Monday, April 22, 2024

Amazon SBA Program (aka Sold by Amazon Program) – Is It Worth Your Investment in 2024?

Amazon is a hot marketplace for connecting buyers and sellers online. With the growing competition and challenges, Amazon keeps rolling out attractive plans and programs to gain an edge over competitors and retain its customers. Recently, this e-commerce giant launched the Amazon SBA program aka Sold by Amazon program, to offer the best possible prices to customers.

Amazon SBA supports sellers in automating their services and expanding their business on the platform. It also helps them maintain competitiveness in the marketplace with optimized offers. But if you don’t know who is eligible for SBA and how it works, this is what we will help you with. We will discuss the fundamentals of the SBA program and its pros and cons in this post. So, let’s get started!

  1. What is the Amazon SBA Program aka Sold by Amazon?
  2. How Much Can I Earn from Amazon SBA aka Sold By Amazon?
  3. Who Can Sign Up for Sold by Amazon Program?
  4. What Products Can Be Sold With Amazon SBA?
  5. How To Register Your Items With Amazon SBA aka Sold By Amazon?
  6. Pros and Cons of Amazon SBA aka Sold By Amazon
  7. How is Sold by Amazon (SBA) Different From Fulfilled by Amazon (FBA)?
  8. Final Thoughts

What is the Amazon SBA Program aka Sold by Amazon?

Sold by Amazon (SBA) is a special program designed to scale businesses with FBA listings. In this selling program, Amazon solely manages pricing, shipping, customer dealing, and even item returns.

With Sold by Amazon, the sellers don’t need to worry about anything, as Amazon takes charge of the pricing of the enrolled products to ensure it stays competitive. Moreover, it constantly monitors, adjusts, and changes the price to offer the best deals to customers at all times.

Sellers who join SBA must define and agree on a minimum price that they will receive on each sale of their products. This is the amount of profit you would get on your goods. Once you set this amount, Amazon runs its dynamic pricing model to compute the prices in real time. It measures the prices by analyzing other similar items on the platform and even external marketplaces like Walmart, Target, etc.

With the SBA program, you always receive the profit amount on each sale regardless of the price Amazon sold it originally for. Even if Amazon sells it at a price less than the set profit, you still get your share without any difference. Moreover, if your product is sold at a higher price, you receive a full profit of the sale price, which means it is a win-win situation for the sellers.

Additionally, Amazon manages the stock of inventory and provides shipment support for the enrolled products. It also allows access to Amazon’s Buy Box, which boosts the discoverability of the products and increases their sales immensely.

How Much Can I Earn from Amazon SBA aka Sold By Amazon?

When you begin to enroll your product with the SBA program, Amazon sets an amount according to the price of the product, which will be paid to you on every sale. This is called “Minimum Gross Proceeds” or simply MGP, which Amazon quotes itself.

You cannot negotiate or change this amount. If it doesn’t match your expectations, you may not register the product altogether.

On each sale, Amazon pays you the listed price of the item or the decided MGP (the highest of the two). For instance, if your item has been listed at $30 on Amazon and sold at the same price, Amazon will pay you the highest amount, which is $30 minus the fees, even though the MGP was $25. Similarly, if your item is listed and sold at $15, but your MGP is $20, you will get $20 minus the fees.

Therefore, by settling on an MGP upfront, you avoid any monetary loss from Amazon sales since it adjusts the prices of the products and maintains competitiveness.

Who Can Sign Up for Sold by Amazon Program?

Joining the Sold by Amazon program is completely free for all sellers enrolled in Amazon’s Brand Registry and FBA. However, you must fulfill a set of criteria to participate in the program.

To be eligible to join the Sold by Amazon program in the United States, you must meet the requirements listed below:

  1. Having a professional selling plan and verified business account
  2. Participation in Amazon’s brand registry
  3. An approved product catalog
  4. Obedience to Amazon’s seller agreement

If you are a new seller and fulfill the above criteria, you can join Amazon SBA easily. We have discussed the complete signup procedure in the upcoming sections.

