The main objective of Amazon's business model is to constantly improve the customer experience in the marketplace and build strong relationships with customers. To achieve this, Amazon closed a key deal with AOL, an agreement that would place it on the most popular website in the world at the time.
Tom McFadyen, published author of Marketplace Best Practices and CEO of McFadyen Digital, a leading market advisor and implementer for brands such as Neiman Marcus, Lego and American Eagle Outfitters, explains that once Amazon has created the most valuable bilateral market in the world, it has become much easier for the company to offer many other services.
Amazon Seller Central sellers sell products under their own brands or stores on the Amazon Marketplace and maintain ownership of inventory, unlike those in Amazon Vendor Central. Building a hybrid market platform of a brand on top of its normal operations takes time and there are a lot of lessons to be learned on the fly. Therefore, if a brand wants to test it, they should expect this process to take a few months to complete.
Amazon stores most of the products placed on the market and therefore has to manage a large amount of inventory. Ownership of the product passes to Amazon and the company controls the price of the products in the marketplace. This blog will go under the hood of Amazon's legendary marketplace to shed light on how the company makes money, its motivations and how this can inform its approach to selling in its marketplace.
Can retailers adapt to Amazon's largest market? To find out more about this growing phenomenon, read our blog post on ranking on Google. Learn how you can make use of Amazon's marketplace model for your own business.