Over the past six years, Amazon has grown to a whopping 80 billion in sales from third-party sellers alone. However, many third-party sellers still use Amazon FBA, putting their process in the hands of the world's most customer-centric company. Amazon's FBA New Selection Program provides you another reason to pursue it for the sellers who are not part of this program.
This article will delve into the details of this "new selection" program. By the end of this article, you'll have an idea of how you can take advantage of it.
1. What Does the Amazon FBA New Selection Program Offer?
The Amazon FBA New Selection Program offers powerful benefits to new applicants to their Fulfillment By Amazon (FBA) program. These benefits can be a great starting point for new professional sellers, encouraging them to start their Amazon Business on the right foot.
What it "offers" is a reminder of how useful it is to hand your goods over to a Fulfillment Center. FBA sellers have the "Prime" label for their goods. This label informs others your items get to them fast. By doing so, you can focus on marketing, production, and other vital areas of your business.
If you've always wanted to try it out, this New FBA Selection Program offers a series of benefits.
2. Benefits Amazon FBA New Selection Program
- Free Monthly Storage Fees
Amazon offers free storage for each product's first 50 standard-size units under a unique Amazon Standard Identification Number (ASIN) for the initial 90 days. This 90-day period starts from when the first inventory enters your Fulfillment Center.
The item limit is 30 for oversize units.
- Extra Benefits for Clothing and Shoes
Amazon extends its storage benefits for the first 100 products for 120 days for apparel items. The same 180-day service for returns applies to clothing and shoes but also expands to 100 products.
- Free Removals
Among the first 50 standard-size products you place in storage, you can remove those for free within the first 180 days. These free removals also apply to oversize ASINs, but their limit is 30 items.
- Free Return Processing
Amazon will offer complimentary return processing for 20 units of standard-size parent ASINs. Those items also fall under the same 180-day rule as the free removal requirement.
- A $200 Promotional Ad Credit
Amazon will provide you a total of $200 for sponsored ads. This promotional credit allows you to boost your product, familiarizing yourself with the process of creating campaigns.
You will receive the first $100 when you launch a campaign without an end date for an FBA ASIN. You receive the second credit after your campaign for 30 days.
The ASINs do not have to be new to FBA for you to benefit from this. However, your business still has to be fresh to Amazon FBA.
- A $100 Shipping Discount
If you are new to the Amazon FBA business model, they will waive your first $100 worth of shipping with partnered carriers.
Partnered carriers include Amazon's list of providers of truckload shipments. They fit into three general categories:
>> Small Parcel Deliveries (SPD) - They ship smaller groupings of individually labeled packages. These shipments are usually through UPS.
>> Less-Than-Truckload (LTL) - This grouping ships multiple items on pallets or boxes but doesn't need a full-size truck.
>> Full-Truckload (FTL) - These are the most oversized shipments that group multiple items on large pallets that require a full-size semi.
Both LTL and FTL shipments vary in who handles them. Regardless of how much money you can save with larger loads, the $100 credit helps reduce initial FBA costs.
3. Eligibility Requirements of the New FBA Program
To become part of this program, you must meet the following requirements:
- You must be new to the Amazon FBA program
- Professional sellers only
- You need an Inventory Performance Index (IPI) score of 400 (or more)
- You must have an eligible ASIN
Let's dig into the details of those requirements:
How to Become an FBA Seller
Forming an Amazon FBA business model begins by being approved for an account. To do so, follow these four steps:
- Create a standard Amazon Selling account
- Create your product listings
- Establish ASINs based on standard shipping codes (like UPC)
- Ship your coded products to amazon using partner carriers (UPS or other freight shipping company)
- Wait for Amazon to send confirmation of received shipment and start selling
Much of this process involves understanding inventory management. Amazon University has an entire course on that. If you are beginning, start by utilizing the resources given to you by Amazon.
How Does Becoming a Professional Seller Help Me?
First, it's important to note that you can't be part of this program without being a professional seller. Professional sellers have access to more excellent tools to improve their customer service abilities.
Amazon takes preference to those who are willing to pay for their enhanced services. You might think this to be favoritism, but we all know that paying for something is a sign that you feel obligated to make it work.
To become a professional seller, agree to Amazon's TOS and start paying them $40 regularly per month. Professional sellers also get access to enhanced programs alongside the new FBA program. These include the following:
- Amazon Brand Registry
- Amazon LeapPad
- Access to the Amazon API
- Ability to use promotions and gift services as special listing features
If you haven't become a professional seller and sell more than 40 items a month, there's no reason for you not to be a professional seller.
What Factors Impact My IPI Score on Amazon?
A significant part of your Amazon FBA Business Model goes back to your Inventory Performance Index, or IPI, score. This score is high when you are solid at managing inventory. Otherwise, low scores can negatively impact you, causing you to go down in rankings and fail to meet the New FBA Program demands.
