: Understanding Your Addressable Market
U.S. e-commerce continues its structural growth trajectory. In 2023, online sales reached approximately $1.1 trillion, representing 15.4% of total retail salesâa figure that has nearly doubled since 2019. Projections indicate the market will surpass $1.4 trillion by 2025.
The consumer base is extensive: approximately 268 million Americans shopped online in 2023, with 75% of U.S. adults making at least one online purchase per month. For context, this represents roughly 80% of the total U.S. population, indicating near-saturation among internet users.
Spending patterns show continued growth in online channels. Recent survey data indicates that 41% of consumers increased their online spending in 2023 compared to the previous year, while 82% expect their online purchasing to remain at current levels or increase further. Average order values have stabilized at $118 across all categories, though this varies significantly by verticalâelectronics average $310 per order while apparel averages $65.
For Amazon sellers, this market scale translates directly: with Amazon capturing 37.8% of this $1.1 trillion market, the platform facilitates approximately $415 billion in gross merchandise value annually, with third-party sellers representing roughly 60% of that total.
Critical E-Commerce Trends Affecting Platform Selection
Several operational trends shape which platforms succeed and how sellers should approach channel strategy:
Price sensitivity remains paramount. Sixty-three percent of online shoppers compare prices across at least three retailers before purchasing. This behavior advantages Amazon's dominant search position but creates opportunities for sellers on price-competitive platforms like Walmart Marketplace.
Fulfillment speed has become table stakes. Free shipping is now expected by 66% of online shoppers, and 49% abandon carts when shipping costs seem excessive. Two-day delivery, once a competitive advantage, is now baselineâ41% of consumers expect delivery within two days regardless of platform. This fulfillment expectation strongly favors Amazon's FBA infrastructure and Walmart's distribution network.
Mobile commerce continues gaining share. Mobile devices now account for 43% of e-commerce transactions, up from 36% in 2021. Platform selection should consider mobile shopping experienceâAmazon's app generates 60% of its traffic, while other platforms show lower mobile conversion rates.
Social commerce is maturing rapidly. Platforms integrating social mediaâparticularly TikTok Shop and Instagram Shoppingâdrove $67 billion in U.S. sales in 2023. While still small relative to traditional marketplaces, social commerce grew 32% year-over-year, making it relevant for certain product categories, particularly apparel, beauty, and home dĂ©cor.
Search behavior concentrates on Amazon. Product searches increasingly begin on Amazon rather than Google. Current data shows 56% of product searches start on Amazon compared to 46% on Google and 31% on retailer websites. For FBA sellers, this search dominance reinforces Amazon-first strategies, though it also highlights the discovery gap on alternative platforms.
Market Share Breakdown: The Top Online Retailers
Market concentration in U.S. e-commerce remains high, with the top five retailers controlling approximately 59% of total online sales:
1. Amazon â 37.8% market share ($415 billion)
Amazon maintains its dominant position despite slight share erosion from 39.5% in 2022. The platform hosts over 2 million active third-party sellers, with FBA sellers representing the fastest-growing segment. Prime membership reached 167 million U.S. subscribers in 2023, providing Amazon unmatched customer loyalty and repeat purchase frequency.
2. Walmart â 6.4% market share ($70 billion)
Walmart's e-commerce operation grew 24% year-over-year, driven by its Walmart Marketplace expansion and omnichannel integration. The platform now hosts approximately 150,000 third-party sellers. Walmart+ membership, launched as a Prime competitor, has reached an estimated 32 million subscribers, though pickup and delivery integration with 4,700 physical stores provides differentiation from pure-play online retailers.
3. Apple â 3.8% market share ($42 billion)
Apple's online sales remain concentrated in its own product ecosystem, with limited third-party marketplace dynamics. Relevant primarily for sellers in electronics accessories who leverage Amazon or other platforms to reach Apple product owners.
4. eBay â 3.1% market share ($34 billion)
eBay's market share has declined from 4.2% in 2021, reflecting competitive pressure from Amazon and Walmart. However, the platform retains strength in specific verticals: collectibles, refurbished electronics, automotive parts, and industrial equipment. eBay hosts approximately 18 million active sellers, though many are individual sellers rather than business accounts.
5. Target â 2.7% market share ($30 billion)
Target's e-commerce growth has accelerated through same-day fulfillment services (Drive Up, Shipt) and its Target Plus marketplace. The marketplace remains selective, with approximately 800 approved sellers, making it difficult to access but potentially lucrative for sellers who qualify.
