Starting an Amazon business is not as easy as it usually seems, sellers who are just starting without previous experience of the Amazon marketplace often have so many unanswered FBA questions.
You belong in this category of sellers, and that’s probably why you’re here. This post is a compilation of Frequently Asked Questions that will put an end to your confusion as a beginner on Amazon.
Keep reading to find all your answers.
Amazon Terms
Have you come across some industry jargon that you can’t seem to figure out? Here’s what they mean.
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UPC, FNSKU, ASIN, and PPC
UPCs, serve as identification codes for products. These codes can be used to automatically identify products instead of manually differentiating them. UPCs are not restricted to only Amazon, sellers outside the platform can use them too.
ASINs are special Amazon Identification codes. ASIN stands for Amazon Standard Identification Number, unlike UPC, Asians are unique to Amazon and do not apply to other eCommerce platforms.
FNSKU is a special kind of SKU used by Amazon sellers to identify products and track inventory. FNSKUs identify sellers and products, like ASINs, FNSKUs apply to Amazon alone.
PPC stands for Pay-Per-Click. Amazon PPC is an advertising strategy used by Amazon sellers, whereby sellers run ads and pay for each click or conversion that the ads generate.
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ACoS
ACoS means Advertising Cost of Sale, it is Amazon’s way of helping sellers track how much is spent on advertising and how much revenue is generated from advertising. This helps sellers to know if ads are generating revenue, so they do not run at a loss.
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Amazon Buy Box
Amazon’s Buy Box is one way to outrank your competition on Amazon. Sellers who win Amazon’s Buy Box will have their products show up and be recommended by Amazon, more frequently than others.
Related: A Seller’s Guide to Amazon Terms
Sales and Order Fulfillment
Some Amazon sellers are unclear about order fulfillment and sales on Amazon. Here’s the answer to all your questions about Order fulfillment on Amazon, and the different ways to sell on Amazon.
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Amazon Fulfillment Channels
Fulfillment channels are the different order fulfillment methods that you can use on Amazon, fulfillment includes storage, packaging, and shipping orders. Amazon offers various order fulfillment options, all you have to do is to pick the one that works best for you.
You can choose to go for Seller Fulfilled Prime, Amazon FBA, or Fulfillment by Merchant option.
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What is Seller Fulfilled Prime?
Amazon Seller Fulfilled Prime is a fulfillment option that gives sellers access to Amazon Prime subscribers. This simply means sellers who choose this fulfillment option will have the opportunity to sell to a larger audience.
However, if you choose the Seller Fulfilled Prime option, you will have to carry out same-day free delivery on all your orders.
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What is Amazon FBA?
Amazon FBA simply means Fulfillment by Amazon. It is a fulfillment option that allows Amazon to handle storage, packaging, and shipping orders on behalf of sellers. Sellers who choose the Amazon FBA option will not have to worry about order fulfillment because Amazon will take care of everything.
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Fulfillment by Merchant (FBM)
The Fulfillment by Merchant option is just what it says. Sellers who choose this fulfillment option will be responsible for storage, packaging, and shipping. The only difference between FBM and SFP is that sellers do not have to offer free or same-day delivery.
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What Is a Private Label and Who are Private Label Sellers?
A private label on Amazon means selling products directly from manufacturers in your brand’s name. In other words, you choose a niche, choose a bestselling product in that niche, and get manufacturers to create it in your brand’s name. Private labeling is simply a way for sellers to build their brands on Amazon.
As you can already tell, private label sellers are those who sell private label products on Amazon.
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What Is Retail Arbitrage?
Retail arbitrage is a way to become an Amazon seller. Using this method will require to shop for products physically and sell on Amazon at a higher price. Online arbitrage on the other hand will require you to buy products online and sell on Amazon at higher prices.
Arbitrage sellers are different from wholesalers, in that, wholesalers order products in bulk from manufacturers and sell on Amazon at retail prices.
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What Is Amazon Brand Registry?
Brand Registry is for Amazon Private Label sellers who have established a brand. A Private Label seller who meets certain criteria (such as having a trademark) can gain more rights to manage their products. A few of the privileges include improved listing editing control, improved listing content appearance, improved protection against listing hijacking, and more.
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What Is Dropshipping on Amazon?
Dropshipping is another Amazon seller option that involves a supply chain from the manufacturers to the retailer. In this chain, the drop-shipper is the middle man. The drop-shipper gets orders from customers on Amazon, processes the orders, and gets the manufacturer to ship directly to the customers.
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How Much Does It Cost To Sell On Amazon?
Capital is essential to start every business, as you are aware. There is some initial investment required to start an Amazon FBA business, but it’s not too taxing if you are willing to put the time and effort into it. Referral fees, shipping fees, and seller fees are the most common Amazon Fees.
If you do FBA, FBM, or both, you will be responsible for several fees depending on what you’re selling, how much you’re selling, and more.
Aside from your inventory costs, you will also need to get sample orders and find the right Amazon software to assist with product research, keyword research, and listing optimization, all of which are processes to be undertaken if you are planning to scale your Amazon business.
Fees for Amazon Fulfillment include both storage and fulfillment. The more inventory you store, the higher your costs will be. If you are on a budget, you should start with fast-moving items on AmazonFBA to save money. If you have products that are stored for more than 180 days, storage costs will rise.
Related: What It Costs To Start Amazon FBA business
Conclusion
Selling on Amazon is one of the most reliable ways to earn passive income. Navigating the Amazon marketplace requires you to understand these Amazon terms. If you read to this point, then you’re one step closer to building and scaling your Amazon business successfully.
Good luck!
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