What Does Amazon Actually Manufacture? A Deep Dive for 2024

As an avid Amazon shopper, you‘ve probably noticed more and more products sporting the Amazon brand name in recent years. This seems to imply that Amazon makes far more of its own products than it actually does. In reality, the company relies heavily on third-party suppliers to source the vast majority of items available on Amazon.com.

In this comprehensive guide, we‘ll explore exactly what Amazon manufactures in-house, their partnerships with contract manufacturers, and the overall structure of their supply chain as we know it in 2024.

Overview of Amazon‘s 1st Party Manufacturing

While Amazon sells over 12 million different products across dozens of categories, they only manufacture three main types of items in-house:

So in summary, Amazon directly manufactures its own electronics, some basic private label items, and the packaging used to ship orders. But this 1st party production accounts for just a small fraction of their overall sales. In 2022, Amazon devices made up only 5% of the company‘s $386 billion in net revenue.

According to JungleScout, over 70% of units sold on Amazon are sourced from third-party sellers, not Amazon‘s own in-house manufacturing.

The Role of 3rd Party Manufacturers

Amazon employs several strategies to work with the thousands of outside suppliers that produce goods sold on their platform:

• Wholesale purchasing: For Amazon private labels, Amazon buys products in bulk directly from manufacturers to get low prices. Over 50% of AmazonBasics products are made in China.

• Made-by-Amazon: Artisans manufacture unique handmade goods that Amazon handles fulfillment and sales for. This program has grown 200% YoY.

• Sourcing popular products: Amazon uses data to identify top sellers in categories like electronics and approaches the manufacturers to sell on Amazon.

• Fulfillment by Amazon: 3rd party sellers ship their own manufactured products to Amazon warehouses for storage, sale, and delivery. Amazon earns fees for these fulfillment services. As of 2022, Fulfillment by Amazon accounted for 45% of Amazon‘s total unit sales.

Relying on third-party manufacturing provides the advantage of scale and flexibility. As an Amazon retail analyst, I‘ve seen Amazon efficiently adjust supply based on fluctuating demand signals by leveraging their external supplier network. This is crucial for managing volatility.

Amazon Warehouses: Storage and Fulfillment, Not Manufacturing

While Amazon‘s fulfillment centers span over 100 million square feet in the US alone, these warehouses function solely for storing and shipping products. They do not manufacture items within the warehouses themselves beyond creating Amazon‘s custom cardboard boxes on-site.

Any items sold on Amazon.com are manufactured off-site by either Amazon‘s own facilities or third-party vendors. Once complete, products are shipped to Amazon fulfillment centers until ordered by a customer for delivery. The closest analog to manufacturing would be the artisan goods made for Amazon Handmade. But again, production is handled externally by the sellers.

The Bottom Line

As an avid Amazon customer, it‘s important to recognize that the Amazon name doesn‘t automatically mean the product was manufactured by them. The reality is that over 70% of items are produced by outside suppliers and sold through Amazon Marketplace.

However, this should not detract from Amazon‘s innovation. Their expertise is perfecting a supply chain and logistics operation that brings hundreds of millions of products manufactured worldwide into the hands of customers rapidly. So while Amazon may not directly make every item they sell, their capabilities in fulfillment, distribution, and data-driven supply chain management are unmatched globally.