The remaining 46% of market share is distributed among hundreds of smaller retailers, including Best Buy (1.9%), Home Depot (1.8%), Costco (1.6%), Kroger (1.4%), and Wayfair (1.2%), along with thousands of direct-to-consumer brands and niche retailers.
Where Consumers Shop: Platform Preference Data
Consumer shopping patterns reveal which platforms command actual purchasing behavior versus browsing traffic:
Cross-platform shopping is common. The average online shopper uses 3.2 different retailers per month. Amazon appears in 68% of online shoppers' monthly purchase activity, followed by Walmart (online and in-store combined) at 51%, and Target at 34%.
Platform loyalty varies by category. Amazon dominates in electronics (72% shop Amazon first), books (81%), and home goods (64%). Walmart leads in groceries (online and pickup) at 43%, while specialty retailers maintain strong positions in specific verticalsâChewy in pet supplies (38%), Wayfair in furniture (31%), and Sephora in prestige beauty (29%).
Platform selection differs by purchase intent. For convenience replenishment purchases, Amazon Subscribe & Save captures 41% of the market. For discretionary purchases where browsing matters, consumers distribute spending more evenlyâonly 34% of apparel purchases happen on Amazon despite the platform's overall dominance.
The resale market is substantial. Second-hand product searches increasingly occur on mainstream platforms. Among consumers who purchased used items in 2023, 58% searched on Amazon, 44% on eBay, 39% on Facebook Marketplace, and 22% on Poshmark. This trend matters for FBA sellers in categories with robust resale markets (electronics, books, sporting goods), as it affects new product pricing power.
Category Performance Across Channels
Product category performance varies significantly by platform, creating strategic implications for sellers considering diversification:
Categories where Amazon dominates: Books and media (76% market share on Amazon), consumer electronics (68%), home and kitchen (61%), toys and games (58%), and health and personal care (54%). These categories benefit from Amazon's review density, search traffic, and FBA logistics advantages.
Categories where alternative platforms compete effectively: Groceries favor Walmart and Instacart due to perishability and local fulfillment requirements. Furniture and large home goods see stronger performance on Wayfair and Overstock due to specialized delivery networks. Luxury beauty performs better on Sephora and Ulta where brand positioning and in-store experience matter.
Omnichannel categories: Apparel, sporting goods, and home improvement show more distributed market share because consumers value the option to see products in-store or make returns locally. Target, Walmart, and Dick's Sporting Goods leverage physical store networks effectively in these categories.
For Amazon sellers considering expansion to additional platforms, category dynamics should inform platform selection more than overall market share figures. A seller succeeding in books or electronics on Amazon may find Walmart Marketplace a natural expansion path, while a furniture seller might prioritize Wayfair despite its smaller overall market share.
Deep Dive: Top 5 U.S. E-Commerce Retailers
Amazon: The Platform Defining Online Retail
Amazon's $415 billion in U.S. e-commerce sales reflects a platform that has fundamentally shaped consumer expectations around selection, price, and delivery speed. For third-party sellers, Amazon provides unmatched advantages: access to 167 million Prime members, fulfillment infrastructure through FBA, and dominant product search traffic.
The platform's competitive dynamics have intensified. Approximately 2 million active sellers compete for visibility, with 70% of sales going through third-party sellers rather than Amazon's first-party retail operation. Advertising has become essentialâ75% of successful sellers use Sponsored Products, and ad costs have increased 22% year-over-year.
Recent platform developments matter for sellers: Amazon's continued expansion of fulfillment network capacity has reduced FBA storage constraints that plagued sellers in previous years. The rollout of Buy with Prime allows sellers to offer Prime-like checkout experiences on external websites. Climate Pledge Friendly labeling has created new organic ranking signals for qualifying products.
For sellers, Amazon remains the primary channel for most categories, but success now requires sophisticated advertising strategy, brand registry protection, and operational excellence in inventory management and customer service metrics.
Walmart: The Omnichannel Alternative
Walmart's $70 billion e-commerce operation represents the strongest alternative to Amazon, particularly for sellers seeking lower advertising costs and access to Walmart's omnichannel customer base. Walmart Marketplace has opened seller requirements significantly, now hosting 150,000 third-party sellers compared to 30,000 in 2020.
The platform's advantages center on lower competition intensity and favorable economics. Seller fees average 6-15% compared to Amazon's 8-15% plus FBA fees. Advertising costs run 40-60% below Amazon's equivalent ad placements. However, Walmart's fulfillment program (Walmart Fulfillment Services) serves only 30% of third-party sellers, meaning most must handle their own logistics.
