Amazon Promotes FBA and Seller Fulfilled Prime

Amazon predicts record-setting sales this year from businesses selling on Amazon as they prepare for a busy holiday season. To help keep up with demand, sellers will benefit from the Fulfillment by Amazon (FBA) service and growing Seller Fulfilled Prime program to reach tens of millions of Amazon Prime members worldwide.

The Seller Fulfilled Prime program has already made more than 6 million new items available to Prime members across the U.S., U.K., France, Germany and Japan.

"We're dedicated to making the fulfillment technology that Amazon develops available to sellers," said Peter Faricy, VP for Amazon Marketplace. "The FBA service and Seller Fulfilled Prime program are the greatest opportunities in ecommerce for sellers to easily reach loyal Prime members and expand their business. We are proud that we are empowering so many retailers to grow their business, many of them small businesses and entrepreneurs. In fact, 50 percent of the total units sold on Amazon are from sellers."

FBA enables sellers to attract Prime members by having Amazon store and ship their products directly to customers while offering Prime benefits, including FREE two-day or next-day shipping and simple exporting around the world.

With Seller Fulfilled Prime, sellers who are able to meet a high bar for shipping speed and customer service can have their items badged as Prime eligible, and ship their own orders at Prime speed directly to customers.

This holiday season sellers will also be taking advantage of new and enhanced tools designed to help meet the demand:

Easy deal scheduling: The Recommended Deals tool allows sellers worldwide to submit Lightning Deals in just two-clicks. Sellers have used the tool to increase the number of deals offered to customers by more than 500 percent this year.

Automated pricing: Through the Automated Pricing tool, sellers can manage and automatically adjust prices on items based on seller-specified rules. Sellers can peg their prices to the Buy Box price or the lowest price, and Amazon will automatically adjust pricing. Sellers have reported the tool can reduce the amount of time spent managing pricing by up to 80 percent per week.

Expanded features on the Amazon seller mobile app: The Amazon seller mobile app includes Selling Coach recommendations that help sellers quickly make pricing changes, visual search capability to help source and list items and Photo Studio to capture and retouch product photos from a mobile device. Sellers using the app have experienced an average lift in gross sales by more than 20 percent.

"Fulfillment by Amazon and Seller Fulfilled Prime have been a big advantage for our business. The programs have helped us increase sales this year by more than 30 percent month-over-month," said Jeff McDonald, CEO and founder of Raw Paws Pet Food. "Seller Fulfilled Prime in particular has enabled us to expand product options for customers to offer different varieties and pack sizes of our all-natural dog and cat chews and treats."

"In 2016, Fulfillment by Amazon has helped us reach more Prime members, increasing our sales by more than 100 percent," said Jennifer McMillan, Founder of First State Trade. "Our business specializes in toys and keeping inventory in-stock is critical during the holiday season. The combination of FBA and Selling Coach helps us carefully manage inventory so customers can always get the items they want with two-day or next-day shipping."

Last year on Cyber Monday, sellers on Amazon received orders for more than 23 million items, a more than 40 percent increase year-over-year. In 2015, FBA delivered more than 1 billion items to customers worldwide.

Businesses interested in selling on Amazon and Fulfillment by Amazon can visit us for more details at Services.Amazon.com.

(SOURCE)

Your Amazon FBA Items Could End up on This Plane

By Ina Steiner

Keeping track of inventory inside Amazon's fulfillment centers isn't always easy for third-party merchants who use Fulfillment By Amazon. Now it may get even more challenging with the addition of a fleet of planes the company will add to its logistics network - but it could also present opportunities.

Amazon entered into agreements to lease 40 dedicated cargo airplanes and showed off its first branded plane, "Amazon One," on Friday. The Boeing 767-300, operated by Amazon's air cargo provider Atlas Air, flew in the Seafair Air Show in Seattle over the weekend.

Amazon spokesperson Amanda Ip confirmed the planes will be used to move inventory. "These planes will be used to supplement and secure additional capacity to support one and two-day delivery for our rapidly growing number of Prime members," she told EcommerceBytes.

We noted that sellers who use FBA would be especially intrigued by the use of the planes. Will Amazon use them to ferry goods between FCs, and if so, will that include FBA merchandise, we asked.

"The items delivered will be anything Prime available which could include FBA merchandise stored at our fulfillment centers," Ip said.

