A profitable hub for third-party sellers
Amazon serves as a global platform for first- and third-party sellers
(3P). The former are vendors that sell goods directly to Amazon, who later re-sells them to final customers. The latter are independent sellers using Amazon as an e-commerce site to offer their products. Third-party sellers control pricing and product listing, a strategy which proved highly successful for small and medium enterprises in the United States
. 3P sales account for roughly 60 percent of total paid units on Amazon’s marketplace, and around the same share of 3P orders are completed via Amazon’s fulfillment services
Prime services lure users to Amazon
Amazon also offers Amazon Prime
, an annually paid membership giving free one-day delivery in the United States as well as discounted one-day shipping rates, which current users reckon is one of the key advantages
of buying on the marketplace. Due to these exclusive services, satisfaction towards Amazon’s delivery conditions
and discounted prices are generally much higher among Prime users, a global survey showed. Additionally, Amazon Prime has expanded to offer instant streaming of selected movies and television shows through Amazon Prime Video and Music.
Amazon grocery faces competition outside the U.S.
In the grocery segment, Amazon launched its delivery service of fresh food products, Amazon Fresh, in the U.S. and big cities in Europe and Asia, where it usually competes with grocery delivery services
provided by local supermarket chains. In the UK, reported price differences with grocery chains were significant. In the United States, where the service was first introduced, almost four in ten consumers had tried out Amazon grocery delivery
as of 2021.
Pioneering in voice services
Amazon also offers its own line of personal electronics, most importantly the Kindle electronics series. At the end of 2014, Amazon also made headway into smart electronics with its smart speaker called Amazon Echo, which connects to the voice-controlled personal assistant service Alexa
. This explains why Alexa is more used on smart speakers
than on smartphones or other devices, unlike equivalent services of other competitors. The digital voice assistant has seen compatibility with other brands
increase over the years, expanding its potential user base.