What is Amazon? Everything You Need to Know

What does Amazon mean?

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Widely regarded as the biggest digital marketplace in the world, Amazon has transformed the way we shop online. The multinational company focuses on delivering ecommerce solutions to customers and sellers around the world. Amazon also has another branch to its company focusing on cloud computing and artificial intelligence, but for this article, we’ll be focusing on the marketplace.

While many customers still use Google to begin their search for essential products, polls and surveys are beginning to show it’s actually Amazon that’s the most commons starting point for most sales. About 44% of customers start their search for products with Amazon, and 40% buy products on the website at least once per month.

For those in the ecommerce industry, Amazon can represent a valuable avenue for profit and customer relationships. Today, we’re going to be sharing everything you need to know about Amazon, where it came from, and how you can use it to your advantage.

What is Amazon?

what is amazon

Amazon is one of the five “big” companies in the United States technology industry, ranked alongside Facebook, Microsoft, Apple, and Google. It’s widely regarded as one of the most influential economic forces in the world and has had a huge impact on the way we live and shop.

Founded by Jeff Bezos in 1994 from a garage in Washington, Amazon was designed originally as a marketplace online for selling books. Quickly, the environment expanded to offer a wider range of products, including video games, electronics, furniture, food, and more. By 2015, Amazon had surpassed Walmart as the most valuable US retailer by market cap.

Amazon is best-known for its disruption of the ecommerce landscape, and the company continues to invest in new ways to change the way buyers and sellers interact, like Amazon Prime, or Amazon FBA. Today, the solution makes it quick and easy for customers to find the products they want in a digital landscape. At the same time, people hoping to sell their own products online can access Amazon to gain instant access to a huge range of customers.

According to Amazon, sellers have everything they need to promote products, manage reviews, analyze performance and generate sales on the platform. In fact, since third-party sellers first started selling on Amazon in 1999, they’ve grown to account for about 58% of all Amazon sales. What’s more, the third-party sales on Amazon grow at a rate of around 52% year, compared to only 25% per year for sales made by Amazon.

How Does Amazon Work?

Amazon is first and foremost a marketplace. It allows countless third-party sellers to connect with millions of online buyers every day. The multi-level ecommerce strategy offered by the company means you can get involved with Amazon in one of two ways. First, you can start as an “individual” seller, which is the option recommended for people selling less than 40 items per month. Individual sellers don’t get access to advanced selling tools, but it only costs $0.99 per sale.

The alternative option is the Professional plan, which costs $39.99 per month, and allows you to sell as many items as you want for your subscription fee. You’ll also get access to things like selling reports, and APIs. Plus, Amazon offers access to a range of additional selling tools, like Launchpad and Handmade, which can help you to find more customers.

To get started with Amazon, you’ll register for an account, which will involve inputting your bank account number, a chargeable credit card, ID, tax information, and your phone number. Signing up to sell with Amazon places your products alongside the other third-party products from other sellers on Amazon, as well as the first-party products sold directly from the Amazon warehouse.

The amount it costs to sell on Amazon depends on a number of factors, including whether you have a Professional or Individual selling plan. You’ll also need to pay selling fees, which are charged per item sold, and shipping fees, which are based on the product category and the shipping service selected by the customer. Other fees like “Amazon FBA” costs can also come into account.

What Tools do Sellers Have on Amazon?

When sellers sign up to sell with Amazon, they get access to something called “Seller Central” which is an account environment where business leaders can control their selling account, add product information, make inventory updates, manage payments and even access useful guidance and helpful content. Seller Central offers access to tools which allow you to keep track of your inventory and update your listings in a couple of clicks.

With custom business reports and access to templates which you can bookmark to use again in the future, Seller Central makes it quick and easy for businesses to get started online. You can also access Partner support from your account and keep track of daily sales.

Seller Central is also where you can list your products on Amazon. You’ll be able to upload new listings with all kinds of information, including product details, bullet points, pictures, videos, and more. Your Seller Central environment also gives you access to handy performance metrics, like Order defect rates, pre-fulfilment cancel rates, and even late shipment rates, so you can check whether you’re delivering the right kind of customer experience customers.

Additionally, it’s possible to check your customer reviews in your account, so you can respond quickly to any issues customers want to address on your pages.

What is an Amazon FBA?

Sellers on Amazon have two options for shipping their products to customers. The first solution is to do everything yourself. This means you need to maintain your own inventory and use your local shipping services to get the items to your customer’s address. The alternative option is to have Amazon manage responsibility for packing, labelling, and sending your products to your customers.

If you want Amazon to handle the hard work for you, this means signing up for a Fulfilment by Amazon, or Amazon FBA account.

If you choose to fulfil your own orders, you can avoid paying fees to Amazon for their packing and shipping support, but you’ll have to handle things like storing your items and getting them to your customers yourself, which can be a time-consuming and expensive process. Amazon charges shipping rates based on the product category, so you’ll need to find a shipping solution that appeals to you.

Amazon’s Buy Shipping tool can sometimes help you to get a better deal on shipping labels, by allowing you to work with a trusted network of partners.