Good inventory management comes down to four areas:
- Reducing overstocked inventory
- Improving your 90-day sell-through rate with the right balance of inventory
- Avoiding "stranded" listings
- Keeping your more popular product listings in stock
You track your quality by four varying colors meaning for different quality ratings:
- Dark Green (excellent)
- Light Green (good)
- Yellow (fair)
- Poor (red)
All of these factors mean you should focus on keeping an active and moving inventory. Avoid storage fees by keeping stock moving, and always be sure to avoid stockouts. Amazon wants sellers of quality in their more popular programs.
4. What Makes an Eligible ASIN for the FBA New Selection Program?
Amazon won't accept products they exclude from the new program. To meet these ASIN requirements, you must meet these requirements:
- The ASINs need to be new to FBA
- The parent ASIN should not have been enrolled prior
- It cannot be media (video games, DVDs, music)
- The product cannot be of "used quality"
- It needs to be in the standard or oversize category
- "Special oversize" items cannot qualify
You also cannot bundle previously used ASINs together for a new ASIN. This is because parent and child ASINs are considered to be a single ASIN in this case.
What is a Parent & Child ASIN?
Amazon offers many variants to its products. This area is where child and parent products come into play.
For example, you aren't going to sell many T-shirts if you only sell them in grey. However, going to a different listing for the same t-shirt with a different color isn't very appealing.
To address this, Amazon created a platform that easily allows you to switch between different colors of a t-shirt. You also see them on other product listings:
- Variants in garden hose length
- Different sizes in apparel
- Different voltage levels in batteries
The parent is the product you see first, while the child is the same product in a different form. Typically, the first product you see is based on what sells the most.
5. What Does the Amazon FBA New Selection Dashboard Mean?
To track your eligibility for the new platform, Amazon has a dashboard you can use to track your eligibility. It includes a variety of sections that allow you to pinpoint where you stand on this program:
- Status - Whether you are active in this program
- Eligibility - This shows if your IPI meets the program requirements
- Current Enrolled ASINs - It shows the ASINs you have in the program
- Number of Orders - The number of sales for products enrolled in the program over the past 30 days (compared to the previous 30 days)
- Sales - The earnings from ASINs part of the program over the past 30 days (compared to the prior 30 days)
- Savings - The estimated money you have saved from items sold
- Credit Usage - The available shipping and ad credits you currently have available
Please pay attention to this dashboard closely, as it will give you a good idea of the effectiveness of this campaign. You'll also see the remaining money you have for credits, which might be significant depending on how you set your ad campaigns up.
6. The Amazon FBA New Selection Program FAQ
When Did this Promotion Start?
April 1, 2020
Do I Need To Use My Shipping Credit In One Order?
No, Amazon's shipping credits for this program will last for multiple orders. That means if you only had $50 worth of credit used on order one, you can use the remaining credit on your next shipment.
Are There Regional Limitations for Advertising Credits?
Amazon allows you to use credits towards your country of residence. However, these countries are currently not eligible for the promotion:
How Long Do These Promotional Credits Last?
These Credits can last as long as you are active on the program. However, you are given 30 days from applying your first eligible ASIN to activate the advertising promotional credit. After those 30 days, you risk losing credits you do not use.
How Long Do These Ad Campaigns Have To Stay Active To Be Effective?
Amazon recommends you keep these ad campaigns active for 60 days after their activation. This two-month period provides most products the exposure they need to get off the ground. In addition, this exposure allows the listing to receive greater focus from Amazon SEO campaigns down the road.
What's a Good Ad Spend Per Day For These Beginning Campaigns?
Amazon will set the campaign at a daily budget of $20 per day with a cost-per-click (CPC) of 60 cents. This focus might not be practical when comparing things to your niche, so determine a good starting point depending on the competitiveness of your target.
Dynamic bidding allows you to reduce your ad spend when Amazon's system deems it less practical to bid. It's great to start with Amazon's suggestion if you are a newbie, but take down some notes to see what tweaking the numbers may do.
Do I Need To Be a Professional Seller To Be an FBA Seller?
No, you do not need to be a professional seller to be under FBA. However, you will have to pay the individual seller costs and stick with Amazon's shipping rates.
Also, recall that this new program is not for individual sellers. If you want to be part of the New Amazon FBA program, you need to be an FBA Seller and pay for a professional account.
What Products are Best To Start as an FBA Seller?
If you are a beginner (and don't already know what to sell), try and focus on items that are challenging to break and easy to ship. Avoid the oversize category at first, as those shipping charges can sneak up on you.
If you can, avoid mechanical items that are easy to break in shipment. No moving parts if possible!
Any Amazon FBA business model can benefit significantly from the New Amazon FBA Program. With ad credits, shipping credits, and free storage and returns on your first stock of items, it's a significant boost for those who want a boost to their account. Just be sure you pay for the professional selling service through Amazon before you start the process.
With an opportunity like this, it's best not to squander it. Instead, check out DataHawk's Amazon Advertising platform to ensure you are managing your ad spend and credits effectively.