Amazon OK Sacrificing Margins For A Global Inventory Of Products - Amazon.com (NASDAQ:AMZN)

Amazon.com, Inc.AMZN

's e-commerce business is separated into two units. The first embodies items the company directly sells to customers, known as 1P or first party. The second unit comprises items Amazon facilitates in selling by connecting third-party marketplace business with consumers and is done under the Fulfillment by Amazon (FBA) tag. In exchange for the transaction, sellers give Amazon a fee that also covers their merchandise, which is parked in Amazon's warehouses.

Now, Amazon is reaching out to tens of thousands of marketplace sellers in the U.S. and promising to buy their inventory at full retail price and then push these products to international markets, CNBC reports. The initiative is part of Amazon CEO Jeff Bezos' plans to build a complete catalog of products it can offer to a global market and include products that generate little margins or profits. Related Links: Master Of All Trades: Every Industry Jeff Bezos Has A Hand In Jeff Bezos: The Terminator _______ Image Credit: David M Jones [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons

In 2016 FBA sellers worldwide contributed to sell more than 2 billion items, implying the business is huge and with Amazon's global scale it can generate even more volume.

Amazon also wants to control products in its own inventories that are in high demand and can be delivered to customers right away regardless of the country they live in. By comparison, many items sold under the FBA tag could take weeks to be delivered.

Amazon completed a similar initiative in Europe last year when it announced a Pan-European FBA program. Merchants can sell their own products on Amazon's platform and store their inventory at any one of Amazon's fulfillment centers at no extra cost.

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