Ladies and gentlemen, hello, and welcome back to another episode here on the Preston's corner channel today, I'm going to be talking about something very, very important to a lot of you, and that is selling on Amazon. Now most of you might not know this, but actually there's only three ways to sell on Amazon. So that's what I'm going to talk about in this video. Let me jump over here to my split camera screen and show you exactly what I'm talking about. So I've got my notebook here and the three ways to sell on Amazon. So a lot of people get this wrong and here's what I mean. There's only three ways to sell products on Amazon. The first one, number one is called Amazon vendor. Okay. And I'll get into the details on each one of these here in a minute. The other one is called F B a and the third one is called F B M.
Okay. Excuse my terrible handwriting here, but that's not the point. The point is there's only three ways to sell on Amazon. Now I'm going to go through the pros and cons of each one of these ways to sell.
Method #1: Amazon Vendor
So the first one up is Amazon vendor. Now the funny thing about Amazon vendor is it's really an invite only program. If you're selling millions and millions of dollars of products on Amazon, Amazon will literally pick up the phone and call you and go, Hey, you're doing all this work selling on Amazon. What we'd like to do is you sell your products to us. We're the wholesaler. And we'll sell the products on Amazon. When you have Amazon vendor, what you will see, this is under vendor. You will see ships and sold by Amazon what this means, okay, Amazon's going to buy the products from you.
Let's say they buy a hundred thousand units at a time. They issue a PO you get paid up front for those products. They'll sell through those products. And then three months later, when they need some more or however long it takes to sell through those, they'll email you and say, Hey, we'd like to place another PO. The problem though, with Amazon vendor is that you lose control. What do I mean by that? Well, here's what I mean. If your recommended MSRP is $9 and 99 cents, okay? You, your cog of the product is $2. You want to sell to Amazon for $5 and you want them to then resell it for your nine 99. What P what we call it? The MSRP, the manufacturer's suggested retail price. If you are selling to Amazon under Amazon vendor, you lose control of the pricing. Okay? You can suggest they sell it at this, but at the end of the day, the product is shipped and sold by Amazon.
And they're scanning the whole internet for your product. And if the product is priced lower somewhere else, they will reprice your product to be the lowest. So just know that if you're going to be going into this, okay, you can still make a lot of money, especially considering it's a high volume business to get into this, you know, first party ships and sold by Amazon. So that's really interesting. If you're invited, it's a great program. You should definitely check it out. So that's Amazon vendor, the pros and cons.
Method #2: Fulfillment by Amazon
The second one here is called F B a. What the heck does that mean? Well, that means fulfillment by Amazon.
Instead of a customer on Amazon buying your product, and then you having to ship it to them, what this means, dubbed F B A is fulfillment by Amazon. So you've got 10,000 units at your warehouse.
You ship these directly to Amazon. And then Amazon then ships those to the customer one at a time or two at a time. However, so you ship all of your units, the 10,000 units for this example to Amazon's warehouse, Amazon then ships the product to the customer. And for your convenience in this transaction, they want a 15% on average fee for fulfillment by Amazon. It's a great service. If you're using your own warehouse, every time you get an order, you would then have to pay the warehouse to pick, pack and ship the product. And in my experience, working with clients on Amazon FBA, this program right here is more cost effective in some cases, unless you're doing a lot of volume, then using your own three PL or warehouse. So it's great program fulfillment by Amazon and the big kicker here, okay, is that you get the, the best thing you can have on an Amazon listing.
What am I talking about? I'm talking about the thing that will make you the envy of all the other sellers on Amazon. And that is, you probably know it, the Amazon prime badge. Okay. What this means is since you're a part of Amazon's fulfillment network, you get the prime badge, which in the United States, that gives you one to two days delivery on most products for prime customers. So that is a really, really key benefit here because everybody buys on Amazon. They want the product, they want it now. And if you're Amazon prime through FBA, that is a great way to help increase your sales. Get more and make sure that you don't have as many issues as if you were trying. If you were trying to actually ship and sell all the products yourself. Now, one huge, huge, huge benefit. Another one besides this prime badge here is that this specifically, so a big part of Amazon and not to go on a rabbit trail here, but a big part of Amazon is ratings and feedback.
Okay? So somebody can leave you a one to five star review or feedback. I can't talk and write at the same time here apparently, but they get to leave you a one to five star review. The great thing about using the FBA program is if somebody leaves you a one or two or three star review, which is considered bad feedback, okay? If the product, if the review here, if this one to three star review contains feedback about the fulfillment experience, meaning I didn't get my order on time. My order was lost. It was delivered on the wrong day. Yada, yada, yada, guess what? If you're using FBA here, you can get that feedback removed another great way to minimize the bad feedback that you're getting. This is all legitimate. This is through Amazon. They let you do this. Okay? You can get that feedback removed if you're using this FBA program, because Amazon is not going to count that against you because they fulfilled the product.