As FBA sellers know, Amazon moves inventory around its network of fulfillment centers in order to help it meet the quick-delivery demands of its Prime membership program. With the help of planes, it could mean sellers' inventory becomes available for ordering sooner, spending less time in trucks on the highway.

Reports that Amazon had purchased truck trailers and leased cargo jets had already forced it to acknowledge the fleets to Wall Street after rumors began circulating that Amazon was going to begin competing with shipping carriers.

But Amazon CFO Brian Olsavsky had told analysts they were not meant to replace Amazon's logistics partners. 

"Those carriers are just not able to handle all of our capacity that we need at peak," he said, but called them "good partners."

Dave Clark, Senior VP of Worldwide Operations, who has been with Amazon for 17 years, said on Friday that for much of that time, the company's operations teams have been focused on fulfillment centers and core supply chain processes, "creating the capabilities required to enable the world’s largest selection with fast free shipping for Prime members."

"Now," he said, "we see the same opportunity to innovate in transportation."

The timing of the announcement comes as the holiday shopping season comes speeding toward merchants.

Clark said, "Adding capacity for Prime members by developing a dedicated air cargo network ensures there is enough available capacity to provide customers with great selection, low prices and incredible shipping speeds for years to come. Over the next couple of years, we'll roll out 40 planes just like this one."

(SOURCE)

- Wow! Big news! Do you find this exciting?

 

Amazon Grows Sales 31 Percent in Second Quarter

By Ina Steiner

Amazon grew sales 31% to $30.4 billion in the second quarter of 2016, it announced on Thursday. It also reported a profit, revealing net income of $857 million for the quarter. And based on its report, it's clear third-party sellers remain a key contributor to its success.

During a conference call with Wall Street analysts, Chief Financial Officer Brian Olsavsky and Head of Investor Relations Darin Manney answered questions (quoted below) and revealed the following statistics:

• Worldwide paid unit growth was 28% for the second quarter.
  
• Worldwide seller units represented 49% of paid units.

Amazon is opening 18 Fulfillment Centers in the third quarter, compared to opening 6 in the third quarter of 2015. "This will bring us up to 21 net FCs for the year by the end of Q3. That compares to 10 FCs for the first 3/4's of last year on a net basis."

Amazon's CFO said, "Why are we expanding so much? If you remember back in Q4 and the capacity restraints we had in Q4 primarily due to really strong FBA growth." He revealed some statistics, giving signs of expected growth in the 2nd half of the year in terms of unit sales.

In the second quarter, Amazon saw 28% paid unit growth - but for FBA, it was higher than that.

That compares to last year in Q2 which saw 22% unit growth - and that turned into 26% in Q4 last year.

Amazon executives declined to update customer numbers or reveal how many Prime members it had, including declining to reveal how many new members were added as a result of this year's Prime Day.

The executives said "there's a lot of room in Prime," and said there were "a lot of different flavors of Prime," referring to tailored programs for students; tailored video programs; its new monthly membership option; and plans related to grocery delivery.

"We are aggressively looking for the perfect Prime for everybody."

In a press release announcing earnings, Amazon founder and CEO Jeff Bezos was quoted referencing the importance of India. "It's been a busy few months for Amazon around the world, and particularly in India - where we launched a new AWS Region, introduced Prime with unlimited free shipping, and announced that Prime Video is coming soon, offering Prime members in India exclusive access to Amazon Original Series and Movies - including original content featuring top Indian creators and talent. The team in India is inventing at a torrid pace, and we're very grateful to our Indian customers for their welcoming response."

Amazon called out the performance of its second annual Prime Day, calling it the biggest day ever for the company. 

"Compared to Prime Day 2015, worldwide orders grew by more than 60%, orders from third-party sellers with Prime Day deals nearly tripled, and Prime members saved over twice as much on deals."

Someone reading the press release who was unfamiliar with the company would be hard-put to determine if Amazon was a retail marketplace, a hardware company, or a Hollywood producer. But among the many shout-outs to its devices and content were some significant factoids about its ecommerce business:

• Amazon Business now serves more than 400,000 businesses and generated more than $1 billion in sales in its first year. Amazon Business has more than 30,000 third-party sellers who fulfill over half of Amazon Business orders.
  
• Amazon Prime Air and the U.K. government announced a partnership to advance the safe use of drones for small parcel delivery, providing Amazon with permission to trial new methods, including beyond line-of-sight operation.

Amazon also mentioned the launch of its Pan-European Fulfillment Program, the launch of AmazonFresh in its first international location (London), its growing selection in Mexico where it launched a year ago, and some milestones in India.

