How to Start Selling on Amazon

As a First-to-Market (FTM) brand, you carry the exciting burden of readying your products for a successful expansion onto the marketplace. Being the captain of your fate can be equal parts exciting and overwhelming, especially when breaking ground in a foreign market.  

If we’ve learned anything from 2020, it’s that anything can happen. It’s important to understand that there’s no ‘silver bullet’ for launching a new product or brand, but there are proven tactics recounted here to help you successfully navigate the ecommerce seas.   

Why Amazon? 

Amazon is turning into a marketplace that is well positioned for brands, as having made strides to keep brands safe on the channel through programs like Brand Registry. Amazon seems to understand and hold stock in the fact that brands invest in research and development, advertise through other media outlets, engage with customers, and create a shopping experience that excites folks so they come back for more.   

The Two Types of FTM Products 

An FTM launch will look different for each brand, but we can divide the launch types into two very broad buckets: emerging products and established products.  

Often, an Amazon launch consists of a manufacturer creating a product or products with specific intent to sell them on the Amazon channel only. We would call this an emerging product. 

Established products, on the other hand, are products that have been selling for years in small brick and mortar stores, large box stores, Etsy, direct websites, and even farmer’s markets, and the brand now wants to transition their catalog to online marketplaces.  

Brand genesis is an important factor that will play into a brand’s overall FTM strategy, so it’s an important distinction. 

farmer's market

Established Products 

For those brands who do have some form of exposure already, be it online or in a physical store, step one will be determining which products from your catalog will be added to Amazon.  

With the pandemic forcing many brands to look to online platforms to maintain profitability, there’s been a rapid and unique shift in the ecommerce landscape, so again, remember that the FTM strategy will look different for all brands.  

Emerging Products 

For manufacturers that are looking to create a product line exclusively for Amazon or ecommerce marketplaces, there are fewer ‘keeping everyone happy’ hoops and more ‘what products can I rely on to sell’ hoops, which is just as tricky of a situation.  

With roughly 12 million items on Amazon.com, you need to know who and what is out there before you drop your anchor. There is a range of free and paid options to help research product opportunities, which are highly recommended for existing brands and new products alike. 

Company owners often turn to index & rank checkers and search volume tools to ascertain what products currently sell well on the channel, then further research whether the items are viable for production, and then finally, launch.  

Getting That Paper. (Not the Green Kind. Yet). 

We’ll be the first to admit that this isn’t the sexiest section of this guide, but it could be the most important. Having your general business in order is key to avoiding frustrating lag times during set up.  

The enclosed checklist is a fantastic aid for maneuvering through this section, since the majority of the tasks discussed below will require you to work with government agencies and third parties to compile the necessary paperwork. We’ve included helpful links that will take you exactly where you need to go. 

  • Secure your trademark with USPTO. In totality, this process can take 6 months, so the earlier you begin, the better. You will need to have a trademark in order to file for the Brand Registry program on Amazon.  
  • Secure UPC codes (synonymous with barcodes and international EAN) for every unique product in your catalog. This includes product variations, like size or color.  
  • Certain products require testing and material information in order to be approved for resale on Amazon.  
  • Set up processes for tracking, storing, and filing sales and use tax. Once you are a registered business within that state, you will need to file a report annually with the Secretary of State and track the expiration date of your license so you can renew, as needed.  
  • Pull together all contact information, identification, and accounting paperwork necessary for opening an Amazon Seller Central account.  
  • Determine your fulfillment strategy, as the route you take will determine whether you get the highly sought-after Prime delivery badge. 

Download our free First-to-Market Checklist to see if your brand is ready to launch new products on Amazon.

Planning Logistics

Next up, it’s time to plan how you’re going to get inventory from point A to point B in the most effective and secure way possible. This became quite a bit trickier in 2020, which strained supply chains at every juncture. As such, approaching these steps with care is even more important.

Plan Early with Your Manufacturer 

Start planning with your manufacturer early to confirm availability of raw materials and start calculating cost of goods. Confirm lead-times with your manufacturer to assess timing for your initial shipments into Amazon, as well as align your future inventory planning ability for stock replenishment and gauging timing for any new product development. 

Apply Amazon-Compliant Packaging during Production 

For sake of efficiency, having your product packaging modified for Amazon compliance during production is highly recommended. Be sure to include expiration dates, shelf-life, age restrictions and UPC/barcode on the product packaging for Amazon. 

  • If you plan to launch on Amazon Global marketplaces in the future, include multi-language packaging and product directions 
  • If you sell temperature sensitive products, note that Amazon removes any meltable product from warehouses April-October

The actual product packaging (the box the product comes in), it doesn’t have to be pretty! Feel free to shave off some costs and use a plain brown box that has a scannable barcode on the outside. Or, if you choose to polybag the product, then you’ll need to make sure your warehouse can apply all product prep to be acceptable at FBA.   

Amazon FBA shipping requirements

Secure Your Distribution Contracts 

For brands that are established in the market already but looking to expand into the Amazon marketplace, you should notify your distributors and develop parameters to ensure other resellers do not become instant competition. Having iron clad online distribution policies and strict MSRP will be extraordinarily useful as your brand gains momentum on the channel and outside parties become interested in claiming a piece of the pie.  

There are legal resources and consulting partners that specialize in strategy development to keep online channels clean, such as Amazon Sellers Lawyer, that can help you understand your legal options and reduce the chances of channel conflict or price degradation post-launch.  

Create a Warehousing Plan 

Begin building relationships with a warehouse solutions partner quickly. Many brands will use an independent warehouse solution to hold stock that has been manufactured domestically or imported to reduce monthly storage fees to Amazon. Most often, independent warehouse partners will have a competitive fee structure compared to Amazon FBA.  

Product that sits at FBA longer than 12 months will be subject to increased fees under their Long-Term Storage policy. Other brands may lean on established supply chain partners like Deliverr to facilitate storage and shipping which guarantee Amazon compliance. 

Send a Small Initial Shipment 

Your initial shipment into Amazon should be small to help troubleshoot any unforeseen issues and reduce fees as you ramp up sales velocity. Roughly 20-50 units should suffice, with a secondary shipment sent 1-2 weeks after. Once product has been selling on Amazon for 30 days, subsequent shipments should include roughly 4-6 weeks of coverage, increasing upwards of 8-12 weeks during relevant seasonality.   

Time Your Launch Strategically 

Having time is a luxury. But timing is a necessity. Do not rush a launch for sake of excitementExamine your product and pick your launch timing with intent. Will your catalog align with the back to school season, Valentine’s Day, Father’s Day, etc.? Kick off the main event when the opportunity is greatest 

Keep the Learning Going with our Free eBook

The above only tips only scratch the surface. Deep dive into everything your brand should do before launching on Amazon in our free eBook, “How to Launch New Products on Amazon.”



Amazon Agency vs Amazon Retail

Expansion into Ecommerce has Accelerated 

Before 2020, ecommerce had been steadily growing its share of all retail. But when the coronavirus hit and countries around the world issues stay-at-home orders, it forced consumers and businesses to turn to online sales channels in numbers never seen before. As a result, we’ve seen an acceleration in brand and consumer adoption of ecommerce.

Road Bumps Along the Way 

But, 2020 also saw brands face many hurdles on online marketplaces. Amazon struggled to keep pace with the surge in purchases, and they had to restrict which types of products they would accept into their fulfillment centers for a time. Amazon’s first-party (1P) division, Amazon Retail, and third-party sellers (3Ps) alike struggled to remain in stock as supply lines locked down, manufacturing was interrupted, and consumer demand skyrocketed for products well outside of their typical peak season.  

