Amazon as every new venture can be difficult to learn, especially for newbies who do not have any help. It is however impossible to sell and earn on Amazon if you do not have sufficient knowledge of Amazon’s terms.
Amazon’s terms can be confusing for new sellers. It takes a lot of time and research to become familiar with these terms and what they are used for. To get you started, here are twelve basic Amazon terms.
- UPC, FNSKU, SKU, and ASIN
- Amazon PPC
- First-Party Sellers
- Amazon Buy Box
- Ad Impressions
- A+ Content
- Fulfillment Channels
UPC, FNSKU, SKU, and ASIN
Bar codes are the last thing any regular person would pay attention to, but Amazon sellers cannot afford to disregard these seemingly insignificant figures. As an Amazon seller, you will be doing a lot with these codes, so let’s see what each of them stands for and why you need to pay attention to them.
This serves as a sort of identification code for different products. It is usually printed on product packaging and is typically a combination of 12 different numbers.
With UPC’s there is no longer a need to manually identify each item, all you have to do is to scan the code. Once this is done, the computer automatically identifies the item by name, price, and specification. UPC’s are universally recognized, this means that they can also be used by sellers outside Amazon.
Related: 4 steps of how to purchase UPC codes for Amazon?
ASIN stands for Amazon Standard Identification Number, as you can already tell, this code strictly applies to Amazon alone. It is a set of ten alphanumeric characters. ASINs are quite similar to UPCs but they are more like Amazon’s personalized UPCs.
However, Amazon has different marketplaces, so one product can have different ASINs when it’s listed on different Amazon marketplaces. So, when a product is listed on Amazon.com, it gets a unique ASIN, and when the product is listed on Amazon.co.uk, it gets an entirely different ASIN.
The ASIN of a product can be found on both the product listing as well as the listing’s URL. ASINs are useful because they allow Amazon to track inventory, index catalog pages, and show product search results.
For an item to be included in Amazon’s catalog, you must create a new ASIN. As soon as you add an ASIN, other sellers who sell the same items can now use this number. UPCs are universally recognized systems for identifying products, whereas ASINs are unique to Amazon.
SKU and FNSKU
In retail, an SKU (pronounced “skew”) is a series of numbers used to identify products and to keep track of inventory.
Store owners can create a number series of alphanumeric characters that can help them keep track of their inventory. That’s your SKU. In other words, the same product will have a different SKU in different stores.
Amazon FBA sellers use a special kind of SKU, that is FNSKU. The difference between SKU and FNSKU is that the latter identifies both the product and the seller on Amazon. Like ASINs, FNSKUs are peculiar to Amazon alone.
Here’s a simple summary of the above terms:
Amazon PPC is an advertising method used by Amazon sellers to increase reach and conversion through strategic placement of their ads. PPC simply means ‘Pay Per Click ’, and as it implies, sellers who use this advertising strategy only have to pay when someone clicks on their ads.
Amazon PPC ads usually come first in search results when buyers make related searches. The image below shows what it looks like:
There are three types of Amazon PPC ads:
- Sponsored Products
- Product Display
- Sponsored Brands
Sponsored products often appear in the first set of search results like the above image while Product Display ads often appear on the side of other product listings similar to the products in the ads. Sponsored brands ads are usually a separate category of ads that appear before sponsored products.
Related: A Guide To Understanding Amazon Sponsored Products
How is the ‘Pay Per Click ‘ determined?
Amazon sellers usually have to go through a bidding process to secure a slot. This means that different sellers will offer different amounts that they are willing to Pay Per Click, and the person with the highest bid wins.
However, the winner usually doesn’t have to pay the price they offered. Instead, Amazon picks the second-highest bid, adds $0.01 to it, and arrives at the amount that the winner will have to Pay Per Click.
