In fact, it’s hard to distinguish between Amazon vs Amazon marketplace, especially when you shop through an Amazon platform.
Not to mention the differences, this is actually a good thing because selling on Amazon will let online merchants take advantages of the eCommerce behemoth’s great brand reputation when they sell their products on the platform.
In case you are a third-party seller currently owning a small business, you will have the opportunities to reach Amazon’s customer base of over 300 million around the globe. We’ll go over what Amazon and Amazon marketplace in more detail and point out what’s differences between them.
Let’s get started!
What is Amazon?
Amazon is one of the most prominent online marketplaces for both individuals and businesses, and it is available in a variety of countries and languages.
Founded in 1994 by Jeff Bezos, Amazon began as a simple online bookstore. Amazon has grown from humble beginnings to become the world’s largest online eCommerce store and one of the most powerful companies. Not only has it extended its product and service offerings, but it has also entered the streaming video industry, the cloud computing marketplace, and most recently, the banking industry.
Amazon allows people and businesses to sell and display things for sale online in addition to being an online store. It is the world’s largest internet retailer by revenue, with more than $386 billion in 2020.
What is Amazon Marketplace?
The Amazon Marketplace is a marketplace for third-party sellers that is incorporated into the same platform as Amazon.
This marketplace provides users with a considerably large product selection from thousands of external merchants, as well as the ability to compare prices to keep the platform competitive. Many buyers are unaware that they are purchasing from third-party merchants since Amazon Marketplace is so tightly integrated into Amazon.com. There’s a good reason for this, and you’ll begin to understand why further along in the article.
Amazon.com is quite picky about who they allow to sell on Amazon Marketplace. Only a few nations are permitted to participate, and sellers must have financial accounts in those jurisdictions.
Differences between Amazon vs Amazon marketplace
The difference between Amazon vs Amazon Marketplace is that Amazon is primarily a customer-oriented eCommerce platform that allows customers to purchase a wide range of products, whereas Amazon Marketplace is primarily a seller-oriented platform that allows anyone to sell directly to end-users or online customers.
Let’s dive deeply into the slight difference between Amazon vs Amazon Marketplace.
How do Amazon and Amazon Marketplace work?
Amazon.com has a huge selection of products to choose from. Except for the product selection, Amazon’s direct-to-customer sales approach is very similar to most online merchants worldwide. As a buyer, you can find any of the product types such as beauty products, apparel, jewelry, gourmet foods, sporting items, computers, furniture, and practically anything else. Aside from its vast product selection, Amazon goes to great lengths to personalize the shopping experience for its customers.
You’ll find not only special offers and featured products on the homepage, but if you’ve visited Amazon.com before, you’ll also see some personalized recommendations. Amazon recognizes you by profile name and attempts to serve as your personal shopper.
Apart from this, Amazon makes use of embedded marketing strategies to tailor your experience. Therefore, it is possibly the best example of the company’s comprehensive sales strategy: Know your customers in and out. Besides, Amazon has a stranglehold on customer tracking. If you allow the website to place a cookie on your computer, you’ll gain access to a variety of useful features that will enhance your shopping experience. For example, recommendations based on previous purchases and list of reviews and guides written by users who have purchased the products you’re considering.
Furthermore, the multi-leveled eCommerce strategy that Amazon.com implements is another key aspect that elevates the company. The Amazon.com platform allows practically anyone to sell almost anything. You can discover direct sales of Amazon items, similar to the best seller books by Jeff Bezos’s garage in the mid-’90s. Luckily, until now, they’re shipped from a massive warehouse.
In fact, since 2000, third-party sellers – individually, small businesses, and corporations have been able to list products on Amazon. Now, you can find secondhand products, refurbished goods, and auctions which are also available. Except that Amazon has recently added a more extroverted component to its plan, you might say that Amazon is simply the ultimate hub for selling things on the Internet.
When it comes to the affiliate program, any merchants are able to post Amazon links and receive a fee on click-through sales. Amazon now has a program that allows those affiliates to create complete Websites based on its platform (Amazon refers to them as “associates”). They can literally build mini Amazon websites if they want to, based on Amazon’s massive database of products and apps. Thus, you can create a site called Amazonish.com, pull products directly from Amazon’s servers, write your own guidelines and recommendations and receive a percentage of any sales.
On the other hand, Amazon Marketplace allows people to sell their own products, and it has quite a few online vendors. As a matter of fact, third-party sellers account for more than half of all Amazon sales. Amazon will ask for details such as a selling agreement, billing information, tax information, and product information when you create an account. Product information will include universal product codes, or UPCs, which are labeled on packaging to aid in item identification. Amazon reserves the right to remove listings that do not match the criteria for authentic UPC codes.
