Inside the World of Amazon Third Party Sellers and Their Impact on Retail

Most products sold on Amazon are not sold by Amazon. Independent businesses list them, price them and, in many cases, pay Amazon to store and ship them. In the fourth quarter of 2024, those third-party sellers accounted for an all-time high of 62% of the units sold on Amazon, according to Marketplace Pulse.¹

Quick Summary

Third-party sellers are independent businesses selling their own inventory in Amazon's store. They accounted for 62% of units sold on Amazon in Q4 2024, and third-party seller services brought Amazon $156.1 billion in 2024. Sellers choose an Individual plan ($0.99 per item sold) or a Professional plan ($39.99 a month), pay category referral fees, and either ship orders themselves or use Fulfillment by Amazon. Shoppers are protected by the A-to-z Guarantee, the INFORM Consumers Act requires marketplaces to verify and disclose information about high-volume sellers, and the FTC is suing Amazon over how it treats sellers.

That share took 25 years to build, and it has changed Amazon as much as it has changed retail. This guide explains what third-party sellers are, how they operate, what they pay, what protections shoppers have when they buy from them, and how the marketplace reshaped the company that runs it. Wherever possible it relies on what Amazon itself has said in its filings, shareholder letters and seller documentation, on what regulators in the United States and Europe have found or alleged, and on independent research from Marketplace Pulse.

What Are Amazon Third Party Sellers?

A third-party seller is any business or individual that sells its own inventory in Amazon's store, as opposed to products Amazon buys wholesale and resells itself. In its annual report, Amazon describes the arrangement plainly: it offers programs that let sellers sell their products in its stores and fulfill orders using its services, and "We are not the seller of record in these transactions." It earns "fixed fees, a percentage of sales, per-unit activity fees, interest, or some combination thereof" from those programs.²

The accounting follows the same line. Amazon records gross revenue for items it sells from its own inventory as product sales, and records only its net share of items sold by third-party sellers as service sales.² Amazon does not report the gross merchandise volume of third-party sales, as the House antitrust subcommittee noted in 2020, so its accounts show the fees it collects on those sales rather than their full value.³

Amazon's seller site says more than 60% of sales in the Amazon store come from independent sellers, most of them small and medium-sized businesses.⁴ Jeff Bezos put a number on that community in his letter covering 2020: more than 1.9 million small and medium-sized businesses sold in Amazon's store, making up close to 60% of its retail sales.⁵ In 2023, Andy Jassy wrote that the "vibrant third-party seller ecosystem" accounted for 60% of Amazon's unit sales.⁶

The share grew steadily. When Bezos wrote to shareholders about the marketplace in 2019, he opened with a table: independent third-party sellers accounted for 3% of the physical gross merchandise sold on Amazon in 1999, 28% in 2006 and 58% in 2018. Over the same period, third-party sales grew from $0.1 billion to $160 billion, a compound annual growth rate of 52%, while Amazon's own first-party sales grew from $1.6 billion to $117 billion. His summary: "Third-party sellers are kicking our first party butt. Badly."⁷

Getting there took several false starts. Amazon's general counsel, David Zapolsky, wrote in 2023 that Amazon began inviting independent sellers in 1999, and that its first attempts, including separate sections of the website for independent sellers, "failed to resonate with customers."⁸ Bezos was blunter in his letter covering 2014. Amazon first launched Amazon Auctions: "I think seven people came, if you count my parents and siblings." Auctions became zShops, "basically a fixed price version of Auctions," which also drew no customers. Then Amazon turned zShops into Marketplace. "Internally, Marketplace was known as SDP for Single Detail Page," he wrote. The idea was to let third-party sellers compete against Amazon's own retail category managers on its product detail pages, and within a year the marketplace accounted for 5% of units.⁹

The decision to let sellers in was not an easy one inside the company. In his letter covering 2005, Bezos described inviting third parties in 2000 to compete on Amazon's product detail pages, which he called its "prime retail real estate." Amazon's buyers warned that it would make inventory forecasting harder and that Amazon could get "stuck" with excess inventory if it "lost the detail page" to a third-party seller. His answer: "If a third party could offer a better price or better availability on a particular item, then we wanted our customer to get easy access to that offer." Third-party units grew from 6% of the total in 2000 to 28% in 2005.¹⁰ Years later he recalled that when Amazon "decided to invite third party sellers to compete directly against us on our own product detail pages – that was a big one. Many smart, well-intentioned Amazonians were simply not at all aligned with the direction."¹¹

The milestones kept coming. By early 2015, Bezos reported that more than 40% of Amazon's units were sold by more than two million third-party sellers worldwide, and that customers had ordered more than two billion units from sellers in 2014.⁹ A year later the share was "close to 50%"¹², and in 2017, "for the first time in our history, more than half of the units sold on Amazon worldwide were from our third-party sellers."¹³

Types of Amazon Third Party Sellers

Amazon's seller guide describes three basic ways to sell: a business can sell its own branded products, sell generic products, or resell items made by others.⁴ In practice that covers brands selling their own goods, retailers and wholesalers reselling other companies' products, and small makers.

Third-party sellers sit alongside a second group, vendors. The House Judiciary antitrust subcommittee's 2020 report on digital markets draws the line this way: first-party sales are those where Amazon sells its own private-label products or products it sources wholesale from a vendor or manufacturer, while third-party sales are made by independent merchants through Amazon Marketplace.³ Some brands would rather be sellers than vendors, and the report says Amazon does not always give them the choice. It quotes a 2016 comment by Sebastian Gunningham, then head of Amazon Marketplace, about large suppliers such as Apple, Nike and P&G: "We don't want to open that door, relationship has to be reseller."³

Brand owners who do sell on the marketplace have their own path. Amazon recommends that the rights owner of an eligible brand enroll it in Amazon Brand Registry before listing, and once a brand is enrolled, only three types of sellers can create its product detail pages through the standard process: the original rights owner, sellers directly employed by the brand, and third-party resellers associated with the brand. Other sellers can then match their offers to that page, sometimes after completing a brand selling application.⁴

Resellers built the early marketplace. Marketplace Pulse wrote in 2018 that the Buy Box concept let many retailers with access to the same brands compete with each other on price "as if they were all on an infinite retail street," but that the model was shifting toward brands and private-label sellers who could invest in a listing without sharing the rewards with dozens of other sellers of the identical product.¹⁴

Makers of handcrafted goods can apply to Amazon Handmade, which Amazon says uses application and audit processes to ensure the products are genuinely handcrafted.¹⁵ Sellers also come from outside the United States. Amazon's Global Selling program lets businesses sell globally from the US or sell from another country to US customers¹⁶, and Amazon's annual report says China-based sellers account for significant portions of its third-party seller services and advertising revenues.² Amazon first added that language to its annual report filed in February 2024.¹⁷ By Marketplace Pulse's count, China-based sellers made up more than 50% of the top sellers on Amazon.com in 2024, with US sellers at roughly 45%.¹⁸

The seller base is large and concentrated. The House report cited a count of 2.3 million active third-party sellers worldwide in 2020, and a seller survey estimating that about 37% of them, more than 850,000 sellers, relied on Amazon as their sole source of income.³ Marketplace Pulse found that 15,000 sellers with at least 100,000 orders each accounted for nearly half of the US marketplace's sales in 2022¹⁹, and by 2025 it estimated that 2% of US sellers generated more than half of total revenue, while the number of sellers worldwide with more than $1 million in annual sales had grown from 60,000 in 2021 to more than 100,000.²⁰