So it's another great way to help increase your star rating. Amazon. It's all about product rating reviews, getting those four and five star ratings. And it's about making sure that you're at a certain level on those reviews and you keep trending up and you don't go down into that sub three star rating range. Okay? Otherwise we get in big trouble. You get kicked off. You'll be, you'll have nightmares about this. So don't do that. This is another really great thing about the FBA program. Now, finally, if you remember, if we go back here, there's actually one more way to sell on Amazon.
Method #3: Fulfillment By Merchant
And that is called F B M what the heck is FDM? Well, FBM stands for fulfillment by merchant. Okay. And it's basically exactly what it sounds like. So let me just go through an example here. You sell a product to a customer and it's on Amazon. Okay? Once the customer buys here, you are then going to receive that order information to your warehouse.
I have to ship the item to the end customer. It's very simple. Amazon customer buys. The order information is sent to you at your warehouse. You then have to ship that item to the customer and you're held to Amazon metrics. They want you, once you receive this order information, depending on how you have your listing or product set up, you've got pretty much between 28, 24 to 48 hours to ship the product. Otherwise you're going to get in big trouble. Okay? What this means is whenever the product goes to your warehouse and you ship the product and you have the tracking information, you then have to re upload that tracking information to Amazon, and guess what they are going to verify that tracking information. So you can't just print off labels and hold them. That tracking information, that tracking number has to be a legitimate tracking number for the product that is actually going to the customer.
If you sit here and on day one of receiving the order, you print out the label, they two, you don't do anything. Day three, you don't do anything. They for you finally actually shipped the product. Amazon is going to realize that you sat on that order for multiple days without actually shipping it. Because whenever say it's a USP S label or a ups let's use ups in this scenario. If you're selling items that are using ups, you can designate that in your shipping options on your Amazon account, if you print out a ups label and you do not have that scanned by the ups employees, whenever you tender, whenever you turn over that product with a shipping label to a ups employee, then Amazon is going to know that. And they're going to know that look, we gave him this order at this time. And it took them however long to actually to actually turn over,
Over the product and they are going to track this. So if you're going to be using FBM, what you need to make sure is that you've got a warehouse partner over here that can actually react quickly under what they call an SLA. Let's say it's, you know, a couple hours or worst case, 24 to 48 hours. They've got teams of people that come in on the weekends, not just Monday through Friday, that if an Amazon customer orders a product within 24 to 48 hours, they can actually put what they call, pay,
Pick, pack, and ship
The product. Those are the three steps of any fulfillment operation. You want them to be able to pick pack and ship in 24 to 48 hours and then reapplied through an electronic system back to Amazon. So Amazon knows, Hey, your customer ordered from us as a, what they call a third party seller your Amazon customer ordered from us. We received that order. We then shipped it out. As soon as we could under this 24 to 48 hour timeframe. And the tracking number is whatever it is, and it will be delivered on an estimated date range. So there you have it. Those are the three ways to actually, um, sell on Amazon. You've got Amazon vendor, it's got its pros and cons. You've got FBA fulfillment by Amazon. Meaning Amazon makes the sale, sends the customer information to you. You then fulfill the order and you've got FBM fulfillment by merchant. The only program that's invite only is Amazon vendor. Anyone is able to participate under these two programs. Now you think that's it, but actually I'd lie to you. There is another secret way to sell on Amazon. And that is called
Secret Method #4: Seller Fulfilled Prime
This is a big bonus. A lot of people don't even know about this one it's called seller fulfilled prime. What that means is Amazon has actually gone out verified or you're on a three PL that they are certified to some degree that Amazon is saying, we know you're so good. Your metrics prove it. That we are going to let you get that coveted Amazon prime badge. You get the Amazon prime badge, and guess what? You're not even fulfillment by Amazon. You can use your own warehouse with the Amazon prime badge. As long as you can guarantee based on the warehouse and your logistics operation, that you can get the product to the customer in one to two days, that's it seller fulfilled prime. You get the prime badge, you get to have your own warehouse. You get to have control over your operation. You get to have the prime badge, you get more sales, more conversions, more AMA happy, Amazon prime members buying your products through Amazon. So those are the three, actually four ways to sell on Amazon. Thank you so much for watching this video. If you liked it, Hey, like comment. Let me know what you think down below, and I'll see you next time.