Charting a New Course 

After the turbulence of 2020, many brands are reconsidering their approach to ecommerce. To help brands make an informed decision, we’ve put together a list of the key factors that brands should consider when deciding if they should work with an Amazon retailer (1P or a 3P) or transition to working with an Amazon agency.

Should You Work with an Amazon Retailer? 

Now that we’ve covered the primary options, let’s dig into key factors for making a decision about working with an Amazon retailer, an Amazon agency, or transitioning from one to another. 

What is an Amazon Retailer? 

Starting from the top, when a brand partners with a retailer, the retailer buys product from the brand at wholesale prices, then sells it for retail prices on Amazon.  

The brand’s profits are payment for their product, minus the cost of manufacturing. The retailer’s profit is the consumer’s payment for the product, minus the wholesale expenses and channel management costs, which includes things like shipping, storage, fulfillment, commission, and marketing fees. 

When it comes to Amazon, brands that sell through a retailer can partner with Amazon directly (first-party or 1P) or with a third-party seller (3P). Learn about their key differences in our blog post, Amazon 1P vs 3P. 

Many brands choose to sell through a retailer because it provides cash up front, and the brand doesn’t have to get involved in the hassle of actively managing an Amazon channel. 

Pros of an Amazon Retailer 

Let’s start with the pros for partnering with an Amazon retailer (1P or 3P): 

  • Paid upfront via a retailer’s purchase order, which can be useful for funding manufacturing costs 
  • Not responsible for managing consumer-facing sales channel (fewer infrastructure costs) 
  • They handle online sales tax 
  • They are already registered for international value-added taxes (VAT), making international expansion much faster 
  • They provide the expertise and resources  
  • Perhaps the simplest way to start selling on Amazon 

Cons of an Amazon Retailer 

Now for the potential cons of working with an Amazon retailer (1P or 3P): 

  • Limited control over your brand’s representation online 
  • Limited control over product pricing 
  • Limited visibility into channel performance 

It’s worth noting that some of the cons of working with a retailer can be mitigated by partnering with a trustworthy partner. If you’re interested in this business model but concerned about the cons, seek out a retailer that’s committed to building a healthy relationship with your brand. 

Costs of an Amazon Retailer 

As mentioned, in a retail model, the retailer pays the brand for their product. However, retailers may ask for various discounts from the brand so they can pay the numerous Amazon fees (commission, shipping fees, tiered storage fees, and fulfillment fees) while still having some margin left over to generate revenue for themselves.   

Making a Decision 

Work with an Amazon retailer if: 

  • You want to focus on the manufacturing and brick and mortar side of your business, while they handle taking your products to market 
  • You don’t want to be responsible for paying shipping, storage, fulfillment, and commission fees 
  • Your business’s cashflow model relies on large purchase order payments 
  • You want to expand sooner rather than later into foreign markets 

Should You Work with an Amazon Agency? 

If you’re not interested in starting with a retailer or you’re working with a retailer and want to take more ownership of your Amazon channel, you may consider working with an Amazon agency. 

What Value does an Amazon Agency Add? 

Now, let’s say a brand doesn’t want someone else representing them on Amazon; they want to sell their products themselves. That’s an increasingly popular decision, and one that we’ve seen more and more brands transition to in recent years.  

However, there’s a challenge in representing yourself. Managing an Amazon channel requires three things that can be hard to come by: 

  1. Personnel: You need bodies dedicated to managing your Amazon channel. If you’re using existing personnel, what projects are you pulling them off of? If hiring new personnel, you need the budget for salaries and benefits. 
  2. Expertise: At over 25 years old now, Amazon is a mature marketplace that requires complete attention. With millions of sellers on the platform, you must enter the platform with a strong understanding of the landscape and strategies if you want to succeed. 
  3. Time: If you manage your brick-and-mortar relationships, do you have time to also manage your ecommerce relationships (and critically, keep the two in balance so that one relationship doesn’t sour the other)? 

 

If you lack in any of the above, then you may need outside help to fill in the gaps. That’s where Amazon agencies come in.  

What is an Amazon Agency? 

Amazon agencies can typically offer services in two ways: complete Amazon management or selected services. The former means that they provide everything needed to run every aspect of your Amazon channel. The latter means they provide only a handful of services that you specifically need help with, such as managing your Amazon advertising campaigns, while you handle the rest. 

Pros of an Amazon Agency 

Pros for partnering with an Amazon agency: 

  • More control over your brand’s representation online 
  • More control over product pricing 
  • Increased visibility into channel performance 
  • Your profit margin may exceed that of a retail model 
  • They provide the expertise and resources 

Cons of an Amazon Agency 

Cons for partnering with an Amazon agency: 

  • You’re paying the agency instead of having a retailer pay you 
  • You may be responsible for inventory and supply chain management (some agencies offer this service, but not all) 
  • Since you are selling through your own Seller Account, you are responsible for collecting and remitting online sales taxes 
  • You’re also responsible for VAT in international markets, slowing your ability to expand internationally 

When determining if you’re willing to pay for an agency’s help, think of it as an investment. If you pick the right investment, it may set you back at the start, but soon, it will pay for itself and then some. 

 

Costs of an Amazon Agency 

In an agency model, the brand pays for all the Amazon fees themselves (commission, shipping, storage, fulfillment, marketing), but you have more margin to work with. Because the brand holds the inventory risk in an agency partnership, the agency fee can be significantly lower than the retailer’s margin. The agency then collects either a monthly retainer or a commission. 

Making a Decision 

Either start by working with an Amazon agency or transition to one if: 

  • You want more control of your brand’s representation online 
  • You want a greater share of product margin 
  • You need additional personnel, expertise, time, or resources to effectively manage your Amazon channel 
  • Your budget allows for you to pay a retainer or commission  
  • Your business’s cashflow model can adapt to using revenue from end-consumer sales 

Should You Sell Yourself (Direct to Consumer)? 

If you want to represent your brand yourself on Amazon and you have the personnel, expertise, time, and resources to do so, then you don’t need to partner with a retailer or an agency.  

This route is the end goal for many brands, but it has by far the most and greatest requirements. As such, we often see brands start in retail or agency partnerships, then transition toward selling themselves.  

In this post, we’re focused on comparing working with a retailer to working with an agency, but you can learn more about a Direct-to-Consumer model in this blog post. 

 

Amazon Retailer vs Amazon Agency: Which is Better? 

The annoying but honest answer is that it depends.   

Retail is generally the better choice for brands that need immediate cash flow to fund their manufacturing. Working with a retailer also simplifies domestic and international taxes, as brands do not need to deal with VAT or sales tax when selling online through a retailer; the retailer handles it for them. This also enables brands to expand into foreign markets quicker, since the legal infrastructure is already in place. 

Agency is generally the better choice for manufacturers with tight margins, want larger margins, and/or want more ownership over their brand’s presence in online marketplaces. 

Service That Grows with You 

Kaspien holds a unique position in brand services for online marketplaces, as we’re able to serve brands in both capacities: We can be a brand’s Amazon retailer, Amazon agency, or help them migrate from one to the other. Through our platform, brands can continue building upon the same foundation of data, products, services, and solutions, no matter how their ecommerce needs evolve. 

Related Content 

How Much Inventory Should I Store in Amazon FBA? 