Most sellers who sign up never get that far. Marketplace Pulse counted more than 900,000 new sellers across Amazon's marketplaces in 2024²¹, yet it found that over 30% of registered accounts never make a sale and fewer than 8% of accounts registered before 2019 are still active. More than 60% of today's top 10,000 sellers on Amazon.com registered before 2019.²²

Amazon FBA vs FBM Operations

Every seller chooses how orders reach customers. Amazon's seller guide describes two basic options: fulfill orders yourself, keeping inventory and shipping directly to customers, which Amazon calls Fulfilled by Merchant, or send inventory to Amazon and have it pick, pack and deliver products through Fulfillment by Amazon, which also takes care of customer service and returns. A seller can make that choice product by product.⁴

FBA grew out of Amazon's own warehouses. Andy Jassy wrote that as Amazon added third-party sellers, "they frequently requested being able to use these same logistics capabilities," which let Amazon introduce Fulfillment by Amazon in 2006. He said the service "has saved sellers substantial time and money (typically about 70% less expensive than doing themselves)."²³

Amazon announced the service on September 19, 2006. "We created Fulfillment by Amazon because it is good for Amazon.com customers, and therefore, great for our third-party sellers," Amazon's Joe Walowski said at the launch, according to Marketplace Pulse, which noted that fewer than a million customers had signed up for Prime at the time.²⁴ In his letter covering 2006, Bezos described FBA as a set of web services that "turns our 12 million square foot fulfillment center network into a gigantic and sophisticated computer peripheral." His pitch to sellers: "Pay us 45 cents per month per cubic foot of fulfillment center space, and you can stow your products in our network," then send instructions to pick, pack and ship. "You never have to talk to us."²⁵

The link to Prime made FBA central. In the last quarter of 2011 alone, Bezos wrote, FBA shipped tens of millions of items for sellers, and items enrolled in it became eligible for Amazon Prime, Super Saver Shipping and Amazon's returns processing and customer service.²⁶ Three years later he called FBA "glue that inextricably links Marketplace and Prime," and cited a 2014 survey in which 71% of FBA merchants in the US reported more than a 20% increase in unit sales after joining. In the 2014 holiday period, FBA units made up more than 40% of paid third-party units.⁹ The operational differences between the two fulfillment options, and the disputes over them, are covered in more detail below.

Revenue Models and Fee Structures

Sellers pay for access in two layers. The first is the selling plan. The Individual plan costs $0.99 per item sold and lets a seller list products one at a time with static prices. The Professional plan costs $39.99 per month and adds bulk listing and inventory tools, Automate Pricing, the chance to compete for the Featured Offer, brand-building tools, Amazon Ads, Amazon Business, Global Selling and access to apps and APIs. Sellers can switch or cancel plans after registration.²⁷

The second layer is the referral fee, charged on every item sold. It varies by category and is a percentage of the total price or a minimum amount, whichever is greater; the total price includes shipping and gift-wrapping charges. Examples from Amazon's US fee schedule in August 2025:²⁷

The clothing tiers are recent. Marketplace Pulse reported that in January 2024 the referral fee on clothing priced under $15 fell from 17% to 5%, and to 10% for items from $15 to $20, a move it tied to competition from Shein and Temu. Amazon later said lower apparel fees had "spurred substantial year-over-year unit growth in apparel."²⁸

Media items such as books, DVDs, music and software carry a 15% referral fee plus a $1.80 closing fee per item, and Amazon notes that a product's fee category may differ from the category shown to shoppers.²⁷ Amazon Handmade works differently: creating a Handmade storefront is free, Handmade deducts a 15% referral fee on each sale with no other listing or payment processing fees, and approved makers can use Professional plan tools without the monthly fee, which Amazon says saves them $480 a year after a one-time first-month payment.¹⁵

Optional services add further costs, including FBA and advertising.²⁷ How much all of this adds up to is contested. In its 2023 antitrust lawsuit, the Federal Trade Commission alleged that Amazon's combined fees, from monthly fees to advertising fees that it said have become virtually necessary, "force many sellers to pay close to 50% of their total revenues to Amazon."²⁹ Amazon disputes the allegations.²

Independent estimates point the same way. Based on profit-and-loss statements from a sample of sellers, Marketplace Pulse reported in 2023 that a typical seller pays a 15% referral fee, 20% to 35% in FBA fees including storage, and up to 15% for advertising and promotions, for a total above 50% of revenue, up from 40% five years earlier.³⁰ The House subcommittee's report cited an estimate from the Institute for Local Self-Reliance that Amazon's average cut of each sale rose from 19% in 2015 to 30%, and said sellers paid Amazon $39.7 billion in fees in 2018, not counting advertising, about 25% of the $160 billion in third-party gross merchandise volume.³

Fulfillment fees account for much of the rise. Marketplace Pulse calculated that the FBA fee to ship a 1-pound item went from $3.48 in 2020 to $5.06 during the 2022 holiday season, after a series of increases that included a fuel and inflation surcharge.³¹ Andy Jassy told CNBC that spring, "At a certain point, you can't keep absorbing all those costs and run a business that's economic."³¹ According to the House report, an internal Amazon document described seller attrition as a result of its 2018 FBA fee increases as "Nothing significant."³

Performance Metrics and Requirements

Amazon measures sellers through an Account Health dashboard that shows adherence to its policies and performance targets. Customer service performance is measured by the Order Defect Rate, the percentage of a seller's orders with one or more indicators of poor customer service.⁴

Sellers who ship their own orders are also measured on four shipping metrics: the late shipment rate, the share of orders confirmed as shipped after the expected ship date; the pre-fulfillment cancel rate, the share of orders the seller cancels; the valid tracking rate, the share of packages with a valid tracking number; and the on-time delivery rate, the share of tracked units delivered by the promised date.⁴

Amazon's advice for earning good reviews reads like a summary of those metrics: represent products accurately, pack them to prevent damage, respond to customer messages within 24 hours and provide valid tracking numbers.⁴ Behind the metrics sit Amazon's policies. Its annual report says those policies are designed to stop sellers from collecting payments when buyers never receive products or receive items materially different from their descriptions, and to stop the sale of unlawful, counterfeit, pirated or stolen goods.²

Falling short can end a seller's business on Amazon, and how Amazon enforces its standards has drawn complaints. The House subcommittee heard from sellers who described account suspensions and delistings with little explanation. Stacy Mitchell of the Institute for Local Self-Reliance testified that "Among the most egregious examples of Amazon's arbitrary treatment of sellers are its abrupt suspensions of their accounts, frequently made without explanation."³ Sellers told the subcommittee that messages to Seller Support often drew automated replies, and the founder of an infant product said it took "at least 10 or 15 contacts with Seller Support" each time her listings were removed by mistake. Another seller complained that "an algorithm can make a decision that just shuts off my income stream."³

Disputes are hard to take outside Amazon. The report says all of Amazon's third-party sellers are subject to a binding pre-dispute arbitration clause, and that between 2014 and 2019 only 163 sellers and 16 vendors started arbitration proceedings against the company.³

Regulators have forced some changes to the rules. In 2018, Germany's competition authority, the Bundeskartellamt, opened abuse proceedings over Amazon's terms for sellers after receiving many complaints. It closed the case in July 2019 when Amazon agreed to change its Business Solutions Agreement for amazon.de, its other European marketplaces and marketplaces worldwide. Under the changes, an ordinary termination of a seller account requires 30 days' notice, Amazon must inform sellers and give reasons when it terminates for alleged infringements or blocks an account, and sellers can object to refunds Amazon grants customers and seek compensation. The authority also reported that Amazon permanently blocked more than 250,000 seller accounts on amazon.de in 2018 and temporarily blocked more than 30,000, citing fraud as the main reason.³²

