Best Buy Relaunches a Marketplace: Ad Revenue Is The Biggest Difference Now

While choosing a third-party provider to build a marketplace is a different proposition in 2025 than 2011 when it was first launched (build vs buy), there is quite another big difference.

Can you guess what it is?

My bet is that it's the freight train called Amazon's advertising business in particular, and retail media generally.

In 2016, Best Buy shut down their US third-party marketplace citing less than 1% revenue contribution - meaning, who cares???

Yet, in 2015 (let's call this the year Best Buy made the decision) Amazon's "Other" revenue was around $1B. (of which advertising was always projected to be the biggest component of this number). Raise your hand if you remember when Amazon did not even break out their advertising business?

In 2025? $61B. Just the Amazon advertising business alone is much bigger than Starbucks, Netflix, Nike, and Salesforce. Uh-huh. Somehow, this is easily forgotten.

And while Amazon does not break out operating margin for the ad business, you can pretty much bet this is one of their most profitable businesses. Some analysts model it 55% operating margin.

Think Best Buy would like a mulligan on its retail media decision?

The story of Best Buy in the past several years has been reclaiming better service to customers, as well as the profit contribution of warranties and other services. As Lowes CEO and others have clearly stated - the road to profitable media and service revenue truly runs through a marketplace model.

And while investment is needed, the payoff is super-clear at scale.