You may have seen “Amazon Services LLC” or “Amazon.com Services LLC” and wondered, “Is Amazon LLC the same as Amazon?” The answer is yes and no. Amazon Services LLC is a subsidiary of the parent company Amazon.com, Inc. So they’re related but not exactly the same.
We all know Amazon.com — it’s a top-choice marketplace for millions. So, what’s the difference between Amazon.com and Amazon LLC? Let’s explore.
Key Takeaways
- Amazon Services LCC is a subsidiary of the greater Amazon.com whole. They specialize in operating the most crucial parts of Amazon’s business, the Amazon marketplace, services related to Amazon Prime like Amazon Video, and even more external services like Audible.
- Amazon Services LLC exists in part to act as a tax break for the company, allowing not just Amazon to save money, but also to pass those savings onto all their customers.
- Amazon Services LLC is one of the most customer-facing parts of Amazon. While it is not the same as Amazon.com, Inc.
What is Amazon Services LLC?
Before diving into the specifics of Amazon Services LLC, it’s helpful to understand what exactly is Amazon’s holding company and how subsidiaries like Amazon Services LLC play a role.
Amazon is a huge corporation and owns over 100 different subsidiaries, including Amazon Services LLC. LLCs are made for a wide variety of reasons, but the reason that matters here is one for cost savings. In part because of being one of the biggest companies of all time, their sheer size can result in a huge amount of costs that would negatively impact all of their customers.
That’s where the secret weapon comes into play. LLCs, depending on the state, can provide a great number of cost savings to the company through varying incentives, such as tax breaks. LLCs also have the added benefit of reducing debt liabilities of Amazon, as an LLC can take them on as the main Amazon holding company.
All of these savings are then passed onto their entire customer base, buyer and seller alike, allowing for the affordable prices they offer on all of their services to begin with.
It can be a bit confusing to see in practice though.
So to answer the question of “What is Amazon Services LLC”, it can be explained like this:
While Amazon.com, Inc. is the holding company you’ll see listed on the stock exchange, Amazon.com Service LLC operates as the entity that provides the services from Amazon that we know and love — the Amazon marketplace, Amazon Prime, etc. Amazon.com Services LLC. Amazon Services LLC is just one of the hundreds of subsidiaries owned by the greater Amazon holding company as a whole.
Is Amazon an LLC or Inc?
Technically, Amazon falls under the categories of both an LLC and Inc. This comes from the fact that the parent company, Amazon.com is a corporation, but their subsidiaries are not.
Instead, they function as LLCs. The main difference between the two is that an LLC is owned by just a few people, as little as a single person, while a corporation is owned by shareholders.
The reason Amazon.com itself is not an LLC is due to the latter having more restrictions on how it can raise money. Most relevant is that an LLC can’t issue stocks. This is important because it means that it can’t be owned by shareholders. Therefore, Amazon would have no presence on the stock market.
While many parts of Amazon have changed over the years, the holding company has and always will be a corporation.
What services are available through Amazon.com Services LLC?
What services does Amazon offer? It’s actually hard to keep track of them all. Amazon provides a dizzying number of services through the seemingly endless list of companies that it owns. However, the list of services that make up their core is significantly tighter. According to their website, Amazon.com, Inc. has five group companies as of October 2024:
- Amazon.com, Inc.
- Amazon.com Services LLC
- Amazon Advertising LLC
- Amazon Web Services, Inc., and
- Audible, Inc.
Amazon.com, Inc.
Amazon.com Inc. is the center of it all, the heart of the operation. This is the original Amazon, founded in 1994 by Jeff Bezos with the original intention of serving as one of the first online bookstores.
This was back when just buying flowers online was a novelty. It wasn’t even called Amazon Inc. back then, instead having the somewhat less-catchy name of Cadabra Inc, though just a few short months later he would have the epiphany of calling it what we now know it as today, and the rest is history.
All other LLCs and subsidiaries were formed or acquired years after.
Amazon.com Services LLC
If Amazon.com, Inc. works as the body, then Amazon.com Services LLC functions as the beating heart of almost all company operations. It primarily handles functions as a service provider for all the other parts of Amazon, as well as various third parties.
It makes sure that all services across their entire ecosystem are working properly, not only enhancing the customer’s experience by avoiding costly downtime but also supporting the countless number of businesses that rely on Amazon to run their business.
No matter how you look at it, Amazon would not be able to function as a company without this incredibly important LLC.
Amazon Advertising LLC
Amazon Advertising LLC focuses on offering advertising solutions across all of Amazon’s countless services. By taking advantage of Amazon’s enormous and exponentially growing collection of user data and shopping behavior insights, Amazon Advertising LLC is able to provide advertising services that directly enhance and even power things like sponsored products and targeted ads, ensuring the right ad is given to the right person. This enhances product visibility and plays one of the most crucial parts in driving sales.