Product Categories and Restrictions

Anything sold in Amazon's store must comply with the law and with Amazon's policies, and Amazon tells sellers to read its Product safety and Restricted products policies before listing. Its seller guide links to category-specific restrictions covering, among others, animals and animal-related products, cosmetics and skin and hair care, drugs and drug paraphernalia, hazardous and dangerous items, lock-picking and theft devices, medical devices, plants and seeds, and tobacco.⁴

Some categories carry specific listing rules. Cell phones and accessories must be listed with the manufacturer's Universal Product Code⁴, and certain cell phone devices may require approval.²⁷ If a product is already in the store, a seller usually matches its offer to the existing detail page using the product's GTIN; if it is not, the seller creates a new page. Amazon recommends product images of 500 by 500 or 1,000 by 1,000 pixels.⁴

Some categories lean heavily on independent sellers. Amazon's 2023 Small Business Empowerment Report listed the five most-shopped categories from US sellers as Health and Personal Care, Beauty, Home, Grocery and Apparel.³³ Others are dominated by Amazon itself. In books, Amazon told the House subcommittee that its own retail business accounted for 74% of sales and third-party sellers for 26%.³

Inventory Management Strategies

Where inventory sits has become a service in its own right. Jassy described how Amazon built lower-cost "upstream" warehouses optimized purely for storage, with algorithms that predict when shipping fulfillment centers will run out and replenish them automatically, and then opened those Amazon Warehousing and Distribution facilities to sellers.²³

He listed other logistics services Amazon now sells to sellers: Global Mile for importing products; Amazon Freight or third-party carriers through the Partnered Carrier Program for moving inventory from the border or domestically to storage; Amazon Shipping, which lets sellers who manage their own shipping use Amazon's last-mile delivery network; and Multi-Channel Fulfillment, for sellers who want Amazon's network to store inventory and ship orders regardless of where the customer ordered. Supply Chain by Amazon combines several of these.²³ Amazon said Multi-Channel Fulfillment helped more than 300,000 sellers worldwide deliver orders from their other sales channels in 2024.³⁴

Capacity has not always kept up. Jassy wrote that Amazon spent its first 25 years building its fulfillment network and then had to double it in 24 months during the pandemic, and that a tight labor market made it "challenging both to receive all of the inventory our vendors and sellers wanted to send us and to place that inventory as close to customers as we typically do."³⁵ In March 2020, Amazon announced it would temporarily delay shipments of non-essential products from its warehouses. The House report says the change blocked third-party sellers of those items from sending new FBA inventory while Amazon reportedly continued shipping some non-essential items of its own, and that Amazon confirmed it gave its own products preferential treatment for a period but called it "unintentional."³

Sellers now manage inventory within limits and fees set by Amazon. Marketplace Pulse reported that Amazon sets how much warehouse space each FBA seller can use, and that starting March 1, 2023, sellers could bid a reservation fee for extra capacity through a Capacity Manager, earning a $0.15 performance credit for every dollar of sales generated with the additional space.³⁶ In 2024, Amazon added inbound placement fees for sellers who do not split shipments across its regional centers, and announced fees for carrying low stock. Amazon explained the second fee this way: "When sellers carry low inventory relative to unit sales, it inhibits our ability to distribute products across our network, degrading delivery speed and increasing our shipping costs."³⁷

Amazon also sends sellers automated advice. In his letter covering 2014, Bezos said the Selling Coach program generated more than 70 million machine-learned "nudges" in a typical week, alerting sellers to opportunities to avoid running out of stock, add selection that is selling and sharpen their prices.⁹

Customer Service and Communication

Who handles customer service depends on fulfillment. With FBA, Amazon handles customer service and returns for the seller³⁸; with Fulfilled by Merchant, the seller does.⁴

Amazon's A-to-z Guarantee sets the clock for sellers who do not respond. A shopper can file a claim if a package has not arrived three days after the latest estimated delivery date and the seller has not responded within 48 hours, or if a return request for a damaged or defective item has gone unanswered for more than 48 hours.³⁹ The INFORM Consumers Act adds a legal layer: for high-volume sellers, marketplaces must verify contact information and, above a certain sales level, disclose it to shoppers.⁴⁰

Amazon controls most of the channel between sellers and their buyers. The House report says Amazon generally forbids sellers from contacting their customers, and that packaging and order confirmation emails for third-party sales feature the Amazon brand rather than the seller's. It quotes the Online Merchants Guild, a seller trade group: "Many Amazon sellers use websites such as Shopify to try and establish their own eCommerce presence, but without the ability to market to their supposed core customer base, their Amazon customers, it's pretty futile."³

Feedback is part of that channel. Marketplace Pulse reported in July 2025 that the share of US customers reporting positive experiences with marketplace sellers had fallen to 84.7% over the previous 12 months, from 92.1% in 2020, and that from August 4, 2025, Amazon would let customers leave seller feedback as a star rating without written comments. It argued that star-only ratings would make it harder for FBA sellers to show that a complaint was about Amazon's delivery rather than their own service.⁴¹

Competition Analysis and Market Research

On Amazon, sellers often compete for the same product page. Amazon's guide explains the pricing concepts it uses. The Featured Offer is the offer a customer often sees near the top of a product page with the Buy Now and Add to Cart buttons; to compete for it, a seller needs a competitive price, a Professional selling plan and a product in new condition. Amazon shares a "competitive external price," the lowest price for the item from major retailers outside Amazon, and says a seller's price plus shipping must be at or below it to count as competitive. It also shares the lowest price currently offered by any seller in the Amazon store so others can match or beat it.⁴

An older Amazon Ads page described the same box as the Buy Box, where "multiple sellers can offer the same product, so you may compete with other merchants to appear in the Buy Box," with eligibility based on performance criteria.⁴²

The House report says Amazon told the subcommittee that its featured merchant algorithm is designed to predict the offer customers would choose after comparing all the offers in detail, and that it weighs criteria such as price, delivery speed and cost, Prime eligibility and seller performance. The report cited an industry estimate that about 80% of Amazon sales go through the Buy Box, and noted that "only Amazon knows exactly how its featured merchant algorithm works."³

The FTC's 2023 complaint shows how much rides on that box. It alleges that when an item has no Buy Box, shoppers must click a link labeled "See All Buying Options" to reach the other offers, and that fewer than 1% of purchases on Amazon are made from offers outside the Buy Box. It also alleges that Amazon has told itself internally that eliminating a seller from the Buy Box causes that seller's sales to "tank."⁴³ These are allegations that Amazon disputes.² Amazon's position is that it declines to feature poor deals. "Just like any store owner who wouldn't want to promote a bad deal to their customers, we don't highlight or promote offers that are not competitively priced," Zapolsky wrote.⁸

Those pricing mechanics are also at the center of litigation. Amazon's 2024 annual report lists private and state lawsuits alleging that its pricing policies and Featured Offer practices violate antitrust and consumer protection laws, including a suit filed by the Arizona Attorney General. Amazon says it disputes the allegations.² The list is long. Beginning with Frame-Wilson v. Amazon.com in federal court in Seattle, private plaintiffs in the US and Canada have alleged price-fixing arrangements between Amazon and the vendors and sellers in its store, and the attorneys general of the District of Columbia and California filed similar suits in May 2021 and September 2022. Courts in Frame-Wilson, De Coster v. Amazon.com and the California case dismissed claims that Amazon's pricing policies are inherently illegal but allowed claims that they are an unlawful restraint of trade to proceed, and in August 2024 the DC Court of Appeals revived the District of Columbia's suit after a lower court had dismissed it.² The House report said Amazon imposed price parity provisions on US sellers until 2019 and then replaced them with a Fair Pricing Policy, which the subcommittee concluded had the same effect of discouraging lower prices on other sites.³