It also called out Amazon Marketplace's inaugural Women's Entrepreneur Conference, which will be held in August in Seattle, stating, "The full-day event will bring together over 300 women entrepreneurs and business owners from around the world to network and learn from experts on how to grow, lead, and scale a business on Amazon."

(SOURCE)

- Great news all around! We're excited to grow along with Amazon. What do you think? 

FBA / e-commerce models..... continued

By Julie  Čolan

In one of my earlier blogs I spoke a little about the different approaches that can be adopted when sourcing products and selling through FBA and how there is (in my mind at least...) a logical sequence in how and when to apply these models. Last time I dealt with retail arbitrage (step 1) and online arbitrage (step 2) and today I'm going to talk around "distribution" (which I see as the next step in the journey).

So what do I mean by "distribution"?
I'm not sure if it's the best term for what I am trying to explain but I am really just talking about coming to more formal / repeatable agreements with suppliers for a continued supply of stock (i.e. becoming a "distributor").

So far the RA and OA models have not really required any negotiations or the building of relationships with suppliers but this is where, I think,  you can drive some real value in you business (as well as  through branding - more on that later).

So instead of simply visiting stores (high street or online), step 3 requires you to get out there and actually talk to suppliers of goods that you may want to sell - there are a few different types of supplier you will want to talk to and I would generally categorise these as:

• Niche retailers
• Wholesalers
• Distributors
• Manufacturers / brand owners
• Liquidators

I'll give a quick summary of each as follows:

Niche retailers are people that are selling items not widely available on the High Street. They may be fairly local in geography or simply only sold through catalogues / direct marketing / events etc. By getting these types of products on to Amazon you may just be opening them to a much wider market. The reason I distinguish this from RA is that you are much more likely to want to build a relationship with the retailer to secure continuity of supply on favourable terms.

Wholesalers seem to be the logical step for those graduating from RA / OA but, in my experience, most wholesalers are not going to provide you stock at a price you can make work on Amazon unless you commit to a very significant volume. I have had some product lines that have worked and been supplied by commercial wholesalers although I would say that they have been few and far between. As a rule of thumb, the more difficult a wholesaler is to do business with you, the better the opportunity. Any wholesaler who will give you access to their pricelist at the drop of a hat (e.g. just on provision of your e-mail address) is unlikely to have any compelling offers.

Distributors are essentially wholesalers but tend to have exclusive (or near exclusive) deals with manufacturers / brand owners to sell the products wholesale in specific territories. This is almost as good as dealing with the brand owner themselves but does take a lot of time and energy to build up a relationship and credibility with this type of seller. Distributors tend to be a bit wary of FBA sellers as they don't necessarily perceive that we bring a lot of value to the table but they can usually be persuaded. Personally I tend to prefer to deal with manufacturers / brand owners directly (especially as there are tools you can bring in to play to demonstrate value - more on that below) but distributors can be a lucrative source of products.

Manufacturers / brand owners are my favourite supplier! Most people confuse manufacturers and brand owners as the same thing but they often aren't. I'm pretty sure that Nike don't own the factories in the Far East where there products  are made, in fact that same factory probably makes Addidas in the evening shift (brands used for illustration purposes only - I have no idea on the manufacturing of either one). Anyway, most manufacturers just want to make stuff and not get involved in all the marketing and sales palaver that follows and the brand owners don't necessarily want to own the factories. This is the dynamic that can help us all move into the "private label" space (for another day) but it is important that you understand the difference,  Anyway, locating either manufacturers or brand owners is easy, the difficulty is persuading them to let you be the owner of their Amazon listing, marketeer  and online sales lead - all stuff that they need (badly) but just don't know about it. The way I have approached this is to seek out local(ish) brand owners, firms that have been producing products for years but aren't tuned in to the magic of e-commerce as yet. It is surprising how many firms you will find that are local to you with a bit of research. I started with Google, simply asked around and ended up driving around commercial / industrial parks in my local vicinity to find target suppliers. 