Amazon’s logistics network received quite a bit of attention in 2020. Quarantines led to surges in online buying, and Amazon’s fulfillment centers struggled to keep up (although Amazon grew 40% year-over-year in Q2)To cope, Amazon temporarily restricted which product categories it would accept into fulfillment centers, increased the minimum performance requirements for utilizing their systems, and limited the maximum number of products that could be stored in their warehouses. 

But even before COVID-19, Amazon logistics were a hot topic. In the great game of supply and demand, the question has always been how to provide enough inventory without overstockingHere at Kaspien, we live by the idiom “always buy enough, but never too much.” That, however, is much easier said than done.  

Running out of stock can result in cascading repercussions that damage the velocity of a listing, so it’s imperative that we consistently strike a balance between having enough but not too much inventory. – Joy Kuykendall, Account Manager

There are many factors to consider when deciding how much inventory to ship and store at Amazon, several of which we’ll cover here. Your first step: determine your goals before assigning a strategy. 

What are My Company Goals? 

Is your strategy geared towards cash flow management? If so, you’ll more than likely consider a more conservative approach, what we call a “lean model” here at KaspienIf your goals are focused more on revenue this year, you’d probably consider a more aggressive approach, pushing higher quantities to market and supporting sell-through with pricing and marketing strategies. 

Inventory Management Strategies 

Once you have goals in place, you can determine if you want a lean model or an aggressive model. Obviously, both come with their own set of considerations and risks. But what exactly are the consequences for stocking too much or too little inventory at Amazon? 

Overstocking Results in Fees 

Most Amazon sellers are aware that Amazon charges monthly storage fees per item (by cubic foot)If, for one reason or another, you wind up with too much inventory at Amazon, you’ll be subject to what are referred to as “Long-Term Storage Fees” in addition to monthly storage fees. Per Amazon, “Inventory that has been in a fulfillment center for more than 365 days will be charged a monthly long-term storage fee (LTSF) of $6.90 per cubic foot or $0.15 per unit, whichever is greater.” These fees compound the longer the inventory sits in the warehouse without selling, eroding your bottom line.  

At Kaspien, we have a devoted team to monitor our inventory levels and ensure listing price supports a healthy sell-through rate. 

“It’s important for sellers to find the optimal level of inventory. Overstocking inventory increases storage costs and can negatively impact a seller’s IPI [Inventory Performance Index] score.” said Autumn Roybal, Pricing and Inventory Manager.  

The best way to avoid these fees would be to not overstock at the warehouse or to conduct a removal, which has its own set of associated fees. 

Understocking Costs Sales & Impacts Marketing 

Sellers also face repercussions when they run out of stock at Amazon. If you run out of stock, then competing sellers or competing brands will win the sale. But running out of stock has more than just an immediate impact. Once out of stock, your listing won’t hold its rank, and product rank ties directly to product searchability and discoverability. As a result, marketing and sales performance suffer even after you replenish inventory. 

As Joy KuykendallPartner Optimization Account Manager, puts it, “We must closely monitor inventory cycles of each listing to ensure there is enough inventory to prevent stocking out, especially in listings for which we are the only Prime seller. Running out of stock can result in cascading repercussions that damage the velocity of a listing, so it’s imperative that we consistently strike a balance between having enough but not too much inventory.” 

How Much Inventory Should I Buy? 

As with most things, a balanced approach is generally the safest and most impactful route to managing inventory levels. One of the most valuable tools for determining your ideal inventory level is historical sales data, ideally for 30-60 days. You can also reference year-over-year trending, if you have the data available, to further help forecasts.  

Using historical sales data, you can predict how the product will sell over multiple months, though it’s not quite linear. You must also account for seasonal trends and channel details, such as seller saturation, rank, and reviews. Thirdparty sales estimators can give you a good idea where to start if you don’t have access to historical sales data, such as when you’re launching a new product or product line. 

Also, keep in mind product specific nuances. Is the product at a high price point? Does Amazon consider it oversized? Is it meltable? Hazmat? Not only will these items have different sales velocity, they will also have different implications when it comes to fees associated with longterm storage at Amazon. 

Amazon Inventory Storage Fees 

The below fees are accurate as of November 2020.  

Monthly Amazon Inventory Storage Fees (Non-Hazmat) 

Standard Size 

  • January – September $0.75 
  • October – December $2.40 

Oversize 

  •  $0.48 
  •  $1.20 

Monthly Amazon Inventory Storage Fees (Hazmat) 

Standard Size 

  • January – September $0.99 
  • October – December $3.63 

Oversize 

  •  $0.78 
  •  $2.43 

Determine Amazon Inventory Carrying Costs 

In addition to storage fees, you should also keep in mind other costs your inventory will accrue so you can factor it into your margin calculations. Amazon inventory carrying costs refers to the total expenses associated to managing, shipping, and storing inventory at Amazon. This includes the aforementioned storage fees, as well as general operational costs to your business in discovery and planning, manufacturing or acquiring, shipping and handling, and any insurance or taxes for the item. Lastly, FBA fees should be considered part of the Amazon inventory carrying cost: The Fulfillment by Amazon (FBA) fee is a per-unit fee, based on the dimensions and weight of the item. 

How can I Prepare for Supply Chain Disruptions? 

As we all learned in 2020, supply chain disruptions can be a very real threat to a seller’s ability to “always buy enough, but never too much.” Some of these disruptions can be accounted for, such as major holidays in the countries where you produce products (Chinese New Year is a great example). In these cases, you can plan ahead and prepare for these events. You can also extend forecasts and stock up more than normal to account for the months where the lead times won’t support timely inventory fulfillment.  

For unexpected disruptions like we all experienced with COVID-19, it may behoove you to develop a “backup plan,” such as a dropship listing you can turn on in a pinch in the event that your FBA inventory runs out. Seller Fulfilled Prime (SFP) and Fulfilled by Merchant (FBM) are other worthwhile options to protect against out of stocks if you have the means to support them.  

How Should I Plan for Peak Seasons? 

Sellers generally see improved sales across the board during peak seasons. You can determine peak seasons for your specific product or brand based on historical sales, but generally, trends on the marketplace are common sense. Sunscreen sells well in the summer months; Toys sell well around the Christmas holidays.  

Make sure you prepare early to ensure you have enough inventory allocated for the higher velocity season. You could consider negotiating discounts or improved payment terms to offset the larger cash investment for allocation. Obviously, be mindful of your normal best practices for ordering, and always expect Amazon to impart some sort of kink in the chain (see Amazon Inventory Restrictions at the top of this post).  

Peak seasons also tend to have longer lead times due to port delays and increased freight velocity/surcharges, so be sure to account for those during your planning. 

In Closing 

There’s plenty to consider when determining how much inventory to ship into and store at Amazon, and when you’re first developing your strategy, it can take some trial and error. Remember that not all SKUs are created equal and tailoring your most effective strategy can take some time. Using the above tips and tricks will  help you on your way! 

Learn More about Inventory & Supply Chain Management 

Walmart vs Amazon: How the two companies compare

Amazon has long dominated online marketplaces in the US. However, in 2020, Walmart launched a series of initiatives that would borrow from Amazon’s learnings to bring Walmart into a competitive position, such as Walmart Fulfillment Services and a subscription service, Walmart+ (Walmart Plus) 

The success of these initiatives immediately underwent a trial by fire as the coronavirus pandemic swept the US. Amidst quarantines and dramatic swings in consumer buying behaviors, Walmart’s online segment has conducted itself admirably.  

So, in this post, we’re taking a closer look at how Walmart Marketplace compares to the great leviathan of US ecommerce. 

