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Thu Aug 8 2019 17:09:16

Amazon SBA Treats Sellers as Suppliers

By: Ina Steiner

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We're still trying to wrap our heads around a new program from Amazon called SBA (Sold by Amazon). Today, CNBC reported on the new program that sounds like a hybrid form of drop-shipping with repricing thrown in. "When a customer purchases a SBA product, Amazon will purchase the product from you, and sell it to the customer," Amazon explains on its website.

SBA listings will appear to customers as "Ships from and Sold by Amazon.com," just like products sold by Amazon itself, and Amazon is the seller of record and handles online sales tax.

Amazon sets the price, and brand sellers must agree to a "Minimum Gross Proceeds" (MGP) upfront; Amazon can sell SBA items for less than MGP, but if it does, it will still pay the seller the MGP. "You will be paid based on the sales price, or the Minimum Gross Proceeds (MGP), whichever is greater."

Sellers who must be careful about MAP pricing requirements should fully explore the implications - Amazon states: "SBA will manage pricing to drive competitiveness and will not incorporate any manufacturer MAP policies. However, each listing enrolled in SBA will have a Minimum Gross Proceed (MGP) - you will never receive less than this amount, protecting your margins (see FAQ #3). We recommend working with your brands to determine where SBA makes sense for you."

Standard selling and FBA fees will apply, but there are no additional fees for joining or participating in the SBA program. Sellers will continue to manage their listings and inventory the same way they do for their FBA listings. And while sellers can't currently run Sponsored Products ads or Lightening Deals on SBA listings at this time, Amazon is "working on enabling" those features.

What about returns? "For volunteering as an early adopter, Amazon will handle product returns with no additional cost to you at this time. Should this change, Amazon will notify you in advance."

According to the Amazon website, "To be eligible for SBA you must register your brand through Amazon Brand Registry, have a Professional Selling account, and have your products registered for Fulfillment by Amazon Services (or FBA)."

In an overview of the new program, Amazon writes, "Sold by Amazon (or SBA) provides a new, hands off the wheel selling experience for FBA listings that is designed to help Sellers grow their business. Sellers choose which products to enroll in SBA, and once enrolled, these products are priced by Amazon. Amazon's pricing engine will make pricing adjustments so customers receive competitive prices."

Not only do many Amazon sellers use repricing programs to optimize pricing, which can be in constant flux, but Amazon's own repricing is legendary - Business Insider wrote last year that Amazon changes product prices 2.5 million times a day based on customer's shopping patterns, competitors' prices, profit margins, inventory, "and a dizzying array of other factors."

eBay has also been trying to influence sellers pricing practices, and it is working toward becoming a "Managed Marketplace," according to eBay CEO Devin Wenig.

But SBA is about more than pricing, and could be related to other changes it has made to its product-sourcing methods. There has been a lot of talk about Amazon moving vendors from Vendor Central accounts to Seller Central accounts.

CNBC described the SBA test program as letting Amazon "control third-party product prices in exchange for a minimum payout to sellers."

The publication said a spokesperson told it "the SBA program is designed to "save time and increase sales by automating prices so they can consistently and effortlessly offer customers great prices." It's also meant to provide sellers "peace of mind that they will never receive less than the agreed upon amount for that product.""



Comments (11) | Permalink

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Perminate Link for Amazon SBA Treats Sellers as Suppliers   Amazon SBA Treats Sellers as Suppliers

This user has validated their user name. by: toolguy

Thu Aug 8 22:15:14 2019

We can all look forward to some form of SBE

Amazon beats eBay to the punch once again. . . . .

Perminate Link for Amazon SBA Treats Sellers as Suppliers   Amazon SBA Treats Sellers as Suppliers

by: Whatever This user has validated their user name.

Fri Aug 9 13:16:52 2019

Can these idiots make it any harder to sell???  I love it actually because the buyers are actually waking up and learning how to comparison shop just driving more traffic to my website

Perminate Link for Amazon SBA Treats Sellers as Suppliers   Amazon SBA Treats Sellers as Suppliers

This user has validated their user name. by: The End

Sat Aug 10 21:44:58 2019

DON'T EVEN THINK ABOUT IT JOSH.

