We've talked about 2-factor authentication in the past so I won't go deeply into it in this post. The important take-away is that Amazon now offers this service and you should use it!
Here's an overview article and here's a great step-by-step with screen shots. I set this up for my account and it was really easy using my phone and Google Authenticator. You can also use text messaging, or setup text messaging as a backup method.
The main reason that 2-factor is good and important is that it prevents an attacker, who has stolen your userid and password, from logging in as you. This is because they would need to have your smartphone in addition to the userid and password! (yes, there are other methods as well).