Being a seller on Amazon comes with a tremendous chance to connect with new customers all over the world by selling online. However, there are multiple ways to sell your products on Amazon. For anyone who wants to sell on Amazon or change their current seller model, the options can be confusing. Today, Alpha Repricer- the best Amazon repricing tool is here to help you understand the various types of sellers on Amazon. With this quick guide, you can get a better idea of what seller set up might be right for you.
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.
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, if you think from a buyers’ perspective, they usually prefer to shop from FBA sellers because 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, 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 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 sellers have their products manufactured or supplied, usually from entities in China, under their own brand. This type of seller runes their business through FBA. once the supplier or manufacturer has prepared your whole-sale order, it is shipped to an Amazon fulfillment center. This is a good way to break into selling your own brand online without a huge investment.
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.
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.