Amazon 101

Introduction

As briefly discussed in the “Welcome” section of the Employee Handbook (pg. 2) Hinge Consulting is comprised of a team of highly skilled experts from a wide range of backgrounds. This is a necessary component in Amazon Channel Management as it requires a wide range of skills. In order to better understand your role at Hinge Consulting, this section is dedicated to reviewing some of the basics for navigating Amazon channels and platforms.

What is Amazon?

As many of you will already be familiar, Amazon is the world’s largest online retailer, as well as a prominent cloud services provider. The company was originally a book seller but has expanded to sell a wide variety of consumer goods and digital media in addition to electronic devices, such as the Kindle e-book reader and other devices of the company’s own making.

Amazon Web Services (AWS) is a comprehensive, evolving cloud computing platform. The first AWS offerings were launched in 2006 to provide online services from websites and client-side applications.

More than 90 million consumers regularly shop at Amazon, and the number grows daily. As its business has blossomed, Amazon has made it easy for third-party sellers—individuals, large businesses, and mom-and-pop stores—to grab a piece of the action. 

How Does This Apply to You?

Depending on your role on Hinge Consulting Team, you may have a different relationship with Amazon than your fellow employees. However, there are some basics that everyone employed within Hinge Consulting should be cognisant of and this guide will begin with the Amazon interfaces.

Amazon Interfaces

Introduction

There are a variety of ways merchants can choose to sell their products on Amazon. Here is a brief overview of the four primary merchant interfaces to choose from on Amazon.

Seller Central

Amazon Seller Central is the web interface used by merchants to manage and view their orders. If you sell via Seller Central, you’re considered a marketplace or third-party seller (more on third party sellers later).

As a marketplace seller, you have different options for managing your virtual storefront. Amazon has a pay-as-you-go system for individual sellers as well as a pro merchant option for high-volume sellers. Pro merchant sellers can also choose Fulfillment by Amazon (FBA) whereby Amazon takes care of shipping, customer service, and returns. Seller Central offers the following features:

• Anyone can sell

• Quick payment

• More control over inventory and prices

• Doesn’t allow A+ content

• Potential for higher margins

• Control over listings & inventory shipments

A More Indepth Look

Seller Central’s robust analytics capabilities do a great job of helping merchants forecast demand. If you want a similar level of insight through Vendor Central, be prepared to pay for Premium Analytics reports. Additionally, make sure to check with your Amazon buyer before making the switch, as Amazon doesn’t give all its suppliers the option to purchase Premium Analytics reports.

Vendor Central

Amazon Vendor Central is the web interface used by manufacturers and distributors. If you sell via Vendor Central, you’re called a first-party seller. You’re acting as a supplier, selling in bulk to Amazon. Registration on Vendor Central is by invitation only.

A tell-tale sign that a company is selling through Vendor Central is the phrase “ships from and sold by Amazon.com.” Here is a short list of Vendor Central’s features:

• Invite only

• Standard payment term

• Less control over prices

• Allows A+ content

• Potential for larger volume

• Access to AMS, AMG, and other promotions

• Amazon Vine Program, Subscribe & Save, and other marketing programs

A More Indepth Look

Having your products sold as a first-party seller through Vendor Central means that, as far as shoppers are concerned, your product is being “sold by Amazon.” That seal of approval can provide a boost in consumer confidence that you don’t have as a third-party merchant. This also allows merchants to participate in Amazon’s promotional programs, such as Subscribe and Save and Amazon Vine. Vendor Central is also where you can develop EBC like A+ Content (more on this in Basic Terms and Concepts).

At Hinge, the use of Vendor Central is dependent on the client’s sales volume for their product.

Vendor Express

Vendor Express requires that merchants own the intellectual property rights for the products they sell to Amazon. Here is the list of the Vendor Express features:

• No annual charge to join

• Products appear to customers as Sold by Amazon

• Free Shipping from merchant’s warehouse to Amazon or directly to customers

• Product storage and order handling

• Direct fulfillment options so that you can ship[ directly to Amazon customers with prepaid shipping

• Products are eligible for Prime and free shipping to customers

• Access to Amazon Market Services (AMS)

A More Indepth Look

Amazon may request a minimum sample of free units to test the quality of the product and evaluate the demand from Amazon customers before placing an initial purchase order. After the merchant’s products sell, we may start issuing purchase orders. Amazon requests a limited number of samples as an investment in the program.

Launchpad

Launchpad is an interface that is targeted specifically toward start-up companies and assists in the development of new companies with built-in features. Some of the Launchpad features include:

• Built-in product detail page (PDP).