Sellers also compete with Amazon itself, and the data Amazon holds has been the biggest point of contention. Asked at a July 2020 hearing about Amazon's internal documents describing third-party sellers as "internal competitors," Bezos answered, "In some ways, we are competing."³ Amazon told the subcommittee that its Seller Data Protection Policy, adopted in 2014, "prohibits Amazon Retail teams from using non-public seller-specific data to compete against third-party sellers." After The Wall Street Journal reported in April 2020 that employees had used data about a seller of car-trunk organizers to develop a competing private-label product, Bezos told the subcommittee: "we have a policy against using seller-specific data to aid our private-label business, but I can't guarantee you that that policy has never been violated." Amazon later reported that its internal review found "a single former employee pulled and analyzed only aggregate data for both products in compliance with the Seller Data Protection Policy." The subcommittee said the review did not change its views.³

The report also described an imbalance in market data. Amazon sells sellers some analytics, but the subcommittee said much of its data was unavailable to them or available only at a high price, citing reports that access to the Amazon Retail Analytics Premium program cost vendors at least $30,000.³

European regulators reached their own conclusions. In November 2020 the European Commission sent Amazon a Statement of Objections setting out its preliminary view that Amazon systematically relied on non-public data from marketplace sellers, such as units ordered and shipped, sellers' revenues and visits to their offers, to calibrate its retail offers. "Data on the activity of third party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers," said Margrethe Vestager, the commissioner in charge of competition.⁴⁴ In December 2022 the Commission made commitments from Amazon legally binding across the European Economic Area: Amazon agreed not to use non-public seller data for its retail business, to treat all sellers equally when ranking offers for the Buy Box, and to show a second competing offer when one is sufficiently different on price or delivery.⁴⁵

The UK followed. In November 2023 the Competition and Markets Authority accepted similar commitments covering Amazon's UK marketplace, including equal treatment of offers for the Buy Box and limits on Amazon's use of marketplace seller data, to remain in force until June 2028. Ann Pope of the CMA said they would "help thousands of independent UK sellers to compete on a level playing field against Amazon's own retail arm."⁴⁶ The CMA noted that giving commitments does not imply a finding that competition law has been infringed.⁴⁶

Technology and Automation Tools

Bezos credited software for much of the marketplace's growth. Asked in his letter covering 2018 why independent sellers did better on Amazon than on eBay, he pointed to investment in selling tools, "including tools that help sellers manage inventory, process payments, track shipments, create reports, and sell across borders." Of greatest importance, he wrote, were Fulfillment by Amazon and Prime, which Amazon launched "at significant financial risk and after much internal debate" and which "meaningfully improved the customer experience of buying from independent sellers."⁷

Much of what separates the two selling plans is software. Professional sellers can list and manage inventory in bulk, use Automate Pricing, and sell through apps and APIs.²⁷ Enrolled brands get A+ Content, Manage Your Experiments and Brand Analytics.⁴

Brand Registry adds automated protection. Amazon says brands that share information about their products and intellectual property get predictive protections that use machine learning to stop bad listings before they are published, search and reporting tools for trademark, copyright, patent and design violations, a dashboard of protection statistics, and access to a patent evaluation process that uses neutral third-party evaluators and is cheaper and faster than going to court. Brand Registry is free, and brands can join whether or not they sell in Amazon's store.⁴⁷ The same page describes Project Zero, which gives brands the ability to remove counterfeit listings immediately without contacting Amazon, and Transparency, a product authentication program.⁴⁷ Amazon says that by 2024 more than 2.5 billion product units had been verified as genuine through Transparency, and that 88,000 brands had enrolled.⁴⁸

Generative AI is the newest layer. Amazon said more than 100,000 independent sellers had used one or more of its generative AI listing tools by 2023, including tools that draft product titles, descriptions and other details from a few words or a product photo.³³ Amazon also points sellers to hundreds of third-party apps for managing their businesses, and to Veeqo, which lets sellers manage inventory and buy shipping labels from several carriers for orders from all the places they sell.⁴⁹

International Expansion Opportunities

Amazon's Global Selling program lets US sellers reach Amazon customers in other countries and lets sellers abroad reach shoppers on Amazon.com. A unified North America and Brazil account covers the United States, Canada, Mexico and Brazil, and Amazon lists selling regions across the Americas, Europe, Asia-Pacific and the Middle East and North Africa. Its tools include cross-listing, supply chain services, vetted global shipping providers, a digital wallet and automatic currency conversion.¹⁶

Cross-border selling has been a focus for a decade. In his letter covering 2014, Bezos wrote that Amazon hosted merchants from more than 100 countries, who reached customers in 185 nations, and that almost one-fifth of third-party sales took place outside sellers' home countries.⁹ A year later, he said sellers in 172 countries reached customers in 189 countries, cross-border sales made up nearly a quarter of third-party units, and Amazon had translated hundreds of millions of product listings and provided conversion among 44 currencies.¹² Amazon said US-based sellers exported more than 330 million items to customers in more than 130 countries in 2023³³, and more than 2 billion items over 25 years.³⁴

National markets differ. Germany's competition authority reported that more than 300,000 third-party sellers were active on amazon.de in 2018 and that they accounted for 55% to 60% of its sales volume, with German sellers generating 60% to 65% of third-party sales, sellers from outside Europe 20% to 25% and sellers from other European countries 10% to 15%.³² The UK authority cited an estimate of 280,000 independent sellers on Amazon's UK marketplace in 2019.⁴⁶

Most sellers still stay home. Marketplace Pulse found in 2025 that 69% of Amazon sellers operate in a single marketplace and fewer than 1% sell in 11 or more countries; fewer than 1% of US sellers sell outside North America, though 12% sell in Canada and 5% in Mexico. It pointed to regulatory complexity, particularly in Europe, and to the size of the US market as reasons.⁵⁰

Selling across borders also brings local rules. Amazon's annual report notes that India restricts foreign ownership of companies involved in online multi-brand retail, so on Amazon.in it provides marketing tools and logistics services to third-party sellers. In Europe, the Italian Competition Authority fined Amazon €1.13 billion in December 2021 over marketplace and logistics practices it said infringed EU competition rules; Amazon paid the fine and is appealing.² Bezos wrote in 2015 that Amazon had adapted FBA for India with Seller Flex, which configures part of a seller's own warehouse as a node in Amazon's fulfillment network.¹²

Financial Planning and Profitability

Amazon gives sellers a Revenue Calculator to compare estimated fees, costs and revenue for FBA against their own fulfillment, and warns that its results are estimates only.²⁷

Amazon has also tried to estimate what sellers earn in aggregate. In his letter covering 2020, Bezos wrote that Amazon's Selling Partner Services team estimated third-party seller profits from selling on Amazon at between $25 billion and $39 billion that year, and that he used the lower figure to be conservative.⁵ That is Amazon's own estimate, and it sits alongside the FTC's allegation, noted above, that fees consume close to half of many sellers' revenue.²⁹

