Amazon.com, Inc. (NASDAQ:AMZN) is expanding quickly in several product areas, but Baird analysts say there is still plenty of room for the company to grow. They conducted their third quarterly survey of the items available for purchase on the retailer’s website and found significant growth in a few areas.

Amazon

Amazon’s Prime selection is growing

Analysts Colin Sebastian and Rohit Kulkarni report that the selection of items which are now available for free shipping through Amazon Prime has passed 21 million units. However, they say there is still massive opportunity for growth in this category.

They found that almost 90 percent of the items which are for sale at Amazon are listed by third party sellers. Almost 95 percent of those items are in non-media categories. Just 11 percent of physical goods are actually eligible for free shipping through Amazon Prime. Because of the company’s continued limited market share in a number of categories and the under-representation of Prime eligible products and Amazon.com, Inc. (NASDAQ:AMZN)’s greater focus on general merchandise, the analysts see “multiple levers of market share expansion in a retail industry worth a trillion dollars.”

Non-media categories present an opportunity for Amazon

The analysts said the large percentage of products which are not eligible for Prime shipping may be one of the company’s key motivators for trying to expand the service’s appeal. They estimate that Amazon Prime has more than 10 million members which order three to four times more units than non-members. They are also naturally inclined to buy more products which are eligible for Prime shipping.

They expect Amazon.com, Inc. (NASDAQ:AMZN) to keep building out its fulfillment capacity in an effort to convert more of its third party sellers to Fulfillment by Amazon. This makes it easier them to more closely monitor the customer experience while also expanding the number of products which are available for Prime shipping. They said the more the retailer expands its fulfillment capacity, the more they believe Prime subscriptions will increase. In turn, they said the company may also be able to penetrate even more categories and see even greater velocity of unit sales.

Baird analysts maintained their Outperform rating and $325 per share price target on Amazon.com, Inc. (NASDAQ:AMZN). They said even though there is the potential for “negative near-term macro overhangs,” they believe the retailer will keep benefiting from multi-year growth opportunities in the technology, media and retail categories.