Walmart vs Amazon – History 

Amazon’s History 

Amazon was founded as an online book seller on July 5, 1994. The company went public just under three years later in 1997then expanded into music and DVDs in 1998.  

Amazon as we know it today, with millions of third-party sellers selling alongside Amazon on its platform, began in 1999, when Amazon launched its third-party seller marketplace. Amazon Web Services, or AWS, joined the fray in 2003.  

2005 brought the introduction of Amazon Prime. From there on out, Amazon continued to grow into the behemoth we know today. The last 15 years have been filled with acquisitions and ventures into all types of industries, including mobile phones, robotics systems, the Washington Post, Twitch video game streaming service, Whole Foods, the creation of Echo and Alexa, prescription medication, and more.  

This article contains a thorough summary of Amazon’s major milestones over the years. 

Walmart’s History 

Walmart is far older than Amazon, founded in 1962. The company went public in 1970.  

The next 30 years saw rapid growth in physical store locations, but it wasn’t until 2000, just five years after Amazon launched, that Walmart launched online stores. Likewise, it wasn’t until 2009 that Walmart launched a third-party seller marketplace, 10 years after Amazon.  

However, Walmart beat Amazon to the online grocery game, starting online grocery pickup in 2015.  

Walmart acquired Jet.com in 2016, a move that would ultimately teach Walmart many lessons about ecommerce, but not drive any immediate, significant growth. 

Walmart launched TwoDay Delivery in 2017 to compete with Amazon’s 2-day shipping, then NextDay Delivery in 2019. 

Though Walmart had been making progress in developing its online marketplace, it wasn’t until 2020 that their online marketplace really began to capture brands’ attention as a high-opportunity ecommerce marketplace 

In February 2020, Walmart launched Walmart Fulfillment Services. In September 2020, they launched Walmart+, a subscriptions service with exclusive benefits, similar in theory to Amazon Prime, but each offering a different set of perks enabled by their unique positions. 

Walmart vs Amazon – Size 

Ecommerce Share 

Amazon currently controls roughly 38% of the United States ecommerce retail market, according to eMarketer. On the other hand, Walmart only controls approximately 8% of the ecommerce retail market.  

Amazon has over 95 million monthly unique website visitors in the US, while Walmart.com has over 100 million monthly unique visitors. 

Physical Locations 

It should come as little surprise that Walmart’s physical locations vastly outnumber Amazon’s, given each company’s history. Walmart has 5,353 US stores as of July 2020, while Amazon ha589 physical stores as of August 2020. 

International Presence 

Amazon has marketplaces in 16 countries, while Walmart has its online marketplace available in 10 countries and physical stores in 27 countries 

Walmart vs Amazon – Customers 

How do Walmart shoppers differ from Amazon shoppers?  

The answer? Not a whole lot. According to Walmart, Walmart’s and Amazon’s customer demographics are nearly identical when viewed by generations or by income levels. 

Walmart’s VP of Walmart Fulfillment Services delved into more Walmart vs Amazon myth busting in our co-hosted webinar. You can watch it for free on-demand. 

Walmart Fulfillment Services (WFS) vs Fulfillment by Amazon (FBA) 

Speaking of Walmart Fulfillment Services (WFS), let’s take a look at how it compares to Fulfillment by Amazon (FBA). 

For the moment, WFS and FBA share many similarities. Both services allow third-party vendors to ship their product at a fulfillment center, where the product is stored until purchased, then fulfilled. Both will: 

  • Pick, sort, pack, ship, and track products 
  • Handle shipping, returns, and refunds  
  • Provide 2-day shipping 
  • Provide same-day shipping in select areas 

One big difference is that Walmart.com allows for item pickup at any of its stores, while Amazon only has a few stores that do online pickup. 

WFS vs FBA eBook & Webinar

We offer a comprehensive breakdown of WFS vs FBA in our free eBook. If you’re interested in learning more about WFS, watch our on-demand WFS webinar that we co-hosted with Walmart’s VP of WFS. 

Walmart Fulfillment Services vs Amazon FBA

Walmart vs Amazon – Marketing Services

In terms of marketing, Amazon and Walmart.com are very similar, but Amazon has many more options to choose from.  

Amazon Marketing Services 

Amazon marketing products available to sellers include:  

Walmart Marketing Services 

Extensive right? In contrast, Walmart offers a limited selection of marketing products for sellers, including:  

This difference in selection is not surprising though. Amazon has been focused on ecommerce for 25 years, while Walmart has only really made ecommerce a heavy focus in the last five years. Over time, Walmart Marketplace will develop new marketing services to match Amazon’s list. 

For the time being, online sellers will see far greater returns from marketing dollars invested into Amazon marketing than in Walmart marketing. Amazon’s services offer greater control over audience targeting and more data insights, which, in turn, yield higher profitability. 

Walmart Plus vs Amazon Prime 

Until recently, Walmart did not have a competitor to Amazon Prime, Amazon’s premium paid subscription service. In July 2020, Walmart announced Walmart+, its own premium paid subscription service. These subscriptions are very similar as both give you access to perks and benefits like two-day shipping and one-day shipping on a host of products.   

Walmart Plus vs Amazon Prime

Walmart Plus Member Benefits 

  • Free 2-day shipping 
  • Early access to deals 
  • Express delivery for groceries and select goods 
  • Fuel discounts at Walmart gas stations 
  • Scan & Go service in Walmart stores 
  • Walmart dropped its minimum $35 purchase requirement for 2-day shipping in December 2020 
  • Planned Walmart Plus credit card 
  • Planned Walmart Plus entertainment package 

Amazon Prime Member Benefits 

  • Free 2-day shipping 
  • Early access to deals 
  • Express delivery for groceries and select goods 
  • Prime video 
  • Free video games 
  • Free access to Amazon library 
  • Ad-free Amazon Music 

Amazon Prime costs $119/year, while Walmart Plus costs $98/year. Amazon Prime has 126 million members in the US as of October 2020, so Walmart has a lot of catching up to do. 

Walmart vs Amazon – Challenges 

Counterfeit Products Plague Amazon 

Amazon has the ignominious reputation of being rife with counterfeits and unauthorized sellers. In January 2020, the United States Department of Homeland Security released a report detailing counterfeiting on the Amazon marketplace platform. The company has been slow to face the issues but has been making some strides.  

Unlike Amazon, Walmart.com is a gated marketplace, which has helped mitigate the risk of counterfeits and unauthorized sellers. 

Amazon Accused of Stealing Third-Party Data 

Another problem facing Amazon is the accusations of stealing data from businesses that use its marketplace or Amazon Web Services (AWS). Jeff Bezos, founder and CEO of Amazon, testified before United States Congress about these allegations on July 29, 2020, and Amazon provided written answers on September 4, 2020 to the committee’s follow-up questions. 

Walmart is Playing Catch Up 

Walmart Marketplace’s greatest hurdle is that it is starting so far behind Amazon in the ecommerce game. However, Walmart has an extensive infrastructure, capital, and the benefits of learning from Amazon’s successes and failures. As we touched on regarding marketing, Walmart is still well behind Amazon, but they have made admirable progress this year with the launch of Walmart Fulfillment Services and Walmart Plus.  

