In the past two years, Amazon has signed more than 27,000 Indian merchants to sell goods directly on its American site. The program is profitable in both directions. The merchants gain hassle-free access to the American market, avoiding export/import, marketing and distribution costs that go along with international commerce, and Amazon gains a huge influx of third-party sellers who manufacture quality products at a low cost.
Amazon handles everything for the Indian merchants, including an e-commerce platform, advertising, storage and fulfillment. In return, Amazon takes approximately one-third of every transaction. Since production costs are low in India, this arrangement results in lower prices for U.S. consumers and profits for the merchants.
Some merchants with contacts in the U.S. work with a hybrid business model, letting Amazon host their products but fulfilling through a U.S. domestic 3PL, resulting in lower costs for the merchant.