Archive for April, 2020

Fulfillment By Amazon vs. Fulfillment By Merchant

Is Fulfillment By Amazon (FBA) or Fulfillment By Merchant (FBM) Best for Your Business?

The goal when developing your Amazon strategy is typically to increase sales and grow your bottom line. One of the main choices that need to be made when deciding to sell on Amazon is whether to sell your products through Fulfillment By Amazon (FBA) or Fulfillment By Merchant (FBM) and how to set up your account accordingly to reach these goals.

Fulfillment By Amazon (FBA)

If you enroll in the FBA program, you can automate your order fulfillment. Your inventory is sent to Amazon so every time you make a sale Amazon handles the fulfillment. Your products are stored in Amazon warehouses and Amazon takes care of customer regulations and shipping practices. If anything happens to go wrong with your orders or deliveries, Amazon takes care of everything including returns. An FBA business model can be particularly helpful for sellers hoping to rapidly grow a scaling Amazon business and reach more customers.

Fees

Amazon charges storage fees and fulfillment fees. These fees include Amazon’s 24/7 customer support and tracking information. FBA gives you more time to focus on growing your business and a higher chance of winning the Buy Box. Enrolling into FBA makes you eligible for Amazon Prime free shipping, therefore, making your items more appealing to a large audience.

Amazon has millions of active customers and Prime subscribers. Brands specifically available to Prime buyers are those that utilize FBA. These brands have an increased opportunity to gain more sales through Amazon FBA because they are more visible to Prime buyers.

Advantages of FBA

  • Fast Delivery
  • Effortless logistics and shipping
  • Discounted Shipping Rates
  • Management and Ease of Returns
  • Customer Service Management
  • Storage Space

Fulfillment By Merchant (FBM)

FBM allows merchants to be in control of their inventory storage, packaging, and shipping. Merchants can expect fewer fees paid to Amazon and higher margins as well as the elimination of delayed payments, fees to Amazon for handling your assortment or shipment costs to get products to fulfillment centers. With FBM you are in control of the selling process which allows you to establish your brand from the ground up.

Shipping via FBM allows you to ensure the quality of each item at the time it is shipped to customers resulting in less negative feedback. You can also provide personalized packaging for your customers compared to regular Amazon packaging. When selling through FBM, your inventory does not need to be paid for all at once and shipped to Amazon warehouses, so it is easier to get started selling faster. Amazon has strict requirements for accepting products into their warehouses and it can take time to ship your entire assortment to them.

Using FBM You will have to battle for the Buy Box. Sellers that control the Buy Box will have their product added to the customer’s cart and get the sale. Without control of the Buy Box customers will have to scroll down the page to find the small section and link under “Other Sellers on Amazon”. Not having the Buy Box can make it difficult to gain sales. If you are certain that there are no other sellers for your product, and you can win the Buy Box then FBM is a good option to sell through.

Advantages of FBM

  • Control over Business
  • No Unexpected Costs (No storage or fulfillment costs)
  • Opportunity to build an independent brand

Seller Fulfilled Prime

There are more Amazon Prime customers then non-prime customers. Most of the consumers on Amazon searching for products get the benefits of fast free shipping of any eligible Prime product in less than 2 days. Ordinarily, these consumers only buy from sellers that offer Amazon Prime. Customers that buy from non-prime FBM sellers will have to pay additional shipping charges and will receive slower shipping which can result in your product getting overlooked. If you are an FBM seller it is possible to be accepted by Amazon into the Seller Fulfilled Prime Program which allows you to deliver to domestic Prime customers from your own warehouse. This badge is typically reserved for established businesses on Amazon with a track record of fast shipping and positive customer reviews. Once accepted into the program and your trial is complete you are able to store inventory in your own warehouse, process orders and buy shipping labels from approved carriers, pick, pack and ship your orders the same day and Seller Fulfilled Prime carriers collect and deliver orders in two days to customers.

Which Option Is Best for Your Business?

If you need help with your FBA or FBM strategy or have any additional questions, please do not hesitate to contact one of our Channel Key Amazon consultants. You can also reference the Amazon FBA calculator to help you decide whether to use Fulfillment By Amazon (FBA). The calculator allows you to compare FBA to FBM and to calculate the fees involved with FBA. As a full-service channel management agency, we are dedicated to helping you increase your sales.

Fulfillment by Amazon (FBA) Revenue Calculator

Use this calculator as a guide in evaluating FBA only. All you need to do is provide your fulfillment costs and the calculator will show you real-time cost comparisons between your fulfillment and Amazon’s offering for orders fulfilled for their FBA customers. Click here.

