Are there any online marketplaces more reputable than Amazon? Probably not. Why not? For one, Amazon has successfully made use of many unique innovations. For another, Amazon has significantly systematized the selling process, structuring a generalized marketplace which virtually any seller can plug into without much difficulty. And for yet another, Amazon has become so large that it can negotiate discounts with international organizations, including significant shipping cost discounts. Simply speaking, other online marketplaces do not compete at this level. Amazon’s online marketplace is exceptional. Amazon’s success notwithstanding, sellers on Amazon still need to manage, pack, and ship their own products, and provide their own customer service, right? Wrong. One of Amazon’s innovations is Amazon fulfillment; Amazon handles the inventory, orders, shipping, returns, and customer service on behalf of the seller. To plug in to the marketplace, the seller only need deliver the products to one of Amazon’s warehouses. Amazon takes over from there. Essentially, with Amazon’s marketplace, the roles change – sellers become suppliers, and Amazon becomes the seller. This process looks as follows.
The process makes room for other innovations, perhaps the most effective being rapid and free shipping for Amazon Prime buyers, for any of the seller’s products. Individual sellers do not have the clout to make this possible by negotiating shipping discounts and arranging special shipping processes with national and international shipping companies, and they do not need to, because Amazon does so on their behalf. Buyers prize this option, making the seller’s products more attractive. Why wait a week or more to receive what you have purchased when you can receive it in two days? And this is made even better by the fact that you can purchase virtually any kind of product. The relationship between Amazon and sellers is synergistic. Amazon cannot produce the wide variety of products created by sellers worldwide, yet has a superior online marketplace to sell these products effectively. Sellers cannot individually provide such an effective online marketplace, but can provide the products. Both benefit and profit from this relationship.