Amazon is the largest online retailer, generating revenue of more than USD 230 billion in 2018. This is a remarkable statistic, which shows the enormous growth of this E-commerce site — and the potential available to Amazon Sellers.
The best part about Amazon is that it always encourages newcomers into its marketplace. New sellers can visit its platform and sign up following an easy and quick process.
Within some time of signing up, they can begin actively listing their products and crush it with the right keywords.
The Difference Between Amazon & Other E-commerce Sites
More than 40 percent of shoppers start their search on Amazon, which is 10% more than Google. With this massive consumer base, Amazon has its own business model and pricing strategy, which is different from other E-commerce sites.
In general, E-commerce companies work as a facilitation marketplace and help the process of buying and selling of products between third party sellers and buyers.
The core business module of Amazon operates as a retail outlet by selling products to consumers with fixed prices and their own terms. “In contrast to other sites, the amazon marketplace does not link shoppers to a merchant’s site, and makes sure that every sale is executed at its own marketplace,” says Mark Henry, head of the research department at Premium Jackets.
Different Seller Types: Amazon VS Other E-commerce Sites
There are more than 5 million sellers across all Amazon marketplaces, and more than 1.7 million sellers have products listed for sale. The enormous number of sellers on Amazon are classified into various categories. It’s unlike other E-commerce sites where merchandisers can simply list their products and sell them.
When intending to get a start on Amazon, the seller may get confused by hearing terms like FBA and FBM. Therefore a brief study of seller, fulfillment types and differences between Amazon and other E-commerce sites make things easy for them.
Here we have listed different categories of sellers to market their products on Amazon.
Amazon Seller Central
Amazon Seller Central is the hub for Amazon sellers, and support two categories of Sellers according to their fulfillment modes:
In FBA (fulfilled by Amazon), the order fulfillment is automated with advanced shipping and fulfillment services by Amazon. In this approach, sellers can get more sales from Amazon by following KPIs for Amazon FBA business.
The process begins as the seller sends the product to Amazon, where they store it in their warehouse. When a buyer orders the product, Amazon packs and delivers the product. Returns and refunds are also handled by Amazon. In exchange, they charge storage and fulfillment fees to the Seller.
FBM (fulfilled by merchant) is a type where the Seller lists their product on Amazon and opts for delivering the products to buyers by their own means. In contrast to FBA, here the seller packs and ships the product by taking the fulfilling responsibility from Amazon.
This approach is more suited for products that have lesser profits. It is generally overlooked by sellers as the expenses of packing and shipping are much higher in comparison to Amazon FBA.
For both FBA and FBM the Amazon Seller benefits from the Amazon marketplace to sell directly to the consumer. As the 3P seller (or MOR — merchant of order) the Seller is the legal owner of the product before it changes hands with the purchaser.
Third-party sellers get their products by purchasing directly from the manufacturer or acquiring the product from other retailers. In simple terms, a 3P seller is other than Amazon itself, and lists products on the Amazon marketplace for sale.
With in-depth research of various E-commerce platforms, it shows that the selling approach of Amazon is different than other E-commerce sites. This world-leading site has its own pattern of selling, types of sellers, and the approach which it shares with its sellers and marketplace. As briefed in this article, sellers must have a good understanding of ways and approach of selling auspiciously on Amazon.
John William is currently working as a Business Development Executive at King Essay. He also serves as senior research analyst at Crowd Writer. He closely observes the latest trends in the business world and the growth of the E-commerce industry. Being a sports person, he likes playing tennis and badminton.