You're sitting on your couch, scrolling through your phone, and you realize you're out of laundry detergent. Two clicks later, it's arriving tomorrow. When you ask yourself is Amazon e-commerce, the answer feels like a screaming "yes." I mean, they basically invented the way we buy stuff online today. But if you look at their balance sheets or how they actually function in 2026, the answer gets a lot weirder and way more interesting than just "a website that sells socks."
Honestly, calling Amazon just an e-commerce company is like calling a smartphone a "calculator." It’s technically true, but it misses about 90% of the point.
Is Amazon E-Commerce at its Core Anymore?
Most people think of Amazon as a giant digital warehouse. They buy a toaster from a brand, put it in a box, and ship it to you. That’s the classic retail model. However, if you look at their financial reporting, the "Online Stores" segment—the part where Amazon actually acts as the retailer—hasn't been the main engine of their profit for a long time.
Jeff Bezos once famously said that "your margin is my opportunity." He wasn't just talking about lowering prices for customers. He was talking about building infrastructure that other people have to use.
Today, Amazon is more of a landlord than a shopkeeper. Over 60% of the items sold on the site come from third-party sellers. These are independent businesses. Amazon provides the digital real estate, the logistics (Fulfillment by Amazon), and the advertising tools. They take a cut of every single step. So, is Amazon e-commerce? Sure, but specifically, they are an e-commerce infrastructure provider. They own the pipes that the internet’s commerce flows through.
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The AWS Elephant in the Room
You can't talk about their business model without mentioning Amazon Web Services (AWS). It’s the invisible backbone of the internet. When Netflix, Airbnb, or even government agencies need cloud computing, they pay Amazon.
For years, the massive profits from AWS essentially subsidized the shipping losses on the retail side. It allowed Amazon to offer "free" Prime shipping while everyone else was struggling to pay for cardboard boxes. They played a long game. They used high-margin tech services to fund a low-margin delivery empire. It’s brilliant. It's also kind of terrifying if you're a competitor.
Why the Definition Matters for Sellers
If you're a business owner, understanding the nuances of how Amazon operates changes your entire strategy. You aren't competing with Amazon; you are working inside their ecosystem.
Take the "Buy Box." That’s the little button that says "Add to Cart." Most shoppers don't realize that dozens of sellers might be offering the same product. Amazon’s algorithm decides who gets that prime placement based on price, shipping speed, and seller health. It’s a ruthless meritocracy.
- Logistics is the real product. Amazon has more planes, vans, and sorting centers than almost anyone on earth.
- Advertising is the new gold mine. Have you noticed how the first five results of any search are "Sponsored"? Amazon has become the third-largest digital ad platform behind Google and Meta.
- Data is the lubricant. They know what you want before you even search for it.
The complexity is staggering. They aren't just selling you a book; they are selling the author a platform, the publisher a distribution network, and other advertisers the chance to show you a different book.
Is Amazon E-Commerce Facing a Real Threat?
Nothing lasts forever. Even though they seem invincible, there are cracks.
Social commerce is the big one. TikTok Shop and Instagram are cutting out the "search" phase of shopping. Instead of going to Amazon to look for a blender, you see a video of a blender on your feed and buy it instantly. This "discovery-based" shopping is a direct threat to Amazon’s "search-based" dominance.
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Then there’s the regulatory side. Governments in the US and EU are looking at whether Amazon’s dual role—being the marketplace and a seller on that marketplace—is a conflict of interest. They can see which products are trending and then launch their own "Amazon Basics" version of that exact item. It’s a huge point of contention.
The Nuance of Global Markets
In places like India or parts of Southeast Asia, Amazon isn't always the top dog. They face massive competition from local players like Flipkart or Shopee who understand the regional logistics and payment preferences better. Even in the US, Walmart has made a massive comeback by leveraging their physical stores as shipping hubs.
It turns out that having 4,000 giant buildings full of groceries is a pretty good head start for e-commerce.
Real-World Impact on Small Business
I talked to a friend who runs a small home decor brand. She told me that being on Amazon is a "love-hate relationship." On one hand, she gets access to millions of Prime members. On the other, Amazon takes nearly 50% of her revenue once you factor in referral fees, storage, shipping, and the advertising she has to buy just to be seen.
This is the reality of the "is Amazon e-commerce" question. For the consumer, it's a miracle of convenience. For the seller, it's a complex, expensive, and essential utility.
How to Navigate the Amazon Ecosystem Today
If you are looking to buy, sell, or invest, you need to stop looking at them as a store. Look at them as a data and logistics company that happens to have a front-facing website.
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- For Consumers: Don't assume Amazon always has the best price. Use price-tracking tools like CamelCamelCamel. Often, brands offer better deals on their own websites to avoid Amazon's fees.
- For Sellers: Diversify. Relying 100% on Amazon is dangerous. If their algorithm tweaks one morning, your business could vanish. Build a Shopify store. Build an email list. Use Amazon for reach, but own your customers elsewhere.
- For Everyone: Watch the "Prime" value proposition. As they add more ads to Prime Video and increase annual fees, the "deal" isn't as clear-cut as it was in 2015.
The landscape is shifting. Amazon is pivoting hard into AI and healthcare (Amazon Clinic and One Medical). They are trying to become the "operating system for your life." Whether they are still "e-commerce" at that point is almost a matter of semantics. They are an everything company.
To stay ahead, start by auditing your own recurring subscriptions. Check your "Subscribe & Save" items—often the prices creep up after the first few months without you noticing. If you're a seller, look into "Off-Amazon" attribution tools to see how your social media ads are actually performing. Don't let the giant own all your data. Take some of it back. Use the tools they provide, but never forget whose house you're playing in.
Actionable Next Steps
- Review your Amazon "Hidden" Costs: Go to your account settings and look at your digital subscriptions. Most people pay for at least one channel or service they forgot about.
- Price Check: Next time you make a purchase over $50, check the manufacturer's direct website. You’ll be surprised how often a "10% off your first order" popup beats the Prime price.
- Audit Seller Fees: If you're a merchant, calculate your "Total Cost of Sale" including ad spend. If it's over 40%, it's time to re-evaluate your pricing or your platform mix.