How Amazon became America’s biggest clothing seller

Amazon’s grip on the apparel industry just keeps getting tighter.

Amazon’s market share for the apparel and footwear segment reached nearly 13% in 2024, with sales over $67 billion, more than double Walmart’s about $32 billion business, according to a Wells Fargo industry note published in September. The firm expects Amazon’s sales in the category to surpass $72 billion in 2025.

When looking at purely online sales, it’s more than 10 times Walmart’s size.

The e-commerce giant first overtook Walmart as the top clothing retailer in the U.S. in 2018 as its apparel and footwear sales crossed $35 billion, according to research from Wells Fargo and Euromonitor. 

Amazon’s push into the fashion category meaningfully began in 2012, as it began courting brands like Kate Spade and Vivienne Westwood to its platform. 

The segment at Amazon grew at a 40% compounded annual growth rate over the next five years. By 2018, brands like Nike, North Face, Carter’s, Calvin Klein and J. Crew were all exploring ways to partner with Amazon. At the same time, the company began focusing heavily on its own private label brands.

That excitement around in-house clothing simmered in 2022 when the company decided to start scaling back its private label business amid reports of falling sales. Most of that segment is now focused on basics — closet staples like T-shirts, underwear and socks that fall under its brand Amazon Essentials.

“Amazon would rather sell the same one item a million times than a million unique items. And that’s one of the big challenges with apparel,” said Oscar Barbarin, managing director at Hawke Media, which is an Amazon seller consulting agency. 

Now, Wells Fargo estimates that Amazon’s private label business is only about 1% of its retail sales and about 2.5% of apparel. 

Where Amazon succeeds is through aggregating a wide range of third-party brands into a one-stop-shop marketplace. The company works to maintain low prices, and most returns are free.

And while these aspects have attracted shoppers and helped Amazon grow, it’s also created problems for the company. 

The FTC filed a lawsuit in 2023 against the company over antitrust concerns. Notably, the complaint alleges that Amazon punishes sellers if they list a product elsewhere for cheaper.

An Amazon spokesperson said in a statement to CNBC that it offers tools and education to help sellers maintain competitive prices and that other retailers take similar measures.

“Just like any store owner who wouldn’t want to promote a bad deal to their customers, we don’t highlight or promote offers that are not competitively priced,” the spokesperson said. “If the FTC is successful in this lawsuit, the result would be anticompetitive and anti-consumer because we’d have to stop many of the things we do to offer and highlight low prices—a perverse result that would be directly opposed to the goals of antitrust law.”

The lawsuit also says that sellers are often forced to pay nearly 50% of their revenue in fees to…