What Products Can Be Sold With Amazon SBA?

Amazon is a well-maintained platform with strict guidelines and clear policies for the buyers and sellers on the marketplace. To enroll or sell products with Amazon SBA, consider the following requirements:

  1. The product must be new.
  2. It should have a valid Universal Product Code (UPC) or European Article Number (EAN).
  3. It should comply with Amazon’s Seller Agreement.
  4. It must not be hazardous.

With these guidelines, Amazon aims to ensure and promote a safe purchasing experience through SBA offering top-quality products to buyers.

How To Register Your Items With Amazon SBA aka Sold By Amazon?

Any eligible seller can register products with Amazon SBA aka sold by Amazon. If your products meet Amazon standards, you can register them following the steps given next:

  1. Navigate to your seller account.
  2. Open Settings and select Account Info from the drop-down list.
  3. If you have an eligible ASIN, you will find a registration button for SBA. Click this button to register your account for SBA.
  4. After registration, your products will not be enrolled automatically. You must select your products individually for enrollment.
  5. Go to Manage Inventory to select the Sold by Amazon option in the menu.
  6. You will find your eligible products in this list and the Minimum Gross Proceeds (MGP) Amazon is offering for each.
  7. Click the Enroll button next to the ASIN you want.

That’s it! Following these steps, you can successfully enroll your products. You can even unenroll products at any time you want in only two simple clicks.

Pros and Cons of Amazon SBA Program aka Sold By Amazon

Still hesitant to give pricing control to Amazon? Here’s a list of pros and cons to help you decide better.

Pros

  1. Amazon manages your pricing and you control the listings
  2. It is completely free to join
  3. It provides a tax-exempt certificate
  4. It allows you to select which products you want to enroll with SBA
  5. It lets you unenroll your products at any time
  6. It gives you fair MGP, protecting you from surprises
  7. Buyers feel safe purchasing products under the SBA program
  8. No major investments needed
  9. You can continue driving traffic with your previous sponsored ads

Cons

  1. MPG amount is not fixed and can change according to the margins
  2. Amazon provides no sales guarantee
  3. You lose control over your product pricing
  4. It may devalue your brand by setting insanely low prices

How is Sold by Amazon (SBA) Different From Fulfilled by Amazon (FBA)

Users often misinterpret SBA and FBA services and confuse the two. It is important to know that the two are different and work differently.

Fulfilled by Amazon (FBA) was launched several years before the Sold by Amazon (SBA) program to facilitate sellers with a unique set of requirements. Meanwhile, SBA was introduced to enhance the visibility and market competitiveness of products. Therefore, it is important to highlight how the two work.

Let’s take a closer look at the differences between SBA and FBA programs to understand them better.

SBA

FBA

The seller is responsible for shipping products to Amazon’s fulfillment centers, and then Amazon delivers them to the customers

Amazon is responsible for receiving, securing, and shipping products to customers

Amazon owns the products

Third-party sellers own the products

Amazon sets the prices and controls the sales

Third-party sellers set the prices

Amazon sends the product proceeds to the seller

Amazon takes care of the order fulfillment

Sellers enrolled in FBA and Brand Registry can participate in SBA

Non-Amazon sellers can also join FBA

It was launched in 2019

It was launched in 2006

FBA is a prerequisite to this program

It doesn’t require any enrollment

Final Thoughts

Selling on Amazon needs effective strategy and planning. Amazon SBA program aka Sold by Amazon is an attractive plan for sellers who want to boost sales and visibility on this high-competition platform. It helps them maintain competitive product listings and enhance customer reach while limiting control over the product. However, if you want to take charge of your product, FBA can work for you better. So, the final decision depends on you. Consider the pros and cons of Amazon SBA and FBA programs thoroughly and make the decision accordingly.