Walmart vs Amazon – Ecommerce Growth 

As anyone can see, there are pros and cons for both Amazon and Walmart. Amazon may be the giant in the ecommerce space, but that means they have a large target on their back. Both Amazon and Walmart have seen tremendous growth in 2020: 

Walmart Ecommerce Quarterly Net Sales Growth 

  • Q1 2020: 74% year-over-year 
  • Q2 2020: 97% year-over-year 
  • Q3 2020: 79% year-over-year 

Amazon Quarterly Net Sales Growth 

  • Q1 2020: 26% year-over-year 
  • Q2 2020: 40% year-over-year 
  • Q3 2020: 37% year-over-year 

Clearly, both companies’ offer huge growth potential. In general, we recommend prioritizing Amazon over Walmart because the sales potential is, currently, so much greater on Amazon. However, Walmart is growing rapidly, and you would be wise to try to get on Walmart sooner rather than later so you can grow with it. 

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

Download the eBook

WFS: Walmart’s Gamble to Challenge Amazon FBA


FBA Seller Reimbursement Services

Selling on Amazon offers many opportunities and is an excellent way to grow your brand. One of the most helpful tools that Amazon offers sellers is Fulfillment by Amazon (FBA)which boasts a sprawling network of Amazon-owned warehouses across the country. Sellers ship inventory to these Amazon fulfillment centers for storage and eventual fulfillment to the end consumer. Amazon’s fulfillment services are a foundational component of Amazon’s success. 

However, these fulfillment centers aren’t perfect. They regularly make mistakes that cost sellers money, and sellers must petition Amazon for reimbursement if they don’t want to eat the costs. With many sellers unaware that they need to take action, we often see significant amounts of money left on the table. 

Why Does Amazon Owe FBA Sellers Money? 

Amazon’s fulfillment centers regularly lose or damage inventory, overcharge fulfillment and storage fees, or under-reimburse sellers. To get fully reimbursed, FBA sellers have to cross reference up to 17 reports to identify and submit cases. 

Most Common Types of Mistakes in Fulfillment Centers 

There are quite a few mistakes for which Amazon may owe an FBA seller reimbursement, but two case types in particular account for the vast majority of inventory reconciliation cases: 

Inbound Discrepancy 

Inbound shipments with items that have a discrepancy between shipped and received after 15 days.   

Lost Inventory

Inventory lost minus inventory found and reimbursed. 

At Kaspien, we see these two case types account for 95% of all FBA seller reimbursement cases. Below are other types of cases that account for the minority of reimbursement cases. 

Amazon Inventory Reconciliation Case Types 

Carrier Damaged Return

Customer returns that were damaged by Amazon-partnered carrier minus reimbursed. 

Commission Discrepancy

Orders with SKUs where the charged referral fee (commission) exceeds Amazon’s estimated referral fee for the order date. 

Damaged Inventory

Inventory damaged in the warehouse. 

Destroyed Without Permission

Inventory destroyed. 

Dimension Discrepancy

ASINs with either dimensions or weight that have significantly increased compared to previous values, affecting fulfillment fee and/or monthly storage fee. 

Failed Return

A refund was issued to customer for a return, but the items returned were fewer than the number that was refunded. 

Fulfillment Center Damaged Return

Customer returns that were damaged in an Amazon fulfillment center. 

Fulfillment Fee Discrepancy

Orders with SKUs where the charged fulfillment fee exceeds Amazon’s estimated fulfillment fee for the order date. 

Missing Reimbursement

Customer return flagged as ‘reimbursed’ but the seller doesn’t see the reimbursement come through. 

Missing Return Unit

Customer return was flagged as ‘Unit returned to inventory’ but the unit was not actually returned to inventory.  

Over Refunded

Refund issued to customer exceeded the actual order total.  

Returned Inventory Discrepancy

Customer returns with units returned to inventory under a different SKU than that which was purchased. 

Under Reimbursed Failed Return

A refund was issued to customer for a return, then the customer failed to return the item, and the reimbursement was issued but the reimbursement amount is less than the refunded amount. 

Under Reimbursed Return

A refund was issued to a customer for return, the customer returned the item, and the reimbursement was issued but the reimbursement amount is less than the refunded amount. 

Unfulfillable Damaged Inventory

Damaged inventory that has been damaged for more than 20 days and is therefore unfulfillable. 

How to Get an FBA Reimbursement 

Manual Amazon FBA Reimbursement 

Due to the ambiguity of Amazon case management, managing inventory reconciliation manually is laborious and inefficient. Here’s the general process for manual case management:  

  1. Download separate business reports (in some cases, this may add up to 12 separate reports). 
  2. Cross-reference reports to identify reconciliations.  
  3. File and manage separate Amazon cases for each instance where Amazon owes you money while complying with each case’s unique allowance window.  
  4. Manual case management can take up to a month to actualize, which requires careful tracking and frequent follow-up on all submitted cases.  
  5. Review your Amazon statements to ensure you were reimbursed for the correct amount, even after the case is closed. 

As you can see, the FBA reimbursement process is arduous. In the long-term, few brands can afford to spend the time managing the manual process, but neither can they allow cash to bleed from FBA errors. 

Automated Amazon FBA Reimbursement 

Luckily, there are plenty of software solutions for this problem, including our own proprietary seller reimbursement software, Channel Auditor 

What is Channel Auditor? 

Channel Auditor is a software that helps FBA sellers mitigate fees and recover lost funds. It does so by automatically identifying cases that are eligible for reimbursement and expediting case creation. It’s your Amazon auditor that never sleeps.  

Does Channel Auditor Automate Case Creation? 

Amazon’s policies expressly forbid automating case creation in Seller Central. Those violating this policy can be fined, suspended, or banned.  

Channel Auditor does not automate case creation, but it does the next best thing. It automatically identifies cases that are eligible for reimbursement, then provides the exact text and evidence needed to petition for reimbursements. All you have to do is copy and paste, click submit, and Channel Auditor does the rest. 

How Channel Auditor Automates Amazon FBA Reimbursements

Automatic Case Identification

First, sellers connect Channel Auditor to their Seller Central account, allowing it to pull inventory reports for their channel. Channel Auditor immediately and automatically starts cross-referencing multiple reports to identify Amazon reimbursement cases. Using this information, Channel Auditor can forecast how much money a seller can be reimbursed.

Expedited Case Creation

After inventory reconciliation cases are identified, sellers select the cases they want to create from within Channel Auditor. Channel Auditor provides the exact text needed, including links to evidence that supports the claim.

Easy Case Management

From there, Channel Auditor automatically tracks case progress and notifies the seller of their results.

Channel Auditor Case Study

A brand in the Health & Personal Care category started using Channel Auditor in June 2020. In a single month, they were reimbursed over $7,000! In less than five months, they recovered over $13,000 in Amazon seller reimbursements! 

See How Much You’re Owed 

If you’re curious how much Amazon owes you but aren’t ready to start a subscription, that’s alright. Request a quote from Channel Auditor – for free – and we can tell you exactly how much money Channel Auditor could recover for you if you used it.  

Request a free quote today. 

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.

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.”

Walmart Fulfillment Services vs Amazon FBA

In the world of ecommerce, FBA (Fulfilled by Amazon) is one of the most used phrases. Now, get ready to use WFS (Walmart Fulfillment Services) just as frequently. Walmart Fulfillment Services launched in February 2020, putting Walmart in better position to compete with Amazon. Walmart Fulfillment Services is a fulfillment network owned and operated by Walmart. It allows brands who sell on Walmart to ship inventory directly to Walmart’s fulfillment centers for storage and order fulfillment for goods purchased on Walmart.com. 

Before Walmart Fulfillment Services, brands who sold on Walmart.com had to fulfill orders through a dropship model or through a third-party logistics (3PL) provider. The dropship model placed all order fulfillment and customer service responsibilities onto sellers, and the 3PL model could be cost-prohibitive for certain items 

This fulfillment situation made selling on Walmart difficult for some sellers and brands. Walmart Fulfillment Services improves the selling experience for Walmart’s Marketplace by providing sellers a solution for storage, 2-day fulfillment, customer service, and return management, all competitive with Amazon’s FBA capabilities. 

