Amazon marketplace stands for an E-commerce website that is wholly owned and managed by Amazon where it allows third-party merchants to list their products on sale which can either be new or even used products but will be given at a set amount.
Amazon also sold its share AMZN at https://www.webull.com/quote/nasdaq-amzn at a low price at first and got many new shareholders to support their business firm.
By utilising Amazon marketplace third-person merchant increase passage to the Amazon’s customer base where they can showcase their products and Amazon doesn’t even have to acquire additional inventory to keep the products being sold by the third-party retailers.
Items purchased by the third party sellers can either be fulfilled by the merchant (FBM) and can also be fulfilled by Amazon (FBA). FBM assets are usually kept at the merchant’s storage, whereas FBA goods are stored in Amazon warehouse, and the shipping, packing and delivering is done by Amazon in FBA.
Amazon charges the merchant who uses FBM because Amazon showcases their product on their website, and every time a product of the merchant is ordered, Amazon takes a portion of the amount as charges.
Amazon also takes charges to form those merchants who use FBA because of all the delivering, packing, and warehousing of the products takes time as well as the storage location of the Amazon goods.
The third-party selling at Amazon is about 31% of the Amazon total sales, so in the year 2016, they added around 10,000 more third-party merchants to make larger than 1 Billion USD in its annual sales.
Due to the ease of creating an Amazon account, it has become very easy for the third-party dealers to just create an account and add themselves as a seller and Amazon will verify and put up their products on its website and app.
In 2017 over 1,00,000 more third-party merchants joined Amazon.
What is the criticism faced by Amazon?
Amazons policy of dispute resolution and practices made in the marketplace have attracted critique from multiple retailers. The Verge, a publishing company, told that many sellers fear to file a complaint against Amazon as they think that Amazon will not be done anything but a lawsuit will be filed against them.
The users are usually given the priority by Amazon, and if they give a bad review about any of the small companies, then Amazon forces the sellers to do anything to make their customers happy in order for getting Amazon a great review and so the sellers have to forcibly reduce the price of their product. You can get more information from AMZN news.