Amazon sells almost everything, even items sold through distributors. If you do not list your products, someone else will. To take control of your brand reputation, you may need to be proactive and start listing your products. Here’s a closer look at how to build an Amazon channel strategy for protecting your brand.
How Do Products Get on Amazon?
Anyone can add a product to Amazon, including third-party sellers that sell your products. Allowing anyone to sell has helped Amazon become the largest online marketplace. Amazon receives over 5.7 billion visitors each month.
To list a product, an individual or business just needs to create an Amazon Seller Central account or a Vendor Central account. If a product is already listed, the seller joins the list of existing sellers. If the product does not already have a listing, the seller can create a new product listing.
Choosing a Method for Selling Products on Amazon
There are three main ways to sell products on Amazon:
Fulfilled by Merchant (FBM)
Fulfilled by Amazon (FBA)
FBM is used when you ship products directly to customers. FBA allows you to store products at an Amazon fulfillment warehouse, which are then shipped to customers by Amazon. This allows for faster deliveries but Amazon takes a larger cut.
Vendor Central allows businesses to sell products to Amazon. Amazon handles everything else including setting the price, managing the product page, and shipping the product to customers. However, Vendor Central is exclusively for established brands with popular products.
At the heart of the Amazon system is the buy box algorithm. The seller who receives the buy box position receives the sale when a customer clicks on the “buy now” or “add to cart” button.
How the Buy Box Works
A link below the buy box allows customers to view offers from other sellers. However, about 85% of customers simply choose the default seller chosen by Amazon. So, how does Amazon choose a seller for the buy box position? The driving factors include price, product availability, and seller reputation.
Sellers who ship products using Fulfilled by Amazon (FBA) often receive priority placement. The best price also tends to receive the buy box position. Finally, you need a customer feedback score of at least 90% to beat out other sellers.
Pros of Listing Products on Amazon
Why should you list your products on Amazon? The top benefits of becoming an Amazon Seller include:
Fast and Easy Listings: Listing products on Amazon is quick and easy. After you have created an Amazon Seller account, you can start uploading your inventory and filling out the product details. In less than a day, you can have your entire inventory available for sale on Amazon.
Convenient Shipping Options: Amazon simplifies the way that you ship to customers. If you choose to use the Fulfillment by Amazon (FBA) program, you can store items at Amazon warehouses, allowing customers to take advantage of the free two-day shipping for Prime customers.
Reach a Larger Market: Amazon is especially useful for startups and businesses trying to establish their brands. You can instantly reach millions of potential customers. Amazon receives billions of unique visitors each month, including over 200 million visitors from the United States.
More Control Over Your Brand: Perhaps the biggest advantage of selling on Amazon is the control that you gain over your brand. If you do not list your products, someone else will. They can create the product page, provide inaccurate details, and upload low-quality photos. As the official manufacturer of your product, you should get to set the product details and upload high-resolution photos. This ensures that customers view accurate product information.
Along with more control over your brand, you may gain more brand recognition. About 75% of Amazon customers use the website to search for new brands. Close to 70% of customers also compare prices on Amazon to individual brand websites.
Cons of Listing Products on Amazon
Amazon offers many advantages to shoppers, including a wider selection of goods and competitive pricing. However, many of these advantages lead to disadvantages for manufacturers:
You Pay a Variety of Fees: Amazon charges steep fees to sellers. You pay a fee for each product sold. If you sell through the FBA program, you also pay a processing fee and a storage fee.
Lack of Customer Loyalty: Amazon owns the customers. There is a lack of customer loyalty, as customers view Amazon as the seller. However, you are still responsible for customer satisfaction.
Amazon Pays Sellers After 90 Days: One of the biggest drawbacks of selling on Amazon is the strict policies that sellers must follow. This includes the payment schedule for receiving funds from sales. Amazon holds the payments for 90 days. When you sell products directly to consumers through a public website, you get paid instantly. Having to wait 90 days can create budgeting challenges, especially for smaller businesses.
How to Control Your Brand on Amazon
Keeping unauthorized sellers from selling your products on Amazon is almost impossible. However, there are steps that you can take to gain more control over how your products are represented.
Register Products with the Amazon Brand Registry: Consider registering your products with the Amazon Brand Registry to receive some protections against misrepresentation. Enrolling a product in this program prevents other sellers from changing the product page. The product details and photos that you supply will always override content submitted by third-party sellers. Keep in mind that the registry does not stop others from selling your products. The registry simply ensures that the product pages remain accurate. Amazon has several requirements for the registry. First, you need a brand website to verify ownership of the product. The brand name also needs to be visible on the packaging and product.
Establish MAP Policies with Distributors: One concern with distributors is that they may sell your products for less than your minimum advertised price (MAP). Shoppers looking for the best deal may buy from other sellers instead of you.
To keep distributors from underselling you, establish MAP policies. Include a section in your contracts with distributors that prevents them from selling products at a lower price. If they fail to follow your MAP policy, you have the right to terminate the contract.
Send Cease and Desist Letters to Unauthorized Sellers: Unauthorized sellers are often a greater threat to your brand compared to distributors. Nothing is stopping unauthorized sellers from listing your products and offering inferior customer service. However, you may request that they stop selling your products.
You can send messages directly to sellers through Amazon. Send unauthorized sellers a message requesting that they discontinue the sale of your products without your authorization. Most unauthorized sellers do not want to deal with any unnecessary hassles. They often list many products and may stop listing yours after receiving a message.
Any business that produces consumer products should list their products on Amazon. Listing your products helps you reach a wider market, remain competitive, and build greater brand recognition.
Consumers also love Amazon. Shopping is made easy as people can browse for almost any product, including your products sold through a third party. Poor service from a third-party seller could harm your reputation.
To take charge of how your brand is represented on Amazon, you need to list your products and get ahead of the others. Otherwise, your reputation will be decided for you. The first step is setting up your Amazon Seller Central account and listing your products. Click here to get free Amazon workflows to improve your Amazon channel strategy.