Download our Walmart Fulfillment Services vs. Fulfilled by Amazon eBook 

The Advantages of Using Walmart Fulfillment Services 

The Walmart Marketplace is quickly growing, and now is the time for brands to position their products on the marketplace. Marketplace Pulse reported that in June 2020, over 3,500 sellers joined the Walmart Marketplace, bringing the total number of sellers to 48,332, with most being dropship sellers.  

Fast Shipping & Greater Buy Box Share 

Amazon’s FBA program set the bar exceptionally high for online shopping convenience, and consumers now expect fast shipping for their online purchases. According to Walmart, consumers are less likely to convert on offers with a 5day shipping window, whereas items with a 2-day offer can see a 30% conversion lift. Brands and sellers who can offer nationwide 2-day shipping on their products can enroll in Walmart’s TwoDay Program, resulting in improved searchability and Buy Box percentage 

Logistically, fulfilling nationwide orders in 2-days can be challenging for sellers and brands. Such capabilities require a vast infrastructure – an infrastructure that Walmart already has thanks to its thousands of physical store locations across the US.  

Items fulfilled through Walmart Fulfillment Services are guaranteed nationwide 2-day shipping. On top of that, products in Walmart Fulfillment Services also capture a larger share of the Buy Box over all other offers, including non-WFS 2-day offers. Products sold through Walmart Fulfillment Services will display “fulfilled by Walmart” on the products, which Walmart hopes will increase consumer trust in product authenticity. 

Walmart Marketplace Listing

During the onset of the coronavirus pandemic in the US, Amazon’s fulfillment network struggled under the strain, and they were unable to maintain 2-day shipping. Walmart, on the other hand, was. Products fulfilled through Walmart Fulfillment Services maintained the 2-day shipping guarantee throughout the pandemic. While Walmart handles far less volume than Amazon currently, the difference is a promising indicator that Walmart is building a robust infrastructure. 

Affordable Storage Fees 

Walmart Fulfillment Services offers consistent storage fees that are comparable to FBA, with monthly storage fees starting at $3.45/unit. Walmart also states there are no long-term storage (LTS) fees, a stark contrast with Amazon’s FBAHowever, if inventory stagnates in Walmart Fulfillment Service, it seems likely that Walmart would implement LTS fees to incentive liquidation and better inventory forecasting.  

This simple fee structure help sellers forecast the profitability of each shipment going into the Walmart Fulfillment Service network. Amazon’s storage fees are more complex, with monthly storage fees increasing in Q4 and LTS being applied monthly to items that have been housed for over a year. For most of the year, Amazon’s monthly storage fees are $0.48-.75 per cubic foot (depending on size) and from October to December, these fees increase to $1.20-$2.40 per cubic foot. 

Another notable difference between Walmart Fulfillment Services and FBA is that, for the moment, brands only have to ship to one Walmart fulfillment center. The single ship-to location provides a much simpler process for brands than Amazon FBA, which requires brands to ship inventory to multiple fulfillment centers. This situation will likely change in the future as Walmart’s online operations continue to expand, but for the time being, it’s a pleasant perk of Walmart’s system. 

Key Differences Between WFS and FBA 

We’ve mentioned differences in pricing models and ship-to locations, but how else does Walmart Fulfillment Services differ from FBA?  

Read about Walmart’s new subscription service that will rival Amazon Prime, Walmart Plus. 

Reporting 

While FBA does offer deeper reporting to sellers and the extra service of fulfilling orders for select websites off Amazon, Walmart is quickly enhancing their reporting. Walmart has made impressive improvements to their reporting over the last three months, including working closely with their approved sellers on creating dashboards. These dashboards will help sellers understand product performance, as well as identify which products not yet sold on Walmart have the highest opportunity to perform well on the platform 

Product Preparation 

Unlike Amazon’s Seller Central, Walmart’s Seller Portal currently does not offer the ability to create box labels or shipping labels required for shipping to Walmart’s fulfillment centerAs a result, prepping shipments can be a manual process.  

Product Requirements for Walmart Fulfillment Services 

Walmart Fulfillment Services’ product requirements are a bit stricter than FBA requirements. Learning from some of Amazon’s missteps, Walmart is working hard to prevent counterfeit items from polluting its platform and keep warehousing to a minimum. Below are a few Walmart Fulfillment Services product requirements and how they differ from FBA. 

  • WFS – Products must ship to Walmart fulfillment centers from within the United States. 
    FBA – Amazon FBA centers will accept international shipments if the correct labeling if applied, including box labels and pallet labels if shipping LTL. 
  • WFS – Country of Origin must be on the retail packaging.  
    FBA – This is not required at FBA.   
  • WFS – Products must have UPCs on the product packaging. 
    FBA – Amazon’s ASIN labels can be printed and applied to products when needed. WFS does not offer labeling options or services.  
  • WFS – Maximum product weight is 30 lbs 
    FBA – Will accept shipping cases up to 50 lbs., along with single products weighing over 150 lbs. (with additional fees applied). 
  • WFS – Maximum product dimensions: 25″ x 20″ x 14″. 
    FBA – Dimensions up to 25” on any sideFBA also accepts oversized single items that are over 108” on its longest side and over 165” in length + girth.  

Sell on Walmart.com 

Selling on Amazon has taught brands the importance of keeping channel control. If brands do not sell their products on a marketplace, someone else will, and unfortunately, rogue sellers are not known for providing the best representation for brands.  

Walmart is growing quickly, which means that now is the time to position your brand on the platform before someone else does. The Walmart Marketplace is the second largest marketplace in the US, with over 400 million website visits per month. In the second quarter of 2020, Walmart reported that their ecommerce sales grew 97%. By being an early adopter, brands can position themselves in front of a larger audience and ahead of competitors.  

If you want to learn more about how Walmart Marketplace compares to Amazon, visit our post “Amazon vs Walmart.” It covers the two company’s history, size, customer base, marketing services, fulfillment options, subscription programs, challenges, and growth.

Accessing Walmart Fulfillment Services 

Walmart Fulfillment Services is currently open only to select sellers, and so far, the number of sellers approved to sell is low. Walmart wants to limit the risk of counterfeit sellers entering the marketplace, which is easier to do with a smaller number of trusted sellers. As such, it is unclear if Walmart will move to a less strict approval process for Walmart Fulfillment Services 

We were among the first group of sellers personally invited to sell Walmart.com in 2016, and we are an approved WFS seller. We’ve had an excellent experience with the program. Our account manager is easy to contact, and the Walmart team has provided reporting to help grow our product selection. By partnering with Kaspien for Walmart, brands can draw from our Amazon expertise and leverage our proven marketing strategies and software services to help their brand grow on the Walmart Marketplace. 

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

Download the eBook

WFS: Walmart’s Gamble to Challenge Amazon FBA


How to Create Amazon Listings in Seller Central

Setting up listings in Seller Central can be intimidating. Here’s what we’ve learned from creating thousands of Amazon listings over the years.  

When it comes time to creating listings on Amazon, it’s best practice is to have keyword-rich product listing copy already written and optimized. Creating a fully-optimized listing from the start will set you up for success, as it can be difficult to edit your listing post-creation.  