So if 4 sellers bid to pay $2.00, $2.50, $4.00, and $5.00 respectively. The highest bid in this auction is $5.00 and that is the winner of this bid. However, Amazon will take the second-highest bid which is $4.00, add $0.01 to give $4.01 and that will be the price that the winner will have to pay. Easy Peasy!
Ad Impressions on Amazon are a metric to track how frequently your ads show up on Amazon. Ad impressions are different from PPCs because they do not work with clicks, impressions only take into account the number of times your ads were seen.
Ad impressions are a good way to track your keywords and see which ones are impacting your conversions positively or negatively. An increase in impressions usually means a decrease in your click-through rates.
If you are a private label seller on Amazon or you sell through Retail Arbitrage, you fall into the third-party seller category on Amazon.
Amazon First-Party sellers are sellers who do business directly with Amazon, that is, those who sell inventory directly to Amazon. First-party sellers are also known as Vendors.
Usually, products sold by 1P sellers have the tag “ Ships from and sold by Amazon.com”. It takes a special invitation by Amazon for anyone to become a first-party seller. Afterward, you’ll be sent a purchase order you need to fulfill and ship to Amazon.
First-party sellers on Amazon usually make use of Vendor central accounts rather than seller central.
Every Amazon seller must have come across this term, ACoS but what does it mean? ACoS simply means Advertising Cost of Sale.
As an Amazon seller, you must take account of how much you spend on business processes. Advertising is a huge part of selling on Amazon and a reasonable amount of money goes into this, how then do you ensure that you aren’t running at a loss?
This is what ACoS does for you. It is simply the ratio of your advertising cost to the total revenue you realize from your ads:
Ad Cost / Ad Revenue
ACoS is usually in percentages, so whatever you get from the above calculation is the percentage spent on advertising for every dollar you’ve made.
The ACoS is crucial for evaluating your ad spend and strategizing effectively. An ACoS that is too high will cause you to lose money.
Amazon sellers usually worry about having a good ACoS figure, however, it is not possible to estimate whether your ACoS is good or bad. It is dependent on your marketing goals per time and what you intend to achieve.
Related: 2020 Guide to Creating Great Amazon Marketing Strategy
Amazon Buy Box
Selling on Amazon puts you up against thousands of other sellers, you have to face fierce competition, find a way to stand out and make sales.
Becoming a private label seller on Amazon is one way to cut down on competition, the other way is to win Amazon’s Buy Box. To be fair, winning the buy box is a lot easier for private label sellers.
Amazon’s Buy Box is the white section that allows you to add items for purchase to your cart or proceed to checkout.
The Buy Box is extremely important to resellers, such as Amazon arbitrageurs, because they are juggling for it. Additionally, when you access Amazon with a mobile device, the Buy Box displays immediately beneath the product, and there is no “Other Sellers” section.
How do you win the Buy Box?
No one can tell exactly how to win the Buy Box, only Amazon knows that. But here are a few things we know might be helpful:
- Get a professional account
- Items on sale in your store should be new
- The items must be available in your inventory
Winning the buy box is not equivalent to having only your items displayed for the whole day, however, you get to have your items displayed for the major part of the day.
Amazon’s A+ content feature allows sellers to describe their products better using high-quality images and videos. The A+ content feature is different from product descriptions and is only available to sellers on the professional plan.
Related: Selling on Amazon: Individual vs Professional Selling Plans
The major part of selling on Amazon is fulfilling orders. Amazon offers multiple fulfillment options, but two of the most popular ones are:
- Fulfillment by Amazon
- Fulfillment by Merchant
The fulfillment by Amazon option simply means that Amazon takes care of storage, packaging, shipping, delivery, and everything else that has to do with your products.
On the other hand, if you choose the Fulfillment by Merchant option, you will have to take care of all these processes yourself.
Related: How to sell on Amazon FBA for Beginners
Becoming a successful Amazon seller is often dependent on how well you understand the platform. Amazon sellers usually have to do a lot of research before they’re able to fully grasp the industry’s jargon. If you read this to the end, you just took a step in the right direction.