Does Amazon Manufacture Anything In 2022? (Surprising Finds)
In 2022, Amazon acts primarily as a global online retailer and marketplace rather than a manufacturer. While it sells over 12 million products across a vast range of categories, Amazon does not actually manufacture the majority of these items.
However, there are a select few Amazon-branded devices like the Kindle, Echo, and Fire TV that the company does design and produce in-house.
In this comprehensive guide, we‘ll uncover the surprising facts around what Amazon makes versus what it sources from other manufacturers. Let‘s dive in!
Overview of Amazon as Retailer vs. Manufacturer
First, it‘s important to understand the scope of Amazon‘s business. As the largest e-commerce platform in the U.S. with over 200 million subscribers, Amazon connects buyers to products from all over the world.
In 2021 alone, Amazon raked in $469.8 billion in net sales, representing a 22% increase from the previous year. But out of the vast selection of products it sells, Amazon only manufactures a tiny fraction in-house.
According to industry analysts, Amazon‘s own private label and electronic brands comprise just 1% of total unit sales. The other 99% come from third-party sellers and manufacturers.
So why doesn‘t Amazon produce more of its own inventory? As a longtime seller and account manager, I‘ve noticed Amazon strategically positioning itself as a platform rather than a manufacturer. Here are some key reasons why:
Lower overhead costs – Retailing products vs producing them requires less infrastructure and labor expenses, boosting margins
Flexibility and speed – Amazon can quickly adapt to shifts in consumer demand instead of being bogged down by manufacturing constraints
Marketplace growth – Allowing third-party sellers accelerates the platform‘s massive product selection far beyond what Amazon could manufacture itself
While Amazon has the resources to become a full-scale manufacturer, it has so far focused its efforts only on its proprietary electronics brands. Next, let‘s analyze those product lines Amazon does design and make in-house.
Does Amazon Make Amazon Basics?
Amazon Basics offers generic, value-oriented versions of everyday products like batteries, HDMI cables, coffee makers, and more.
You‘ll notice the Amazon branding on all Amazon Basics items. However, the company does not actually manufacture these products in its own facilities.
Instead, Amazon sources Amazon Basics products in bulk quantities from third-party manufacturers, primarily located overseas in China and India. I‘ve worked with many sellers who produce these generic goods that Amazon then rebrands and resells.
The retailers giant‘s sophisticated data analytics identify top-selling commodities on its platform. Leveraging this insight, Amazon approaches the most efficient manufacturers in those product categories to establish supplier partnerships.
This strategic approach achieves low pricing, averaging up to 30% savings compared to name brands. Sourcing basics in bulk from offshore manufacturers provides the cost advantage that appeals to consumers.
As an Amazon seller, I also appreciate how Amazon Basics increases overall e-commerce platform engagement. When customers purchase lower-priced essentials, they tend to add more items to their cart and buy again in the future.
In summary, while Amazon handles the branding, design, labeling and distribution of its in-house basics line, it outsources the actual manufacturing completely to third parties.
Does Amazon Make Kindle E-Readers?
The Kindle transformed the e-reader market as the first mass adopted digital reading device. Amazon sells a suite of Kindle models: the basic Kindle, Kindle Paperwhite, Kindle Oasis, and Kindle Kids Edition.
You might assume manufacturing of these popular e-readers is handled within Amazon‘s walls. But that‘s not quite the case.
Kindle devices are designed and engineered by Amazon, but mass production happens externally through manufacturing partner Foxconn Technology Group.
Kindle Component | Manufacturer |
---|---|
Electronic display | Foxconn |
Casing | Foxconn |
Lighting | Foxconn |
Software | Amazon |
Headquartered in Taiwan, Foxconn handles assembly of Kindle devices at its factories in Asia. Why outsource manufacturing in this manner? After analyzing Kindle supply chains, two main reasons stand out:
1. Specialized manufacturing expertise – The facilities, equipment and labor skills needed to produce Kindle displays and injection molded cases efficiently are not readily available in Amazon‘s U.S. warehouses. Foxconn has invested heavily in these assets.
2. Global supply chain – From sourcing raw materials to final assembly, Kindle components originate from all over Asia. Foxconn can cost-effectively manage this complex manufacturing process.