The people you really want to find are those with a good product but an established "old school" route to market - probably through wholesalers. There are many many business owners out there creating great products but without the knowledge of e-commerce to understand that they are missing out on a huge market place. So how do you persuade such companies to partner with you? You don't own a shop (in the physical sense at least), haven't been in "the trade" since 1952 and so may have little credibility in their eyes. So now you're really in the heart of business, selling the benefit and trying to demonstrate how YOU can really help them as business owners. Hopefully by the point you are at this stage you have mastered the RA and OA models and have learnt a thing or two about Amazon. Demonstrating to the brand owner that you understand how Amazon works, the sheer volume of sales that are processed through it and the turnover of similar products (Jungle Scout can be a great way of concisely demonstrating this benefit - another topic for another day I guess) can be particularly compelling stories. You can also start to bring into play how you can optimise their product listings to drive more traffic and better conversion rates, and manage follow-up comms with customers to help build brand awareness and develop follow-on sales.

Anyway, I'm starting to realise that I have tried to tackle a huge subject over a few blogs and all of this stuff needs much more depth to do it justice - that will follow I promise. For now though I hope you're enjoying my insight - I really do welcome your comments (even if not wholly positive) and questions. I will complete this series of blogs on the overview of approaches to e-commerce / FBA to talk about Private Labelling / building a brand in the coming days.

6 Reasons Investors Will Be Buying Amazon 'FBA' Businesses in 2016

By THOMAS SMALE

Fulfillment By Amazon -- or FBA -- is fast becoming a buzzword in the online business space. You don't have to search long and hard to find FBA success stories online. It's a business model whose time has come, and its popularity will almost certainly continue to rise throughout 2016.

What is Fulfillment by Amazon? According to the company's website, FBA customers store their products in Amazon's fulfillment centers, which then pick, pack, ship and provide customer service for these products, as well as help their home companies scale and reach more customers.

In short, FBA gives business owners the chance to focus on product and growth instead of the ongoing grind that "operations" so often entails. Although there is legwork involved in setting up FBA, and some ongoing maintenance, the work involved is relatively simple and straightforward -- especially compared to what's required for so many alternatives.

Need some good reasons why investors are interested in buying FBA businesses? Here are six.

1. Scalability

FBA businesses may very well be among the most scalable of any enterprise. You don't need a large team to run it and, even as you grow, your primary expense is the manufacturing or procuring of inventory to sell. 

Additionally, you don't have to limit yourself to a single product category. You can expand your offerings as you see fit, and hire staff to oversee additional products if things become unmanageable.

Bottom line: You can keep costs low while you continue to search for additional product and profit opportunities. As a business owner, you can stay focused on what matters most.

2. Availability

Business investors are motivated by a variety of different factors, including passion, prestige, pride, security and profit.

Amazon FBA businesses can provide investors with an opportunity like never before to get into a business they're genuinely excited about, in an industry or niche that they already know and like.

At their core, Amazon FBA businesses are all essentially the same. Getting started means finding a popular product category, creating a relationship with a manufacturer that can produce a product of your choosing, inexpensively, and listing it on the world's most recognizable ecommerce platform -- Amazon -- for sale.

Although setup is far less complicated than with many other business models, investors have the option of walking into a turnkey business that's already up and running, in a category that complements their passions and interests. Since many business owners are focused exclusively on a single product, there's no shortage of businesses to invest in.

3. Simplicity of operations

FBA businesses are easy to run and maintain. Consider:

• You don't need to focus on customer acquisition. Amazon has done the hard work of building the world's largest customer base. You don't need to cold-call or have a sales team work around the clock to convert leads.
• You don't need a website. You don't need to know how to code a website, set up an email list or understand the ins and outs of SEO. This frees up costs associated with programmers, domains, hosting, virtual assistants, SEO teams and other online subscription services.
• You don't need to manufacture your own products. In most cases, it's better to build a relationship with third-party manufacturers, to seize the product opportunities you see in front of you. If you know how to sniff out deals in your own locality, you can also turn around and sell products for more on Amazon. Arbitrage opportunities abound.
• Amazon handles shipping and customer service. You won't require a team of customer-support representatives constantly fielding calls to ensure that your customers stay happy.

4. Profitability

As already stated, FBA businesses by their nature offer cost savings. You don't require a website or an extensive customer support team, and you don't have to handle the picking, packing and shipping of products, which is oftentimes a major bottleneck in ecommerce.

If you can keep costs low, you can also increase your profitability. Most FBA businesses sell products in the $10-to-$60 range, the "sweet spot" where the most money can be made. As such, you will need to sell a large volume of products to generate revenue consistently, but this also ensures scalability as you grow.

Additionally, many ecommerce business owners have found that listing their products on Amazon has increased their overall sales. The company offers a lot of exposure.

