Reasons why Alibaba and Amazon are not the same

Reasons why Alibaba and Amazon are not the same

Considered the two key players of the modern day ecommerce, these two are popular as they operate without physical stores while serving customers around the world. In China, Alibaba is the biggest ecommerce site while Amazon represents the biggest ecommerce website in the U.S and rest of the world. Amazon sells its products to customers around the world while acting as intermediary for small businesses that want to promote their products on the ecommerce site. Alibaba on the other hand is known for linking businesses to different suppliers around China. Find out from the Article on Alibaba below how it functions differently.

Business model

Amazon represents one business or unit that successfully sells or ships its merchandise to customers around the world. It is therefore a single unit which also allows other small business to join part and sell their products via the official amazon site only that a commission has to be charged. Alibaba is an ecommerce site that links buyers and sellers and therefore their main services are intermediary. This is the reason they differ in their global reach and the amount of revenue that they collect from their operations around the world.

Source of revenue

Alibaba as a business is more inclined towards linking sellers and buyers and unlike amazon, it does not sell any of its products. The source of its revenue is through the various networks that transact under it as the major intermediary. Businesses working under it have to pay for higher rankings during search results as a form of marketing. The memberships that suppliers pay for is also part of the revenue for Alibaba. Amazon alternatively works different as their revenue is collected from selling their products to customers online while also charging the businesses that transact under it.