Are Amazon Prioritizing FBA sellers over FBM sellers?
Since we have changed our sales from FBA to FBM we’ve experienced a steep nose dive in sales figures despite being the lowest priced supplier for our products.
Are Amazon Prioritizing FBA sales over FBM sales?
And if they are should we contact The Office of Fair Trading / Trading Standards regarding the matter?
78 replies
Seller_72Sy9T6sEfmjl
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yes
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why? Amazon are doing nothing wrong - Amazon is not a search engine it is an ecommerce platform which are invited onto and Amazon can serve their customers in the way they think fit.
Seller_XwROWrYVrGQMc
I don’t believe it happens. Fbm sellers do have the basket and better sales if the price of fba seller is not competitive
The basket is not about pricing alone either. If your product, customer service or listing has been subject to dispute, you lose your bargaining power.
Sales are low because the Web team and the technical team have got the search algorithm wrong. The articles are not coming up on amazon searches anymore. Random articles come up and random get sold. The search feature has been dysfunctional for the past few months.
Seller_cJms0GbotqqtV
Yes, they are upfront about this. FBA sellers’ stock is automatically available to Prime customers. FBA sellers also have an advantage over FBM sellers when the buy box is awarded. This seems to affect sales, because a fair number of buyers either assume the buy box is the best offer (often it isn’t), or can’t be bothered to do the couple of extra clicks/swipes that are required to access all available offerings of a product.
There are no grounds for seeing this an unfair trading. All sellers have access to FBA and the possible advantages it offers. Only if Amazon were selective about who can and can’t have FBA would there be any grounds for complaint.
Paul
Seller_lt0vdQSvuVUco
I’ve posted this reply on another thread, but think it relates to this one, so re-posting here.
I think there can be little doubt that some form of manipulation is now going on. It seems to be driven by two things. When Amazon “ask” (and I use the word in a Darwinian sense) a buyer to follow a course of action and they don’t, Amazon punish that lack of compliance by a drop in sales. Secondly, when a seller adds new stock to the site, Amazon reward that implied dependence by increasing sales of other items that the seller already had listed.
I believe that there’s very much a system of “preferred sellers” when it comes to product searches on Amazon. If a product has few (or no) offers by preferred sellers, down it goes in the search rankings. If a product has many (or exclusively) by preferred sellers, up it goes.
I also believe that the first criteria taken into account by the Amazon Preferred Seller search algorithm is type of seller. First in the pecking order is, of course, products Amazon are selling themselves, followed by FBA sellers and lastly FBM sellers.
Of course, such a system would be based up what Amazon wants a customer to buy, based in turn with which Amazon would prefer to prosper, rather than what product would best suits the customer’s needs.This method of manipulation would be covert and not openly challenge Amazon’s claim to be customer focused, and so the illusion could still be maintained.
This wouldn’t be anything of a surprise or revelation, as it would be in line with what we already know and what Amazon already admit: Paying for Sponsored Products increase search standing. In other words, pay and Amazon will boost a certain product. The next step to Amazon boosting search results of product from which they benefit more (albeit more indirectly) from the sale of, is a very small one.
Seller_94VWxluF6zYyI
When I asked a similar question in the middle of another thread about a year ago I was shot down for conspiracy theory nonsense. It was argued that people opt for PRIME because they want it the next day and that’s why my FBM sales had suddenly nosedived. However people were paying the £3 P&P Amazon charge if you don’t spend £20 (when we were offering free P&P for FBM)
We manufacturer our items (not ship them in from China and rebrand) and so we are the only seller on our listings (FBM and FBA on a handful). We noticed the exact same thing: while sales are good to start with FBA, they’re only really replacing what you would have sold with FBM. And when you don’t have a size in stock in FBA we don’t sell it on FBM… And once all your stock has sold it takes about 2 weeks before we’ll start selling the FBM stock back to a normal level.
Seller_HR310RAxZYXnH
It seems highly likely that Amazon do reward FBA sellers over FBM sellers. Why wouldn’t they? They get paid more fees from FBA sellers that FBM sellers. I have frequently heard FBM sellers saying they don’t want to pay Amazon any fees and that’s why they sell FBM - to get more profit. Trouble is it’s an incorrect assumption. You don’t get more profit - because you get less sales!
So it’s a choice you have to make. You pay your money and get to a preferred sales position, or you don’t and you take the punishment.
FBA sellers do have to pay for the advantages they get, including the ability to use Sponsored Ads, getting Prime customers and keeping their shipping metrics up because Amazon does their shipping. They don’t have to worry about bad weather, undeliverable addresses, returns etc. They pay for all those services within their FBA fee.
Amazon is a big business and for them, every little helps, including getting FBA fees and adevrtising revenue from FBA sellers. It comes down to the bottom line in every business, ours as well as theirs.
It’s perfectly understandable and common business practice. Nothing you can do about it. You just have to think more carefully about what choice you want to make regards fulfillment.
Seller_DlnasvFyAyS3W
Amazon as a corporation are going to face some challenges in the near future… they basically take government subsidies and then use these to cover losses on the competitive parts of their business. Breaking up Amazon is in the works, it has been mooted in Washington, DC many times and will happen in due course.
In the meantime, yes of course they favour FBA, FBA makes them a fortune because they pay their staff so little that they all need to government help to live. Plus Bezos is an enemy to the Republican party and they are going to be in power for a long time to come.
Seller_lt0vdQSvuVUco
What you have to realize is that Amazon prefer sellers to be FBA. There#s many reasons for this. I’ll list just a small number of them.
They get to rent out storage space at at least 3x what it would cost to have it stored in a private warehouse. Yes, they offer fulfillment, but a seller pays for that anyway at point of sale, and no doubt Amazon make an extra cut by charging more than the delivery costs them.
If you have stock with them for over 12 months, then they really go in for the kill with long term storage fees. A truly bizarre concept, as you’ve already overpaid for the storage before that point.
When your stock is in a fulfillment centre, they have control of it. You can’t pull the stock and put it on another sales platform or sell the items through a physical outlet, because it’s it’s not in your possesion. To regain that control, you have to pay to get the items returned to you. This locks the products into sale on Amazon, thus stiffling competition.
So it’s a triple-win for Amazon when you commit goods to FBA. So from their perspective, it makes sense to reward sellers who fall in line with their system by boosting their sales. Of course, that in turn punishes those who don’t by shifting more of their sales to those that do by whatever means of manipulation they can exert.
All FBM sellers are now feeling the effects of this, but light is at the end of the tunnel. As Amazon put more and more of a squeeze on FBA sellers to keep shareholders happy and share prices high and rising, including the recent FBA price hike, more and more of them question the viability of the program. As more leave, less product is available to purchase through Prime, and subscriptions are cancelled. This will cause a vicious downward spiral which becomes exponential. Eventually, the system will lose its “clout”, share-holder confidence will crumble as prices start to fall and the whole FBA system will collapse.
Seller_eGKchd347dDW0
FBA seller get more points for a listing ITS A FACT
You will 100% sure win BUY BOX if you price is same.
As a fact you can have few % higher price and you will win i know it 100% as i do have listings FBA and FBM.
I dont thing there is exact formula, but YES FBA get much more sales and you can price more
We have some listings FBA and some FBM
I can only say if you dont sell FBA - you are playing in kinder garden and you will NEVER get massive sales
I am not saying you should sale FBA
Mix & Match is working for us
Some positions work for FBA some for FBM
It takes time to figure it out