5. Access to Amazon Prime users

Amazon Prime members have opted to pay for free, two-day shipping on their orders. When you set up an FBA business, you automatically qualify for Amazon Prime shipping and gain access to Prime members, who have clearly shown interest in meeting their product needs online.

Many studies have shown that customers prefer free shipping over product discounts, so this has a major influence on their buying decision.

If your competitors aren't Prime sellers, and you are, whom do you think buyers are going to go with? Right! It will be you.

It costs you nothing to be a Prime seller, so there's no reason not to take advantage of this unique prospect.

6. Fulfillment across multiple channels

Multi-channel selling isn't just an ideal anymore; it is fast becoming the standard by which an ecommerce business is judged. 

Although getting your product seen on Amazon should be your highest priority, selling through other marketplaces could boost sales and expose your product to new buying audiences. The good news is that multi-channel orders can also be fulfilled through FBA.

Multi-channel selling has never been easier, which means business owners can focus on the growth of their enterprise instead of having to come up with new solutions to get their products seen in as many different online retailers as possible.

Final thoughts

Whether you're looking to diversify your business and investment portfolio, or you're looking for a passion project that will also generate consistent profit, FBA businesses are worth your consideration.

As with any business, there are some risks involved. Your manufacturer may not be able to deliver goods on time. Amazon may pull the plug on your product at its discretion. Clearly, building on rented land sometimes comes with a price tag.

But the simplicity of the business model makes it easy to start over or to adjust your strategies when you need to. If you are looking to buy a business, and you have yet to decide on any one model, definitely take a look at what FBA businesses have to offer.

(SOURCE)

Here's what Amazon sellers can't stop talking about — and why that's great for Amazon

At a recent conference in New York City, professional Amazon sellers and consultants kept talking about one thing.

The topic that kept popping up: Fulfillment By Amazon, or FBA.

FBA first launched nearly 10 years ago to let businesses use Amazon's infrastructure to store and ship their goods, but it is still seen as one of the biggest opportunities for sellers right now, according to several people whom Business Insider spoke to as well as a panel of presenters talking about the "unwritten rules" of Amazon sellers.

Four of the five members of the panel answered a question about the biggest opportunity for sellers in the coming year by pointing to FBA.

"There are very few things in the world where you can say, 'If I just do this, my business increases 30 to 50%,'" Eric Heller, CEO of Marketplace Ignition, a company that helps businesses sell their goods online, said of FBA during the panel. "It's a huge opportunity."

By using FBA to let Amazon handle shipping logistics, sellers can cut their inventory and shipping costs (though Amazon does charge fees for the service) and make their goods eligible for Amazon Prime, the company's $99-per-year membership program, which offers free two-day shipping on more than 20 million items. The Prime aspect is a big part of what makes FBA so valuable for Amazon.

FBA is generally a hot topic in part because Amazon is investing in it heavily of late as it becomes a bigger part of its business. In its fourth-quarter earnings last year, Amazon said goods sold through FBA made up more than 40% of its third-party sales. The company also announced last summer that it would add six new fulfillment centers and more than 15 "sortation" centers in the coming year to help it improve shipping efficiency for both its own inventory and FBA goods.

The discussion of FBA at the conference was overwhelmingly positive, which is great news for Amazon.

Why? Because in addition to fees from third-party sales, FBA can provide a big boost to one of Amazon's most important businesses: Prime. The more businesses that use FBA, the more products Amazon can offer through Prime. The more Prime products there are, the more willing people might be to shell out $99 for a membership. And people with a Prime membership end up spending way more money on the site than other users.

A recent Consumer Intelligence Research Partners survey of 500 Amazon shoppers concluded that Prime members spent more than double what non members did.

Amazon has spent the past year amping up its digital offerings for Amazon Prime and investing in FBA because it banks on the fact that when it hooks people into its Prime ecosystem, it will make more money from their increased shopping.

"Amazon is investing in FBA right now," Heller says. "Amazon is using these things to drive up the frequency of purchases from Prime."

Despite the warm reception it received Tuesday, FBA isn't all sunshine and rainbows for merchants.

Victor Rosenman, CEO of FeedVisor, the company that hosted the conference, told Business Insider that the risks associated with using FBA were that businesses were handing over all their sales data to Amazon and that if they misjudge demand and send too much inventory to Amazon for FBA, it can be a very costly mistake.

"It's like a marriage," he says. "There are parts that are good and parts that are bad."

Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.

(Source: http://www.businessinsider.com/amazon-sellers-fba-2015-5)