Amazon’s third-party sellers, long the backbone of the company’s retail growth, are increasingly expanding into Whatnot, the live-auction marketplace that has been attracting a surge of resellers. The shift underscores how sellers are diversifying revenue streams as competition and costs rise on Amazon’s platform.
Amazon’s third-party ecosystem now accounts for more than 60% of the company’s retail sales, generating tens of billions annually. But sellers have seen average advertising costs on Amazon climb by nearly 20% over the past two years, while storage and fulfillment fees have also risen. Many merchants, particularly those managing narrow margins, are turning to Whatnot as a more flexible venue to reach buyers without the steep costs associated with paid search and sponsored placements.
Whatnot, which was valued at more than $3.7 billion in its most recent funding round, has built its reputation in categories like sneakers, trading cards, and comics. But the platform has rapidly expanded into fashion, beauty, household goods, and liquidation stock. Sellers can pay transaction fees of about 8% to 10%, lower than some categories on Amazon, while bypassing high fulfillment costs by shipping directly to buyers after auctions close.
The economics of the model appeal to small and mid-sized merchants. A seller with $50,000 worth of excess inventory sitting in an Amazon warehouse could face thousands of dollars in long-term storage fees. On Whatnot, the same seller can stage a series of live auctions, moving goods quickly while maintaining better cash flow. Several sellers report gross margins improving by 5 to 10 percentage points when shifting underperforming items to the live-auction format.
At the same time, Amazon continues to offer unmatched reach, logistics, and customer trust. Its Fulfillment by Amazon network processes millions of orders daily, providing a scale Whatnot cannot yet match. But sellers increasingly view Whatnot as a complementary channel. They use Amazon for high-volume, replenishable goods and Whatnot for one-off lots, product testing, or categories where storytelling and direct engagement with buyers can drive higher conversion rates.
The shift illustrates a broader transformation in e-commerce. Live selling, once a niche model, is becoming a mainstream sales strategy. By combining Amazon’s operational power with Whatnot’s interactive marketplace, sellers are building hybrid approaches that reduce reliance on a single platform while boosting profitability. Analysts expect the number of Amazon merchants cross-listing to Whatnot to accelerate in the coming year, reshaping the competitive landscape of online retail.