Core Insights - Amazon's market share in the apparel and footwear segment reached nearly 13% in 2024, with sales exceeding $67 billion, significantly outpacing Walmart's $32 billion [1] - The company is projected to surpass $72 billion in sales for this category by 2025 [1] - Amazon first became the top clothing retailer in the U.S. in 2018, with sales crossing $35 billion [2] Growth and Strategy - Amazon's apparel segment grew at a 40% compounded annual growth rate over five years, attracting major brands like Nike and Calvin Klein [3] - The company began focusing on its private label brands but scaled back in 2022 due to falling sales, now primarily offering basic items under Amazon Essentials [4][5] - Amazon's private label business constitutes about 1% of its retail sales and 2.5% of its apparel sales [5] Market Dynamics - Amazon's success is attributed to its aggregation of a wide range of third-party brands, maintaining low prices, and offering free returns [6] - The FTC filed a lawsuit against Amazon in 2023 over antitrust concerns, alleging that the company punishes sellers for lower prices on other platforms [6][8] - Amazon claims its fulfillment services are 70% less expensive than comparable two-day shipping options, but high return rates in apparel reduce profitability [9] Seller Considerations - Brands must weigh the volume of sales against the costs associated with selling on Amazon, including high fees that can take nearly 50% of revenue [8][10] - The challenges of acquiring new customers make the trade-offs in margins worthwhile for many brands [10]