The technology powering both Amazon.com Services LLC and Amazon Advertising LLC is only possible due to the hosting from the next company, Amazon Web Services, Inc.
Amazon Web Services, Inc.
Amazon Web Services is what makes up the backbone of all of Amazon company services. It is what provides cloud services for far more than just every single part of Amazon’s company services.
It also extends these services to other companies and governments both foreign and domestic to the United States, as well as to individuals. Uses include things as routine as hosting a blog and customer analytics, to more intense tasks like on-demand cloud computing and machine learning.
Amazon Web Services has its clients only pay for the bandwidth and power they use, giving them affordable access to the one of the most powerful data center operations in the world.
Audible, Inc.
To round off the main parts of Amazon Inc, we have Audible Inc. Continuing Amazon’s original mission of providing access to books, but in a completely different medium. Audible, like the name suggests, provides audiobooks.
Unlike the rest of Amazon’s products, Amazon Prime offers no benefit here, and a separate subscription to Audible is necessary to take advantage of monthly credits towards free books. In addition to audiobooks, they also offer in-house content like original audio content, as well as podcasts produced internally and externally.
They have been a part of Amazon’s brand for a very long time, and as the demand for audiobooks only grows year after year, they are expected to grow ever more important to their core business.
That’s not the end of it, though. Amazon also owns countless smaller companies, though their size is only relative to the behemoth that is the core company, as some of these are giants in their own right. Other subsidiaries include:
Whole Foods
Whole Foods is a supermarket chain that specializes in providing high quality natural and organic foods to the discerning customer.
They are known for having high standards for quality, and while prices can sometimes be marginally higher as a result of this stricter process, the value and benefits of this approach speak for themselves. Amazon bought them in 2017 and quickly integrated them into their services, making them a core part of their brand.
Goodreads
Purchased in 2013, this is a social network geared entirely around book lovers. Users are able to see what others think about a given title, make their own reviews for others to read, discover new books through recommendations made by other users in both lists and social media posts, as well as connect with others who have similar interests.
Those who own Kindles or have downloaded the app are able to rate books straight through the interface itself.
Twitch
Twitch is one of the biggest live-streaming platforms on the internet. While it primarily focuses on the broadcasting of video games, the platform supports streaming about just about anything, including podcasts, live travels, and even full-on live productions like game shows and other events.
Twitch encourages its users to participate in the streamer’s content through various ways, such as text chat, polls, and even custom features unique to each stream that can directly affect the content being shown.
Amazon Prime subscribers automatically get Twitch Prime with their membership, giving them the ability to give $5 a month for free to their favorite streamer, as well as access to a plethora of free high-quality games and in-game content for live service titles.
Zappos
Zappos was originally a competing platform for Amazon until they were purchased in 2009. It now functions as a different experience for Amazon customers looking for the best deals on a vast array of clothes, shoes, and other apparel. It also has free shipping and offers a return policy just as generous as Amazon’s.
Amazon Robotics
Originally known as Kiva Systems, Amazon purchased them in 2012 and eventually rebranded them as what they’re known as today, Amazon Robots. This company specializes in developing robotic systems primarily to help automate warehouse operations. The robots help Amazon warehouse workers perform their tasks more efficiently.
MGM Holdings
MGM is a storied entertainment company that has been around for a full century, founded in 1924. It has produced countless films, like Fargo and James Bond, and TV shows, like Shark Tank and Stargate SG-1. They continue to produce some of the most influential content in the field of entertainment. Seeing their value, Amazon purchased them in 2021.
IMDb
IMDB, or Internet Movie Database, is the biggest and most comprehensive database of information on all things in motion.
It offers detailed user reviews and ratings of movies, filmographies, and even exclusive interviews and insider news with people in the film industry. Amazon purchased them in 1998, and so they have been steering them since almost the very start of their journey.
Why Does Amazon.com Have Amazon Service LLC?
Amazon.com Inc., like all other large corporations, quickly realized the potential of splitting up their business into smaller, more manageable, and cost-effective LLCs.
Many companies set up LLCs because they limit personal liability for business debts and provide better opportunities for raising investment, and Amazon is no exception to this. LLCs also provide a lot of tax advantages as no tax is levied separately on the company.
On the topic of raising capital, earlier in this article it was mentioned that LLCs actually limit fundraising in some respects, such as the ability to hold stock, but when the company is properly compartmentalized, it opens other opportunities as well.
This is because some investors are more willing to invest in subsidiary LLCs rather than the bigger whole, as it gives their investment a number of benefits, the biggest one being that of the different tax structure.
