Amazon is the world’s largest online retailer and marketplace, functioning as a massive digital ecosystem that connects buyers and sellers globally. While it began in 1994 as an online bookstore, it has transformed into a trillion-dollar technology giant spanning e-commerce, cloud computing, digital streaming, and artificial intelligence.
How Amazon’s E-Commerce Platform Works
Amazon essentially operates two distinct business models within its main retail website to fulfill orders:
- First-Party Retail (1P): Amazon buys inventory directly from manufacturers and brands wholesale, stores it in its own warehouses, and sells it directly to consumers. You can spot these items when they say “Ships from and sold by Amazon.com”.
- Third-Party Marketplace (3P): Independent merchants use Amazon as a digital mall to sell products directly to buyers. Over 60% of physical units sold on the site come from these independent sellers.
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