How to Become an Amazon 3P Seller

Bryant Garvin

March 12, 2019

These days, more than 50% of Amazon’s sales come from third-party sellers. If you’re one of those brands who stopped receiving purchase orders from Amazon recently or are simply hoping to become an Amazon Third-party (3P) seller, this post is for you.

The good news? If you’ve got some determination, good products and work ethic, you can build a scalable business as an Amazon seller.

Become a 3P Seller

Before you get started, it’s important to understand a few things about Amazon and Amazon sellers. Amazon directly sells products from a variety of brands like Nike, and also has its own private label goods. Less than half of all sales are by Amazon, and the remaining transactions are all done by third-party sellers.

Amazon’s goal is to offer the best possible prices and the widest range of products online. That’s why existing retailers and entrepreneurs can list their own products for sale. 3P sellers can do extremely well by offering competitive pricing and top-notch products.

Here’s how to become an Amazon 3P seller:

Set up an Amazon 3P seller account

Before you can start selling on Amazon, you need to set up an account. To do this, you’ll have to prep a few things:

- Individual Seller or Pro Account

- Make sure you understand Amazon’s selling policies & seller code of conduct

- Gather your business details

If you’ll be selling fewer than 40 items a month, you can choose to be an Amazon Individual Seller. This means you’ll pay 99 cents per sale plus transaction fees.

Amazon Seller Central

For businesses planning to sell more than 40 items, you’ll need to sign up for an Amazon Pro Seller Account. This means that you’ll pay a subscription fee of $39.00 and transaction fees.

And if you’re manufacturing your own products, you can choose to have an Amazon Vendor account and become an Amazon wholesaler if you meet certain requirements. It is invite only for those brands that are considered nationally distributed brands currently. There are pros and cons with Vendor Central for manufacturers and brands. Recently Amazon quit sending purchase orders to thousands of those selling through the Vendor Central platform causing many to question the long term viability of choosing this route.

When you set up your Seller Central account, you’ll also need to choose where you’ll ship from and to, and include your bank and contact information, along with your legal name and address.

Set up a seller profile

Once you have an active account, you can complete your seller profile. This is where customers can see information about your company, review feedback from past customers, and see your return and shipping policies.

This is also where you can tell customers all about your business, share your mission or company philosophy, and create an emotional connection with your potential customer.

List your products

Now you can list the products that you’d like to sell in the marketplace. If your product is already for sale on Amazon, you can use the descriptions and stock images on the site. You just have to describe the products and list how many you have available.

If you are moving from Vendor Central to Seller Central all of the product (ASINs) you were already selling will make this process simpler. All of the content and images you created for your products in Vendor Central should stay.

If you are a manufacturer or brand you want to make sure you take advantage of Amazon’s Brand Registry.

If you have a new product, you’ll have less competition but you’ll need to provide a UPC/EAN Number, SKU, product title, description, bullet points, and images.

Choose your fulfillment method

You have two options when it comes to shipment and fulfillment. The first is Fulfillment by Merchant (FBM). That means that it’s your responsibility to maintain inventory, label, package, and ship your products to each customer.

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The second option is Fulfillment by Amazon (FBA) this means that your inventory is stored in Amazon’s fulfillment centers, and you don’t need to worry about packaging and shipping. However, if you do choose FBA, you’ll need to meet the prep requirements. These include correct labeling, removing any other scannable barcodes, and packaging each unit within one secure package.

Poly bags must have warnings to prevent suffocation, and expiration dates must be clearly marked in the correct format. There are also a number of other prep requirements that you must follow in order for your products to be accepted.

Additional considerations for running your own 3P account

Tax Nexus Creation:

Before deciding to go the FBA delivery option as a seller it could create tax consequences because you still own the inventory until it is sold. The Supreme Court ruled in June 2018 that marketplace sellers, holding product in marketplace distribution centers (Amazon Fulfillment Centers) create a Tax Nexus for each state the distribution centers were located.

3P Forecasting:

You are completely responsible for maintaining stock inventory levels that are consistent with demand.  Both FBM and FBA will require you to retain enough inventory in your warehouse or in the FBA warehouses and regularly restock inventory to ensure that you are in stock on all products.  

Out of Stocks:

If Amazon runs out of inventory of your product, it will be marked “Out of Stock” and the BuyBox will defer to another seller who will win the BuyBox in the place of your seller account.  If all sellers are out of stock – the product detail page will no longer be searchable other than through an amazon.com/dp/ASIN url direct search for the product.

Out of Stock issues will affect your ability to leverage Amazon to grow sales more than any other thing. I refer to this as the “Amazon Death Spiral” - where because you are out of stock, your advertising is shut off, your sales rank drops, and you quickly lose any organic keyword ranking.

This will also open you up to unauthorized sellers jumping in to sell your product and fulfill the demand that is there, but you are not capturing because of inventory issues.

3P Customer Service:

As a seller of a product, you will be responsible to respond to customer inquiries and process returns.  Amazon Seller Central mandates that customers receive a response no later than 24 hours after they submit a question including weekends and holidays.  If you fail to respond within the proper time, you may have your account suspended.

