Amazon is a big deal. The tech giant is the largest Internet-based retailer in the world by total sales and it's services run from selling USB cables to video streaming, cloud computing, consumer electronics ... With such a range of services under its belt, it's no wonder that remembering what everything is, what it does and how it all fits in is a task in itself! If you already an Amazon seller or are looking to get started, it's always worth familiarising yourself with their offerings to make sure you're making the most of what they have to offer and see how Shiptheory can help make the process as easy as possible.
The jewel in Amazon's crown, to the customer Amazon Prime is a yearly subscription service granting access to "One-Day Delivery on millions of items, instant streaming of thousands of movies and TV episodes, unlimited photo storage, stream a growing selection of over two million songs".
All listings on the Amazon Marketplace bearing the Prime logo are available to Prime members with free or heavily discounted, same-day, next-day or premium delivery services. It's no surprise that listings in the Amazon Marketplace displaying the Prime logo tend to get preferential positioning in category listings and help draw the prospective buyer's eye.
So how do you get the Prime badge on your listings? Amazon themselves have the privilege (of course), or you can sign up for Amazon's 'Fulfilment by Amazon' (FBA) service. There is a third option - 'Seller Fulfilled Prime' - but we'll come back to that one in a bit.
The Fulfilment by Amazon (FBA) service offers Marketplace sellers of any size, the opportunity to take advantage of Amazon's massive storage, packaging and worldwide dispatch services. In the simplest terms, you send Amazon your products and Amazon takes over storage and fulfilment of your orders for you for a fee.
The secondary advantages are that this automatically enables next day and, in some places, same-day delivery options as delivery is undertaken by Amazon's delivery network. As such, your listings will also be Prime enabled and state that fulfilment is performed by Amazon. FBA listings are often ranked higher in searches, and conversion rates are widely reported to improve as a result.
What's the catch? Well, there are, of course, fees to pay for each sale and dispatch, and there are both short and long-term warehousing fees dependent on how much stock you send to Amazon to store and how much is sold or remains in warehousing. Amazon recommends keeping around 6-weeks worth of stock available.
Finally, since your order management is passed to Amazon, customer services and refunds/returns are also undertaken by them. If you don't mind others making decisions on returns and replacements, damaged stock and failed deliveries, this could be the choice for you. Amazon are a very customer-first company and will use any inventory made available to them to keep their customers satisfied.
Multi-Channel Fulfilment
Multi-Channel Fulfilment piggy-backs off of the Fulfilment by Amazon services detailed above, to offer fulfilment of sales from other marketplace channels using inventory stored with Amazon, using their dispatch services network. Advantages include not having to worry about warehousing, setting up or managing carriers services and, in some cases, quicker delivery times and cheaper costs.
Much like with FBA, fees are calculated per order on top of short and long-term warehousing fees depending on how much stock is kept with Amazon. There are separate fees for Multi-Channel Fulfilment, so it's are worth considering separately from FBA.
Interestingly, however, you don't need to be selling any of these products on Amazon's Marketplace to take advantage of these services, so this is an option available to anyone. Simply send your stock to Amazon and complete an online form to place a Fulfilment order or upload a CSV file of shipment data and Amazon will take care of the rest.
First launched in 2015, Seller Fulfilled Prime (SFP) offers qualifying Amazon sellers the option of having the Prime logo displayed on listings that they fulfil rather than solely having to opt into Amazon's fulfilment services. For sellers that would rather retain control of their own inventories or for whom it doesn't make sense to offsite their stock, this offers a great opportunity to have their listings more visible in the Marketplace by way of the Prime logo. It does, however, mean having to adhere to quite stringent metrics.
Seller Fulfilled Prime listings must offer the same level of service to customers as any other Prime listing, meaning free next day delivery options, online tracking options and a very high successful delivery completion rate. Prospective SFP customers will also have to complete a trial period before being allowed onto the scheme proper.
Shipping is purchased through Seller Central via Amazon-approved couriers only that have been screened to be able to satisfy Amazon's tight requirements, but each retailer will still need to have their own accounts with these couriers to purchase shipping.
At the moment, only Amazon sellers with a proven track record are being invited to apply, but since the scheme is still relatively in it's infancy this could be one to keep an eye on if you're looking to step up your offerings through Amazon in the future.
Amazon Vendor Program
If you're an official distributor, manufacturer, or are selling private label, there may other options available to you via Amazon's Vendor Program. In essence, this is wholesaling direct to Amazon who then act as the seller of your brand. This obviously can have a potentially great impact on sales numbers with Amazon essentially vouching for your product, but it can come at a cost.
Like with FBA, Amazon takes care of all order management, customer service and returns, so it's a much more-hands off option of selling. Amazon will purchase from the seller in volume but pay less and more often than not, look to undercut the competition on the Marketplace. You can continue to sell your products through your Seller Central account, but it will mean you're competing against Amazon's, often lower priced and prioritised listing.
There are two levels to the Amazon Vendor Program: Vendor Express and Vendor Central. Express is open for anyone to apply whereas Vendor Central is an invite-only scheme which offers more features but less seller control.