We hope that this post was insightful. If you have any additional questions leave a comment below, we’ll be there, we’ll respond, and we will help you through the process. If you found this post to be helpful, please like, share, comment, and tell other people about it.

If you need immediate advice or assistance with Amazon strategies? Talk to our Channel Key team. Thank you for reading.

#1 Amazon Channel Management Agency

 Discover the Benefits of Partnering with An Amazon Channel Management Agency

COVID-19 has impacted millions of people and businesses around the world. Many brands are leaning into winning eCommerce channels like Amazon to remain operational. During these uncertain times, businesses need to consider fulfillment operational changes in their strategy. Our primary goal at Channel Key is to develop smart and competitive strategies that increase your company’s sales and overall revenue. As your full-service channel management experts, you can trust that our team remains up to date on the latest shifts in the industry such as updates amid the COVID-19 crisis and the on-going changes within Amazon.

The relationships that we build with our clients is at the core of our success. From Amazon store concept to execution, Channel Key is here for our clients every step of the way. We are proud to work with brands and manufacturers of all categories selling in the Amazon space. We provide full-service channel management solutions to our clients that include:

  • Marketplace Strategy
  • Strategic Business Planning
  • Catalog Management
  • Ad Strategy Management
  • KPI Reporting
  • Brand Awareness
  • Revenue Growth
  • Profitability Analysis
  • New Product Launches
  • Operational Health

We offer more than a one-size-fits-all approach to Amazon marketing. We conduct market research analysis and use our extensive eCommerce experience to create online shopping environments that thrill customers and drive sales and referrals.

We ensure the brands and manufacturers that we work with, operate at their best so that they can continue to have success on Amazon and grow their businesses. Whether you want to get started selling on Amazon or need to improve your presence on this channel, our team of dedicated experts can help you. See what our clients are saying click here.

We’ve helped complete more than 4.5 million eCommerce transactions on Amazon and manage more than 145,000 SKUs. Our team of Amazon Marketplace experts can help you maximize revenue and gain better brand control on Amazon.

We have more than 30 years of combined experience in helping diverse clients across the country accelerate their Amazon marketing sales. Our team is passionate about creating business success on this top retail site. Beginning with a personalized approach to learning all about the businesses we work with, we help companies with the following as they navigate the Amazon market.

  • Develop Amazon distribution strategies
  • Implement Amazon marketing strategies that increase sales and return on investment
  • Create SEO content and customer support strategies that improve Amazon seller performance
  • Provide fulfillment by Amazon coaching and inventory planning

FREE CONSULTATION

If you need a winning Amazon strategy or have any additional questions regarding the marketplace, you’re in luck! Contact us today for a free consultation with our Channel Key experts. As a full-service channel management agency, we are dedicated to helping you increase your sales.

We hope that this post was insightful. If you have any additional questions leave a comment below, we’ll be there, we’ll respond, and we will help you through the process. If you found this post to be helpful, please like, share, comment, and tell other people about it. Thank you for reading.

Amazon Buy Box % Share

Amazon Buy Box % Share

The Buy Box plays a strategic part for sellers on Amazon. In many instances, the Buy Box is the point where many customers begin adding items to their shopping carts leading to an increase in sales for some sellers. The Buy Box can be thought of as your final e-commerce sales funnel. Sellers are constantly competing to win the Buy Box because they want their product to be selected when customers click “Buy Now” or “Add to Cart”.

Buy Box Percentage

Amazon does have an algorithm set in place to determine which sellers of a certain product will be represented in the Buy Box. Typically, Amazon rotates the winners of the Buy Box and each seller is given a share of the Buy Box based on multiple variables. In most cases for popular selling items, sellers need to share the Buy Box.

To win the Buy Box sellers must ensure that their listings are eligible. You must have a professional selling account and meet specific performance metrics which include low Order Defect Rate (ODR), customer shopping experience, and length of time selling as well as other variables.

The Buy Box percentage can be found under Amazon Seller Central Business Reports. You have the option to see data by date or ASIN. Sellers can use the Buy Box to strategize new pricing decisions. When doing this it is best to look at each individual ASIN. This allows you to review the Buy Box percentage for any of your items. This is the percentage of page views where the Buy Box appeared on the page for customers to add your product to their cart. The Buy Box percentage will only tell you if your product will be purchased by a customer who clicked the Buy Box when they viewed the product page.