Prior to creating the listing, you should have the following content pieces prepared: product title, key features or bullet points, images, and a standard product description. If you need help writing those, check out our blog post on Amazon listing requirements and best practices. Other content areas in the “backend” of product listings can be more easily modified post-creation, but it doesn’t hurt to have those ready to go from the beginning as well.  

Other details that are required in order to create a new product listing include: a product number (UPC, EAN, etc.), a SKU for internal use, product specifications like dimensions and weight, and pricing information.  

Amazon Listing Content Check List 

The following is a high-level overview of fields you will need to or should fill out when creating an Amazon listing. They are broken out by detail tab in the listing creation page. If you want to make your Amazon listing process as easy as possible, gather these items before you create your listing. 

Amazon Listing Creation Content Checklist

Now let’s walk through the main way to make listings on Amazon. 

Amazon Listing Creation Process 

The process to create a single listing on Amazon is a rather simple and an intuitive one; it’s just a matter of knowing where to go to get started and what fields to fill out. When signed into your Amazon Seller Central, travel to Catalog > Add Products.  

Add a product to Amazon Catalog

On this page, find the “List a new product” box and enter your product name, UPC, EAN, or ISBN to search. If Amazon doesn’t find an existing listing related to your query, you can then click Create a new product listing to start the creation process.  

Add a product to Amazon catalog

The first thing you must determine is the category your product fits into. You can either utilize the search feature to help you narrow down categories, or you can manually click through the product categories to drill down to an appropriate sub-category. Once you find your category, click on that hyperlink to bring you to your listing creation page. This page will display multiple tabs grouping together similar listing fields together, and this is where our content creation process begins. 

 

Create a new product in Amazon

Vital Info 

On the first Vital Info tab, you will need to fill out the Product ID with your UPC, EAN, or ISBN, the product name with your optimized title, your manufacturer, and your brand name. Often times, manufacturer and brand name are the same, but please note that the brand name is what displays just below the title on a product detail page. It is very important the spelling is correct in these two fields from the beginning, as it is one of the harder fields to update post-creation. If you are ever unsure what to input into a field, Amazon provides small information icons next to the fields that can help guide you in the right direction.  

Input vital info into Amazon

 

Offer 

Next, let’s move to the Offer tab. This is where you’ll notate your selling price, create your custom SKU, provide a Condition, and note how this listing’s inventory will be fulfilled. If you do not create a SKU yourself, Amazon will create one for you that is a long alpha-numeric string. If your brand doesn’t already have a SKU naming system, we highly recommend you create a system now before you create any listings. 

Input offer details into Amazon

Compliance 

The Compliance tab is the area where you can provide any battery information (if relevant) to your product, note warnings like Prop 65, and a Safety Data Sheet if that pertains to your product type.  

Add Amazon compliance info

Images 

In the “Images tab, you can submit up to nine images. This is a rather intuitive tab where all you have to do is click “Choose File, navigate to where your images are located on your computer and select to upload. Most categories permit you to upload up to ten images. If you are uploading images to a product that is a variant of a Parent-Child relationship, look for the image slot that is labeled “SWATCH. This will be the image that displays in the variation preview on your listing. Amazon accepts JPEGs, TIFFs, and non-animation GIFs. 

Add images when creating Amazon listing

Description 

The Description tab is what contains the “meat” of your listing; this is where most of your optimized product copy should live. The product description field permits up to 2,000 characters to be submitted. Initiallyyou will only see one Key Product Features field, so you must click the link “Add More” to provide more fields, to a maximum of five. The character permitted in the Key Product Features fields fluctuate between categories, so it is best to hover over the information “i” badge to see what your current category permits. This tab also provides you the opportunity to attach any small parts or choking warnings. 

Add description to Amazon listing

Keywords 

The Keywords tab is full of fields that help improve the discoverability of your product listings, but do not display on your listing anywhere. Similar to the Key Product Features, you can have up to five fields on most of these, but you must click the “Add More” link to make them all appear. Focus on the Search Terms field, as it allows you to add up to 500 characters of keywords you might not have published on the frontend of the listing. 

How to add keywords to an Amazon listing

More Details 

The More Details tab is where all of your nitty-gritty product specifications live. This is a relatively self-explanatory tab, but you will see there could be a lot of fields that do not relate to your product. Amazon generalizes what fields might be needed based on your category, so do not feel pressure to fill out all fields. We recommend screening through all fields and filling out the relatable ones, but below are the minimum requirement fields to create your listing for Fulfillment by Amazon: 

  • Weight 
  • Item Dimensions – Length, Width, Height 
  • Unit Count 
  • Unit Count Type 

Create an Amazon listing with more details

Once you have input all of the above suggested fields, you are now ready to “Save and finish” your new product listing. Once you click this button, Amazon will assign an Amazon Standard Identification Number (ASIN) and you can almost immediately see what your new listing looks like. You can either click on the title in your Amazon catalog, or you can navigate to the following URL with your ASIN replacing the tale end, https://www.amazon.com/dp/*ASIN*. 

Learn More About Amazon Listings 

This blog post is just scratching the tip of the iceberg. Download our in-depth whitepaper, The Ultimate Guide to Creating Amazon Listings, to learn even more about creating optimized listings on Amazon 

Common Mistakes Brands Make on Amazon

This article was originally published on Forbes on June 22, 2020.

Selling on Amazon is full of challenges, but some of those challenges are unnecessary. I lead a company that’s helped over 4,000 brands sell on Amazon over the last 12 years, and during that time, we’ve seen a lot of mistakes, some of which are shockingly common. To help remedy this problem, I’ve put together the seven most common mistakes we see brands make on Amazon and how to fix them. 

7 Common Mistakes When Selling on Amazon

1. More Sellers Does Not Equal More Revenue 

When brands first embark on Amazon, many have the belief that having more sellers equates to more sales, which in turn equates to more purchase orders. While brands may receive more purchase orders, we’ve seen this approach lead to unforeseen problems hundreds of times.  

Having too many sellers, especially if you’re not collaborating closely with each, creates the “too many cooks” problem. Since any seller in the listing can edit listing content and set their own price, inconsistencies and inaccuracies can quickly appear. Low-quality images and poor wording misrepresent your brand, and fluctuating prices can make shoppers question product authenticity. Sellers are likely to compete on pricing, risking a race to zero, which hinders their ability to place future purchase orders.

There are also problems for marketing: When multiple sellers run marketing for the same listing, their ads compete, driving up costs without generating more sales.  

To fix this issue, we advise two steps: 1) Work with one or only a few sellers so you maintain control over your brand’s online representation, and 2) ensure that your contracts limit to whom buyers can sell your product, helping mitigate the risk of unauthorized sellers. 

2. Running Marketing Only On Amazon

Running marketing only on Amazon is a tactical error because it leaves opportunities on the table. Running off-Amazon marketing — such as paid search, paid social, and influencer marketing — increases the number of shoppers you can reach and the number of touchpoints guiding them to purchase. By leveraging both on- and off-platform marketing, brands create a feedback loop of more visibility, which leads to more traffic, which leads to more sales, which improves organic product placement, which leads to more visibility…and the cycle continues. 

3. Running Marketing Only During Peak Seasons

This is a much more grievous sin. Halting marketing during the off-season is a serious mistake because Amazon marketing takes months to gain good traction. By turning off marketing during slow sales seasons, brands are essentially surrendering ground to competitors. When their sales season comes back around, they have to claw their way back to where they left off instead of being positioned to capture new market share.

To fix this issue, don’t ever turn off marketing completely. It makes sense to reduce marketing spend during slow seasons when competition isn’t as fierce, but you should never completely fall off the radar. 