Walmart's customer base skews toward value-focused consumers and shows higher average household incomes than commonly assumedâthe median Walmart+ subscriber household income is $87,000. Product categories with strong performance include consumables, household essentials, electronics, and home goods.
For FBA sellers considering Walmart expansion, the platform works best for products with proven demand, stable inventory, and competitive pricing. The lower traffic volume means product launches are slower but can achieve profitability faster due to reduced advertising requirements.
eBay: The Niche and Secondary Market Specialist
eBay's $34 billion in U.S. sales represents a declining but still substantial marketplace with specific strengths. The platform's market share has contracted from 4.2% to 3.1% over three years as Amazon and Walmart have captured growth, but eBay maintains leadership in several valuable niches.
Categories where eBay outperforms include collectibles and memorabilia (49% market share), refurbished and open-box electronics (37%), automotive parts and accessories (28%), and industrial surplus equipment (24%). The auction format, while less dominant than in eBay's early years, still generates 18% of GMV and provides price discovery for unique or rare items.
For sellers, eBay's economics remain attractive: final value fees of 12.9% average lower than Amazon's total take rate of 30-40% (referral fees plus FBA plus advertising). However, eBay's traffic is roughly one-tenth of Amazon's, requiring sellers to understand the platform's search algorithm and active buyer base.
eBay suits sellers with deep inventory in specific categories, those handling liquidation or overstock, and businesses built around collectibles or parts. It's less effective for sellers seeking to build branded product lines or those requiring fulfillment support comparable to FBA.
Apple: The Closed Ecosystem
Apple's $42 billion in direct online sales operates fundamentally differently from marketplace models. Third-party sellers have limited accessâonly through Apple's "Made for iPhone/iPad" accessory program, which requires expensive certification.
For Amazon sellers, Apple's online presence matters primarily as a competitive reference point. Products in Apple's ecosystem (cases, chargers, headphones, smart home devices) constitute major Amazon categories with high search volumes. Understanding Apple's product roadmap and accessory requirements informs product development for these categories.
Apple's services revenue, which includes App Store and digital content sales, reached $85 billion globally in 2023, but this segment operates outside traditional e-commerce dynamics relevant to physical product sellers.
Target: The Curated Marketplace Approach
Target's $30 billion e-commerce operation combines owned inventory with a selective marketplace, Target Plus, hosting approximately 800 approved sellers. The platform's selectivity creates higher barriers to entry but potentially better economics for accepted sellers.
Target's customer demographic skews toward higher household incomes (median $76,000) and college-educated shoppers. Product categories with strength include home décor, apparel, beauty, and children's products. Target's private label brands (Cat & Jack, Threshold, Good & Gather) compete directly with third-party sellers but also signal category opportunities.
The marketplace application process requires established brands with proven sales history, typically minimum $1 million in annual revenue and existing retail distribution. For qualifying sellers, Target provides less competition, higher average order values, and strong alignment with design-forward, millennial-focused products.
Target's same-day fulfillment services (Order Pickup, Drive Up, Shipt) are available to marketplace sellers through Target's fulfillment program, providing differentiation from Amazon in certain geographies.
Strategic Implications for Amazon Sellers
This market structure creates several strategic considerations for FBA businesses evaluating channel expansion:
Amazon-first remains optimal for most sellers. The platform's 37.8% market share, Prime membership base, and fulfillment infrastructure make it the logical primary channel for the majority of product categories. Sellers should establish profitable operations on Amazon before diversifying.
Walmart represents the most viable second channel. For sellers with operational capacity beyond Amazon, Walmart Marketplace offers the best risk-adjusted return. Lower competition, reasonable fees, and growing traffic make it suitable for products already succeeding on Amazon.
Category dynamics matter more than overall market share. A seller in collectibles should evaluate eBay despite its smaller market share. A furniture seller should consider Wayfair. Understanding category-specific platform strengths yields better returns than following overall traffic patterns.
Omnichannel capabilities create competitive advantages. As Walmart, Target, and other retailers integrate online and physical retail, sellers who can support in-store pickup, returns, or regional fulfillment gain positioning advantages in specific categories.
Platform concentration creates dependency risk. While Amazon dominance makes business sense, sellers generating 90%+ of revenue from a single platform face existential risk from account suspension, category changes, or competitive dynamics. Measured diversification to a second platform provides strategic insurance even if less immediately profitable.
The U.S. e-commerce market's continued growth and Amazon's sustained dominance create a favorable environment for FBA sellers, while the maturation of alternative platforms provides expansion options for sellers ready to scale beyond a single channel.