Amazon's reports give a sense of typical sales. It said US independent sellers averaged more than $230,000 in sales in 2022⁴⁹, more than $250,000 in 2023³³ and more than $290,000 in 2024, when more than 55,000 independent sellers passed $1 million in sales in its store.³⁴

Margins depend on the business model. Marketplace Pulse estimated in 2024 that Amazon charged a typical private-label seller 50% to 60% of sales in fees in 2023³⁷, and noted that resellers often spend less than 5% of sales on advertising while private-label sellers often spend more than 10%. Some sellers, it reported, discovered only at the end of the tax year how little net profit remained after fees, inventory, freight and staff.³⁰

Amazon also lends to sellers. Bezos wrote in 2016 that Amazon Lending had provided more than $1.5 billion in short-term loans to small and medium businesses in the US, UK and Japan since it launched¹², and Amazon said it and its lending partners lent $2.1 billion to independent sellers in 2022, up 50% from the previous year.⁴⁹

How Amazon Third Party Sellers Operate

The practical steps are set out in Amazon's seller guide: choose a selling plan, register and configure a Seller Central account, enroll a brand if eligible, list products, price them, choose a fulfillment method, monitor performance, promote the products and gather reviews.⁴ Configuring the account covers the public seller profile, payment and business information, shipping and returns settings, tax information, notification preferences, login settings and user permissions.⁴

Identity checks are part of registration and now a legal requirement. Amazon began showing the business name and address of sellers on the US marketplace in September 2020, bringing the US in line with its European, Japanese and Mexican marketplaces.⁵¹ Ahead of the INFORM Consumers Act taking effect in June 2023, Amazon asked sellers with $5,000 or more in annual sales to reverify their identity, bank account, phone number, business address and tax identification number, and Marketplace Pulse counted nearly 100,000 sellers changing their business name or address in a few weeks.⁵²

Fulfillment by Amazon (FBA) vs Fulfillment by Merchant (FBM)

With Fulfillment by Amazon, a seller sends products into Amazon's fulfillment centers. Amazon picks, packs and ships the orders, handles customer service and returns, and can offer customers free two-day shipping through Prime.³⁸ Amazon says FBA costs 30% less per unit than standard shipping options from major US carriers and 70% less per unit than comparable premium options, and that products shown with two-day delivery have a meaningfully higher conversion rate than products with slower delivery.⁵³ Amazon said independent sellers had shipped more than 80 billion items through FBA since it launched.³⁴

The FBA network now extends beyond Amazon's own store. Buy with Prime lets brands offer Prime delivery and checkout on their own websites, with Amazon handling storage, picking, packing, delivery, payment and returns through Amazon Pay and FBA. Jassy wrote in 2023 that Buy with Prime had increased shopper conversion on third-party shopping sites by 25% on average⁶, and Amazon's Buy with Prime site cites a 16% average increase in revenue per visitor, based on A/B tests with 167 merchants between July 2023 and June 2024.⁵⁴

Fulfilled by Merchant sellers keep their own inventory and ship directly to customers, and they are measured on the late shipment, cancellation, valid tracking and on-time delivery metrics described above.⁴ Sellers who ship their own orders can now also buy Amazon's last-mile delivery through Amazon Shipping²³, and Amazon's Buy Shipping service offers discounted rates it has negotiated with other carriers.⁵³

The Prime badge is the crux. Bezos wrote in 2016 that Amazon had created Seller Fulfilled Prime, inviting sellers who could meet a high bar for shipping speed and consistency to offer Prime directly from their own warehouses.¹² The program closed to new registrations in early 2019, Marketplace Pulse reported, and in August 2020 Amazon told participants that "Fewer than 16% of SFP orders in the US met the Prime Two-Day delivery promise," announcing stricter requirements from February 2021, including Saturday delivery and nationwide coverage.⁵⁵ The FTC's complaint tells the story differently. It alleges that Seller Fulfilled Prime, launched in 2015, let sellers make Prime-eligible offers without buying FBA services, that it was "an immediate hit among sellers," and that Amazon shuttered enrollment in 2019 after concluding it had lowered a barrier to competition.⁴³

The House subcommittee concluded that FBA was effectively the only practical route to the Prime badge for most sellers. It cited an Amazon draft Q&A for a 2018 earnings call that said Prime and FBA "reinforce each other" and are "inextricably linked." Asked whether FBA helps a seller win the Buy Box, Bezos said, "I'm not sure if it's direct, but, indirectly, I think the Buy Box does favor products that can be shipped with Prime." Amazon told the subcommittee that participation in FBA is voluntary.³ The European Commission's 2022 commitments require Amazon to set non-discriminatory conditions for sellers to qualify for Prime and let Prime sellers choose any carrier.⁴⁵

The FTC's lawsuit targets the same link. It alleges that Amazon conditions sellers' ability to get Prime eligibility, which it calls "a virtual necessity for doing business on Amazon," on using Amazon's fulfillment service, making it more expensive for sellers to also sell on other platforms.²⁹ Amazon's response calls that allegation "simply not true," saying sellers "have choices, and many succeed in our store using other logistics services or choosing not to advertise with us."⁸

Product Sourcing and Inventory Management

Before a product can be sold, it needs a detail page. A seller matches an existing page by GTIN or creates a new one, and branded products enrolled in Brand Registry have restrictions on who can create those pages.⁴ Sellers can list one at a time on either plan, and Professional sellers can also list in bulk.⁴

Sourcing ties many sellers to global supply chains. Amazon's annual report warns that regulatory and trade restrictions, economic factors or geopolitical events affecting China-based sellers and suppliers could hurt its results, because those sellers account for significant portions of its third-party seller services and advertising revenue.² Marketplace Pulse notes that most goods on Amazon are made in China even when sold by US sellers, and that Chinese sellers have increasingly moved manufacturing to countries such as Vietnam to avoid tariffs. In November 2024 Amazon launched Amazon Haul, a section for buying directly from sellers in China; by Marketplace Pulse's count, all of its sellers were based there.¹⁸

Sourcing documents also matter when Amazon questions a product. The House report described sellers being asked to submit original sales receipts to prove authenticity, with one seller saying Amazon rejected submissions where prices had been blacked out as "altered" documents.³

Benefits of Buying from Third Party Sellers

For shoppers, third-party sellers are the reason Amazon's selection is so large. Andy Jassy described the logic as a series of questions Amazon asked itself: "Why should we be the only sellers of these items? Millions of third-party merchants and small sellers offer similar or unique items. Why not let customers choose the selection, price, and delivery speed they prefer from among these millions of sellers?"⁵⁶

Bezos made a similar argument in his letter covering 2014, describing a flywheel: allowing third parties to offer products side by side made Amazon more attractive to customers, which drew even more sellers, and the added scale let Amazon lower prices and drop shipping fees on qualifying orders.⁹

Competitive Pricing and Product Variety

Amazon's early marketplace struggled to get attention. Jassy wrote that after "struggling for a couple years to create awareness for sellers' selection," Amazon decided to show sellers' offers "on the same product detail pages as our first-party selection (where all the traffic was)."⁵⁶ In an earlier letter he said Amazon realized it "could add broader selection and lower prices by allowing third-party sellers to list their offerings next to our own on our highly trafficked search and product detail pages."²³

Competition on the page is what gives shoppers price choice. Amazon asks sellers to price at or below the lowest price from major outside retailers to be considered competitive, and shares the lowest price in its own store so sellers can match or beat it.⁴ Amazon also says it earned the rank of most trusted brand among US consumers in 2022, and presents that reputation as a reason sellers choose its store.⁴⁹

