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If you're a marketplace or ecommerce seller, you've likely thought about selling on Amazon. However, while the site is undoubtedly the biggest platform for sellers, there is a distinct difference between regular Amazon and Amazon Prime. To qualify, you have to use Amazon's fulfillment system, which can cost more. However, this option has some distinct advantages, particularly if you want to increase sales on Amazon.
Overall, selling on Amazon Prime is beneficial and can position your brand better within the platform. Just ask BetterVent. With Prime shipping, the BetterVent® product has seen a 30% year-over-year increase in Amazon sales.
Although the easiest way to qualify for Prime status is to utilize Amazon's fulfillment centers, it's not the only option. There are three ways to get the Prime badge, and each one has pros and cons. If you're not at that point yet, you might want to check out this blog post about how to sell on Amazon for beginners.
The primary decision you have to make is whether you'll be a first-party (1P) or third-party (3P) seller. As a first-party vendor, you sell your products directly to Amazon, which then sells to consumers. Third-party vendors, however, sell directly to customers through Amazon's platform. You can find out more about 3P vs. 1P selling here, including the distinct benefits and disadvantages of each.
If you want to know how to become an Amazon Prime seller, here is a breakdown of the three paths available:
When comparing SFP vs. FBA, only companies that have sufficient infrastructure should go the Seller-Fulfilled Prime route. Otherwise, it's hard to adhere to Amazon's shipping standards. Compared to Vendor Central, though, this option can be much more profitable, as evidenced by Endangered Species Chocolate's success story.
Starting in 2014, Amazon began offering same-day delivery of various products through the Amazon Prime Now platform. Since then, this offshoot of the main ecommerce site has grown to include Amazon Prime Fresh and Amazon Pantry.
The idea of Amazon Prime Now is to allow Prime members to buy perishable (and non-perishable) goods and receive them within a couple of hours. With such speed and convenience, it's never been easier for users to stay at home and order whatever they want. Who knew that the company would be so prescient, considering the challenges of 2020?
As an Amazon Prime seller, you might be wondering how you can get in on that instant-gratification action. Unfortunately, all three options (Now, Fresh, and Pantry) are closed to third-party vendors. The primary reason is to maintain consistency. Since these offerings promise same-day delivery (sometimes in as little as two hours), Amazon can't rely on vendors to fulfill these orders that quickly. Only Amazon has the funding and infrastructure capable of handling it.
That said, you can potentially sell your wares on Amazon Prime Now if you go through the Vendor Central program. Since you're selling wholesale products to Amazon, the company can pack, store, and ship those items however it sees fit across all of its Prime platforms. So, if you're selling bulk foods and pantry items, you might see them listed. Otherwise, you can't participate.
Although there are tangible benefits to selling on Amazon Prime, doing so does not guarantee success. Some vendors can thrive on the platform, while others languish with low sales and profit margins. Part of the problem is that there are various fees included with this option. So, if you're not careful, you could wind up spending more than you make.
Here is a breakdown of the different Amazon selling fees, so you know what to expect.
All of these expenses are included in Amazon Prime seller fees, depending on which path you chose from above. As a Prime seller, you also have to pay attention to the FBA selling calendar to ensure that your stock doesn't run out. Otherwise, you could risk losing your status.
If you use FBA, you'll pay more in Amazon fulfillment fees. However, there are additional costs to consider, even if you're a Seller Fulfilled Prime member. Other fees include:
As you can see, all of these expenses can add up, particularly if you're not selling too many items. Fortunately, you don't have to struggle if you use a Prime or Amazon Seller Consultant. Speaking of which...
Being a successful ecommerce business takes a lot of time, money, and hard work. If you're trying to juggle it all yourself, you're going to struggle at some point. Instead, it's far better to utilize a third-party consultant company like SupplyKick. There are three ways that we can help you thrive on Amazon, both through Prime and Vendor or Seller Central:
Overall, when it comes to selling on Amazon Prime, SupplyKick is the best resource available. Connect with us and let’s walk through your current listings and fulfillment strategy together.