After that, a merchant can enter the Seller Central dashboard and continue to develop their listings once all of the information is complete. Plus, there are options to construct a FAQ page, a “About Seller” page, as well as a corporate logo and graphics. The dashboard also has tabs for product pricing, advertising, inventory and order management. This Seller Central serves as the hub for all third-party contact with Amazon.
Key Differences between Amazon vs Amazon Marketplace
- Amazon is a huge online retailer and cloud service provider, whereas, Amazon Marketplace is a third-party retail market that is integrated with Amazon.
- Amazon is a customer service company providing a wide range of products from across the world to its customers. Amazon Marketplace, on the other hand, is a seller service provider. It allows small people or groups of individuals/businesses to promote and sell their products on an Internet platform for a set price.
- To go on with the process, Amazon uses Amazon Web Services (AWS), Elastic Compute Cloud (EC2), and Simple Storage Service (S3). Meanwhile, Amazon Marketplace uses fulfilled by the merchant (FBM) or fulfilled by Amazon (FBA).
- The Amazon Marketplace is a platform that costs its sellers a fee for each transaction they make. However, there are no such criteria in Amazon because there are no individual sellers involved.
- Amazon sells all products that are completely branded by Amazon, while Amazon Marketplace uses its retail strategies to offer a wider range of brands from around the world.
- Amazon Marketplace allows sellers to resell both used and new items, whereas Amazon does not.
Sell on Amazon Marketplace
Becoming an Amazon Marketplace seller is a great choice for any merchant who is looking for a semi-passive income or the possibility of limitless earnings. To make it a success, you’ll need to figure out which selling approach is the most profitable for the products. Furthermore, you’d better plan your budget appropriately to avoid profit imbalance. If you’re ready to start selling on Amazon Marketplace, let’s keep on reading.
Before talking about Amazon’s selling fee, you should notice that you not only pay the subscription fee but also cover some additional fees like referral fees and variable fees. Those fees are subtracted from the overall sale including selling price, shipping and other charges like gift wrap.
Basically, any merchant who enters Amazon will have to choose a subscription plan which is either the Individual Plan or Professional Plan. The price ranges from $0.99 to $39.99.
For the Individual Plan, you need to pay $0.99 for each item sold on Amazon, not including additional selling fees. This plan is preferable for you if:
- You sell fewer than 40 units a month
- You’re still deciding what to sell
- You don’t have plans to advertise or use advanced selling tools.
Luckily, Amazon will not charge your monthly subscription fee. Instead, you need to pay another additional fee for variable closing fees by category. The price can range from $0.45 to $1.35. Keep in mind that while using the Individual plan, you can only be able to add new products to the Amazon Catalog and grow your business with Fulfillment by Amazon. This is a program where Amazon stores, packs, ships and handles customer service for the product you sell on Amazon.
On the other hand, when you choose the Professional Plan, you need to pay $39.99 per month without depending on how many items you sold. When to choose this plan?
- You sell more than 40 units per month
- You want to advertise your products
- You want to qualify for top placement on product detail pages
- Your store needs advanced selling tools such as APIs or Reports
- You want to sell products in restricted categories.
Besides, every merchant also has to cover the referral fees on each item sold which vary from 6% to 25%, averaging 13%. Similar to the Individual plan, you also need to pay for variable closing fees.
Is it worth selling on Amazon Marketplace?
I’m sure you might be asking yourself if it’s worth it to sell your products on Amazon after all.
The good news is that many companies selling on Amazon can be extremely successful. This is because they have the proper products, clever marketing strategies, tools and customer support. Despite the fact that there is strong competition in practically every category on the market, there are still lots of opportunities for companies to succeed.
For that fact, here is some useful advice you should take into account when deciding to sell on Amazon:
- Before deciding on the product types you want to sell, do some research into potential niches.
- Thoroughly understand the terms “price”, “costs”, and “fees”. This can also include manufacturing costs, shipping, packaging, selling fees, and other expenses.
- Make sure that your business operations are in good shape in terms of inventory management and forecasting.
- Learn everything about marketing, branding and advertising. You can work with an Amazon firm that specializes in Amazon advertising.
- Make use of the cross-channel promotions to get the greatest advantages. Brands can now measure the impact of their marketing efforts across different platforms and channels.
- Stay away from complacency. For sure you don’t want any competitor to smash your brand.
To conclude, we’ve just shown you the slight differences between Amazon vs Amazon Marketplace. Amazon poses massive advantages that any business should take into consideration. There’s no should or shouldn’t advice, it depends all on your effort and wise strategies to thrive your business.
In case you want your business to thrive on Amazon, you can choose an integration that can easily connect your main store to Amazon Marketplace. If that’s the case, you should give LitCommerce a try. This is the most flexible multi-channel solution which can bring your products to the top global marketplaces like eBay, Etsy, Walmart and far more. All data like products, customers, orders can be managed from a single dashboard.
Don’t hesitate to contact the customer support team when you have any questions. They’re always willing to help.
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