The breadth of sellers shows in the numbers Amazon publishes. It said independent sellers in the US sold more than 4.1 billion items in 2022⁴⁹ and more than 4.5 billion in 2023, an average of 8,600 items a minute.³³

Access to Unique and Niche Products

Some of what third-party sellers offer is not available elsewhere on Amazon. Amazon Handmade exists specifically to give makers a place to sell "unique creations" and to give customers "a trusted destination to find genuine handcrafted goods."¹⁵ Global Selling brings in sellers from other countries¹⁶, and brands that sell on their own websites can reach Prime members there through Buy with Prime.⁶

New brands arrive constantly. Amazon said more than 100,000 new brands launched in its store in 2023 and that brand owners' sales grew by more than 22% that year.³³ Bezos wrote in 2016 that the marketplace "adds unique selection," and that more than 70,000 entrepreneurs had sales of more than $100,000 a year on Amazon.¹² Amazon also lets shoppers filter for small businesses through a Small Business search filter and a Support Small shopping page.³³

Orders from independent sellers still go through Amazon's checkout and, when sold and fulfilled by a third party, are covered by the A-to-z Guarantee described below.³⁹

Potential Risks and Challenges

Buying from a marketplace means buying from many independent businesses of very different quality. The main risks are counterfeit goods, sellers who fail to deliver or refund, price gouging in emergencies, manipulated reviews and unclear information about who the seller is. Amazon acknowledges these risks in its own filings.

Quality Control Issues

Amazon's annual report is direct about the problem. Its seller policies are designed to prevent sellers from "collecting payments, fraudulently or otherwise, when buyers never receive the products they ordered or when the products received are materially different from the sellers' descriptions." When those policies "are circumvented or fail to operate sufficiently," it says, that "can harm our business or damage our reputation and we could face civil or criminal liability for unlawful activities by our sellers." It also notes that the cost of reimbursing customers under the A-to-z Guarantee will rise as third-party sales grow.² The warning is long-standing: Amazon's annual report for 2014 already said it "may be unable to prevent sellers" from collecting payments fraudulently and that the cost of its guarantee would increase "as our marketplace seller sales grow."⁵⁷

Amazon also flags a legal uncertainty: "The law relating to the liability of online service providers is currently unsettled," its annual report says, and governments have required, and could again require, changes in how the marketplace business is run. Third parties selling through Amazon expose it to product liability claims, and under the A-to-z Guarantee it may reimburse customers for certain product liability claims up to set limits. Amazon adds that although its contracts prohibit sales of certain products, it may not be able to detect every violation.²

Safety is part of the concern. The House report cited a 2019 Wall Street Journal investigation that found Amazon had active listings for more than 4,000 items that had been declared unsafe by federal agencies, were deceptively labeled or were banned by federal regulators.³

Emergencies expose the problem quickly. In his letter covering 2019, written during the early COVID-19 pandemic, Bezos wrote that Amazon had removed more than half a million offers for COVID-based price gouging, suspended more than 6,000 selling accounts globally for violating its fair-pricing policies, and turned over information about suspected price gougers to 42 state attorneys general offices.⁵⁸

Reviews can be gamed too. In 2021, Marketplace Pulse reported that Amazon had suspended nearly 300 China-based seller accounts in two months, including the brands Mpow and Aukey, with combined annual sales of more than $1 billion, for policy violations such as manipulating customer reviews. Amazon said it had stopped more than 200 million suspected fake reviews in 2020 before any customer saw them.⁵⁹

Counterfeit Products and Authenticity Concerns

Amazon reports on counterfeiting in its Brand Protection Report. According to that report, Amazon invested more than $1.2 billion and had more than 15,000 employees working against counterfeiting, fraud and abuse in 2023. In that year it says it stopped more than 700,000 bad actor attempts to create new selling accounts before they listed a product, and identified, seized and disposed of more than 7 million counterfeit products worldwide.⁶⁰

Amazon also says more than 99% of suspected infringing listings were stopped by its proactive controls before a brand had to find and report them, that valid notices of infringement from brands fell more than 30% since 2020, and that its Counterfeit Crimes Unit has pursued more than 21,000 bad actors through litigation and criminal referrals.⁶⁰ These are Amazon's own figures, and they measure what Amazon caught. Its report for 2024 raised them again: more than 15 million counterfeit products seized and disposed of that year, more than 24,000 bad actors pursued by the Counterfeit Crimes Unit since 2020, and a decline of around 35% in valid infringement notices since 2020.⁴⁸

The report gives examples of enforcement. Amazon says it worked with brands and Chinese law enforcement on more than 50 raids in 2023, with more than 100 suspects detained for questioning; worked with the London police's Intellectual Property Crime Unit and Philips against counterfeit electric-toothbrush heads; and filed a joint civil action with BMW in October 2023.⁶⁰

Critics have argued that enforcement can be uneven. At a House subcommittee field hearing in Colorado, PopSockets founder David Barnett testified that Amazon was aware of large quantities of counterfeit PopSockets on its platform but let the problem continue until his company agreed to spend nearly $2 million on Amazon marketing services. Bezos responded at a later hearing that if someone at Amazon had tied help with counterfeits to ad spending, "that is unacceptable." The same report described sellers of genuine goods who had listings blocked as "inauthentic."³

Customer Service Limitations

Service quality depends on who fulfills the order. FBA orders get Amazon's customer service and returns³⁸, while merchant-fulfilled orders depend on the seller.⁴ International sellers add another wrinkle: the A-to-z Guarantee specifically covers cases where an international seller did not provide a US return address, a prepaid return label or a full refund without return.³⁹

Refunds also have deadlines. A shopper can request an A-to-z refund when a return was delivered to the seller seven days earlier without the expected refund, or when a seller's prepaid return label had an invalid tracking ID.³⁹

Satisfaction with sellers has slipped. Marketplace Pulse's tracking of seller feedback found that positive experiences with marketplace sellers fell between 2020 and 2025 in every marketplace it had tracked since 2020 except Australia, including declines in the US, Germany, the UK and India.⁴¹

Seller Transparency and the INFORM Consumers Act

For years, shoppers often could not tell who they were buying from. The INFORM Consumers Act, effective June 27, 2023, changed that for high-volume sellers in the United States. It defines a high-volume third-party seller as one with 200 or more separate sales of new or unused consumer products and $5,000 or more in gross revenue in any continuous 12-month period during the past 24 months.⁴⁰

Online marketplaces must collect bank account information, contact information and a tax ID from those sellers, verify it, and require sellers to certify it at least once a year. For sellers above a certain level of sales, the marketplace must disclose specific information about the seller in product listings or order confirmations. The Federal Trade Commission and the states enforce the law, and the FTC says its purpose is to add transparency and deter criminals from acquiring stolen, counterfeit or unsafe items and selling them through online marketplaces.⁴⁰

The statute spells out the details. Sellers must provide the information within 10 days of qualifying, and the marketplace must verify it within 10 days. The disclosure requirement applies to high-volume sellers with $20,000 or more in annual gross revenue on the marketplace, and covers the seller's full name, physical address and contact information, as well as whether a different seller supplied the product. Sellers who only have a home address can ask for partial disclosure of their country and state, and every listing from a high-volume seller must show consumers a way to report suspicious activity. A marketplace must suspend a seller who fails to provide or certify the information after 10 days' notice.⁶¹

