When you decide to start an Amazon FBA business, one of the first decisions you need to make is how best to structure your business legally. This means that the decision really depends on whether you use a standard LLC structure for your Amazon FBA or a file to get S Corp. tax status. Amazon`s organizational structure favors a vertical hierarchical approach with global geographic groups and departments based on functions. This gives the company complete top-down control over its global operations, allowing it to increase its market share and maintain its market leader status. Amazon`s organizational structure is primarily hierarchical with elements of function-based structure and geographic divisions. While Amazon started as a lightweight, flat organization in its early years, it has evolved into a hierarchical organization whose roles and functions have been clearly defined as it scaled up. While sole proprietors offer a convenient and easy way to work as an Amazon FBA company, it`s probably best to resist the temptation to take this shortcut. Companies swear by hierarchical structures. They were the very first type of organizational structure and most large companies still use them today, especially those with a global reach like Amazon. In the case of Amazon.com, hierarchy is expressed as an overall system of clear reporting lines that greatly influence the company`s operations. The main advantage of an S Corp over an LLC and other business structures is that it is taxed more efficiently. An S Corp can pay significantly less tax on the self-employed and thus reduce its overall tax liability.
In some cases, your tax may be higher in the context of a sole proprietorship if your business earns significant income. At the federal level, the United States receives 37% of individual income for tax collection with incomes above $US 539,900. Nevertheless, the uniform corporate tax rate is only 21%. Amazon`s organizational structure is that it allows for complete top-down control of global e-commerce operations. This is ideal because the company operates in different areas of activity. As a leading online business, it is imperative for Amazon to maintain a structure that supports its diverse and rapidly growing reach in the market. Sole proprietors are the simplest and simplest type of business entity to form. They do not require any expertise or complex integration requirements. The tax return is also simple and is done with your personal income tax return.
There are valid reasons why it is best to go through the additional procedures to form an LLC or S Corp through which you can conduct your Amazon FBA business, which we discuss below. An interactive diagram and a comprehensive article covering everything from Amazon`s business structure, Amazon`s history and success. Amazon`s organizational structure incorporates many small teams that deal with different aspects of the business. Amazon founder and former CEO Jeff Bezos is credited with introducing the “two-pizza rule.” According to this rule, meetings should be held in teams small enough that everyone can be fed with only two pizzas. The “two-pizza rule” continues to this day under new CEO Andy Jassy. The term “Amazon FBA” is simply used to refer to a business that chooses to use these FBA services as the primary means of distributing products to consumers. Amazon`s organizational structure can be classified as hierarchical. The management team consists of three CEOs and three senior vice presidents who are responsible for various key aspects of the business, reporting directly to CEO Andy Jassy.
Amazon is the world`s largest e-commerce retailer with a diversified business portfolio. It operates in several international locations with 798,000 employees. To manage an organization of this size, it must have a robust organizational structure. The organizational structure of an organization determines how operational activities are managed to achieve desired objectives. It defines the chain of command, the flow of information and the hierarchical scale. For a large international company like Amazon, it must have a well-defined structure to seamlessly manage all business and divisional units and maintain clear communication with all stakeholders. In this article, we talked about Amazon`s organizational structure that can be used as a case study for your management studies. You can also call this an example if you write articles on Amazon. There are also certain business expenses that can be deducted from an LLC`s tax returns. You can use the structure to your advantage by writing off your Amazon VA salary as a business expense when it is below a certain threshold, and thus paying less taxes overall by splitting the income between your personal and business tax returns.