Your Buy Box percentage can be lowered when the product is out of stock, the Buy Box resulted in the customer purchasing from another seller, or your product not being available for purchase using the Buy Box.

It is important to competitively price your items in line with the current market price and your competition. Another important factor to keep in mind is your inventory stock. Amazon prefers listings that are in stock for guaranteed fast delivery. It is critical to keep your account healthy and consistently maintain the required performance metrics as it pertains to customer service and shipping orders. Poor metrics will ultimately end up in you losing your Buy Box eligibility.

Conclusion

If you need help with your strategy to win the Amazon Buy Box or have any additional questions, please don’t hesitate to contact one of our Channel Key Amazon consultants.  As a full-service channel management agency, we are dedicated to helping you increase your sales.

We hope that this post was insightful. If you have any additional questions leave a comment below, we’ll be there, we’ll respond, and we will help you through the process. If you found this post to be helpful, please like, share, comment, and tell other people about it.

If you need immediate advice or assistance with Amazon strategies? Talk to our Channel Key team. Thank you for reading.

The Dynamics of Innovation Amid COVID-19

The Dynamics of Innovation Amid COVID-19

Exploring how innovation transforms industries, suggesting a strategic model to help brands and manufacturers adjust to ever-shifting market dynamics

The goal of Innovation is to create more effective processes, products, and ideas. Creating dynamic products can act as a catalyst that can enhance your business growth and can also help businesses adapt to a rapidly changing marketplace. COVID-19 has impacted millions of people and businesses around the world. Amazon is one of them. Amid the COVID-19 pandemic, the company has had to prioritize essential products as a result of an increase in orders for household staples and medical supplies, as well as other high-demand products to more quickly receive, restock, and ship to customers. Amazon has temporarily disabled shipment creation stopping all non-essential item replenishment into their FBA centers. For the next several weeks Amazon will be prioritizing shipping out essential items to consumers.

Operating in an uncertain environment 

Among the chaos, non-essential brick and mortar businesses have fallen off the map due to government-mandated shutdowns to reduce the spread of the virus. Many brands are leaning into winning eCommerce channels like Amazon to remain operational. With an increase in orders for essential products, Amazon is changing the rules of the game. Businesses need to consider fulfillment operational changes in their strategy. With strains on cash flow with non-essential Vendor Central (1P) setups, this could be an ideal time to reposition on the platform and consider making a transition to Seller Central (3P). Amazon has stopped PO’s for non-essential products delaying customer payments possibly until the middle of April.

Understanding market shifts and innovating to adapt

Optimizing your fulfillment strategy and focusing the marketing of products to potentially different verticals relevant to COVID-19 is critical in the new Amazon environment. For example, a brand that specializes in selling high-quality, low-priced wholesale products covering a wide range of categories and styles is now selling bulk hygiene kits to municipalities to support the safety of the homeless population. Another brand that specializes in selling innovative sanitation devices for sleep and respiratory therapy equipment is attempting to get quick FDA approval for using their product to sanitize N95 masks due to a shortage in supply.

Helping brands and manufactures pivot during this time of crisis

To best leverage Amazon it is highly recommended for businesses to re-evaluate not only their entire merchandising strategies but also their operation and fulfillment strategies. There is still an opportunity to take back control. During this time of crisis brands and manufacturers with non-essential products may need to pivot their strategy from FBA to Fulfillment by Merchant (FBM). The goal is to reinvigorate your business on Amazon and transitioning fulfillment operations will allow non-essential businesses to still be operational. This is the time to re-evaluate promotional and advertising strategies. This is the moment where brands need to consider potentially spending more or spending less and looking at pricing structures as well as areas to take market share from competitors while the market is down.

Conclusion

Times are challenging right now but, there is a light at the end of the tunnel. The most important thing to keep in mind is to avoid getting fixated on the ominous short-term circumstances presented by COVID-19. Non-essential brands still have an opportunity to make the most out of an unfortunate situation by tapping into long term opportunities in the present.

If you need a winning Amazon strategy or have any additional questions, please don’t hesitate to contact one of our Channel Key Amazon consultants. As a Full-Service Channel Management Agency, we are dedicated to helping you increase your sales. Talk to our Channel Key team.

We hope that this post was insightful. If you have any additional questions leave a comment below, we’ll be there, we’ll respond, and we will help you through the process. If you found this post to be helpful, please like, share, comment, and tell other people about it. Thank you for reading.

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