LLCs are not generally subjected to federal income tax, instead pushing everything through to the individual members that own the LLC, who then report their profits and losses on their individual tax returns. This dodges the dreaded double taxation situation that every corporation wishes to avoid.
In short, the answer to why Amazon has Amazon Services LLC under their umbrella so that they can attract more investors and save money.
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How Does Amazon LLC Differ From Amazon, Inc.?
Amazon Services LLC is a subsidiary of Amazon.com Inc. that focuses on keeping all the other parts of the company functioning. It is different from the wider Amazon company in that they have delegated various tasks for it to perform exclusively.
While Amazon, Inc. is the holding company, amazon company services are carried out primarily by Amazon Services LLC, ensuring smooth operations across their platforms.
Think of it this way: Amazon.com Services LLC is an employee of Amazon.com, Inc. Amazon.com Services LLC’s job is to:
- Manage the different storefronts on Amazon.com, including Amazon Prime, Amazon Music, Whole Foods Market, Amazon Style, as well as independent Amazon Sellers.
- Handle delivery and logistics of products for sale, taking orders placed on Amazon.com and shipping them to customers efficiently.
- Control the services offered through Amazon’s Web Services (AWS), like compute power, database storage, content delivery, and more.
- Offer cloud-based services, including Amazon Fire TV, Kindle, Amazon Echo, Ring cameras, and more.
- Provide entertainment through its multitude of platforms such as Amazon Studios, Amazon Music, Prime Video, and more.
To summarize, Amazon Services LLC is not an independent entity. It is a core part of Amazon.com Inc., but it is not the same as the parent, as it handles different vital retail, logistical, and support functions that keep the wider business running smoothly.
What Do I Need to Know About Amazon LLC As An Amazon Seller?
There is something important you should know about Amazon Services LLC as a seller on Amazon. Care should be taken to understand the difference between Amazon.com Services LLC and Amazon.com Inc., as there have been many cases of confusion about whether the former is a scam, if something is wrong, and other issues when they see Amazon Services LLC on their packages.
To be crystal clear, When your product is listed as “sold by Amazon Services LLC,”, it is sold by Amazon on behalf of vendors. When an entrepreneur buys or manufactures products for sale, they can send them to Amazon, where customers can order them.
It’s the responsibility of Amazon Services LLC to take the order and ship it to the buyer. There is nothing to be concerned about.
Do I Need an LLC to Sell on Amazon?
Whether you need an LLC to sell on Amazon depends on a few factors. If you’re just getting started and only have a few things for sale, you are unlikely to run into many issues. However, forming an LLC gives you a large number of benefits and protections that you would otherwise have no such access to.
An LLC gives you protection by splitting off your personal and business assets. If something happens to your business, a legal issue comes up, debt becomes too much, whatever it may be, your personal assets are completely protected. There are more:
- Protect personal assets
- Build business credibility
- Access better tax options
- Scale your business more easily
- Appear more professional to suppliers
Whether or not you should form an LLC to sell on Amazon is ultimately up to you and what you’re looking to get out of Amazon. The benefits are high though, and any serious business ventures will almost certainly benefit massively from doing so.
Would You Consider Amazon Services LLC to be an Amazon Company?
There is no question that Amazon.com Services LLC is an Amazon company. It was incorporated as a part of Amazon Inc by Amazon itself. There was never a time where it existed on its own.
If you need an analogy, think of Amazon.com Services LLC as a room in a building. The building itself is called Amazon.com Inc. Each room in the building is a different LLC, but housed within Amazon Inc. itself.
Think of how a family considers different rooms in their house, such as the living room, the dining room, the bathroom, and others as specific spaces for specific tasks. This is very similar to the function that LLCs perform.
Amazon Services is a part of Amazon, and the distinction is only for business purposes. Amazon LLC should be considered an Amazon company as a shareholder, buyer, or seller. The distinction might still seem like corporate semantics, but it’s just how a massive company like Amazon keeps everything organized effectively.
Conclusion
Amazon.com Services LLC is just one subsidiary of the massive parent company, Amazon.com Incorporated. Other subsidiaries include:
- Amazon.com, Inc.
- Amazon.com Services LLC
- Amazon Advertising LLC
- Amazon Web Services, Inc., and
- Audible, Inc.
Most companies of this size create subsidiaries to make their finances easy to manage and allow them to minimize risk in their various ventures.
Amazon Services LLC is essentially the part of the company responsible for taking care of Amazon.com customers.
It manages the Amazon storefronts, takes orders from Amazon.com, and handles the delivery and logistics of getting products to customers across the world efficiently. It provides entertainment through different Amazon mediums like Amazon Video and Audible. It offers scalable and reliable cloud computing services through AWS.
Although Amazon Services LLC is not the same as Amazon.com, Inc., it is very much part of the Amazon family.