Alternatively, with Amazon FBA, you sidestep the headaches involved with managing and shipping your own inventory. Currently, Amazon has over 175 fulfilment centers worldwide, which contain more than 150 million square feet of storage space. FBA allows you to store your stuff in Amazon’s warehouse, and take advantage of the company’s world-class shipping, customer service, and returns support. With FBA, you get free super saver shipping, and Prime eligibility too.

The Amazon FBA fulfilment process simplifies the process of getting products to your customers and ensures you can delight your audience with all the right experiences. Amazon’s team begins the inventory sorting process, which includes damage assessment to ensure you’re getting the right quality of item to your customers. As soon as shoppers place an order, the FBA model automates the process, and gets it direct to your customer.

How to Sell on Amazon

Selling on Amazon starts with registering a seller account. You can do this by visiting the “Seller Central” page on Amazon and clicking the button to “Start selling”. Notably, you’ll also use this environment later to manage your seller account. After you’ve created the account, you can begin listing your products on Amazon.

If you have the individual account for selling (mentioned above), you’ll be able to add one of the products you want to sell to your Amazon Marketplace catalog at a time. If you have the professional plan, you can add batches of your product.

If you’re selling products that haven’t been listed on Amazon yet, things can get a little more complex. You’ll need to start by telling Amazon what the Universal Product Code of your item and Stock Keeping Unit is. That’s the UPC and SKU. You’ll also have to list the features of the product on Amazon, such as the price, description, and title.

Don’t panic if you don’t know the UPC immediately, you should be able to find it. There’s an organization called GS1 which develops communication standards for businesses and assigns permanent UPCs to products for the entire lifecycle of the item. This means even if multiple different companies are selling the product, it will still have the same UPC.

The SKU is similar to your UPC, but it will differ in being a specific string of numbers and letters. The purpose of the SKU is to help retailers identify every product in their inventory, as well as the specific traits of the product, such as brand, manufacturer, size, color, style, and even price. Retailers will create their own SKUs, to help them track every piece of inventory they have.

Remember, the description of your product you’ll add to Amazon isn’t just a necessity for using the platform – it’s also crucial to attracting customers. The best way to make sure you get sales is to list your products with the features your customers are looking for. Think about things like keywords, and what’s going to be most important to your audience.

If you need additional help selling on Amazon, you can find advice here.

Best Tools for Amazon Sellers

Amazon is pretty easy to use for the most part, with a wide variety of features, and a convenient back-end where you can find all the tools you need to list your products. Because you’re not building a website from scratch with Amazon, there’s far less work to do. Of course, there are still tools out there to help you make your sales more effectively.

There are all kinds of different tools and services out there, intended to help you master the Amazon algorithm, boost the success of your startup, find subscribers for your store, or just improve the way you use your fulfilment centers. Options include:

  • Sellzone: A toolbox of essential selling solutions designed to give you useful insights so you can compare and evaluate external traffic sources for any product listed on Amazon. There’s also listing protection, keyword research and more.
  • Amazon Seller app: This is a convenient and free tool for beginners allowing you to access information about how much you should charge for your products, based on the prices listed for similar items.
  • Keyworx: This premium online software delivers keyword tracking and analysis features to focus on Amazon search results. You don’t have to worry about Google and other search engines, as Keyworx has a dedicated rank tracker.

Amazon’s ecosystem is brimming with valuable tools for all kinds of sellers. You can find more of the top tools for Amazon Sellers here.

What is Amazon Prime?

Finally, we come to one of the best-known features of Amazon, Amazon Prime. Amazon Prime is a paid subscription service costing around $199 per year, or $12.99 per month. Prime members receive a range of benefits for the price of Prime, including free one or two-day shipping for most of the items available on Amazon. There’s also access to things like Amazon Prime Music, Movies, and sometimes eBooks and downloads too. Amazon Prime Now, Prime Video, and other features have even helped Amazon to survive COVID downturns.

The popularity of Amazon Prime is part of what makes Amazon one of the most effective selling markets in the world. Sellers on Amazon need a specific Business account to offer Amazon Prime as part of their service. Not everyone will be able to set up Prime as standard. Find more information about Amazon Prime, what it is, and how companies can use it here.

Understanding Amazon

Like Netflix, Twitch, and other market-leading tools, Amazon has evolved rapidly over the years. From it’s launch in Seattle, to a multi-billion dollar corporation today, Amazon is now a major competitor in the digital market. Alongside Amazon sales and fulfilment centers through the Amazon marketplace, you also have Amazon Web services (AWS), The Amazon Echo and Alexa, the Kindle e-readers , Amazon Flex, AmazonFresh, Amazon Audiobooks and fire TV.

Every year, Amazon seems to come up with new products to offer to improve its profitability. There are even strategic acquisitions and partnerships with companies like Whole Foods to consider. For business owners, this technology company can help with everything from selling your products online for the first time, to data storage for your compute needs. The online retailer has a host of Amazon products to explore, and it’s growing bigger every day.

Rebekah Carter

Rebekah Carter is an experienced content creator, news reporter, and blogger specializing in marketing, business development, and technology. Her expertise covers everything from artificial intelligence to email marketing software and extended reality devices. When she’s not writing, Rebekah spends most of her time reading, exploring the great outdoors, and gaming.

Comments 12 Responses

  1. What kind of deal could I get if I were to sell my childrens book on Amazon? Presumably Amazon would be the publishers also, right?