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by: Flying Childers This user has validated their user name.

Sun Aug 11 07:18:35 2019

I have had a brick and mortar store for many years in a small tourist town in suburban NY.  I also sell vintage and handmade items on Etsy.  
Without a doubt, Amazon has destroyed retail shopping and made it unrecognizable from what it once was.  From Manhattan to Main Street once thriving shops have been put out of business directly or indirectly by the Big A.
Now Dr. Evil, aka Jeff Bezos, is not going to be happy till he destroys online shopping as well.  It’s just not enough to be the richest man in the world.  
If there is any internet giant that should be dismantled it’s Amazon.

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by: timeaftertime This user has validated their user name.

Sun Aug 11 13:40:23 2019

If ''the SBA program is designed to ... provide sellers ''peace of mind that they will never receive less than the agreed upon amount for that product.'' ''  (Another grammar star writer, it should be  '' 'xxx' '' not all quotation marks)

YEAH RIGHT - the price they felt bludgeoned into because there may be no other reasonable way for them to sell their item ????

Toolguy, are you looking into your crystal ball?  What might be the next step after eBay forces managed payments onto sellers ?

Perminate Link for Amazon SBA Treats Sellers as Suppliers   Amazon SBA Treats Sellers as Suppliers

This user has validated their user name. by: DeathFromAbove

Sun Aug 11 14:13:26 2019

This is exactly the sort of thing that the new antitrust investigation needs to put under a microscope.  This will in no way help sellers, or consumers.  It's just another accelerant to put anyone smaller than amazon out of business.  It will make prices so low that competing is impossible, so amazon just steps in and takes over when you fail.  They get a 40% commission when you sell things at a loss, then they get all of your business when you are forced to quit.  Then they can set the price at whatever level they want.  Very definition of anti-competitive and unfair business practices.  They have way to much power over our retail market - it has to end.  

Perminate Link for Amazon SBA Treats Sellers as Suppliers   Amazon SBA Treats Sellers as Suppliers

by: Chicago48 This user has validated their user name.

Mon Aug 12 01:14:37 2019

Glad I'm not FBA.  I anticipate a lot of FBA/warehouse sellers will pull their goods from AMZ warehouse and sell out of their basement again.  I watch a lot of Youtube / Ebay/AMZ influencers and in the background they have rooms full of inventory that they ship to AMZ/FBA.  I don't think they will do it anymore and will ship from their basement.  This new move by FBA will effect the 40% Chinese who ship to AMZ warehouses the most.

Perminate Link for Amazon SBA Treats Sellers as Suppliers   Amazon SBA Treats Sellers as Suppliers

by: Chicago48 This user has validated their user name.

Mon Aug 12 01:15:55 2019

Additionally, this SBA/FBA plan can only apply to NEW, packaged, and in excellent condition goods.  Those who sell Used/collectibles won't come under this plan.

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by: mcposty This user has validated their user name.

Mon Aug 12 18:33:26 2019

This is just amazon competing with its sellers more. Its a basic drop ship model that they will control what they pay you for something. Same model as wayfair.

Its a suckers deal because there will be no negotiating the price

Perminate Link for Amazon SBA Treats Sellers as Suppliers   Amazon SBA Treats Sellers as Suppliers

by: booklover27 This user has validated their user name.

Thu Aug 15 12:45:42 2019

Visibilty for our products is already dead.  The amount of blocking is unbelievable.  At anyone time 80% of your inventory has low visibility (just go through your list of items and find your products on the main search box).  They also block visibility geographically, by product, if they are selling similar product, you have to wait till they sell out, Also by product description and many more nefarious methods that need to be looked into.  Amazon hides the truth better than any company or government.  What I don't understand is where is the competition? Where is the Federal Trade Commission.  SBA (sucked-dry by Amazon)

Perminate Link for Amazon SBA Treats Sellers as Suppliers   Amazon SBA Treats Sellers as Suppliers

by: purpleiris This user has validated their user name.
Web Site

Thu Aug 15 14:20:01 2019

I hope all of those who sell on these sites send the incriminating evidence the DOJ is requesting from all of us. I would send everything you have, not just what they are focusing on because they may be unaware of other ways in which they are violating fair trade and antitrust laws.



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