• Amazon’s self service marketing tool

• Fulfillment by Amazon (FBA)

A More Indepth Look

Amazon Launchpad is a unique platform that serves two core purposes. On one hand, it’s a marketplace within a marketplace that enables customers to sift through a range of cutting-edge and innovative items produced by vetted startups. On the other hand, Launchpad is an incredibly useful service point for small businesses in need of a helping hand. 

Although Amazon provides a marketplace for scores of companies, Launchpad vendors are given a bit of special treatment. Launchpad product listings are inherently more user-friendly, and allow startups to weave all-encompassing, custom narratives surrounding their products with the help of larger images, videos and more space to write. Launchpad vendors also enjoy more opportunities to get noticed through in-house advertising and a special widget on Amazon’s storefront landing page.

Amazon Vine

Vine is an Amazon review program which invites the most trusted reviewers on Amazon to post opinions about new and pre-release items to help their fellow customers make informed purchase decisions. Amazon invites customers to become Vine Voices based on their reviewer rank, which is a reflection of the quality and helpfulness of their reviews as judged by other Amazon customers. Amazon provides Vine members with free products that have been submitted to the program by participating vendors. Vine reviews are the independent opinions of the Vine Voices. The vendor cannot influence, modify or edit the reviews. Amazon does not modify or edit Vine reviews, as long as they comply with Amazon’s posting guidelines. A Vine review is identified with the green stripe Customer review from the Amazon Vine Program.

It will appear in under the review like this:

Content and Listings

Introduction

This section will cover the basics in product listings, including Product Detail Page, EBC, and A+ Content. 

Product Detail Page

The Product Detail Page (PDP) is the merchant’s active listing on Amazon. Merchants can add content to their through Seller Central. This content can be as limited as a price and a picture or more advanced with multiple pictures and the use of bulletins and product descriptions to incorporate keywords for Search Engine Optimization (SEO). Below, you will find an example of a listing with basic content.

As you can see it includes a product title at the top, a single picture, and brief bullet points. If you scroll down you will see the product description and product details.

Though, there is nothing wrong with this listing, there is also nothing exceptional hich may be why this product is ranked number 2,281 in Beauty and Personal Care.

Enhanced Brand Content

Enhanced Brand Content (EBC) is a tool on Seller Central which allows merchants to implement additional content which can be used to enhance listings  on a merchant’s PDP. EBC enables Brand Owner sellers to modify the product description field of their branded ASINs and allows brand sellers to describe their product features in a different way by including a unique brand story , enhanced images, and text placements.

Enhanced Brand Content can also be used to answer the most common customer questions by providing relevant product details that help drive more rapid purchase decisions and may reduce the likelihood of having products returned.

EBC is open to sellers who have been approved as brand owners through Amazon’s Brand Registry process. Once approved as a brand owner, sellers will qualify to add EBC to ASINs that are part of their approved brand catalog, but cannot add content to ASINs that are not part of their brand.

EBC includes product bulletins, product descriptions, images, and any A+ content. 

A+ Content

A+ Content is a paid addition to a merchant’s PDP through Vendor Central, which allows for a larger word count and better content with customizable modules which help companies better express their brand. It is a way for merchants to integrate inphographs, videos, and mixed media. Below you will find and example of A+ EBC.

Ultimate Nrf2 uses colorful images an indepth keyword rich product descriptions to push their way into the number 176 spot in Health and Household.

For one of the best examples of EBC in action, you may want to check out Amazon’s own Alexa and Echo PDP’s.

Basic Terms and Concepts

Introduction

This section will briefly review some of the core terms and concepts for understanding the inner mechanisms of the Amazon platform. It is designed as a quick reference and not a complete learning aid, as some positions will require a greater degree of comprehension than others.

Buy Box

When a merchant lists a product on Amazon through Fulfilment by Amazon (FBA), it is eligible to win the buy box. The buy box is simply extra exposure on Amazon. An example of the buy box is below. As you can see on the right, this book has an excellent position. Not only is there extra real estate, but this book is priced $8 higher than the lowest non-FBA book, and it still shows up in the buy box.

The Buy Box is a coveted space which can be “won” by any seller with an active offer against an ASIN. A shopper of this product may see one such seller in the Buy Box, while another shopper may see the same product with a different seller a few minutes later. The seller “Block Party Bricks” is the current Buy Box owner for this ASIN.

Fulfilment by Amazon

Fulfillment by Amazon is a program where you ship all (or some) of your inventory to Amazon’s warehouse, where they store and fulfill orders on your behalf. When I first heard of the FBA program, I was extremely skeptical. I did not want someone else storing, packing, and shipping my books. I wanted to control my business. But, after using the program for a couple months, the benefits far outweighed any disadvantages. I will get into the exact benefits of the FBA program a little later in this section, but first I want to get to some examples.