4. Not Aligning Amazon Strategy With Brand Strategy

Another common error is failing to align your Amazon strategy with your overall brand strategy. For example, a brand may run promotions off Amazon that are not carried through to Amazon or produce new stunning images and brilliant copy for their website but don’t update their Amazon listings with them. Amazon is a growing marketplace and needs to align and complement your overall strategy if you want to maximize your online sales. 

5. Noncompliant Claims In Listings

It’s never been a good idea to make misleading or inaccurate claims in product listings. Such claims result in suppressed listings and account shutdowns, which can cost a brand thousands in sales. 

This mistake is likely to become an even bigger issue, as Amazon faces increased scrutiny. Before the coronavirus captured our attention, congress was considering the Shop Safe Act, which would hold Amazon responsible for counterfeit or noncompliant products sold on its platform. Based on our own data, we saw the early indications of how Amazon would respond in February when it tripled their requests for proof of product testing.  

If your listings contain unsubstantiated claims or have not passed U.S. safety testing, then you need to fix that.  

6. Not Understanding Amazon Profit Margins 

Selling on Amazon is not like traditional retail, and neither are the profit margins. These three factors are commonly overlooked or misunderstood:  

1. Amazon fees: Amazon collects a sales commission as well as shipping, storage and fulfillment fees. These fees take a large chunk out of profit margins. 

2. Inventory errors: Sometimes, Amazon’s fulfillment centers lose or damage inventory, overcharge fees or underreimburse. While its automatic systems catch most of these errors, it misses some. Those errors add up, eating into profit margin. 

3. Marketing: Marketing costs money. Some brands see that and stop there. But if your marketing is effective, the profits exceed the costs, sometimes dramatically so. If your profit margins are narrow, you should consider investing in marketing to widen them.  

Addressing these issues starts with gathering data. You don’t know what you don’t know, so start by pulling reports and analyzing data. If you discover a red flag, you can seek help. There are many agencies, consultants, and software applications available that help optimize shipments to Amazon, identify reimbursement cases and improve marketing efficiency.

7. Poor Inventory Management

All too often, we see brands sending way too much inventory into Amazon warehouses without realizing that Amazon will charge long-term storage (LTS) fees, especially around peak seasons. On the other side, we also see brands sending in too few units, resulting in out-of-stocks. Running out of stock harms marketing performance and organic product placement, creating a domino effect that can be tough to bounce back from even when stock is replenished. 

To fix these errors, you or your seller needs accurate sales forecasting, which is typically obtained through software. 

Amazon truly is like navigating a jungle, but there are many experts who can help. Alternatively, you can push up your sleeves yourself and dig into the many resources about selling on Amazon. The Amazon opportunity is too great to ignore.

One should be able to infer the mission of a company based on their data infrastructure. By reviewing the data infrastructure, you can see what inputs and outputs matter to a company, who is using the data, and how it’s used.  

At Kaspien, we use data-centric processes to inform our business strategies. These processes, such as ideation, hypotheses testing, or refining operation, all depend on a data platform that is both deep and wide. The depth of our data enables more nuanced and precise insights, while the breadth enables us to understand the big picture and identify trends and anomalies.  

Together, a deep and broad data platform maximizes our insights, empowering us and our partners to grow smart. Leveraging data, we can identify the biggest opportunities and gravest threats early, allowing all our business segments to successfully adapt to ever-changing marketplaces. As a result, we empower our partners and drive success on Amazon, Walmart, and beyond. 

Why do we need a data platform? 

Our teams make decisions based on the best available data. We rely on hourly updates of our data for three things: 

  1. Monitor performance 
  2. Adjust strategies 
  3. Discover new opportunities 

 

To achieve these essential functions, our data infrastructure must be able to collect, transform, and load data into systems where the data can be further tailored to the specific needs of each team.  

For example, our Finance, Data, and Marketing teams all utilize similar data, but each team needs the data structured in very different ways. Our Finance teams ingest 10 million rows of data each day to enable precise capital allocation. Our Data team processes 600 million rows of data to build and refine internal software and algorithms. Our Marketing team pours over 2 million rows of data each day to assess campaign performance and make strategic adjustments. To meet the needs of each team, we pump billions of data points through our platform every day.  

Creating a Data Platform Takes Time

Our data platform has seen meteoric growth over the past few years. Currently, our entire system processes just over 1 billion data points per week, a growth of 40% over the past 2 years. etailz data growth

While we now enjoy countless benefits of a robust data platform, our data operations were not always so streamlined. We had to adapt to the growing number of business initiatives and data requirements. We grew our engineering and data teams to build our platform and continue to invest in our data infrastructure today. The tools we use give us the ability to acquire, update, and distribute data with ease. Our platform is amenable to adding new data sources, managing prioritization queues, and delivering real-time data.

In short, our data platform is the stanchion from which the rest of our services stem.  

Data & Insights Power Our Services

We provide dozens of ecommerce services that cover the full gambit of running and optimizing an online business, including inventory and supply chain management, brand protection, digital marketing, creative services, and tax compliance. We also have developed a suite of software services, including self-service options for ad managementseller & price tracking, and Amazon seller reimbursements. All our software and services are exponentially improved by leveraging our data platform, and those benefits are shared by all of our partners, fueling their success. 

How does Kaspien process and manage mission critical data?  

Our primary analytics data pipeline (and associated workflow) is orchestrated via Apache Airflow. We’ll go into further detail about how we use Airflow in a later blog post (see here and here for some good introduction material). Airflow allows us to build in diagnostics, tests, and monitor the progress for all our systems, which include applications and databases. 

data processing cycle

Our analytics data is largely warehoused in AWS S3 and RDS, Redshift, MongoDB, and Snowflake. We use these various warehouses for the different types of data that we need to collate to be useful for our analytical purposes, which vary from team-to-team. 

Our data pipeline starts with the systems we developed that gather data from marketplace APIs, third-party data sources, and our web-scraping systems. We process 3 million data points per hour from these systems. We then prepare our data to be collated and structured to ensure data integrity and maximum utility for our teams. 

Aggregating disparate data

Many of our experiments and exploratory analysis depend on systematic data collection to ensure high-resolution and high-quality data. Our rich datasets covering pricing, demand, product metadata, among many others, have grown by 15% month-over-month over the past year. 

At this point the data are stored in their final form in warehouses for our ‘end-user’ processes to consume, such as internal dashboards, purchasing applications, or inventory management systems. But for the Data Team, the data in these warehouses are not final. Rather, they are but a collection of staging warehouses to then further transform and load into our own analytics databases. From these databases, we prototype forecasting models, respond to real-time research needs, or explore new aspects of our data. 

Data Benefits Our Partners 

Ultimately, the insights derived from our data platform help our partners and clients grow. Our diverse portfolio of data combined with our partner’s portfolio creates synergies we can harness.  

For example, while our partners may have sales and marketing data for their own portfolio of products, we can use our data to simulate and forecast sales. For marketing efficiencies, we have data related to pay-per-click ads, search engine optimization, and retargeting going back years for hundreds of thousands of products. Our Business Intelligence teams can stand up dashboards for monitoring key performance indicators that we know are important to track, personalized for each partner. Our historical data on shipping lead-times and product warehousing cycles will help our partner manage inventory and capital allocation. And last but certainly not least, our Data Science team uses these data to train AI models for our core business and partners. 

Data is the core of what we do. It enables us to make improvements on the micro and macro levels for our partners, fueling their growth to new heights. If you want to leverage our data, software, or services, get in touch through our contact form.