Amazon FBA PL Basic
Knowledge & Terminology
What is Amazon.?
It's an internet-based
enterprise that sells either directly or through a middleman between other
retailers. In a broader sense, we can also say that it is a search engine where
sellers meet buyers and buyers meet sellers for goods and services.
Fullfilment Center: Its amazon storage
warehouse in marketplace.
Fullfilment Fee: Its amazon rate for
fulfilling the order in the light of shipment size or we can say that it’s the
fee for order pick and pack in regards of the shipment.
Referral Fee: It’s the referral fee
that is based upon the product base price. Most probably, referral fees are
different for different categories. However, it lies b/w 8 % to 15% of the item
price.
Storage fee: It’s a storage fee
for the seller through Amazon's FBA model for facilitating their inventory in
the Amazon warehouse.
Long-Term Fulfillment
Fee:
Amazon charges you the fee if your inventory is aged or older than 360 days.
Amazon Liquidation
Inventory:
It’s a process that Amazon does offer to its sellers for excess or unsellable
inventory to create the fulfilment order so that Amazon can later liquidate
your inventory, provide you with the recovery value, and charge you their fee
for the whole arrangement.
FBA: The full form is
fulfilled by Amazon, including all the labeling, handling, storage, and
delivering.
FBM: Full Form is
fulfilled by the merchant, whereas the seller himself handles all the handling,
labeling, and deliveries and keeps updating Amazon by maintaining their book at
Amazon.
Amazon Revenue
Calculator: It’s the way to determine the product cost and its net profit
margin before touching the marketplace to sell. However, we can also say that
it’s the estimates fees to check for FBA/FBM to sell on Amazon.
Amazon Standard
Identification Number (ASIN):
ASIN is specifically
assigned to products by Amazon for identification purposes. It would be similar
to the UPS/EAN for the product at the Amazon fulfilment center.
Amazon Shipment Rate
Model:
Amazon provides the two shipment based models as mentioned below:
Per Item/Weight-Based: Shipping rates are
according to the per item weight.
Price Banded: The shipment rate is
determined according to the item's total price.
A9 Algorithm: It’s the system that
determines how your products appear in Amazon's search engine. It depends upon
the different factors. A few main points are listed below:
- Listing Title
- Listing bullet points
- A Plus Content
- Product Images/Videos
- Review /Ratings of Product
- Competitive Price
- listing keywords, indexing, and
many others, etc.
Account Health: This is the seller's
performance that indicates where you stand in the eyes of Amazon or the buyer.
Moreover, It depends on
the three things mentioned below:
- Customer Service Experience
- Policy Compliance
- Shipping Performance
Customer Service
Experience (CSE): It holds the buyer's overall analysis of your services and
goods, for example, the order defect rate, negative feedback, or any refund
claims by the buyer.
Policy Compliances: It is the Amazon
terms and conditions for sellers to maintain discipline and quality assurance,
whereas any breach of the general seller agreement can’t be committed.
Shipping Performance: It reflects the
seller's shipment performance in terms of late shipment, valid tracking rate,
and pre-fulfillment cancellation rate.
Inventory: It’s the amount of
the goods/product available to ship. It should not be in excess, nor should it
be in shortage.
Index Performance Index:
Short Form IPI, it’s
the indicator the gauge seller overall inventory performance. It depends upon
the inventory condition, excess inventory percentage, FBA sell-through rate,
stranded inventory percentage, and FBA in-stock rate.
Standard Inventory: It’s the inventory at
the Amazon store that needs to be fixed to make it sellable.
Unfulfillable inventory: it’s the inventory
that is damaged and not in a condition to sell again.
Dispose off: It’s the option that
Amazon gives you to destroy your inventory in the case of unfulfillable inventory.
However, Amazon charges a minor fee for doing so.
Return to Address: It’s the way Amazon
allows you to return standard inventory or unfulfillable inventory to you on
demand.
Amazon Promotion Type:
From time to time,
Amazon allows its sellers to promote their products with deals, on special
occasions, or by continuously providing coupons and promotion offers to grab
market share. There are four types of offers, as mentioned below:
- Deals
- Coupons
- Prime Exclusive Discount:
- Promotions
Deals: it normally includes
promoting your product on a specific deal page in consideration of the Amazon
fee for the deal.
Coupons: Amazon continues to
provide you with a way to promote items through coupons. Amazon also has a
coupon page, where all the items are displayed with a coupon tag discount.
However, Amazon charges a coupon fee per unit ordered.
Prime Exclusive Deal: Amazon continuously
provides you with the Prime Exclusive deal, whereas, you can offer discounted
rates to Amazon Prime customers. There is no fee for the Prime Exclusive Deal.
Promotion: It works in the same
way as the Prime Exclusive Deal, but it is open to all Amazon customers as well
as other platforms on social media to attract traffic and convert it to the
Amazon product detail page.This is absolutely free to enrol in.
