Amazon Says ‘Prime Day’ Sales Up 30 Percent for Merchants

SEATTLE, United States — Amazon.com Inc. said Prime Day sales from third-party merchants surged 30 percent compared with a year earlier, fuelled largely by international demand.

While US sales appeared to start slowly on Tuesday, hampered by technical glitches, the world’s largest e-commerce company built momentum on the summertime promotion it created last year to entice shoppers to subscribe to its $99-a-year Amazon Prime membership.

“Led by strong growth internationally, we are seeing more than 30 percent increase over last year in the number of items sold by small businesses and sellers on Prime Day,” Amazon said in an e-mail, reflecting sales as of 3 p.m. New York time. “We are expecting a record day for small businesses and sellers on Amazon with many more deals to come today.”

ChannelAdvisor Corp., a North Carolina firm that helps 3,000 merchants sell on online marketplaces such as Amazon, said that as of 5 p.m. New York time, its customers were experiencing similar US sales to the first Prime Day last July. Third-party sales in the UK gained 12 percent from a year earlier. ChannelAdvisor Chairman Scot Wingo said he expected US sales to pick up because Amazon ran out of inventory early last year and appeared to be pacing the deals to last through the day this time.

“Last year was very door-busterish and the deals ran out early,” Wingo said.

Amazon created Prime Day last year, but some shoppers were disappointed that inventory ran out quickly and the company offered deals on obscure items such as shoe horns and food containers. Analysts credited the event with boosting sales and building a strong foundation for the 2015 holiday shopping season.

Bigger Deals

The company this year offered more deals and deeper inventory. It relied on thousands of third-party merchants who sell goods on Amazon and give the company a cut of each sale to boost the number of deals. More than 2 million third-party sellers use the website.

Amazon also used Prime Day to push shoppers beyond physical goods by offering discounts on housecleaning through Amazon Home Services, restaurant delivery in several cities and on-demand video rentals for movies such as “Kung Fu Panda 3” and “Deadpool.” Hot-selling items on Tuesday included pressure cookers and iRobot Roomba vacuums, according to the company.

The event highlights the benefits of Prime membership, such as free two-day shipping on many items, which converts the occasional Amazon shopper into a devotee. Prime subscribers spend about $1,200 annually on the website, compared with $500 for non-subscribers, according to Consumer Intelligence Research Partners in Chicago. Amazon had 63 million Prime subscribers as of June 30, an increase of 43 percent from a year earlier, according to the research firm.

Amazon confirmed technical problems before 9 a.m. New York time, six hours after its 3 a.m. kickoff. A few hours later, company spokeswoman Ana Rigby said in an e-mail that the issue involving Lightning Deals had been resolved.

Shoppers vented their frustration on social media using the hashtag, #PrimeDayFail, with many saying they couldn’t add items to their digital baskets.

“@Amazon my cart continues to fail. Very disappointed. There are some great deals that I’m missing. #PrimeDay #PrimeDayFail #AmazonPrimeDay,” wrote Giselle Mazur in a Twitter post.

Tremendous Demand

Even with last year's backlash, analysts said the event helped Prime membership and helped set the stage for a strong holiday shopping season. James Cakmak, an analyst at Monness Crespi Hardt & Co., estimated, based on last year's success, that technical difficulties would not hamper sales for too long this time.

“It will serve as a tail wind for the third quarter,” Cakmak said. “You have a perfect storm heading into the day, and while technical difficulties may get in the way in the short term, it shouldn’t affect revenue.”

Mike Pachter, an analyst at Wedbush Securities Inc. in Los Angeles, said the problems indicate Amazon is seeing tremendous demand from shoppers.

“The biggest cloud manager on the planet having issues? That’s a testament to high demand and high expectations for reliability,” Pachter said in an e-mail.

The company’s shares fell less than 1 percent to $748.21 at the close in New York. They have climbed 11 percent this year.

By Spencer Soper and Nicole Piper; editors: Jillian Ward and Andrew Pollack.