How to Identify Reliable Third Party Sellers

Before buying, check who is selling the item and who is shipping it. The seller's name links to a profile page with its ratings and feedback, and for high-volume sellers the INFORM Consumers Act requires certain business details to be disclosed.⁴⁰ Amazon began showing sellers' business names and addresses on their profile pages in the US in 2020.⁵¹

Seller Ratings and Reviews

Amazon lets customers leave a public product review, a seller feedback rating, or both.⁴ Reviews were a deliberate choice from Amazon's early days. Jassy recalled the question Amazon asked: "When we offer reviews, why must they all come from professional 'experts?' Customers are great resources and will be brutally honest. Why not include customer reviews even if they sometimes dissuade a purchase?"⁵⁶

Look at a seller's recent feedback, the number of ratings behind the score, and complaints about late delivery or items that differ from the listing. A new seller with few ratings offering a well-known brand far below its usual price deserves extra caution, given the counterfeiting risk Amazon itself describes.⁶⁰ Keep in mind that star-only seller ratings, introduced in August 2025, carry less detail than written feedback.⁴¹

Reviews of the product itself are a separate signal. The House report notes that in 2016, after reports of sellers generating fake reviews, Amazon banned incentivized reviews except those obtained through its own program, Amazon Vine, which was for years closed to third-party sellers.³ When Germany's competition authority closed its case in 2019, Amazon had agreed to gradually open Vine to marketplace sellers who own a brand registered with Amazon.³²

Return Policies and Guarantees

Read the return policy before you order, especially for items shipped from abroad. If something goes wrong and the seller does not resolve it, Amazon's A-to-z Guarantee is the backstop, and asking a card issuer for a chargeback instead makes the order ineligible for an A-to-z refund.³⁹

Amazon's Role in Third Party Seller Management

Amazon sets the rules sellers must follow, runs the payment and checkout process, and steps in when a sale goes wrong. It also faces growing scrutiny from regulators over how it uses that power.

A-to-Z Guarantee Protection

The A-to-z Guarantee protects shoppers who buy items sold and fulfilled by a third-party seller, covering both timely delivery and the condition of the item. A shopper can make a claim directly to Amazon if the order's last possible delivery date was 90 days ago or less and one of several conditions applies.³⁹

Those conditions include a package that has not arrived three days after the latest estimated delivery date, where the seller has not responded within 48 hours; an item that is damaged, defective or not as described, where the seller has not authorized a return within 48 hours; a return request the seller closed or refused; extra charges, such as customs fees, that the seller did not cover; and a return delivered to the seller seven days earlier without the expected refund.³⁹

For a damaged, defective or materially different item returned within the stated windows, the refund covers the product cost, original shipping and return shipping. For other returns, restocking fees may be deducted and return shipping is not covered, except for some clothing, shoes, jewelry and watches. The guarantee does not cover digital items, services, stored value instruments or automobiles, and a shopper who asks their payment provider for a chargeback is no longer eligible for an A-to-z refund.³⁹

Seller Performance Standards

Amazon's performance standards run through the Account Health dashboard, the Order Defect Rate and the shipping metrics for merchant-fulfilled orders.⁴ Enforcement ranges from blocking new accounts, which Amazon says it did more than 700,000 times in 2023⁶⁰, to suspending existing ones, as it did with more than 6,000 accounts over pandemic price gouging.⁵⁸

Amazon's own conduct toward sellers is under legal challenge. In September 2023 the Federal Trade Commission and 17 state attorneys general sued Amazon, alleging that it is a monopolist that uses "anti-discounting measures that punish sellers," conditions Prime eligibility on using its fulfillment service, degrades search results with paid advertisements and biases search toward its own products. FTC Chair Lina M. Khan said the complaint showed how Amazon was "raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them."²⁹

Amazon answered the same day. Zapolsky called the suit "wrong on the facts and the law"⁶², and in a longer response argued that the FTC's case would force Amazon to feature higher prices and offer slower Prime shipping. He wrote that about 500,000 independent businesses in the United States sell on Amazon and have created 1.5 million US jobs, and that consumers still buy more than 80% of retail products in physical stores.⁸

What the FTC Complaint Alleges About Sellers

The complaint itself, filed on September 26, 2023, in federal court in Seattle, lays out the government's picture of the marketplace in more detail, much of it redacted in the public version. It says Amazon charges sellers four primary fees: a selling fee, charged monthly or per item; a referral fee based on each item's price; fees for Amazon's fulfillment and delivery services; and advertising fees. "As a practical matter," the FTC alleges, "most sellers must pay these four fees to make a significant volume of sales on Amazon."⁴³

The complaint describes sellers as ranging from small businesses that offer a single product to multinational firms selling thousands, and says the marketplace let Amazon expand selection without carrying the risk of unsold inventory, a risk sellers bear. It says sellers' products made up 60% of Amazon's unit sales in the second quarter of 2023, up from 55% in 2021, and that shoppers see retail and marketplace listings intermixed, with "no obvious differences between the types of listings."⁴³

On price, the FTC alleges that Amazon punishes sellers who offer lower prices elsewhere, including by burying them in search results or removing them from the Buy Box, and that many sellers raise their prices off Amazon, never try discounting, or stop selling elsewhere to avoid penalties. It says Amazon's fees have risen so steeply that it "reportedly takes close to half of every dollar from the typical seller that uses Amazon's fulfillment service," and quotes one seller: "we have nowhere else to go and Amazon knows it."⁴³

On advertising, the complaint says that in 2014 Amazon sought to "unleash monetization of Amazon web pages, devices, and mobile apps," that advertisements on Amazon reach 96% of Americans aged 25 to 54 each month, and that search results pages once dominated by organic results are now "cluttered with advertisements," with Sponsored Brand ads above the results and Sponsored Product ads within them.⁴³

Amazon disputes the allegations. Its annual report says that in September 2024 the federal court in Seattle granted Amazon's motion to dismiss five state law claims in that suit and denied the motion on the remaining claims, and that Amazon intends to defend itself vigorously.² In March 2025 the court dismissed, with prejudice, amended consumer protection claims brought by New Jersey and Pennsylvania over an Amazon pricing algorithm the complaint calls Project Nessie. That order covered only those three state-law counts.⁶³

Regulators Outside the United States

The US case is one of several. Germany's Bundeskartellamt secured changes to Amazon's seller terms worldwide in 2019.³² The European Commission's 2022 commitments cover Amazon's current and future marketplaces in the European Economic Area, with Italy excluded for the Buy Box and Prime commitments because of the Italian authority's own remedies. They run for seven years for Prime and the second Buy Box offer and five years for the rest, are overseen by an independent trustee, and expose Amazon to fines of up to 10% of its total annual turnover if it breaches them.⁴⁵ The UK commitments are likewise monitored by a trustee approved by the Competition and Markets Authority, and also let UK sellers negotiate their own rates directly with independent Prime delivery carriers.⁴⁶

Tips for Safe Shopping with Third Party Sellers

• Check the seller's name and profile before buying, especially for branded goods.
• Look for the seller's business name and address on its profile page.
• Be wary of prices far below what the brand and other sellers charge.
• Read the return policy, particularly for sellers shipping from outside the United States.
• Ask for a refund through Amazon rather than your card issuer: requesting a chargeback makes the order ineligible for an A-to-z refund.
• Contact the seller first when something goes wrong, then file an A-to-z claim if they do not resolve it within the time Amazon allows.
• Report suspicious listings through the reporting option that marketplaces must show on high-volume sellers' listings under the INFORM Consumers Act.

