Amazon started off selling all of the items on their website themselves. You’d place an order for a book, and Amazon would fulfill and ship your order directly.
But since launching, Amazon has now expanded into a marketplace. That means many of the items sold on Amazon are actually sold by third party sellers. In fact, over 50% of Amazon sales are now driven by third party sellers!
So how do you know you’re getting a legit product when you place an order? Does seeing “Sold by Amazon” protect you? That’s what we are digging into today…
The 3 Types of Amazon Sales
First, you have the “Ships from and Sold by Amazon” option. You can see this under the Buy Now button.
This means that Amazon purchased the product as inventory, and your order is shipped directly from an Amazon warehouse. Because of this, it’s less likely (although not impossible) that you’ll receive a counterfeit or fake item.
Second, you have the “Ships from Amazon, Sold by 3rd Party Seller” option:
This means the item is from a 3rd party seller’s inventory that they shipped in bulk to Amazon’s fulfillment centers. Amazon will fulfill and ship your order, but it’s not inventory they own directly.
Third, you have the “Ships from and Sold by 3rd Party Seller” option:
This means that the 3rd party seller both owns the inventory and ships it directly from their warehouse. Amazon is strictly functioning as the marketplace that collects payment and connects you to the 3rd party seller.
Brand vs. Seller Name
The brand and seller names can get confusing. The brand name doesn’t mean that the item is sold from there or verified, simply showing that the company manufactured the accessories or clothes. The seller info is listed separately and you can find it right below the “add to cart” or “buy now” options.
Amazon doesn’t control the shipping speed when a third party sells a product. In other words, your goodie may take longer to arrive. Plus, if you encounter any issues, you must return the item to the seller instead of Amazon.
Sold by Amazon (SBA) Program
Amazon created the SBA program in 2019 to continue providing the best prices to customers. SBA allows brand owners to have products sold and shipped by Amazon. Sellers can enroll their products in the program, transferring the goods to Amazon until a customer purchases them.
Sellers have the opportunity to earn proceeds on the sale. A downside is that the owner sacrifices control over pricing. Since Amazon uses a dynamic pricing engine and real-time, gathering data from similar products and markets, sellers could see a lower product price. In turn, they have to ask: is this worth it?
How To Know if Amazon Sells a Product
The sidebar filter on the Amazon homepage can guide you to specific products. Here are a few simple steps to determine what Amazon sells.
Log onto your web browser and type what you’re looking for, then hit the search button. Navigate to the department section. Click on what matches the product, and choose Amazon.com as the seller.
Confirm that Amazon sells the product before you grab your credit card. The corresponding page should continue to say that Amazon sells and ships the item.
SBA vs. FBA
Wait, what’s FBA? FBA stands for “Fulfilled by Amazon.” Okay, what’s the difference between the two?
In the SBA program, Amazon prices the products and owns the transactions. