How FBA works

Amazon’s scale is staggering. In 2018, the company’s valuation surpassed $1 trillion. At the start of 2021, the company’s valuation hovered around $1.6 trillion and Amazon employs over 1.1 million workers.  

One of the most important factors in Amazon’s astounding success is its operations. Specifically, its fulfillment network, which now enables customers to receive goods within hours of placing an order on Amazon. This fulfillment network is called Fulfillment by Amazon. 

What is Fulfillment by Amazon? 

Fulfillment by Amazon (FBA) is a global network of warehouses owned and operated by Amazon. These warehouses are used to store products and fulfill orders made on the Amazon marketplace. FBA offloads the burden of shipping goods to end consumers from sellers on its platform. There are over 110 Amazon fulfillment centers throughout the continental United States, mostly in medium and large cities, and Amazon continues to announce new fulfillment centers regularly. In just December 2020, they announced 7 new fulfillment centers. 

FBA enables sellers to offer rapid shipping, including same-day delivery in eligible cases, and it simplifies customer returns. Sellers get storage, fulfillment, and returns processing in one convenient package. Amazon sellers do not have to use FBA to sell in the Amazon ecosystem, but Amazon has certainly tried to make FBA the most appealing option for end consumers.  

How Does Fulfillment by Amazon Work? 

In practice, FBA looks something like this: 

  1. Manufacturer ships product from factory to Amazon fulfillment center 
    • The shipment may need to go through several regulatory checkpoints along the way
  2. Goods are received and logged at the FBA center 
  3. Amazon’s systems update the product listing to show that inventory is in stock 
  4. Shoppers order product from Amazon.com 
  5. FBA center ships the product to the customer, with expedited delivery options available 
  6. The FBA center will process any product returns, when/if they occur 
  7. When inventory levels are low, the manufacturer ships more product to the FBA center
     

In many cases, brands partner with third-party sellers to retail their product on Amazon. In these cases, the third-party seller places a purchase order (PO) for a certain number of units. The manufacturer is responsible for shipping the products to the designated Amazon fulfillment center(s). 

Fulfillment by Amazon Product Preparation Requirements

Amazon has strict product preparation requirements that continue to evolve, and Amazon refuses to accept shipments that fail to comply with these requirements.  These include: 

  1. Do not ship any boxes over 50 lbs. unless your products are considered oversized and packed one unit/box
  2. Do not ship any boxes with a side over 25″ unless your products are considered oversize and packed one ASIN/box
  3. Do not shrink wrap, strap, tape, or bind boxes together.
  4. Outer shipping cartons cannot contain a scannable manufacturer bar code (other than the bar code on the FBA box label or shipping label)
  5. For pallets, boxes cannot overhang by more than one inch. All pallets must be shrink wrapped. Pallets must be standard size (48″ x 40″) unless a single box will not physically fit on a standard-size pallet
  6. Always apply FBA labels on outer carton

Pros and Cons of Fulfillment by Amazon

Benefits of Fulfillment by Amazon 

For most brands selling on Amazon, FBA is one of the best ways to grow. Here are a few benefits of FBA: 

  1. FBA handles all shipping logistics once they receive your inventory 
  2. Amazon has major discounts with the largest United States carriers, such as the United Postal Service (UPS), so fulfilling through FBA is often the most cost-effective option
  3. FBA centers handle product returns 
  4. FBA often provides the fastest delivery option for Amazon customers 
  5. Amazon’s Multi-Channel Fulfillment (MCF) service allows brands to store and fulfill inventory via FBA even for items that are sold through non-Amazon sales channels 

Disadvantages of Fulfillment by Amazon

Like any service, there are drawbacks. Here are a few disadvantages of FBA: 

  1. First and foremost, Amazon has repeatedly restricted storage limits for FBA since early 2020. If you don’t have enough inventory space to meet demand, you’re losing sales
  2. Storage fees and fulfillment fees add up, making accurate demand planning a necessity if you wish to optimize your bottom line
  3. Manufacturers must prepare products correctly or the FBA receiving team may reject them 

Fulfillment by Amazon Product Preparation Services 

Not all manufacturers have the time, personnel, or resources available to satisfy FBA product preparation requirements. If the manufacturer cannot prepare products themselves, they can send inventory to FBA product preparation facilities. These facilities are operated by third-parties who specialize in prepping products for Amazon.  

Kaspien has FBA product preparation facilities across the United States. Having numerous locations means that we can reduce shipping time and costs to get inventory to these facilities and then to Amazon fulfillment centers.

 

The two cornerstones of Amazon marketing are search engine optimization (SEO) and paid sponsored advertising. Combining both efforts is a crucial strategy for growth on Amazon. In this blog post, we’ll explain how SEO and search marketing works on Amazon and how the two can be combined to improve overall results. 

Amazon Search Engine Optimization Overview 

When discussing SEO, we are referring to the overall optimization of product listing content with the end goal of high placement on the Amazon search engine results page (SERP). Optimizing listings means optimizing copy. You can put down whatever copy you want, but if you wish to rank on the SERP and convert sales, you must optimize for both the A9 algorithm and your consumer. For example, below is a keyword-stuffed title that might be well optimized for the algorithm, but not for the consumer: 

The title is long and difficult to understand. If consumers saw this title on a SERP, they would likely keep scrolling to other listings. Brands must find a balance between titles and copy optimized for the algorithm but are also consumer-friendly.    

When optimizing your listing, there are primary and secondary focuses. The primary focus should be your title, the key features, and the standard product description. These are what the A9 algorithm scrapes for when determining relevancy to consumers.   

Second, focus on your A+ Content, Media Gallery, Pricing, Search Terms, and Reviews. These secondary focuses help drive conversions. A+ Content, photos, videos, and reviews are among the few ways consumers can connect with your product without physically touching it. Pricing is also important because if your price is too high, consumers will choose cheaper comparable products instead. 

Amazon Advertising Overview 

When talking about advertising on Amazon, we are referring to paid advertisements seen throughout the Amazon marketplace. This paid advertising includes Sponsored Product Ads, Sponsored Brand Ads, and Sponsored Display Ads. Paid advertising is the fastest-growing division within Amazon, and as such, the platform is steadily becoming a pay to play marketplace.    

When should you use paid advertising? That depends on your goals. Are you trying to drive additional impressions and clicks? Are you trying to increase sales on specific ASINs? Are you trying to raise brand awareness? Are you launching a new product on Amazon? These questions will influence which types of ads to use.   

Below are the types of sponsored ads on Amazon: 

Amazon Sponsored Product Ads

Pay-per-click (PPC) ads that appear in strategic areas on Amazon, such as the top of the search results page and within a product detail page. These ads give brands’ products more visibility and increase the likelihood of purchase by consumers. 

Amazon Sponsored Brand Ads

Formerly called Headline Search Ads, this ad type displays a banner ad at the top of the search results page. The banner ad contains a brand image and features up to three products. This ad type is typically best suited for generating brand awareness. 

Amazon Sponsored Display Ads

PPC ads on Amazon and Amazon-owned websites and apps that target shoppers by searches, views, purchases, or products. 

Interdependency Between Search Engine Optimization and Amazon Advertising 

Now that we’ve covered the basics of SEO and Amazon advertising, dive into the interconnectedness of the two. The intersection takes place amdist keyword research, gathering reviews, setting up variations, setting up your listing media gallery, and Amazon compliance. 

Keyword Research 

Keyword research identifies top trending keywords for your products that improve the chances of placing in relevant search results. SEO for product listings and search marketing both rely on keyword research to be effectiveAdd focus keywords into title and listing copy to build organic relevancy, improve ad performance, and overall placement.  

Customer Reviews 

The process of growing reviews compliantly is time-consuming, but they provide a level of trust that sellers need in order to persuade consumers to purchase. The number of reviews also directly impacts the performance of organic and paid placement. To improve your placement, you can run paid advertising to bring more converting traffic to listings, which will naturally help increase review numbers. Even more so if SEO has already implemented their review generation efforts. 

Unfortunately, Amazon retired the Amazon Early Reviewer Program in April 2021, making it more difficult for new products to acquire new reviews. 

Variation Listings 

Variations put like items together within a single Amazon listing, giving consumers the ultimate shopping experience. Variation listings accomplish two things that help improve SEO and search marketing performance:   

  1. Variations can aggregate reviews and make a listing look more trustworthy. Will encourage more traffic to click ad.   
  2. You can consolidate ads to focus on top child ASIN, but it will drive sales to the whole variation and improve rank. 

Media Gallery 

The media gallery is the carousel of images and possibly videos that appears above the fold of a listing. Optimizing the media gallery entails uploading high-resolution, compliant images, and videos. For many ad types, the hero image is displayed in the sponsored placement. Additionally, you can use Sponsored Brand Videos to show specific features to shoppers. 

Amazon Compliance 

Keeping up with Amazon’s terms of services is a full-time job, but doing so will ensure your listings and ads stay active. When working on Amazon SEO and search marketing, be sure to omit restricted keywords from listings to reduce the risk of listing suppression. You should also ensure that target keywords are within character restrictions, so they have weight in listing relevancy. It’s also worth noting that you can bid on phrases related to but not including restricted keywords to improve placement for those searches. Listen to podcast episode, Resolving Compliance Issues on Amazon, with Amazon Sellers Lawyer.

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Dropshipping Business for Amazon

Since the outbreak of COVID-19, you may have been hearing more about Amazon dropshipping, and for good reasonWhen the pandemic hit the US and shelter in place orders went into effect, several things happened in quick succession: 

  • Online purchases surged as shoppers turned to ecommerce instead of brick and mortar stores 
  • Some product categories experienced out-of-season sales peaks, resulting in out-of-stocks 
  • Amazon’s fulfillment centers buckled under the strain of new orders, and to recover their footing, they restricted inbound shipments 

As a result of the out-of-stocks, brands needed to ship more goods into Amazon’s fulfillment centers so they could resume selling to Amazon shoppers, but Amazon’s category restrictions prevented them from doing so quickly enough. 

That’s when many brands and sellers discovered the enormous benefits of Amazon dropshipping. 

What does an Amazon Dropshipping Business Look Like? 

Dropship is a selling and fulfillment model wherein a brand acts as the manufacturer, fulfillment provider, and potentially also the seller. It can be a key component in creating a dynamic fulfillment network. Let’s take a look at the most common dropship approach vs. the fulfillment by Amazon (FBA) model: 

Dropship Model 

  1. Manufacturer and seller agree to dropship together, which involves creating an EDI connection between their inventory management and warehouse systems 
  2. Seller lists product on marketplace 
  3. Shopper orders product and seller is paid 
  4. Seller places order with manufacturer and manufacturer is paid 
  5. Manufacturer ships product from their warehouse directly to the shopper 

 

Fulfillment by Amazon (FBA) Model 

  1. Manufacturer and seller agree to FBA together 
  2. Manufacturer is paid as seller places a purchase order, then manufacturer ships inventory into Amazon fulfillment center 
  3. Seller lists product on marketplace 
  4. Shopper orders product and seller is paid 
  5. Amazon fulfillment center ships the product to the shopper 

 

TL;DR: Dropship differs from FBA in two significant areas: when sellers and manufacturers are paid and who provides fulfillment services. In FBA, the seller pays the manufacturer upfront via a purchase order. FBA also requires inventory to be on-hand in the Amazon fulfillment center before consumers can buy the product. Dropship does not require this. Instead, manufacturers double as fulfillment centers. 

Pros and Cons of Dropshipping on Amazon 

Pros of Amazon Dropshipping 

1) Expand catalog selection.
Through dropship, brands can list products on Amazon for which sellers won’t place a product order. For example, if a brand wishes to offer a large product selection, but a seller cannot justify buying a large volume of product due to slow sales velocity, dropship enables sellers to still list those slow-moving products without taking on inventory risk. Then, if products perform well in dropship, they can be migrated to FBA.  

2) Easier prep requirements. 
Because inventory is not shipped into Amazon fulfillment centers, brands do not have to meet Amazon’s strict product preparation requirements. This eases the burden on brands and opens the door to sell products on Amazon that exceed Amazon’s FBA size or weight thresholds. 

3) Mitigates FBA-dependency.
As mentioned previouslydropship provides a degree of agility and resilience to a brand’s fulfillment strategy. If they have a dropship infrastructure already established, sellers can respond quickly to unexpected consumer demand since brands don’t have to send inventory to Amazon first or be limited by Amazon’s inventory restrictions. 

Cons of Amazon Dropshipping

1) Shipping speed depends on you.
Dropship sellers are not guaranteed a Prime badge or 2-day shipping on Amazon because the manufacturer is fulfilling orders. This can result in fewer sales, especially if you’re operating in a saturated category, as consumers are more likely to purchase products with 2-day shipping than products without.  

2) You handle customer service.
In dropship, brands are responsible for promptly shipping out orders, processing returns, and addressing customer inquiries. This requires committing additional resources, not the least of which are time and personnel. 

3) Requires constant maintenance.
Dropship on Amazon requires an always up-to-date connection between the manufacturer’s warehouse and the marketplace listing. If the brand is working with a seller, this means that the seller’s inventory system must be in sync with the manufacturer’s inventory system. Being in sync involves connecting technology, but also that manual inputs are being maintained. If this is not done, it can result in out-of-stocksharming sales velocity and creates a poor customer experience. 

When Should You Dropship on Amazon? 

Amazon Dropshipping is generally seen as an excellent backup to FBA because FBA offers so many benefits for brands, sellers, and consumers. However, we saw dropship become a massive asset in March 2020, when Amazon’s fulfillment centers ran out of stock of essentials. Through dropship, we were able to help our partners continue fulfilling orders even when they were restricted from replenishing inventory levels, resulting in a 3.25x increased in Amazon orders year-over-year 

In short, dropship is an excellent safety net and a great way to expand your product selection on Amazon as your grow your channel. If you’re looking for someone to help in your Amazon dropshipping efforts, check out our dropshipping services. If you’re interested in learning about other fulfillment options for ecommerce, check out our post, Walmart Fulfillment Services vs Amazon FBA.

Scissors cutting price tag

One of the most frustrating experiences as a brand owner is seeing copycat competitors undercut your pricing. In retail, competition is healthy because it forces businesses to innovate, resulting in better deals and products for consumers. However, sometimes it’s not a matter of two quality products vying for patronage. In some cases, it’s a high-quality product being undercut by a low-quality product.  

There’s not much that brands can do about competitors’ prices, but there’s plenty they can do to convince shoppers that the higher cost of their product is well worth it.  

How to Defend Against Competitors Undercutting Pricing 

#1 – Highlight What Makes Your Product Better 

On Amazon, customers have many choices when looking at products. A simple and free way to help your products stand out is to promote your differential features in the copy, images, and A+ Content. Differentiators are features that make your product different from your competition, such as location of production, quality of materials, performance, additional features or capabilities, aesthetics, or warranties These factors can help convince customers that your product is worth paying a little more.

#2 – Use Amazon Live 

Amazon Live is an Amazon service that allows sellers to broadcast livestreams in which they demonstrate product usage, features, and benefits. Featured products appear directly below the live broadcast window. Brands can use Amazon Live to share their story, live events, educational content, and so much more. Customers on Amazon Live can ask questions and receive answers in real timeAmazon Live allows customers and brands to connect on a more intimate level compared to a video or listing and is an excellent (and free) way to increase visibility. 

#3 – Engage with Your Audience on Social Media 

Social media is one of the most powerful tools that brands can leverage to grow their audience. When we talk about social media, were meaning Facebook, Instagram, Twitter, LinkedIn, Snapchat, TikTok, YouTube, and so many more platforms.  

Brands can use social media in many ways, but one of the most important uses is actively engaging with your customer base. This means responding to comments in a timely manner, creating social posts that invite your audience to actively participate in a discussion, and responding to all direct messages. Audiences want to feel a connection to a brand, and engagement on social media is one of the top ways to do so.  

Most importantly, a strong social media presence builds brand trust. Consumers are more educated than ever, and social media is a big part of that education. They’ll initially turn to your social channels to ensure your brand is legitimate but they’ll stay to engage with your brand on a personal level.  

If you need assistance in growing your brand’s social presence, look into our social media management service.

#4 – Respond to ReviewsComments, and Questions on Listings 

When managing many listings, responding to each and every review and comment can seem dauntingHowever, responding to your customers, regardless of whether their feedback is positive or negative, is critical to differentiate your brand from competitors. Responding to questions, praise, and criticism takes time and energy, and not everyone is willing to do it. By taking time to respond to customers in a timely manner, you demonstrate that your brand cares about your customers, and shoppers will favor you for that. 

#5 – Represent Your Brand Consistently Across All Sales Channels 

Consistent representation across all sales channels is often overlooked, but it’s incredibly important for maintaining brand integrity and strong customer relations. Inconsistent representation can lead shoppers to question quality and product authenticity.  

Brands should seek to maintain a consistent brand name, brand voice, high quality copy and images, and prices across online marketplacesThis ensures you provide a fantastic customer experience with your brand, no matter where shoppers find your products. By doing so, you cultivate a reputation as a reliable brand that cares about your brand, products, and customers. 

#6 – Be Where Your Customers Are 

The ecommerce landscape is constantly changing. In order to stay ahead of your competitors, you need to meet shoppers where they’re at. In today’s age, that means listing your products online, such as on Amazon, Walmart, and Google Shopping. As mentioned above, that likely also means curating an active presence on social media. In addition to posting and responding regularly, consider running social media ads and leveraging influencer marketing. You competitors may simply wait for shoppers to find them, so you can get a leg up by getting directly in front of shoppers, no matter where they’re at. 

illustration with three people and the words amazon brand registry roles

The Amazon ecosystem is getting more competitive and complex each day. Counterfeit goods slipping into listings and rising marketing costs are just two of the many issues brands face when selling on Amazon. Luckily, one tool brands can use to overcome some of these issues is Amazon Brand Registry.

What is Amazon Brand Registry?  

Amazon Brand Registry is an Amazon program that provides brands additional protection and access to other marketing services, including: 

Enrollment in Brand Registry is free but requires a trademark registration number with the United States Patent and Trademark Office (USPTO). Learn more about all the benefits in our Always Up-to-Date List of Amazon Brand Registry Benefits. 

What are Amazon Brand Registry Roles? 

One big issue for unregistered brands is the lack of control over their listings. When your brand is not part of the Amazon Brand Registry, unauthorized sellers can come into your listing and change content. As brand trust becomes more important to consumers, it is crucial to maintain control of your listings.    

When brands are brand registered with Amazon, only authorized accounts can change listings. Authorized accounts can include your employees or another account to which you have assigned a role, such as an authorized agency. There are currently three types of Amazon Brand Registry roles: Administrator, Rights Owner, and Registered Agent. Each comes with a different level of permissions.   

  1. Administrator: An individual who has full permission to assign roles to user accounts.   
  2. Rights Owner: An individual who is the rights owner or an employee of the rights owner who is authorized to report violations.   
  3. Registered Agent: A third party who is authorized by the rights owner to report violations.   

 

If you wish to give a seller the authority to report violations on your behalf and have extra authority within your listings, you must add them as a Registered Agent, Rights Owner, or Administrator. 

How to Assign Brand Registry Roles 

To assign roles for Amazon Brand Registry, follow these steps: 

1 – On the Amazon Brand Registry platform, click on Brand Registry Support. 

screenshot of amazon dashboard for Welcome to the Brand Registry

2 – Click through Update your brand profile > Update role or add new user to account 

screenshot of Amazon Brand Registry Support

3 – Follow the on-screen form to submit the seller’s email as the role you desire them to have. 

Apply for Amazon Brand Registry 

Learn how to apply to Amazon Brand Registry.

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Tips for Influencer Marketing

Online shoppers can’t physically inspect your products before buying them on online marketplaces, such as Amazon, Google Shopping, eBay, and Walmart. As such, recommendations are one of the few ways that online shoppers can connect with your products, and influencer endorsements are one of the best forms of recommendation. Influencers spend years gaining the trust and respect of their followersmaking them ideal advocates for your brand.  

Nowadays, many brands run influencer marketing campaigns. That shouldn’t be surprising, as influencer marketing is one of the best forms of social proof. Their followers trust their actions and guidance within their particular niche. This trust is incredibly valuable to growing brands.    

Influencer marketing campaigns can be challenging to manage and execute, but have no fear. In this post, we’re sharing seven tips for how to manage and maximize the results of your influencer marketing campaigns.   

1. Create Goals for Your Marketing Campaigns  

As with any project, a successful influencer campaign starts with clearly defining goals. Your goals should be tailored to your specific brand, as goals will differ depending significantly on your current social media development level. Common goals among brands include brand awareness, brand engagement, driving traffic to your listings or website, driving sales, or increasing followers for their social media. 

2. Clearly Define Your Goals to Your Social Influencers  

Now that you have clearly defined goals, they need to be communicated to your influencers. If your influencers are not on board with your goals, they are not the right fit for your influencer campaign. Additionally, if your primary goal is to drive traffic to your listings, they need to be aware of that so they can be sure to include all relevant links.  

3. Engage with Your Social Influencers  

Engaging with your influencers keeps them excited about your campaign. Before the campaign starts, message your influencers personally and see if they have any unanswered questions. Also, follow their account and like some of their posts. Start engaging with their brand, so they start engaging with yours. During the campaign, continually message them about their efforts, progress, and results. It is your role to keep them in the loop about changes or errors in their posting. After the campaign is over, thank them and discuss their results. Influencers are not Facebook or Instagram Ads; they’re people, and they need to be engaged to maximize efforts.   

4. Allow Your Social Influencers to Be Creative  

Micro-managing influencer’s content is how influencer campaigns turn into advertising campaigns. Influencers know their audience best. Let your influencers play around with styles, messaging, and so on. The best way to ensure they stay aligned with your goals is to give them the freedom to be creative.   

5. But, Give Them the Specifics 

There are a few specific details that do need to be communicated. This type of communication includes giving them a specific link for your listings or website, how many pieces of content they need to produce, whether the product needs to appear in the post, and so on. These communications should be made before you hire an influencer.   

6. Track Post-Performance Metrics 

Like any marketing campaign, you need to have metrics to see how the campaign performed. In the case of influencer marketing, tracking likes, comments, views, click-through rates, and so on can provide insights into overall campaign performance. Knowing the ROI on your influencer marketing campaigns will allow you to identify what is working and what is not working. If promoting products on Amazon, you can use Amazon Attribution links to associate performance metrics with individual influencers.

7. Create A Relationship with Your Highest Performing Influencers 

Now that your influencer campaign is over, identify the highest performing influencers based around your goals and post-performance metrics. These are going to be the influencers you want to create long-term relationships with. You can do this in several manners, such as asking them to join other influencer campaigns, reposting their content, continuing to engage with their brand, and so forth.   

Looking for Help with Your Influencer Marketing Campaigns?  

Kaspien was the first major third-party seller to combine influencer marketing with Amazon marketing. We’ve spent over 4 years running over 150 influencer campaigns for our partners. Learn more about how we can drive traffic to your listings through influencers. 

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Amazon and social media marketing

What is Social Media Marketing? 

Social media marketing is the act of promoting products and brands to consumers on social media platforms, such as Facebook, Instagram, Twitter, LinkedIn, Triller, TikTok, and Snapchat. In today’s virtual age, social media marketing is one of the most powerful marketing tools that brands have at a relatively low cost. 

When done in tandem with other marketing efforts, social media marketing can deliver extraordinary results. A great example of this is Häagen-Dazs’ Instagram and TikTok viral marketing campaign in the United Kingdom. In this campaign, Häagen-Dazs sponsored a weekly home-entertainment series, called “Secret Sofa,” which was promoted by influencers. They had numerous UK creators on TikTok and Instagram create videos around the sponsored series. From this campaign, Häagen-Dazs doubled its Amazon orders amid the COVID-19 pandemic.   

There are two types of social media marketing: organic and paid. 

Organic Social Media Marketing 

Organic social media marketing is any activity that doesn’t require a budget, such as posting, commenting, replying to messages, or interacting with other accounts. Organic marketing is all about growing brand awareness and engaging with your audience. Building relationships and earning customer trust is just as essential for brands online as for brick-and-mortar stores. It’s about striving to achieve the familiarity and service of a locally owned business, but on a much larger scale.

Learn about Kaspien’s organic social media marketing services.

Paid Social Media Marketing 

The second type, paid social media marketing, is about reaching your consumer through paid efforts on social media. These can include influencers, paid advertisements, sponsorships, and much more. Paid marketing is meant to drive traffic and sales on websites or online marketplaces. 

Learn about Kaspien’s paid social media marketing services.

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How to Use Social Media Marketing to Drive Amazon Sales 

Social media marketing can seem like a daunting undertaking for brands new to the space. It can be complicated, but there are a few principles to guide you.  

First off, engage with your audience. Use social platforms to create content, such as images and videos, that display your brand’s values and aesthetic. Do you want your brand to be seen as witty, earnest, fun, no-nonsense, etc.? You can reinforce your branding every time you engage with your audience with copy and visuals alike.  

Second, include a call to action. Suppose your goal is to sell a product, point shoppers to your products and listings. Not every post should include a CTA, as that risks coming across as overwhelming or making the relationship feel shallow. Balance CTAs with organic engagement.   

If you first engage and interact with your social network on the social platforms, directing them to your listing or website will be much easier. In many cases, shoppers need to connect with your brand long before they consider purchasing your products.  

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Promote Products Online: Amazon Marketing 

Amazon is the largest online marketplace and shoppers on Amazon have a higher intent to purchase than those searching via Google. The problem is that Amazon advertising is getting more expensive. In addition to growing brand awareness and building loyalty, social media marketing can help brands grow their Amazon sales. Reaching shoppers off Amazon and directing them back to Amazon allows you to bypass competitors’ Amazon ads. Plus, if they’ve interacted with your brand on social media in the past, you’ve already gained their trust on Amazon. 

Thanks to the Amazon Attribution Program, you can even attribute on-Amazon sales to off-Amazon promotions. If a consumer finds your products through your social media, and you’ve placed a trackable link created via the Amazon Attribution Programyou’ll gain insights such as clicks, Amazon listing views, and purchases. Amazon attribution is a necessary tool to gauge the effectiveness of your social media efforts. 

Run Amazon Giveaways via Social Media 

One great example of how to utilize social media marketing to drive Amazon sales is through product giveaways. Amazon used to run a program called Amazon Giveaways, but Amazon retired giveaways in October 2019. We saw great success in running product giveaways, so the loss of the program was disappointing (BUT, we did create a list of low-cost marketing alternatives to Amazon Giveaways). However, through social media marketing, you can still run giveaways manually through your social media channels. Our partners have seen excellent results promoting their Amazon listings through giveaways held on their social media channels, as it’s a natural way to drum up interest in your products on Amazon. 

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Amazon Giveaways Alternatives

Amazon Giveaways used to be an affordable and impactful way to increase traffic to Amazon listings and support sales growth. However, in October 2019, Amazon retired the Amazon Giveaways Program. We’ve noticed an uptick in searches for Amazon Giveaways as brands plan their holiday marketing strategy for Amazon.

Since Amazon Giveaways are no longer an option, we’ve put together a list of other cost-effective Amazon marketing services you can use to support Amazon’s sales growth this holiday season.   

Amazon Marketing Services for the Holidays 

The holidays are a crazy time for the eCommerce world. In 2019, online holiday spending in the US totaled $142.5 billion. With the continuation of the COVID-19 pandemic, holiday spending is expected to rise on online marketplaces. 

Giveaways on Social Media Utilizing the Amazon Attribution Program 

Even without the Amazon Giveaways Program, you can still offer product giveaways. Instead of using Amazon’s program, you can offer giveaways through your brand’s social media channels. This tactic does require more work on your end, as you’re responsible for managing the giveaway from start to finish, but it’s a relatively low effort project and can be a great way to boost your visibility.   

Consider partnering with an influencer to expand the reach of your giveaway on social media. The influencer can post the giveaway on their social channels while you cross-promote on your social channels as well, amplifying your giveaway’s reach while introducing thousands of new potential customers to your brand. 

Thanks to the Amazon Attribution Program, you can track on-Amazon metrics, such as traffic, page views, and sales, generated from this off-Amazon giveaway. These tracking measures allow you to see the effectiveness of your giveaways on Amazon. 

Amazon Coupons 

Amazon Coupons display on the search engine results page (SERP), on the Amazon Coupons page, and the product listing. Coupons are a great way to boost sales, especially on products where the price is differentiating.  

Amazon Coupons

Brands can enroll up to 50 ASINs into a single coupon and offer a dollar amount or percentage off. The coupon cost to the advertiser will equal the discount + $0.60, both of which are subtracted from the coupon budget. Each coupon must have a minimum of $100 for the budget; however, brands will be charged only for redeemed coupons. Within Amazon Coupons, brands get to dictate the duration, the discount, and the product selection. This variety of options makes Amazon Coupons very customizable to your marketing needs.  

Amazon Live 

Back in 2019, Amazon revealed Amazon Live. Amazon Live allows sellers to use the app, Amazon Live Creator, to broadcast live streams where they demonstrate product usage, features, and benefits. Featured products appear directly below the live broadcast. While playing, the videos appear on the brand’s listings, Amazon store, and Amazon.com/Live. The service is currently only available to brand registered brands based in the United States.   

Amazon Live is free and a great way to promote product launches or familiarize viewers with product features. These live events are the best time to allow for frequently asked questions or questions and answers. 

Amazon Stores and A+ Content 

While not an active promotion, Amazon Stores and A+ Content are free tools for brands enrolled in Amazon Brand Registry

Amazon Stores are digital storefronts for brands on the Amazon marketplace. These branded stores allow you to list your entire catalog of products. A+ Content (previously Enhanced Brand Content) provides the opportunity to share more product information through stylized content and additional images.  

A laptop displaying an Amazon Store for brands and sellers

These services are a great way to help your consumer engage with your brand and your products. Creating Amazon Stores and A+ Content is a way to encourage customers to convert once they reach your listings. 

Amazon Marketing is Alive & Well 

Amazon Giveaways may be gone, but your options for cost-effective Amazon seller marketing tools are not. Amazon Coupons, giveaways on social media, Amazon Live, Amazon Stores, and A+ Content are fantastic alternatives to increase sales and conversions. There’s a rich combination of opportunities available that can deliver similar and even better results than Amazon Giveaways, especially when deployed in conjunction with one another. 

Learn more about the current Amazon marketing landscape in our whitepaper, The State of Amazon Marketing. 

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1. Dropship Vendor (DSV): A business model where sellers list their products on Walmart.com, but hold the products in their own warehouse or a third-party logistics provider’s warehouse. Walmart appears as the seller in the listing. When a customer orders a seller’s product from Walmart.com, the seller ships it to the buyer. Walmart requires the merchandise to be shipped with a Walmart packing slip. If the customer chooses the “pick up in store” option, the seller must send the product to that Walmart retail location. As a plus, Walmart will cover the shipping cost.  
Learn More >

2. Everyday Low Price (EDLP): A pricing strategy by Walmart that promises customers that Walmart will have consistently lower prices than their competitors. Customers can access these prices without coupons, promotions, or special discounts. Everyday Low Price (EDLP) is one of Walmart’s key customer retention strategies. For sellers, this methodology ties into Walmart’s pricing parity requirement, which says that sellers must ensure that their price is the lowest price on the market or else they risk Buy Box suppression.  
Learn More > 

3. Free & Easy Returns: Walmart allows customers to exchange or return an item within 90 days after purchase. Customers can return their items in-store, by mail, or by pickup at their home. All the customer needs is a receipt. There are some, but not many, expectations to this rule. 
Learn More > 

4. NextDayDelivery: If a customer purchases a product with the NextDay delivery designation, the seller must deliver it by the end of the following day. For the customer, orders over $35 are free. Most products sold on Walmart.com are eligible for the program, but products sold by Walmart Sellers are not.  
Learn More > 

 

5. Order Defect Rate (ODR): The number of orders with a minimum one defect divided by the total number of orders (both within the same period). Defects include cancellations, returns, delivery defects, and customer complaints. Sellers must maintain an ODR of 2% or lower to meet Walmart’s performance standards. 
Learn More > 

6. Pricing Parity/Reasonable Price Not Satisfied: To ensure a great customer experience, Walmart set automated rules that eliminate non-competitive priced items from the Walmart.com marketplace. Walmart enforces this by identifying identical products on other platforms, such as Amazon, and seeing if they are listed at a lower price than listed on Walmart. The Price Parity rules unpublishes products when the offer price is higher than a competing website. The Price Parity rules are slightly different from the Reasonable Price Not Satisfied rule, which unpublishes products if the offer price is drastically higher than competing websites.   

Amazon enforces a similar price parity policy, which is one reason it’s so important to maintain consistent strategy, marketing, promotions, and pricing across all online sales channels. 

7. Referral Fees: Walmart charges a category-based referral fee ranging between 6%-20% (most common is 15%) for selling on their marketplace. 

8. Seller Center/Seller Portal: A Walmart platform,similar to Amazon’s Seller Central, used by Walmart sellers to market and sell products to Walmart customers. 

9. Seller Scorecard: The Seller Scorecard,found in Walmart Seller Center,provides an overview of how well your products are performing under the Walmart Seller Performance Standards.  

10. TwoDay Delivery: If a customer purchases an item with TwoDay delivery designation, then the seller must deliver the product by the end of the following day. For the customer, orders over $35 are free. Most products sold on Walmart.com are eligible for the program, but products sold by Walmart Sellers are not.  
Learn More > 


11. Walmart 3P Merchant: An independent company that sells products on Walmart’s online marketplace.This can be a brand selling its own products directly or a dedicated wholesale retailer selling products to consumers on a manufacturer’s behalf.  

12. Walmart Buy Box: A section on the product page near the “Add to Cart” button that shows from which seller shoppers will be buying. A seller earns sales only when they win the Buy Box. When multiple sellers are in the same listing, each will win the Buy Box for a certain percentage of time. Walmart awards the Buy Box to sellers based on product price, availability, and seller performance.  

 

13. Walmart Enhanced Content: This Walmart.com feature allows sellers to create listings with additional media, such as more images, banners, comparison charts, descriptions, interactive product tours, and videos. These features help capture shopper interest and can lead to higher conversion rates.  
Learn More >

14. Walmart Fulfillment Center: A physical location to which Walmart sellers ship inventory. Inventory is stored in and fulfilled from the fulfillment center.   

15. Walmart Fulfillment Services (WFS): A Walmart service in which third-party vendors keep their product at Walmart’s warehouses. Walmart will pick, sort, pack, ship, track, and handle product returns and refunds for a fee. 
Learn More > 

16. Walmart Marketplace: The official name of Walmart’s online platform.The Walmart Marketplace allows Walmart and approved third parties to sell goods online to Walmart customers. 
Learn More > 

17. Walmart Media Group (WMG): Walmart’s first-party media branch. Brands who sell on Walmart can work with WMG to promote their products rather than hiring a third-party seller, marketing agency, or an internal marketing team to do it for them. 
Learn More > 

18. Walmart Plus: A Walmart subscription-based service similar to Amazon Prime that gives members access to unlimited same-day delivery for eligible items, discounts at Walmart gas stations, and early access to Walmart deals. The current cost is $98/year, which is roughly $20 less than Amazon Prime.  Walmart Plus is expected to officially launch in August 2020. 
Learn More > 

19. Walmart Solution Providers: Third-party providers who offer a wide range of ecommerce services for the Walmart Marketplace. Services can include item setup, inventory, order fulfillment, pricing, marketing, and more. Walmart categorizes Walmart Solution Providers into three categories: Full-Service Solution Providers, Specialty Solution Providers, and Content Solution Providers. Kaspien is a Specialty Solution Provider. 
Learn More > 

20. Walmart Sponsored Products: Similar to Amazon Sponsored Product Ads, these cost-per-click (CPC) ads are used to promote products on com website, mobile platform, and app. 
Learn More > 

Also check out our list of 100 Terms Every Amazon Seller Should Know.

Want to learn about selling on Walmart.com? Check out our free eBook!

Download the eBook: “WFS: Walmart’s Gamble to Challenge Amazon FBA”


 

On August 4th, Amazon published a press release announcing the impending launch of Amazon Sweden. On August 11th, Amazon sent an email to sellers with more details about what to expect with the new marketplace.  

In this email to sellers, Amazon stated that Amazon Sweden will be available within EU Seller Central accounts as Seller Central Sweden. All Professional Selling fees and referrals fees will stay the same with this expansion.  

The email also outlined how products currently in Amazon’s European Seller Central will synchronize to Seller Central Sweden. Amazon has created the Build International Listings (BIL) tool to automate and accelerate this process. If a seller does not wish to have his or her listings synchronized, they must override it manually. Amazon notes that products subject to the Swedish Chemical Tax will be excluded. 

It is uncertain when Amazon Sweden will launch. In January of this year, Amazon sent a similar announcement for Amazon Netherlands, which was publicly launched in March. If Amazon maintains a similar timeline for Sweden, we could see the marketplace publicly launch in October, though an official date has not yet been released. In the meantime, Amazon asks sellers to go into their EU Seller Central account and check to ensure all of their product listings are synchronized accurately. 

If you’re interested in expanding your brand to Sweden, we can provide a full suite of Amazon services for marketing, brand protection, logistics, and more. 

Amazon’s Email Announcement to Sellers 

“Dear Selling Partner, 
 
We are pleased to announce that we have started the work to launch the Swedish Amazon.se Store, to delight local customers and give Selling Partners the opportunity to expand their European business even further.

Seller Central Sweden will soon be available to you as a seventh country option in your EU Seller account. With the same monthly Professional Selling fees and referral fees, you can access all seven European Amazon Stores.

To support you with the expansion of your business, we will synchronize your eligible product selection with your Seller Central account for Amazon.se. You will be notified via email once Seller Central Sweden is available and the synchronization is complete. You can then revise your synchronized selection.

How will we synchronize the existing product selection: 

  • We will enable the Build International Listings (BIL) tool in Seller Central, which allows us to list your eligible existing products from your Home Marketplace on Amazon.se on your behalf, to save you valuable time. You can edit the BIL connection between the Seller Central accounts of your choice afterwards at any time here by clicking “remove connection”. 
  • Please note: When the BIL tool is active, it will regularly synchronize your existing listings and prices for all linked Seller Central accounts. Please check your preferred tool settings here after the synchronization is complete.  
  • The product descriptions will automatically be translated to Swedish, using BIL’s Machine Translation functionality. 

Learn more about BIL and its functionalities here 

What product selection will be synchronized? 

  • We will synchronize your eligible selection which is currently exportable to Sweden and prices that are active on Amazon.co.uk and Amazon.de. For your self-fulfilled listings, we will synchronize your prices from your BIL source marketplace, adjusted for exchange rate* to Swedish Krona. 
  • For your Fulfilment by Amazon (FBA) Pan-European FBA (Pan-EU) listings, we will take into account:  
  • VAT differences between BIL source marketplace and Sweden. Example: If you are selling a product on Amazon.de for 10.00€, we will synchronize the product price on Amazon.se as SEK 114.5, taking the VAT differences in Germany (16%) and Sweden (25%) into account. 
  • Fulfilment fee differences between your BIL source marketplace and Sweden. 
  • You will be able to benefit from the Fulfilment by Amazon (FBA) and Pan-European FBA (Pan-EU) programs with domestic fees and offer your products to local customers. You can find the promotional fees that are valid until June 31st, 2021 here. 
     
    *The BIL tool adjusts prices periodically to reflect currency conversion fluctuations in the target marketplaces’ currencies. The frequency of these updates might vary from daily to weekly. These updates will not show changes of less than 1%.

Please note: If you are selling Consumer Electronics, we will not synchronize products that will become subject to the Swedish Chemical Tax that is expected to become effective in Sweden from 1st of October, 2020. We will provide you with more information in the upcoming weeks. Please reach out to your tax adviser for additional information.

What you need to do: 

  • In the next few weeks, we will notify you via email once the product synchronization is complete. Check here under Account Notifications, if your email address for important Technical Notifications and Business Updates is still up to date. 
  • Check your synchronized listings and prices under Manage Inventory in Seller Central.  
  • If you are already using the Build International Listings (BIL) tool, you can edit the connection between the Amazon Stores of your choice and prevent product listings from synchronizing here at any time. If you wish to opt-out from selling on Amazon.se, click here to “remove connection”. 
  • If you are not using the BIL tool yet, we will activate it on your behalf to synchronize your selection to Amazon.se. You can edit and remove the BIL connection here afterwards. 
  • Once Amazon.se launches, your listings will become available to our local customers from the start of the new Amazon Store.”

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Is your Amazon advertising agency delivering results?

Amazon advertising represents one of the most cost-effective tools to advertise products. Experienced sellers and marketers know that every opportunity you get to optimize your ad spend and keywords is a way to increase your bottom line. This means itextremely important to manage your Amazon ads properly. Due to the time and complexity of ad management, many businesses outsource their Amazon advertising to a third-party, such as a marketing agency, contractor, or freelancer. The amount of third-party Amazon advertisers is growing, and the market is getting crowded. The large number of choices can be overwhelming for anyone, let alone a brand entering the Amazon advertising space for the first time.   

When you’re paying someone to manage your ad campaigns, you should know if they’re worth their price. Unfortunately, too often, they’re not. They may be charging you hundreds of dollars per month when they only check on your campaigns monthly. That’s not okay.  

The problem is, it can be hard for business leaders to assess their agency’s or contractor’s true performance if they’re not versed in Amazon advertising fundamentals. To help, we’ve put together this blog post to help you determine if your Amazon search marketer is worth their salt. 

Watch the video to learn how to create high-performing Amazon Sponsored Product campaigns. 

5 Questions to Ask Your Potential Search Marketer 

1) How Often will Bids, Budgets, and Search Terms be Optimized?  

Is it every day, every week, or every month? Is it every six months? Frequency of optimizations is a critical consideration. Some folks are going to be affordable, but they may only log in to “optimize” your Amazon advertising campaigns once a month. The reality is that’s not optimization. The Amazon landscape fluctuates too greatly and too frequently to implement optimizations that rarely.   

On the other hand, some may say that they will optimize your advertising campaigns every day. At that point, they may be over-responsive and over-managing. Amazon changes frequently, but it takes time to see what effect your previous optimizations are having. The sweet spot is somewhere between these two examples, in many cases being two to three times per week. 

2) What Cadence will We Receive Performance Reports?  

Your Amazon advertising agency or freelancer should provide reports regularly. As with the frequency of optimizations, there’s a sweet spot. Checking reports too rarely can result in poor performance and missed opportunities. Conversely, checking reports too frequently can lead to unnecessary stress and micro-management. Optimizations take time to take effect, so your reports should be spaced far enough apart to provide a true picture of what your last optimizations did. 

Performance reports are like your child’s report card. If you review their report card only once per quarter, it may be too late to implement the changes needed to bring the grade up from a D to an A. Likewise, if you review their report card every day, there won’t be enough of a difference to suggest what, if any, changes are needed. 

To start, we recommend a monthly cadence for performance reports. This prevents overreactions, while still being frequent enough that you can make strategic adjustments.  

3) How Do You Plan to Manage Budget and How Will We Hold You Accountable?  

Your budget may be based on a percentage of sales, or you may have a $10,000/month marketing budget. How is your Amazon advertising agency going to manage and optimize your budget effectively? Are they using an ACoS target? Are they going to try to reduce costs as much as possible? Are they going to be targeting only sales? Your Amazon advertising agency should have well prepared answers backed by data for these questions. 

One type of relationship to watch out for is pay-for-performance oriented relationships. While your sales may increase, you may be increasing your ad spend by an inordinate amount, diminishing efficiency and ROI.   

4) How Much of Our Budget is Spent on Branded Keywords?  

Are there any high-value keywords that you’d like your products to place higher on the SERP for? Is it a branded term, a competitor’s term, an industry-specific term, or a category-term? If so, you should discuss that with your potential Amazon advertising agency or contractor because those types of targeted keywords may have a higher cost or higher conversion rate. 

It’s easy to spend more than 50% of your budget on branded terms, but that can inhibit your advertising campaigns’ ability to reach new shoppers. Ask your partner how they will manage and optimize between your branded terms and non-branded termsUltimately, you’re trying to find consumers who aren’t only searching for your brand because that’s how you reach new people and acquire more customers 

5) What Organic Sales Lift can be Attributed to Your Marketing Efforts?  

When you’re paying someone for a service, you have a right to know what results you can reasonably expect from their work. Excellent Amazon ad management products, used with reasonable effort, proper inventory, good positioning, and excellent logistics, should raise sales by 30%. Some people will claim they can go even higher than that. If they say they can increase organic sales by 35%-40%, thatI’s not too crazy, but if any agency or marketer says they can guarantee 50%, 60%, or 70% organic sales growth, you should be worried. 

Here at Kaspien, we offer AdManager to help businesses optimize their Amazon advertising campaigns. If you want to use it yourself, SaaS is available. If you want us to manage your ad campaigns for you, we can do that too. 

Telling Factors You Can Check On 

Once you have hired an agency or freelance search marketer to manage your Amazon advertising campaigns (or if you already have one currently employed), you should continue to monitor their work. We recommend checking the following 6 factors as a way to assess how well they’re managing your advertising campaigns. 

1) Are All Campaigns Set to Automatic Targeting?  

If they are, that means your search marketer is not actively managing the campaign. They’re letting Amazon’s autopilot handle the work while they collect a paycheck from you, and your campaigns are missing significant optimization opportunities.   

2) Are Automatic Campaigns Greater than 20% of Total Spend without any Search Terms being Added to Other Campaigns?  