3P Payment Terms:

Amazon will pay you twice a month and notify you after each payment.  There are several costs and deductions that are taken out of your Amazon payments similar to accruals.  These costs include:

- FBA Shipping Costs - Aggregated costs of all shipping FBA costs

- Seller Commission Fees - % of total retail value of the product based on category

- Long Term Storage Fees - Additional fees for products held in Amazon’s fulfillment centers over 6 months.
- Promo Rebates - for any discounts or concessions provided to customers

- Advertising Costs

- Premium Account Monthly Cost

3P authorized wholesale partner - the Pattern model

Another option available to brands and manufacturers is selecting to use a 3P authorized seller. This is where Pattern traditionally partners with brands. Pattern buys inventory from a brand and resells the inventory on the Amazon marketplace, (and others like eBay, Jet, Alibaba etc) as an authorized seller.

Pattern takes inventory risk and assists by reinvesting margins in to brand growth via content & advertising, brand protection, and brand global distribution.

The seller (Pattern) under this model will list on their own seller central account & select the fulfillment method based on margin economics and how to best represent the brand and enable sales on the Amazon platform.  

Pattern always buys inventory directly from a brand and provides a prime eligible offer whether it be through FBA, Seller Fulfilled Prime, or FBA On-Site.  

By using the above steps, you’ll be able to set yourself up as an Amazon 3P seller. Of course, there are a number of other things to consider along the way, and we can help with any questions or concerns. Get in touch to learn more.

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Sept 27, 2022

Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)
Sept 22, 2022

How an Amazon SEO Agency Should Be Serving Your Brand

If you’re in the global ecommerce space, you are most likely aware of Amazon, and probably selling your products on the marketplace. With over $470 billion in sales in 2021 alone, Amazon stands as the third largest company in the world based on revenue. The ecommerce giant is a household name in the U.S. and working hard to grow its market share across five continents worldwide.

Having your products available on Amazon and being competitive there, though, are definitely two different things. If you want to really succeed on Amazon, you’ll need specialized insight into how Amazon works and how to make it work for you. So, for many brands, it’s a great idea to work with an Amazon Search Engine Optimization (SEO) agency.

At Pattern, Amazon SEO optimization service is one of our key competencies. We understand that technology, data-driven insights and expertise  are the most important tools brands can leverage to win top listing spots on digital marketplaces. With expert teams and years of experience, we help brands conquer the Profitability Death Spiral as they compete with other products and sellers online. We offer Amazon SEO agency services as a core solution to brands that need more resources to get ahead. 

What is an Amazon SEO Agency?

An Amazon SEO agency serves brands by improving their products’ rank and listing performance on Amazon. They make strategic decisions about ad spending and placement that lead to higher traffic, conversions, and revenue for ecommerce brands.

A great Amazon SEO Agency partner will:

Prioritize Your Success

Unfortunately, many Amazon SEO agencies profit in unfair ways from your brands’ perceived success based on the ROAS numbers they provide. This is done through including branded search terms in ROAS reports, which naturally skew listing performance

Let’s say, for instance, your brand is called “Annie’s” and you sell lollipops. Your brand has a very high likelihood of winning the top listing spots on Amazon for lollipop search terms that are paired with “Annie’s,” your brand name. So, SEO agencies will spend your ad money on those terms and report a very high ROAS. 

To avoid scenarios like these, it’s best to look for an agency that either calculates their profits on metrics other than your ROAS scores or weighs branded search terms differently in the performance metrics reports. Regardless of your Amazon SEO agency’s cost structure, you should align onbranded search terms before committing to a scope of work.

Provide Detailed Competitive Insight

A great indicator of a high-quality Amazon SEO agency is the level of insight they can provide into your competitors’ listing positioning and how it compares to yours. Data fanaticism is so important at Pattern that we’ve developed proprietary technology to display this exact information with precise detail for every brand we work with. In fact, you can find our free version here to see how you compare to some of your top competitors based on ASIN.

It’s certainly possible to improve your Amazon search performance with blind spending strategies. But a truly great solution will help you to know where your dollars are at their most powerful and competitive.

Reduce Your Ad Spend Over Time

Amazon’s A10 algorithm prioritizes customer satisfaction—it wants to show consumers the best products that align with their search intent to improve conversions and sales. So, the best way to gain momentum on Amazon is to work on incremental wins. 

Improving your performance on more obscure search terms that align with your customers’ search intent is a great way to increase ROAS for the long term. A10 will reward your success with better rankings on higher-volume search terms and the virtuous cycle can help you conquer your most-coveted listing spots. And the best part? This process of gaining momentum, if done right, will naturally decrease your ad spend over time as Amazon recognizes your value and works with you to keep your products at the top of consumers’ search results.

Amazon SEO Optimization and More

As an Amazon SEO specialist, Pattern knows how to help your brand win better success for long-term profitability on Amazon. With our data-driven tools and brilliant teams of ecommerce experts, we help brands with listing management, content optimization, Amazon ad strategies, and more.

Contact us to learn more about our SEO optimization services.

Sept 20, 2022

4 Ecommerce Marketplace Consultant Must-Haves

Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces. 

Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.

So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.

Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products. 

What is an Ecommerce Consultant?

An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.

An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.

Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.

1. Brand Obsession/Specialization/Passion

At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services. 

2. Proven Results

It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.

3. Wide Range of Marketplace Expertise

It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.

4. Network of Resources

The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.

Achieve Your Ecommerce Goals With Pattern

Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces. 

With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.

Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.