Since its start, Amazon Prime has presented a daunting challenge to competitive retailers, and after nine years, its influence continues to grow. Originally offering free two-day shipping on about 1 million items, Prime now does so on over 20 million — and has added free streaming of over 40,000 movies and TV episodes along with access to over a half million Kindle books to the subscriber package.
Even with Amazon's recent increase of the annual membership from $79 to $99, few in the industry expect that popularity to fade. In a sense, Prime is a loyalty program on steroids, with members reportedly spending up to 150 percent more once they sign up.
Prime, coupled with Amazon's consistently low prices, is a tough proposition to battle if you're another online retailer — that is, unless you take a few easy steps to become an Amazon Marketplace affiliate, allowing you access to Prime services and its broad base of customers.
The first step for sellers is to sign up for Fulfillment by Amazon (FBA). With FBA, Amazon maintains inventory for the marketplace retailer, ships orders directly to customers, and manages customer support and returns. For many of these affiliates, Amazon's vast network of distribution centers gives them an opportunity to greatly increase their available inventory, thus making higher-volume selling possible. That may translate into the ability to slim down margins in order to keep pricing competitive.
And obviously, when listing on Amazon, price competitiveness is one of the key metrics to getting good positioning on the site's product pages and placement of a much valued "Buy Box" by your listing.
Once retailers sign up for FBA, Amazon Prime access comes at no extra charge. The upside is obvious: fast, free, reliable fulfillment to the vast and growing population of loyal Prime members. Especially for product lines new to Amazon, Prime can be an effective way to rapidly ramp up sales volume.
However, it's important to remember that, while free shipping can be the clincher, a successful offering has to have all the right elements in place. Vendors need to understand all the factors that can affect sales on Amazon — from effective keyword usage and thorough product descriptions, to responsive pricing — in order to win the sale on the world's most active online marketplace.
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