A/B Testing:
It's a way to
experiment with the main image, A+ content, bullet point, and title of the
product that carries the most popularity among customers to win buyer favour
for sale conversion.
Business Report:
It’s a way to detect
the seller's performance, either sale-wise or buyer-session-wise.
Subheadings of the
Business Report:
- Page View: The
number of visitors to your Amazon store. However, Amazon considers each
store as a different page, so far, wherever customers visit more than one
store. Each will be considered as an individual page view.
- Session: It’s a
set of user interactions with your Amazon page in a certain time frame.
However, this user would go to your multiple Amazon stores for different
products, which would be considered a different page impression but
considered as one session.
- Order
Session Percentage:
It’s the indicator that shows how many orders were placed with the number
of unit sessions in a certain time frame. The order session percentage is
also considered the conversion rate. It is calculated as (number of unit
sessions)/number of ordered.
Basic Amazon Ads Terms:
As a big platform,
Amazon does organise its system, whereas every seller gets the Amazon Ads
programme to promote their product in terms of the competition by targeting a
specific keyword, category, or competitor product. There are a few subterms
that would help you understand Amazon advertising metrics, as mentioned below:
- Placement: The place
where Amazon advertises your product on a specific query or page.
- Budget: The
specific amount that you are willing to pay to promote your product.
- Bid: The amount
the seller is ready to pay for the shopper to click on your advertisement.
- Cost per
click (CPC):
This is the average cost you are paying each time shoppers click on your
ads.
- Cost-per-thousand
impressions:
the average cost you pay to deliver 1000 impressions of your ads.
- Advertising
cost of sale:
It’s the indicator that reflects the ratio of your total spend over the
total attributed sales during that period. It's better to draw the thin
line of your ACOS before setting your profit margins.
- Click
through Rate (CTR):
It’s the ratio of the total number of clicks to the total number of
impressions during that time. It's good to have a CTR greater than 25 % in
terms of the visibility of your product.
- Impression: The
number of your ads that pass through the eyes of the buyer.
- Return on
ad spend (ROAS):
This is a measure of how much you earned for every dollar spent on
advertising, or it is the ratio of total attributed sales to total
spending.
- Return on
Investment (ROI):
This is measured by the net profit gain divided by the cost of buying the
item.
Brand Advertising
Category:
- Sponsored
Ads: It’s a
way to promote the individual products you sell on Amazon.
- Brand-Sponsored
Ads: More
specifically, it’s an additional feature of sponsored ads that promote
your Amazon brand store dashboard.
- Sponsored
Display Ads:
It’s a self-service that Amazon provides to help reach the relevant
audience on and off the platform.
- Automatic
Campaign:
It's for the beginner, who don’t have the product research and market
analysis with respect to competitors and the right audience. As a result,
Amazon determines whether to run ads on specific Amazon data collections
based on product listing content. Moreover, the best practice is to run an
auto campaign for a minimum of 2 weeks and then, through report analysis,
check which keywords, ASINs, or categories are best for running ads in a
manual campaign.
- Manual
Campaign:
It’s a more organized campaign, whereas sellers manually define the
keyword and ASIN or category targeting.
Manual Keyword
Targeting:
1.
Exact Match: For this campaign, exact match keywords are used to run ads
that range from singular to plural and vice versa.
2.
Phrase Match: It carries the phrase match keywords in order except for
prepositions in between them or prefixes and suffixes.
3.
Broad Match: This ad will be triggered by the keywords without any sense of
order, except that the exact match will be included.
Auto Targeting:
1.
Closed Match: IT carries the keyword that is closely related to your
product.
2.
Loose Match: The ads will be run, whereas the keyword is comparatively
close to the match.
3.
Substitute Match: It’s a type of campaign that
shows the ads on the detailed page of a similar item.
4.
Complementary Match: It’s a type of campaign that
shows the ads on the detailed page of the complementary item.
Brand Registry:
Brand registry is a way
to register your store on Amazon, to protect your products from hijackers or
create a hike following of brand loyal customers.
Brand Analytics:
It’s a special feature
given to all the brand register sellers and vendors so they can review their
brand position with respect to their market share in relation to their
competitors. In other words, we can also say that it’s the overviewing eye of
the brand seller to watch the market more in depth.
A Plus Content:
It will provide you with a more
detailed module template for your Amazon product detail page to express your
story to your buyers.
Vine:
It's a programme that allows you
to give away free items to the Amazon Vine community in exchange for reviews.
This programme will charge you the Amazon miner fee to enroll in it.
Save and Subscribe:
It’s the way that
Amazon allows its customers to save 5 to 20 percent by signing up for auto
deliveries.
Backend Search Terms:
The series of keywords
that Amazon allows you to add in your listing, which will later help you to
search for your product using those keywords to rank and index.
By: Junaid Masood