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 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.
Third-party sales on Amazon account for around 31% of Amazon's annual sales.. In 2016 Amazon.com aided more than 10,000 sellers to generate more than $1 billion of annual sales. The incredible ease of creating an Amazon account has led to massive increases in third-party sellers joining the platform, with over 1,000,000 sellers joining in the year 2017 alone.
There are three major paths third-party sellers can take on Amazon. Wholesale, private label and retail arbitrage.
The Amazon Seller Central help section provides sellers on the Amazon Marketplace with guidelines and answers to frequently asked questions. Despite the existence of this help section, a recent study has shown that 50 percent of surveyed sellers incorrectly believe that you cannot directly ask buyers for a product review.
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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- Dzieza, Josh (December 19, 2018). "Prime and Punishment: Dirty Dealing in the $175 Billion Amazon Marketplace". The Verge. Retrieved January 16, 2018.