There are many advantages to selling on Amazon Prime. Prime products rank higher in quest than non-Prime products. This is critical for private label vendors, who are frequently competing against a large number of identical goods that already have the Prime badge and would be at a disadvantage if they were the odd one out.
When there are many sellers for a commodity, Prime gives you an edge over the competition when it comes to winning the Buy Box. It isn’t the only factor that goes into deciding who wins the Buy Box, but it is one of the most critical.
Another big advantage for sellers is the purchasing activity of Prime members. Shoppers sometimes check the box to display only Prime-eligible items – or simply visually filter out products without the badge. This is because Prime members find it difficult to consider something slower after being used to the quick 1-2 day delivery.
Prime members invest more not only annually, but also more regularly and per visit to the marketplace. By putting your product on Prime, you can expect a significant increase in sales for your Amazon company.
Three different ways to sell on Amazon Prime
The three ways your goods will sell on Amazon Prime are summarized below:
Fulfillment By Amazon (FBA)
FBA is an Amazon logistics service that involves warehousing, choosing, packaging, shipping, returns, and customer service. It is a robust, easy-to-use, pay-as-you-go service.
Since the FBA software is incorporated with the Amazon marketplace, when you sell an Amazon item that is placed in an Amazon warehouse, the order is automatically processed. All firms, from sole traders to multinational corporations, will participate in the FBA program.
Seller Fulfilled Prime (SFP)
Sellers who use SFP will manage their delivery and shipping while still receiving the Prime logo on their items. Orders are delivered either from the seller’s warehouses or from a third-party distribution service provider (a 3PL).
SFP membership comes with a certification period that includes strict criteria and performance measures that must be met regularly to remain in the program. Businesses that manage their fulfillment (for example, for orders placed on their website or via other marketplaces) stand to benefit the most from this process.
Instead of selling directly to customers via the third-party marketplace, you sell to Amazon as one of its wholesale suppliers.
Vendor Central is by invitation only; to join, you must be a vendor who has been hired by Amazon. Vendor Central is best suited for well-known brands and suppliers, many of which have already been invited to participate.
Fulfillment By Amazon (FBA)
Joining Amazon FBA, a highly automated and efficient fulfillment network, is the easiest way to sell on Amazon Prime. Amazon receives the merchandise inventory and stores it in their warehouses. When a customer places an order from your listing, Amazon takes care of picking, packing, and shipping it.
Once your products are in FBA, the Prime badge is applied automatically.
- Fulfillment by Amazon (FBA) is a service that allows you to outsource your fulfillment to Amazon. You are not responsible for shipping or any other aspect of order fulfillment.
- It’s completely automated and works in conjunction with Amazon’s marketplace.
- Shipment and customer service are handled by Amazon.
- FBA fees are often less expensive than packing and shipping your products, especially if you’ve never shipped before.
- Amazon can delete negative customer feedback about delivery or fulfillment.
- Your listings would also say “Fulfilled by Amazon” in addition to the Prime badge, which could have a positive effect on consumer trust.
- Long-term storage fees, for example, maybe complicated and/or unexpected.
- Depending on the cost structure, FBA can be more costly than doing your delivery.
- You’ll need to keep an eye on inventory levels in FBA and replenish stocks regularly, keeping in mind the time it takes for shipments to arrive and be processed.
- If you pay extra for Amazon’s “Inventory Placement Service,” you will be asked to ship small amounts to different locations.
- Amazon can “commingle” your inventory with items from other retailers, putting you on the hook for a fake or defective item that came from another seller.
Do you need to sell on Amazon Prime?
Before you commit to FBA, SFP, or Vendor Central, consider whether selling on Amazon Prime is truly necessary for your company.
Amazon has over 12 million items available for purchase. Many of them sell well even though they don’t have the Prime badge, and many of those that do have the badge sell poorly. It is not a guarantee that you will succeed if you are a prime candidate.
While the Prime badge is almost mandatory in some cases, it isn’t necessary for others. So, are you in need of it?
If you’re looking for a way to save money, Prime is the way to go.
- While you have your brand, other Prime-branded brands compete with yours. The bulk of private-label goods fall into this category.
- You sell a third-party branded product that is also offered by other sellers (i.e., they are vying for the Buy Box on the same listing), and one or more of these sellers has the Prime badge.
In conclusion, if you don’t have Prime but are in direct competition with other sellers who do, you’re going to have a hard time selling.
However, keep in mind…
If you don’t need Prime, it’s possible that you won’t need it:
- You have your own branded product, which has buyer demand. If they have to have your brand, and only your brand, they’ll buy it even if Prime isn’t available. (However, keep in mind that if they have the box checked to display Prime only, they can never know your product is available.)
- The price of your goods is significantly lower than that of Prime sellers vying for the Buy Box. Even if Prime sellers are significantly more expensive, you can still win the Buy Box.
- You offer refurbished or used media items, such as textbooks or rare books. Since these are one-of-a-kind by definition, you aren’t in direct competition with others.
- You sell anything on Amazon that is difficult to ship and/or difficult to locate, such as industrial machinery or equipment, specialized tools or parts with low sales volume, and so on. These items aren’t ideal for FBA, which penalizes slow-selling items, and Amazon is unlikely to sell them through Vendor Central.
For the vast majority of vendors, selling on Amazon Prime has a significant impact on rising sales. You should think about three factors when determining whether to get it through FBA, SFP, or Vendor Central for your product listings.
First and foremost, what kind of Amazon company do you have? Do you want to sell to consumers, businesses, or both?
Second, who are your competitors in your field? If your goods compete with similar-priced competitors that have the Prime badge, you’ll need the Prime badge as well.
Third, what is the level of demand for your products? If there’s a lot of interest, Prime is your best mate. If your things are more esoteric, you do not need them.
Finally, through three seller programs that suit a variety of companies, selling on Amazon Prime allows you to associate your brand and goods with consumers faster than ever before. Examine the market situation carefully to see what suits best, and get “primed” for more profits than you’ve ever had before.