Are you an Amazon seller looking to expand your business and increase your sales? If so, you may be interested in learning about the Amazon Sold by Amazon (SBA) program.
This program, launched in mid-2019, allows eligible sellers to have their products sold directly by Amazon. With SBA, Amazon takes care of inventory management, sales tax, and even uses their dynamic pricing engine to recalculate prices in real-time.
By enrolling in the SBA program, you can benefit from automated repricing, increased exposure through Amazon's A9 algorithm, and the convenience of having Amazon handle customer service and fulfillment. However, there are also concerns about losing control over pricing and potential non-compliance with Minimum Advertised Price (MAP) agreements.
In this article, we will explore the pros and cons of the Amazon SBA program, as well as eligibility requirements and enrollment procedures. Let's dive in!
The Amazon SBA Program is a program offered to eligible sellers that allows Amazon to control the pricing of enrolled products. Its purpose is to provide customers with the lowest prices on the marketplace.
When you enroll in the SBA Program, Amazon sets a minimum price for your products, and you receive a guaranteed payout called the Minimum Gross Proceed (MGP) for each sale.
To better understand the definition and purpose of the Amazon SBA program, imagine yourself as an eligible seller looking to maximize sales and minimize manual repricing efforts.
The Amazon SBA program is designed to allow sellers to enroll their ASINs and have Amazon control the pricing of their products.
The purpose of this program is to provide competitive prices to customers while ensuring sellers receive a minimum profit for each product sold.
Enrolling in the Amazon SBA program allows eligible sellers to relinquish control of pricing, giving Amazon the power to dynamically adjust prices based on their preferred profit threshold.
When you enroll in SBA, Amazon's dynamic pricing engine recalculates prices in real-time, using its A9 algorithm to maximize sales.
Sellers receive a minimum amount for each product sold, even if it sells below the preferred profit threshold.
There are several advantages for sellers in the Amazon SBA program.
Firstly, it allows sellers to offer competitive pricing without the need for manual repricing.
Additionally, sellers receive a minimum amount for each product sold, even if it sells at a lower price than the seller's preferred minimum profit threshold.
However, there are also disadvantages to consider. Sellers lose control over product pricing and may not be able to enforce Minimum Advertised Price (MAP) agreements, potentially devaluing their brands.
Keep reading as we discuss the pros and cons with more details:
One advantage of the SBA program for sellers is that you can benefit from competitive pricing and potentially increase sales for your high-volume products.
By enrolling in SBA, Amazon controls the pricing of your products, ensuring that they are offered at the lowest prices on the marketplace. This can attract more customers and drive up sales.
Also, if you're unable to use Vendor Central for product sales and also wish to avoid potential tax liabilities, the SBA program might be the ideal solution for you.
Additionally, with SBA, you receive a guaranteed payout called the Minimum Gross Proceed (MGP), providing financial security for your business.
Sellers should still be mindful of the potential drawbacks associated with participating in the SBA program. One major disadvantage is the loss of control over product pricing. Amazon sets the price for enrolled products, which may not align with sellers' desired profit margins or Minimum Advertised Price (MAP) agreements. This lack of control can devalue brands and lead to non-compliance with MAP agreements.
MAP agreements are established to achieve the following objectives:
However, participating in the SBA program could possibly result in non-compliance with MAP agreements. Regrettably, when such an agreement is breached on Amazon, it can put brands at a disadvantage. This is mainly because Amazon generally doesn't play a significant role in regulating seller pricing agreements.
Additionally, the SBA program prioritizes driving unit sales over maximizing profits, which may not align with sellers' business goals.
To join the Amazon SBA program, you must have a professional selling account, be enrolled in the FBA program, and be part of Amazon's Brand Registry.
Enrolling in the SBA program is a straightforward process that allows eligible sellers to take advantage of its benefits. To enroll, simply log into your Seller Central account and navigate to the 'Inventory' tab. From there, select the 'Manage FBA Inventory' option and choose the ASINs you want to enroll in the SBA program.
Once selected, click on the 'Actions' button and choose 'Enroll in Sold by Amazon'. It's as simple as that!
The Sold by Amazon program offers Amazon sellers an incredible opportunity to expand their reach, boost their sales, and benefit from Amazon's extensive network. By entrusting Amazon with some aspects of their business, sellers can focus more on what they do best: sourcing, marketing, and growing their product lines.
This program not only enhances the overall shopping experience for customers but also provides sellers with a powerful platform to scale their e-commerce businesses.
If you're an aspiring or established Amazon seller looking to streamline your operations and boost your sales, Sold by Amazon might just be the game-changer you've been waiting for. So, why wait? Dive into this program and take your online retail venture to new heights with the support of one of the world's largest e-commerce giants.
The Amazon SBA program can impact a seller's ability to maintain MAP agreements because Amazon controls the pricing of enrolled products. This may lead to lower prices that do not comply with MAP agreements, potentially devaluing brands.
Yes, sellers can opt out of the Amazon SBA program at any time.
The Amazon SBA program prioritizes driving unit sales over maximizing profits. While sellers receive a minimum amount for each product sold, they only receive full profit if the product sells at a higher price than the minimum profit threshold set by Amazon.
Yes, there are third-party repricing tools that offer similar automated pricing options as the Amazon SBA program. These tools provide sellers with full control over pricing, inventory, and branding.
We are your Amazon experts who provide comprehensive solutions and guidance to drive e-commerce businesses closer to success.
