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Amazon's third-party sellers had a 'record-breaking' year

Amazon delivers more than 2 billion packages in 2016 for sellers on its site.

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Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
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Marguerite Reardon
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Amazon said it shipped 50 percent more items this holiday season for its Marketplace retailers than in 2015.

 James Martin/CNET

It was a banner year for third-party retailers on Amazon, the Seattle-based online retailing giant said Wednesday.

Amazon, which also broke its own holiday sales record, said it delivered more than 2 billion items for third-party sellers in 2016, and that it shipped 50 percent more items this holiday season for retailers on its Marketplace than the previous year.

The company also said there were 70 percent more sellers using its Fulfillment by Amazon (FBA) service, which handles packaging and shipping for merchants. This service not only helps Amazon keep tighter control of customer satisfaction, but allows third-party sellers to benefit from the company's Amazon Prime loyalty program, which provides fast, free shipping to tens of millions of customers for a yearly fee.

Sales from third-party retailers were "record-breaking" in 2016, Peter Faricy, vice president for Amazon Marketplace, said in a statement.

Third-party sellers have become an important part of Amazon's business. The company, which takes a cut of the sales from third-party vendors, hopes to get as many retailers as it can to sign up for the FBA program so that it can handle the logistics. The growth of this program could bode well for the company's fourth-quarter earnings, which will be announced in a few weeks.