The Impact of Third Party Sellers on Amazon's Marketplace

The marketplace has changed what kind of company Amazon is. Selling other businesses' goods now brings Amazon fees on a scale that rivals its own retail business, and it has pulled the company deeper into logistics, advertising and regulation.

Revenue Transformation Through External Merchants

Amazon's annual reports show the trend in its own numbers. Third-party seller services include commissions, related fulfillment and shipping fees and other seller services.² Its annual report for 2017 gives the figures back to 2015.⁶⁴

The figures for 2015 to 2017 come from Amazon's 2017 annual report⁶⁴, those for 2018 to 2020 from its 2020 report⁶⁵, 2021 from its 2023 report⁶⁶, and 2022 to 2024 from its 2024 report, in which online stores, Amazon's own retail sales, brought in $247.0 billion.² The House report noted that seller services revenue rose 39% in the first six months of 2020 compared with a year earlier, as the pandemic pushed more shopping online.³

Bezos's own series shows how the balance tipped. Measured by physical gross merchandise sales, the third-party share was 3% in 1999 and 2000, 17% in 2002, 34% in 2010 and 49% in 2014, before passing half at 51% in 2015 and reaching 58% in 2018.⁷

Marketplace Pulse calculated that third-party seller services were 24.48% of Amazon's total revenue in 2024 and argued that the rising third-party share is partly Amazon's design. It reported that Amazon has terminated vendor agreements with many businesses, pushing them toward the marketplace, and that Amazon is shifting from inventory ownership toward collecting seller fees and advertising revenue. It also noted that each fee increase shows how much of a seller's margin Amazon can capture, and that sellers stay because of Amazon's market share and infrastructure.¹ It estimated that Amazon and its sellers together sold about $700 billion worth of goods in 2023³⁷, and that sales by all third-party sellers on Amazon exceeded $500 billion in 2024.¹⁸

Fulfillment Strategy Evolution and Market Dynamics

The fulfillment network built for sellers and shoppers has grown into one of the largest in the world. Jassy wrote that Amazon built its own last-mile delivery capability "roughly the size of UPS."²³ In 2023, he said, Amazon delivered more than 7 billion items to Prime members the same or next day, including more than 4 billion in the US and more than 2 billion in Europe, helped by regionalizing the US network to store items closer to customers and by same-day facilities, of which Amazon had 58 in large US metro areas. Amazon's US cost to serve fell by more than $0.45 per unit year over year, which Jassy linked in part to regionalization.²³ Amazon says it has invested $100 billion in its fulfillment and delivery network.⁵³

For sellers, that network is both the main attraction of FBA and a source of dependence. The FTC's lawsuit argues that tying Prime eligibility to FBA made it "substantially more expensive for sellers on Amazon to also offer their products on other platforms."²⁹ Marketplace Pulse wrote in 2024 that more than 90% of top sellers and nearly all international sellers use FBA, and that the network became more expensive for sellers as it grew more complex and aimed for faster delivery.³⁷

Amazon increasingly sells the network to sellers for use beyond its own store. Doug Herrington, CEO of Worldwide Amazon Stores, told Amazon's 2024 seller conference that Multi-Channel Fulfillment, Buy with Prime and Supply Chain by Amazon let sellers use Amazon's logistics for their own websites, other retailers and social platforms, and that helping sellers grow their total sales would make Amazon a more attractive channel in the long run.⁶⁷

Advertising and Marketing Strategy Evolution

Advertising started as one more question in Amazon's list. Jassy recalled Amazon asking, "Why not experiment with relevant advertisements in our store to expose customers to new sellers and items (versus only what our algorithms might surface based on past purchases)?"⁵⁶

Advertising has grown alongside the marketplace. Amazon's advertising services, which include sponsored ads sold to sellers, vendors, publishers and authors, brought in $31.2 billion in 2021⁶⁶ and $56.2 billion in 2024, up from $37.7 billion in 2022.² Marketplace Pulse calculated that advertising reached 9.36% of Amazon's total revenue in the second quarter of 2025, at $15.69 billion, its highest share on record.⁶⁸

Sponsored Products ads appear in search results and on product pages and are sold on a cost-per-click basis, so advertisers pay only when a shopper clicks; to advertise, a product has to be eligible for the Buy Box.⁴² Amazon tells sellers that small businesses using Amazon Ads attributed 30% of their sales to its ads⁴, and cited a 2022 benchmarking report in which Sponsored Products advertisers spent 13% to 79% less per click than on alternatives.⁴⁹ The FTC sees the same growth differently, alleging that Amazon replaced relevant organic search results with paid advertisements and that ad fees have become "virtually necessary" for sellers.²⁹

The House report pointed to how shoppers search: it cited research that 44% of consumers look only at the first two pages of Amazon search results, a 2020 survey in which at least 73% of large brands used Amazon's advertising and 65% spent at least $40,000 a month on it, and an estimate that the cost per click for sponsored ads rose about 15% on average in a single year.³

Sellers have described the shift in similar terms. The Online Merchants Guild told the House subcommittee that "the only way to sell on Amazon is through Amazon's Pay-Per-Click ('PPC') offering" had become "common belief" among sellers, and that some saw advertising as a way for Amazon to raise seller fees without appearing to.³ Marketplace Pulse argued in 2024 that as Amazon allocated more space to ads, "few of the first 20 search results today are organic," turning an optional service into one sellers feel they must buy.³⁷

Economic Impact Beyond Amazon

The marketplace's effects reach well past Amazon's own accounts. Bezos's 2020 estimate of $25 billion to $39 billion in annual seller profits is one measure⁵; the more than 1.9 million small and medium-sized businesses selling in Amazon's store is another.⁵

Amazon also counts jobs. Bezos wrote in 2016 that marketplace entrepreneurs had created more than 600,000 jobs¹², and in 2018 Amazon estimated that its marketplace had created 900,000 jobs worldwide beyond its own hires.¹³ By Amazon's later estimates, independent sellers employed more than 1.8 million people in the US in 2023³³ and more than 2 million in 2024, and generated more than $2.5 trillion in sales in Amazon's store over 25 years.³⁴ Amazon said sellers in rural areas and small towns grew their sales by more than 30% in 2024.³⁴ These are Amazon's own estimates.

The marketplace also shapes prices and competition elsewhere. The FTC alleges that Amazon's anti-discounting measures keep prices higher "for products across the internet" because sellers are deterred from offering lower prices on other sites.²⁹ Amazon's annual report lists several private class actions and state suits making similar pricing allegations, some of which courts allowed to proceed in part.² How those cases end will determine how much freedom sellers have to price and sell elsewhere.

Sellers' dependence is its own economic fact. Marketplace Pulse estimated in 2024 that Amazon accounts for about 40% of US e-commerce and 80% of US e-commerce marketplace sales, leaving sellers little room to shift volume elsewhere, and quoted Northeastern University professor Moira Weigel: "Amazon sellers resemble gig workers and franchisees in that they assume forms of risk and responsibility that entrepreneurship entails, while relinquishing much of the freedom it has historically provided."³⁷

Conclusion

Third-party sellers went from 3% of Amazon's physical merchandise sales in 1999 to 62% of units sold in late 2024. They give shoppers a wider range of products and prices, and they now generate a quarter of Amazon's revenue through fees, alongside a fast-growing advertising business. The same openness brings counterfeits, uneven service and pricing disputes, which is why Amazon's brand protection programs, the A-to-z Guarantee, the INFORM Consumers Act, the European and UK commitments and the FTC's antitrust case all matter to anyone buying or selling there.