What is Amazon Marketplace? Ultimate Guide

Third-party sellers can sell new or used goods on Amazon Marketplace, an online storefront that is run and owned by Amazon. Third-party sellers have access to Amazon's global customer base through Amazon Marketplace. Amazon refers to merchants who list products for sale on their website as "third-party sellers."

What is the difference between Amazon and Amazon Marketplace?

Amazon.com is an online store. Amazon owns everything that is sold directly on Amazon.com. A platform called Amazon Marketplace enables outside vendors to sell their goods on Amazon.com. On Amazon.com, more than 12 million products are sold annually. Sales on the Amazon Marketplace bring the total to well over 3 billion products.

While third-party retailers can sell both new and used items on Amazon Marketplace, products sold on Amazon.com are always brand new.

The profits from purchases made through Amazon.com go to Amazon alone. The third-party seller contributes a portion of the proceeds from sales made through Amazon Marketplace to Amazon.

What makes the Amazon Marketplace unique?

The largest product search engine and largest marketplace in the world, Amazon, uses algorithms that are largely similar to those of Google and Bing. To put it another way, the platform is filled with a ton of structured product data. It has systems in place through which it organizes the results of product searches according to relevance, rewarding businesses that invest the most time and energy in product research and content management.

The Amazon Marketplace is a highly competitive environment due to its popularity and reach, where brands, retailers, small and mid-sized businesses, and even private sellers compete in the same space. As long as certain criteria are met, pretty much anyone with a physical product can sell it on Amazon Marketplace.

What are the main strategies for selling on Amazon Marketplace?

A business starting to sell products on the Amazon Marketplace has three basic business models or strategies to choose from.

• Wholesaling is the practice of buying a product in bulk from a retailer and then reselling it on Amazon.com.
• Private labeling: A private label seller on the Amazon Marketplace sells goods with their own branding and/or label, frequently produced by a third party.
• Arbitrage between online and offline sales occurs when a seller buys goods (that are discounted or on sale) from both online and offline retailers with the intention of making a profit on the Amazon Marketplace.

The choice of a model ultimately depends on the objectives, competition, and target market of a business. Each of these strategies has its own set of advantages and disadvantages.

How can you sell products on Amazon?

Amazon Vendor Central and Amazon Seller Central are the two methods that third-party sellers can use to sell on Amazon. 

Sellers can sell their goods directly to Amazon at wholesale prices using Amazon Vendor Central. After that, Amazon sold these on Amazon.com and pocketed the proceeds. Manufacturers and wholesalers frequently participate in the invitation-only Amazon Vendor Central program.

Amazon Seller Central allows vendors to market their goods directly to customers. Sellers give a portion of their profits in return for the ability to list their goods on Amazon. The vast majority of independent sellers use Amazon Seller Central to market their goods. 

Sellers can handle inventory and fulfillment on Amazon Seller Central themselves, or they can hire Amazon's experts through the Fulfilled by Amazon (FBA) program. Amazon sellers using FBA only need to ship their stock to an Amazon fulfillment center. Following that, Amazon takes over, notifying customers of their orders, packing the items, and shipping them. 

Amazon Advantage is another option for third-party sellers to sell on Amazon. Through the consignment program known as Amazon Advantage, vendors can offer media products (such as CDs, DVDs, and books) for sale on Amazon. Sellers with the Amazon Advantage program send their stock to Amazon directly. The order is then shipped and fulfilled by Amazon.