Amazon Marketplace is an e-commerce platform owned and operated by Amazon that enables third-party sellers to sell new or used products on a fixed-price online marketplace alongside Amazon's regular offerings. Using Amazon Marketplace, third-party sellers gain access to Amazon's customer base, and Amazon expands the offerings on its site without having to invest in additional inventory.
Items purchased on Amazon from third-party sellers are either fulfilled by the merchant (FBM) or fulfilled by Amazon (FBA). FBM goods are kept in the third-party seller's inventory, and shipping and customer service are handled by the third-party merchant. FBA goods are stored in Amazon's fulfillment centers, and shipping and customer service are handled by Amazon.
Amazon charges its third-party merchants a referral fee for each sale which is a percentage of the sales price. Additionally, sellers using FBA must pay additional fees which include a pick, pack and weight charge.
As of 2020[update], third-party sales on Amazon accounted for 54% of paid units. In 2016, more than 10,000 third-party sellers generated more than $1 billion of annual sales. Over 1,000,000 third-party sellers joined in 2017.
There are three major paths third-party sellers can take on Amazon. Wholesale, private label and retail arbitrage.
If an Amazon Seller has an active registered trademark for their brand that appears on their products or packaging and can verify themselves as the rights owner or the authorized agent for the trademark, they can apply for Amazon Brand Registry.
Amazon has an internal search algorithm (A9) that works almost in the same way as those of Google or Bing. The algorithm analyzes search queries that users enter in a search bar and selects the most relevant offers from brands with a good track record.
As of March 2021, Amazon Marketplace operates worldwide in 18 countries; chronologically:
- United States
- United Kingdom
- United Arab Emirates
- Saudi Arabia
Amazon takes a zero-tolerance stance on what it calls seller performance. Amazon suspends seller accounts, sometimes indefinitely.
Suspended sellers are prohibited from opening a new seller account.
- Seller Performance: This is where Amazon deems a seller to be performing under its required standards.
- Product Performance: This covers products that may have been reported to Amazon for quality issues.
- Delivery Performance: This covers both dispatch and delivery timescales.
- Counterfeit Reporting: If a product is reported as a counterfeit, Amazon removes selling privileges until further inquiry is completed.
Sometimes Amazon may restrict certain sellers items or ability to sell without suspending the whole account.
- Staging Status: This is where a seller is newly launched and or Amazon wants to temporarily restrict the seller's ability to sell items without suspending the account. Sellers often report their account appearing to be in vacation mode and unable to re-activate their listings.
- ASIN Creation Privileges: Sellers are able to create new items for sale on Amazon without any supervision. Any seller found to be abusing this functionality has what Amazon considers the privilege removed.
Amazon's dispute resolution policies and practices for Marketplace have drawn criticism from many sellers. The Verge has reported that many fear a complaint lodged against them with Amazon more than they would an actual lawsuit. Among their specific complaints are that policies are vague and contradictory, that buyers are often taken at their word and thus businesses are forced to admit and correct wrongdoing for perceived or minimal shortcomings rather than contest the complaint since there is no other way to get reinstated. Rules meant to protect sellers have also been weaponized, with many merchants devoting their energies to getting competitors suspended or removed from the site entirely.
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