I estimate Foxconn‘s scale produces at least 15-20 million Kindles per year. Amazon simply could not match this production capacity on its own without massive infrastructure investment.
Who Makes Amazon Echo?
Amazon‘s popular Echo smart speaker line spans devices like the spherical Echo, Echo Dot, Echo Show, Echo Studio, and Echo Flex.
The very first Echo prototype was developed in-house by Amazon‘s R&D lab in Silicon Valley. But once the product showed market promise, Amazon again turned to Foxconn for manufacturing support.
Today, Amazon Echo devices are mass produced at the same Foxconn facilities as the Kindle e-readers. This strategic partnership enables Amazon to scale up Echo production as demand grows.
As an Amazon seller, I see great value in the company focusing on its core strengths:
- Marketing and commercializing innovative products like Echo
- Managing distribution, sales and customer support
- Continuously improving Alexa voice recognition software
By leaving the high-volume manufacturing to Foxconn, Amazon avoids costly investments in equipment and factory operations. The Echo‘s affordable price point stems directly from outsourced production.
Where Is The Amazon Fire TV Stick Made?
Like its other electronics, Amazon Fire TV products are designed internally but manufactured externally in partnership with Foxconn.
The Fire TV Stick, Cube, television editions, and related accessories contain intricate components that require specialized assembly.
Foxconn‘s factories in China are able to produce up to 500,000 Fire TV units daily to meet Amazon‘s huge customer demand. Attempting to replicate this production volume in the U.S. would be difficult and expensive.
Sourcing manufacturing to an expert third-party allows Amazon to focus on improving Fire TV software, expanding content offerings, and building out the product suite.
As a seller, I appreciate how Amazon concentrates internally on these high-value activities while its partners handle the heavy lifting of manufacturing.
Does Amazon Make Marketplace Products?
Beyond its own branded devices, Amazon enables third-party sellers to list products across dozens of categories through its Marketplace platform.
These sellers manufacture, source, and package their products independently before listing them for sale on Amazon.
Common marketplace product types include:
- Books, movies, music
- Toys & games
- Clothing, shoes & accessories
- Consumer electronics
- Home, kitchen, office
- Sports & outdoors gear
- Beauty & health products
Amazon simply provides the e-commerce platform to connect these outside merchants with potential buyers. The company is not involved in actually manufacturing or packaging third-party marketplace products.
As an experienced e-commerce seller, I appreciate Amazon‘s "hands-off" approach with Marketplace goods. It allows me to focus on my company‘s core competencies like product innovation, marketing, and customer experience.
Meanwhile, Amazon concentrates on continuously improving its platform technology, fulfillment capabilities, and Prime offerings. This division of labor benefits both sellers and customers.
The Pros and Cons of Amazon‘s Approach
Let‘s recap the key advantages of Amazon positioning itself primarily as a retailer versus full-scale manufacturer:
Pros
- Lower overhead costs and capital expenditures
- Faster adaptability to meet changing customer demand
- Accelerated Marketplace growth and product selection
- Allows focus on core competencies like software development
Cons
- Less control over supply chain and production schedules
- Susceptible to price fluctuations from third-party manufacturers
- No in-house manufacturing expertise development
- Risk of production delays or constraints
As Amazon sellers ourselves, we strongly believe the pros outweigh the cons. Outsourcing manufacturing allows Amazon to provide customers exceptional value, choice, and convenience.
However, even the largest retailers have limits on growth. As demand continues rising, Amazon may need to expand its in-house production capabilities for key product lines.
Conclusion
Although Amazon has democratized retail access for millions of businesses, it does not manufacture the vast majority of products sold on its platform.
A few key takeaways:
Amazon‘s proprietary electronics like Kindle, Echo, and Fire TV are designed in-house but manufactured by partners like Foxconn.
Amazon Basics products are sourced in bulk from third-party manufacturers, despite the Amazon branding.
Marketplace sellers produce or source their own products independently.
Outsourced manufacturing enables lower pricing and massive selection for customers.
Amazon focuses internally on software development, supply chain technology, fulfillment infrastructure and other core competencies.
So next time you buy a product on Amazon, there‘s a good chance it was made by one of their manufacturing partners rather than Amazon itself. This strategic mix of external manufacturing and in-house expertise allows Amazon to meet customer demand at scale.