Amazon Advertising Platform
Since 2012, Amazon is not only a marketplace but also an advertising platform. Based on a pay-perclick model, sellers can promote their products on Amazon. Despite being relatively young, Amazon PPC is working hard to break the duopoly in the digital advertising market.Google and Facebook have dominated this market for a long time and together hold around 60% of the market. Google is losing market share, though, and this is mainly due to Amazon.
Vendor versus Seller
Before you can start advertising on Amazon you’ll first have to register as a vendor or as a seller. Moreover, it’s important to know the differences
between the two since they both offer different advertising options.
Vendor
You can think of a vendor as a factory or brand that supplies its products directly to Amazon. The big advantage of this is that Amazon is responsible for shipping and customer service. As a vendor you have less control over the content and price of your product, but the purchasing risk lies with Amazon. However, Amazon may negotiate that it can return products free of charge. Vendors can only be invited by Amazon itself.
Seller
As a vendor you have less control over the content and price of your product, but the purchasing risk lies with Amazon. However, Amazon may negotiate that it can return products free of charge. Vendors can only be invited by Amazon itself. Many vendors start out as a seller. When their
products prove to be a hit, they are approached by Amazon. As a seller, you can also choose to outsource the fulfillment to Amazon (FBA or Fulfillment by Amazon). With FBA, Amazon is responsible for packaging, storing and shipping the products. This will eat into your margin but also has many additional benefits, such as a better chance of winning the Buy Box, higher conversion rates and access to Amazon’s Prime target audience.
*Amazon may negotiate that it can return products free of charge.
Seller Fulfilled Prime
The only other way to get access to Amazon’s Prime audience if you do your own fulfillment is by enrolling in the Seller Fulfilled Prime program.
To use Seller Fulfilled Prime you must first successfully complete a trial period. During the trial period you must ship 99% of your orders on time, have an order cancellation rate of less than 0.5% and meet a number of other strict conditions.
