How Buying on Amazon.com Works

Fact checked by Suzanne KvilhaugReviewed by Ebony HowardFact checked by Suzanne KvilhaugReviewed by Ebony Howard

In this article, we’ll learn how Amazon.com, Inc. (AMZN) functions, from the customer experience to the security of payment information to the fulfillment centers.

Key Takeaways

• After creating an account on Amazon.com, purchasing a product is as simple as adding it to your shopping cart, entering your shipping and billing info, and clicking a confirmation button.
• Most orders go through Amazon’s warehouses or fulfillment centers, where packing it and placing it on a delivery truck may take mere minutes.
• Amazon goes to great lengths to keep customers’ info secure—and to track buying habits.

How to Make an Amazon Purchase

The first step of the buying process is to go to Amazon’s website and log into your account (if you don’t have one, you can create one for free). The website then changes based on your previous searches on Amazon and products purchased. Thus, nearly everyone’s Amazon experience is unique, with a personalized layout.

Once you find a product you want to purchase, click Add to Shopping Cart. From there, once you check out, you are taken to a page where you must enter your shipping and billing information. Once you enter this information and select your desired shipping option, click the final confirmation button to complete the order.

How Amazon Fulfills Your Order

Once a customer submits their order, Amazon’s backend system starts working. Orders from third-party sellers are routed to Amazon, which takes a cut of those sales. However, most orders go through Amazon’s warehouses, which are spread out across the world. These are stocked based on algorithms that predict the types and number of products being ordered in that region. These algorithms and fulfillment centers are some of the differentiators between Amazon and other online retailers.

The Amazon backend routes the order to the nearest fulfillment center, where a picker finds it. The product is packed and then placed in a waiting delivery truck, depending on the shipping option.

Note

The entire process—from when a customer gives a final order confirmation to when it’s placed in the delivery truck—may only take minutes.

How Amazon Keeps Info Secure

Amazon uses Secure Sockets Layer, or SSL, which offers protection of payment information from third-party sources.

Many buyers keep their uploaded payment information on file at Amazon.com to activate one-click ordering or even automatic recurring orders.

$148.0 billion

Amazon’s revenue for the quarter ending on June 30, 2024. It’s a 10.0% increase compared to the second quarter of 2023.

How Old Was Jeff Bezos When He Started Amazon?

Jeff Bezos, the founder and chief executive officer (CEO) of Amazon, was 30 years old when he started the e-commerce giant in 1994.

How Much Does Amazon Prime Cost?

Amazon Prime membership is $14.99 per month or $139 per year, unless you’re a student. An Amazon Prime Student membership is $7.49 per month or $69 per year. If you receive EBT, Medicaid, SNAP, or “other select government assistance,” you’ll qualify for Prime Access, which is $6.99 per month.

What Are Some Criticisms of Amazon?

Amazon has been criticized for its treatment its workers in its fulfillment centers and also its sellers.

Amazon offers employment opportunities, but it’s increasingly replacing workers with automated technology (another way it is able to offer lower costs).

Amazon is also an aggressive user of cookies that track users’ activities on different websites. Amazon uses this information to send emails, deliver ads, and customize its offerings based on the online behavior of its customers.

Others have concerns about buying online. Many people are accustomed to touching and feeling a product before buying. (However, Amazon has a return policy; in certain situations, customers may receive a full refund.)

The Bottom Line

Amazon is a leader in online commerce. It started out selling books but quickly expanded into other products. As of 2024, it has a presence in nearly every consumer-oriented market, becoming a disruptive force in the retail space. Though many are critical of the company, there are a number of reasons customers have increased their spending on Amazon, as well: helpful customer service, competitive prices, fast shipping, and a wide selection of products.

Read the original article on Investopedia.