Prime Membership

This is a membership program where, for $99 a year, customers get free two-day shipping. I have been a member since March of 2007, and it is a great service. Everything I order from Amazon is through Amazon Prime, because I know that it will be at my doorstep in two days – sometimes one. Amazon Prime members also have a sorting button on top of the listings. The button will display Prime Offers 

Glossary

AAP:Amazon Advertising Platform

The Amazon Advertising Platform allows advertisers to efficiently reach Amazon shoppers on Amazon sites, across the web, and in mobile apps.

AMG: Amazon Media Group

From home page banner placement to HTML offerings, AMG is a premium advertising offer within Amazon’s vendor services, accessible via Amazon Marketing Services (AMS).

 Reach Amazon shoppers on desktop, tablet, and mobile devices

• Create relevant campaigns that drive results

• Access transparent, full-funnel campaign metrics

AMS: Amazon Market Services

Amazon Marketing Services (AMS) launched four years ago in 2012. Since then, Amazon advertising offerings have gone through a flurry of changes, including the discontinuation of initial Product Ads and Amazon Text Ads and renaming of eCommerce Ads to Product Display Ads.

They’ve finally evolved into three main Amazon advertising formats:

• Amazon Sponsored Products Ads

• Amazon Headline Search Ads

• Amazon Product Display Ads

ACoS: 

The ACoS (Advertising Cost of Sale) is a key metric used to measure performance of your Amazon Sponsored Products campaigns. ACoS indicates the ratio of ad spend to targeted sales and is calculated like this: ACoS = ad spend ÷ sales. Here’s an example:

Buy Box

The buy box is simply extra exposure on Amazon. An example of the buy box is below. As you can see on the right, this book has an excellent position. Not only is there extra real estate, but this book is priced $8 higher than the lowest non-FBA book, and it still shows up in the buy box.

The Buy Box is a coveted space which can be “won” by any seller with an active offer against an ASIN. A shopper of this product may see one such seller in the Buy Box, while another shopper may see the same product with a different seller a few minutes later. The seller “Block Party Bricks” is the current Buy Box owner for this ASIN.

FBA: Fulfillment By Amazon

Fulfillment by Amazon is a program where you ship all (or some) of your inventory to Amazon’s warehouse, where they store and fulfill orders on your behalf. When I first heard of the FBA program, I was extremely skeptical. I did not want someone else storing, packing, and shipping my books. I wanted to control my business. But, after using the program for a couple months, the benefits far outweighed any disadvantages. I will get into the exact benefits of the FBA program a little later in this section, but first I want to get to some examples.

MAP Policy: Minimum Advertised Price

Some manufacturers (such as Evolis, Fargo, Zebra, and others) have a Minimum Advertised Pricing (MAP) policy that we are contractually required to not "advertise" their product below a specific price. This is a required contract with these suppliers for us to resell their products.

MSRP: Manufacturer’s Suggested Retail Price

The manufacturer’s suggested retail price (MSRP) is the amount of money the producer of a product recommends the product be sold for in retail stores. The MSRP is not necessarily the price retailers use or the price consumers pay; items may be sold for lower prices so a company can reasonably move inventory off shelves, especially in a sluggish economy. The automotive industry is one market where the MSRP is used frequently; the price must, legally, be displayed on a sticker on the car’s windshield or on a spec sheet, and is often used by consumers to arrive at a fair price for the vehicle.

ROAS: Return on Ad Spend

Return On Advertising Spend, (ROAS), is a marketing metric that measures the efficacy of a digital advertising campaign ROAS helps online businesses evaluate which methods are working and how they can improve future advertising efforts. Calculating ROAS- Gross Revenue from Ad campaign

ROAS = ______________________

Third Party Seller

Third-party sellers are independent sellers who offer a variety of new, used, refurbished, and collectible merchandise. The steps to place an order with a third-party seller are the same as placing any other order on Amazon.com.

USP: Unique Selling Position

Unique Selling Proposition, or USP, is the term is used to refer to an aspect of a service or good that differentiates it from similar services or goods.

VLT: Vendor Lead Time (Supplier Lead Time)

A means of optimizing supply chain performance in which the supplier has access to the customer's inventory data and is responsible for maintaining the inventory level required by the customer. This activity is accomplished by a process in which resupply is done by the vendor through regularly scheduled reviews of the on-site inventory. The on-site inventory is counted, damaged or outdated goods are removed, and the inventory is restocked to predefined levels. The vendor obtains a receipt for the restocked inventory and accordingly invoices the customer. See: continuous replenishment.