Amazon Marketplace is the part of Amazon where independent third-party sellers list and sell their own products directly to shoppers, alongside Amazon’s own inventory. Sellers keep ownership of their products,…
Amazon Marketplace is the part of Amazon where independent third-party sellers list and sell their own products directly to shoppers, alongside Amazon's own inventory. Sellers keep ownership of their products, set their own prices, and pay Amazon a fee on each sale. On the other hand, Amazon provides the platform, traffic, and checkout. Today it drives the majority of everything sold on Amazon.
If you have ever bought something on Amazon, there is a good chance it did not come from Amazon at all. It came from an independent seller. That quiet split between Amazon the retailer and Amazon the platform is the whole story behind the ecommerce marketplace that now drives most of what gets sold on the site. We’ve spent years helping brands launch and scale on it. And the first thing we tell every beginner is this: understanding what Amazon Marketplace is changes how you sell on it.
So let's break it down plainly. What it is, what it is used for, how it works behind the scenes, and what it really costs. Understand the things that matter when real money is on the line.
Let's go a level deeper than the definition above. Amazon Marketplace turns Amazon from a single store into an open platform. Instead of only buying from Amazon, shoppers buy from millions of independent sellers who range from solo entrepreneurs to small businesses to major brands, all using Amazon's traffic, tools, and checkout.
When you shop, a Marketplace listing looks almost identical to an item sold by Amazon. The difference shows up in the small "Sold by" line on the product page. That seamless blend is intentional, and it is why many buyers never realize they are buying from an independent seller.
The scale here is hard to overstate. Third-party sellers now account for roughly 61% of all paid units sold on Amazon, a share that has held in the 60-62% range across recent quarters. In other words, the marketplace is no longer a side feature. It is the main event, and Amazon's own retail catalog is the smaller half.
This is the question that trips up most beginners, so let's settle it. Amazon operates two models at once, and they work very differently.
Amazon Retail (the 1P model) is Amazon acting as a vendor. Amazon buys inventory wholesale from brands, owns it, sets the price, and sells it under the "Ships from and sold by Amazon" label. The brand sells to Amazon, then steps back.
Amazon Marketplace (the 3P model) is Amazon acting as a platform. Independent sellers list their own products, keep ownership of inventory, set their own prices, and pay Amazon a fee per sale. The seller sells through Amazon and stays in control.
| Feature | Amazon Retail (1P / Vendor) | Amazon Marketplace (3P / Seller) |
|---|---|---|
| Who owns inventory | Amazon | The independent seller |
| Who sets the price | Amazon | The seller |
| How to join | Invite-only (Vendor Central) | Open sign-up (Seller Central) |
| Fulfillment | Amazon handles all of it | FBA or FBM, the seller chooses |
| Profit model | Wholesale margin | Retail price minus fees |
For most people starting out, the Marketplace (3P) route is the realistic path. Vendor Central is invitation-only and built for established brands selling in bulk. Anyone meeting Amazon's requirements can open a Seller Central account and start listing.
At its core, Amazon Marketplace is used to connect product sellers with a massive, ready-to-buy audience without building a store from scratch. But that broad purpose splits into a few practical uses depending on who you are.
Sellers reach hundreds of millions of shoppers and skip the slow grind of driving their own traffic.
New brands borrow Amazon's trust and infrastructure to get sales from day one, instead of spending months on awareness.
Through Fulfillment by Amazon, sellers hand off storage, packing, shipping, and returns, turning a warehouse headache into a predictable cost.
For buyers, the Marketplace widens product choice and creates price competition, so the same item often appears from several sellers at different prices.
Sellers use Amazon's 20-plus global marketplaces to reach customers in the US, UK, Canada, Australia, Europe, Japan, and beyond.
So whether the goal is a first side income or a seven-figure brand, the Marketplace is the engine that makes selling at scale possible without owning the underlying infrastructure.
From the outside, it feels simple: list a product, make a sale, get paid. Behind that simplicity sits a clear sequence. Here is how the process actually runs, step by step.
Everything starts in Seller Central, Amazon's dashboard for sellers. You register an Amazon seller account with your business details, tax information, and a bank account. Then you pick a selling plan, which we cover in the fees section below. The sign-up itself takes minutes; getting your account fully verified can take longer.
Next you create product listings. Each listing needs a clear title, high-quality images, bullet points that focus on benefits, and a description. This is also where SEO begins. Strong keywords in your title and backend search terms decide whether shoppers ever find you. A well-built product catalog is the foundation everything else rests on.
Now you decide who handles storage and shipping: Amazon or you. This is the FBA versus FBM choice, and it shapes your costs, your margins, and whether your products qualify for Prime. It matters enough that it gets its own section next.
Once your listing is live, shoppers find it through search, ads, or category browsing. When someone clicks Buy, Amazon processes the order on your behalf. If you use FBA, Amazon pulls the item from its warehouse and ships it. If you use FBM, the order routes to you to pack and send.
Amazon collects the customer's payment, deducts its fees, and credits the rest to your seller account. Payouts run on a regular cycle, typically every 14 days, with funds held briefly after delivery. The amount that lands in your bank is the sale price minus referral fees, fulfillment fees, and any other charges. That gap is exactly why understanding fees is non-negotiable.
This decision quietly controls your profit margin, so let's give it the attention it deserves. Both methods sell on the same Marketplace. The difference is who does the heavy lifting after a sale.
With Amazon FBA, you ship inventory to Amazon's fulfillment centers and Amazon takes over. It stores your products, picks and packs each order, ships it, and handles customer service and returns. The headline benefit is the Prime badge. FBA products qualify for fast, free Prime delivery, which lifts conversion and helps you win the Buy Box. The trade-off is cost and less hands-on control.
