Amazon is testing a new product that lets it control third-party product prices as its pricing policy draws criticism. On its website, Amazon states that this new program, called Amazon SBA, “provides a new, hands off the wheel selling experience for FBA listings that are designed to help sellers grow their business.”
Amazon is trying to compete with Walmart, eBay, and other such platforms by wanting control over 3P seller prices. With SBA, Amazon gets the liberty to control the prices of your products. This basically allows Amazon to establish a more controlled marketplace. In return, buyers get Minimum Gross profit, or MGP, which is currently set to be revised every 6 months. MGP ensures that sellers will never receive less than the agreed amount of a product. But it is imperative to note that MGP will be adjusted to suit the new price if the product is sold for more than the agreed amount.
According to Amazon, SBA doesn’t cost anything additional to FBA, which charges sellers a fee to store and ship items from Amazon’s warehouses with Prime Shipping. With SBA, Amazon also exerts control over the product’s sale price, by dynamically pricing products to make sure Amazon’s prices are lowest. Other than FBA, you also need to be a brand owner or be a part of the Amazon Brand Registry. You will also get a chance to choose which products you want as a part of your new listing. This means you do not have to enroll the entire listing, should you wish.
With SBA, you get the BuyBox, since Amazon aims to lower the prices of your products. SBA listing will replace FBA listing, which means no additional costs for the buyer. However, Sponsored Ads are not a part of the Amazon SBA as of yet. In addition, SBA gives your products the tag of ‘Sold By Amazon’ which means increased brand value for your product.
Amazon SBA was launched in August and currently is on an Invite Only basis. What are your views on this? Do you think about this new program? Let us know in the comments below!
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In this post it clearly define everything the way Amazon is using SBA to control the product and with what how it’s controlled the marketplace. Good post though !
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