You should always be running both automatic and manual campaigns. However, if your automatic campaigns are generating significant parts of your spend, you should be worried because it indicates your manual campaigns are not being properly optimized. (One caveat to this is if it’s a new campaign. For new campaigns, automatic campaigns may account for the majority of spend while they build relevancy.) 

3) Do Automatic Campaigns Have Negated Search Terms?  

Negating search terms in automatic campaigns after migrating them as keywords in manual campaigns is a matter of good hygiene. Negating search terms from automatic campaigns prevents them from competing with your manual campaigns. If your search marketer is not doing this, that should be cause for alarm. Not doing this is bad etiquette and muddies your metrics, making it harder to manage the given manual campaign, your specific ideal customer acquisition rate, and ideal cost-per-click.  

4) Are Small Groups of Products Utilizing the Majority of Spend?  

If a majority of your spend is from a small list of high velocity products, then youre missing opportunities for your other products. Your search marketer should be attempting to spread your ad spend across your whole catalog, rather than focusing it on a small group 

5) Are Branded Keywords Accounting for the Majority of Spend?  

Branded keywords accounting for a majority ad spend is a huge red flag because it indicates your campaigns are not targeting new shoppers. Consumers will never search for your specific brand if they have never interacted with it before. For example, a consumer might search for “dog toy” or “soft dog toy”, but never “ZippyPaws” unless they have interacted with “ZippyPaws” before. Spending your money on branded keywords to attract new customers is wasting money. 

6) What are Your Highest Performing Keywords?  

If you have a high cost-per-click (CPC) but youre winning the bid for your generic competitive keywords, youre in good shape. It does make you a target for competitors, but it’s a good problem to have. 

Find the Right Amazon Advertising Agency 

Don’t let someone take advantage of your trust. If you’re paying someone, make sure you have mechanisms in place to hold them accountable. Ask prudent questions and check on your campaigns. 

While you’re here, here are some other resources you can use to educate yourself on Amazon advertising 

Listen to the podcast episode: 

 

The Difference Between First-Party and Third-Party Sellers 

If you’ve thought about selling online, you’ve probably heard of firstparty (1P) solutions offered by top marketplaces, like Amazon and Walmart. But what does that mean exactly 

First-party simply means that the owner of the marketplace platform also has a retail entity that partners with brands and represents their products. For example, Amazon has a retail division called Amazon Retail, though in the Amazon community, it’s frequently just called “1P.” Amazon Retail buys inventory from manufacturers and distributors at wholesale cost, then sells the product on Amazon.com. They also offer additional services to their brands for online protection and digital marketing. Walmart also has a retail division that functions much the same. 

What, then, is a third-party seller, or 3P? A third-party seller functions similarly to a first-party seller, however, they do not own the platform on which they are retailing, hence the “third-party” name. A third-party seller can be a dedicated retailer, as is often the case, or it can be the brand itself, if the brand chooses to sell their products without assistance from another entity.  

On Amazon, third-party sellers began as a minority, but now account for more than half of the sales made on Amazon. To compete with 1P, many 3P sellers have expanded or enhanced their services to make a 3P partnership more enticing than a 1P partnership.   

How to Decide if 1P or 3P on Amazon is Better for You 

Iyou’re a brand trying to decide whether to partner with 1P or 3P, look at the data. Where do you believe the market is going? At Kaspienwe look at this kind of market data quite frequently. For us, one of the most interesting pieces of data is how sales volume is oriented on Amazon. 2018 was the first time that third-party seller volumes surpassed Amazon volumes on the Amazon marketplaceIn Amazon’s latest earnings report, they reported that 53% of overall gross merchandise value (GMV) was from third-party sellersCompared to previous years, GMV has grown from 30% to 50%.  

Based on this data, we can infer thaAmazon wants their growth to focus on their 3P businessThat leads to the ever-important question: Why would Amazon favor 3P growth over 1P when they operate their 1P business? The truth is surprisingly straightforward: Ultimately, having other sellers on their platform provides a better economic outcome for Amazon because they avoid inventory risk while still profiting from commissions and marketing fees. 

Amazon Service Offerings

Another key consideration when comparing 1P and 3P is service offerings and performance. What sort of capabilities and expertise do these providers offer to meet your brand’s needs? Do they have a proven track record of success? Are they helping you grow or just maintaining the status quo? Maximizing success depends on finding a partner who can not only provide for your current needs, but also provide new opportunities for growth. 

Brand Control on Marketplaces

One of the most important services, especially for larger, more established brands is control. Amazon has spent the last year under intense scrutiny due to rampant counterfeits and illegitimate sellers who threaten consumers and businesses, and this lack of control has made some major brands sever ties with Amazon. For example, Nike announced they are pulling off the Amazon platform because they don’t feel they have the control or creative freedom they want in their 1P partnership with Amazon 

Icontrol of your branding, control of pricing, control of consistency, and control of messaging are important to your brand, then you’ll likely be more satisfied by working with a third-party seller. 

Learn More with Our Free Whitepaper

If you’re interested in comparing the costs associated with 1P versus 3P, check out our whitepaper, The Costs of Amazon. It compares expenses for 1P, 3P, and direct-to-consumer options. 

The Costs of Amazon: 1P, 3P, and DTC

The Future of Third-Party and First-Party Solutions on Amazon 

Judging by historical trends, we will continue to see third-party volumes grow at a higher rate compared to Amazon Retail (1P)As previously described, this is partly due to the economics being more favorable for Amazon when more sales come from third-party sellers, presuming of course that those third-party sellers are reputable and don’t harm Amazon’s reputation with consumers.  

However, it’s unlikely that Amazon Retail will ever completely disappear because some top tier brands are more comfortable working directly with Amazon. Amazon has also been alleged to require top tier brands to work with 1P if they want to list their products on Amazon. Amazon would do this because, in the case of global brands, they may make more revenue through the 1P model than 3P.  

How Does 1P and 3P Apply to Other Marketplaces, like Walmart.com or eBay? 

We’ve compared 1P and 3P for Amazon, but how do they apply to other major online marketplaces, like Walmart and eBay?  

It comes back to consistency and control. When brands work with 3P seller, they can have a single entity manage all of their channels in unison, ensuring that pricing, content, and marketing are consistent. This provides a clean and positive customer experience, while also mitigating the risks of competing marketplaces rolling up the Buy Box because of pricing inconsistencies across marketplaces. If brands partner with 1P for each marketplace, establishing that same consistency will be very difficult and require more active monitoring and communication on the brand’s part. Kaspien offers services for third-party retail, direct selling supported by an agency, and direct selling independently supported by self-service software.

If you’d like to learn more about any of these services, reach out through our contact form. 

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We have a growing library of resources about Amazon services, including other blog posts, whitepapers, eBooks, podcasts, and more. Subscribe to our weekly blog to never miss a beat!