With Amazon FBM, you keep control of the whole process. You store inventory, pack orders, ship them, and manage customer service yourself. You avoid Amazon's fulfillment and storage fees, which can protect margins on bulky or low-turnover items. The downside is no automatic Prime badge and a lot more operational work on your plate.
| Factor | FBA (Fulfillment by Amazon) | FBM (Fulfillment by Merchant) |
|---|---|---|
| Who ships orders | Amazon | You, the seller |
| Prime badge | Automatic | Only via Seller-Fulfilled Prime |
| Fees | Storage + fulfillment fees | No FBA fees, but your own costs |
| Control | Lower | Higher |
| Best for | Small, fast-moving, high-margin items | Bulky, heavy, or low-margin items |
My rule of thumb after years of doing this: small, light, fast-selling products usually win with FBA because the Prime badge pays for itself. Heavy, oversized, or slow movers often do better on FBM, where high fulfillment fees would otherwise eat the profit. Many established sellers run both, matching the method to each product.
Not every seller plays the same game. Most fall into one of a few business models, and the model you pick shapes your sourcing, margins, and risk.
You sell products under your own brand, usually made by a third-party manufacturer. Higher upfront effort, but you control the brand and protect your margins. This is where most serious sellers end up.
You buy established brand-name products in bulk and resell them on Amazon. Lower branding work, but you compete on the same listing with other sellers for the Buy Box.
You buy discounted products from stores or other sites and resell them for a markup. Low startup cost, but it does not scale cleanly and sourcing is constant work.
A supplier ships directly to the customer on your behalf. Low inventory risk, but tight margins and strict Amazon policy rules apply.
Amazon Handmade serves crafters, while Kindle Direct Publishing lets authors sell books and ebooks. Niche, but real businesses run on both.
There is no single best model. The right fit depends on your budget, time, and goals. A first-timer testing the waters and a funded brand building a catalog will reasonably choose differently.
This is the section that protects your profit, so read it twice. Selling on Amazon is not free, and the fees stack in ways that surprise new sellers. Here is the honest breakdown, with current numbers.
Amazon offers two plans. The Individual plan has no monthly fee but charges $0.99 per item sold, which suits sellers moving fewer than 40 units a month. The Professional plan costs $39.99 per month with no per-item fee, and it unlocks advertising, the Buy Box, bulk listing, and reporting tools. The math is simple: once you sell more than about 40 items a month, Professional pays for itself.
This is Amazon's commission on every sale. The referral fee is a percentage of the total sale price, including shipping. Most categories sit at 15%, though it ranges from as low as 8% to as high as 45% depending on the category. A $0.30 minimum applies per item. Amazon froze these rates for 2025 and 2026, so you can plan around them.
If you use FBA, you pay a fulfillment fee per unit based on size and weight, plus monthly storage fees based on the space your inventory occupies. As a rough example, a small standard item around 8 to 10 ounces priced at $19.99 carries an FBA fulfillment fee near $3.81 once the fuel surcharge is added. Storage fees climb during the peak fourth-quarter holiday months, which rewards tight inventory planning.
The takeaway: before you set a single price, run the numbers through Amazon's Revenue Calculator. On a $19.99 sale, total Amazon fees can reach roughly a third of the price before you even count advertising. Sellers who skip this math are the ones who quietly lose money on every order.
| Not sure your numbers add up? Our team has helped brands tighten margins and fix leaky fee structures across thousands of listings. See our latest case studies. |
Despite the fees and competition, the Marketplace remains one of the fastest ways to build a product business. Here is why sellers keep choosing it.
The proof is in the share of sales. Independent sellers now drive about 61% of units sold and roughly 69% of total marketplace volume, up from 60% in 2019. That trend has run in one direction for years.
I would be doing you a disservice to paint only the upside. The Marketplace is rewarding, but it is not easy money anymore. Go in clear-eyed about these challenges.
None of these are reasons to avoid the Marketplace. There are reasons to treat it as a real business with real operational discipline.
Amazon Marketplace fits a wide range of sellers, but it suits some better than others. It is a strong choice if you are:
It is a weaker fit if you sell highly customized, restricted, or razor-thin-margin products where Amazon's fees and rules leave little room to breathe. In those cases, your own store or a niche platform may serve you better.
Launching is the easy part. Sustaining a profitable store is where most sellers struggle, because the work never really stops. Here is what ongoing management actually involves.
This is exactly where many sellers bring in help. Managing listings, ads, inventory, and account health at once is a full-time job, and getting it wrong is expensive.
| Want your Amazon store handled by people who do this daily? From account setup to listing optimization and ads, our ecommerce and digital marketing team can take the operational load off your plate. |
Amazon is the giant, but it is not the only marketplace, and smart sellers rarely rely on one channel. Here is how it compares to the main alternatives.
Amazon usually wins on raw reach and Prime-driven conversion. The others win on lower competition or niche fit. The strongest sellers I work with treat these as a portfolio, not a single bet.
Amazon Marketplace is no longer a feature bolted onto a retailer. It is the core of how Amazon sells, with third-party sellers driving the majority of units sold. For sellers, that means a real opportunity paired with real demand. The platform rewards those who understand its fees, choose the right fulfillment method, optimize relentlessly, and treat it like the serious business it is.
Whether you are listing your first product or scaling a brand, the fundamentals in this guide are the same ones I lean on with every client. Get them right, and the Marketplace becomes one of the most powerful sales channels available to any seller today.
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