As an Amazon seller, you’re presented with a remarkable opportunity to reach a global audience by leveraging online sales channels. However, navigating the diverse selling methods available on Amazon can be perplexing, especially for those considering a shift in their selling approach. Here at Alpha Repricer, a leading Amazon repricing tool, we’re dedicated to demystifying the intricacies of Amazon seller types. Our expert-written guide aims to provide clarity, helping you discern the optimal seller setup for your business needs.

Table of Contents

Table of content:

  1. Third-party (3P) sellers
  2. Fulfillment by Amazon (FBA)
  3. FBM
  4. 1P Amazon sellers
  5. Vendors on Amazon
  6. Individual seller accounts
  7. Professional sellers
  8. Private label
  9. Brands

Third-party (3P) sellers

A 3P seller is any outside merchant who is signed up with Amazon to sell products on Amazon’s platform. They are not Amazon itself. Any sellers who showcase their items to sell on Amazon are referred to as 3P sellers. When they succeed in selling their products, Amazon receives a small percentage out of their sale price, which is known as a referral fee for allowing them to sell on their platform.

Third-party sellers are further divided into two categories, FBA and FBM. They are categorized by their order fulfillment model.

Fulfillment by Amazon (FBA)

Fulfillment by Amazon or FBA refers to a merchant who sends their products to Amazon. Amazon then stores the merchant’s products in one of its warehouses, commonly known as the Fulfillment centers, to let Amazon handle their storing packaging and shipping. Amazon is in charge of delivering the products to customers on time once they order them.  If you count on Amazon to fulfill your orders, then Amazon charges fees on top of the referral charges. That is because Amazon is providing logistical services.

Sellers can take advantage of FBA by focusing on building their brand while Amazon takes care of storing and shipping your products safely and efficiently.

FBM

If you want to manage shipping and handling independently, then FBM is the right choice for you. Sellers choose FBM to make the most out of their shipping infrastructure. When a seller’s items sell, Amazon sends all the necessary shipment details to the Amazon seller, who will ship those products to the customers. It is a cost-effective option to go for if you don’t want to pay an extra amount for FBA fees. However, we do think that buyers usually prefer to shop from FBA sellers since they are more dependable in terms of services.

1P Amazon Sales

Amazon is not only a marketplace for outside sellers, it also acts as a seller itself. This makes Amazon a 1P seller. Amazon produces a few of its items, such as Amazon Basics and Amazon Echo, and offers them to customers. Amazon also purchases items through the Amazon Vendor program, where it forms partnerships with other wholesalers. Amazon’s 1P sales are usually through its own brands and products. Or sometimes with the help of wholesale suppliers.

Vendors on Amazon

Vendors are those who manufacture or supply products that are purchased directly by Amazon to sell. Amazon issues a purchase order for a certain volume of units of the item at a fixed rate and then sells them to customers on its platform. Amazon takes responsibility for selling and marketing the brands. However, only those who are invited by Amazon can join the vendor program. Very few of any vendors have been able to solicit their supply or manufacturing services to Amazon uninvited.

Individual Seller Accounts

Individual Amazon seller plans are ideal for sellers who expect to sell less than 40 units of their items on Amazon per month. Amazon does not charge a monthly subscription cost on the individual seller plan. However, according to our experience, individual sellers have to pay a fixed amount of $0.99 fee for each item that sells. Furthermore, if a seller with an individual seller account ends up selling 41 items, you will have to pay an extra fee for that particular transaction. Individual account sellers are also not eligible to win the Buy Box.

Professional Sellers

Professional Amazon seller plans are made for those who sell more than 40 units each month. Amazon charges a monthly subscription fee if you sign up with a professional seller plan, which is $39.99. Irrespective of how many units they sell on Amazon, they still have to pay the subscription fee every month. Both the individual and professional sellers are permitted to sell products from the twenty categories mentioned by Amazon. However, sellers with a professional selling plan get an extra ten categories. A major benefit of getting a professional seller account is the chance to compete for the coveted Buy Box.

Private Label

Private Label sellers typically manufacture or source their products, often from entities in China, under their own brand. This type of seller operates their business through FBA. Once the supplier or manufacturer prepares the wholesale order, it ships to an Amazon fulfillment center. This approach offers an excellent opportunity to establish your brand online without requiring a substantial initial investment.

Want to know about selling private label on Amazon? Check out our blog, and you definitely won’t regret!

Brands

Most of the exclusive brands you see in malls also try to get on Amazon to sell their items to customers to get more traffic on their online store. Amazon acts as a building block for brands. Brands go for the FBM program to get more sales through Amazon while using their own logistical infrastructure. With the introduction of online channels for sales, brands don’t have to spend millions for retail space and labor. They can get in touch with their customers directly through Amazon.

Final Thoughts:

You can find different Amazon seller types on Amazon. This guide should be a good starting point for your research into starting or advancing your selling goals. Even when there are plenty of seller models on Amazon, there’s one thing that they all need- a repricer! Alpha Repricer, the best Amazon repricing tool, allows you to keep your prices competitive on Amazon 24/7. Sign up now for our 14-day trial and experience our features! Contact us for more information.

Author

  • Noor Jarri

    Meet Noor Jarri, a seasoned writer specializing in the dynamic world of Amazon. With over three years of experience, Noor has become a trusted resource for Amazon sellers seeking guidance on repricing strategies and navigating the e-commerce landscape.

    As a valued contributor to Alpha Repricer, Noor's expertise shines through in her engaging blog articles, press releases, and guest posts. Praised for her skill in crafting content that is both informative and approachable, Noor's writing is a knowledgeable resource for sellers of all levels. Beyond her professional pursuits, Noor is an avid traveler and culinary enthusiast. She finds inspiration in exploring new destinations and experimenting with recipes from around the world.

    Join Noor Jarri on her journey as she continues to empower Amazon sellers with insights, tips, and strategies to thrive in the ever-evolving marketplace.

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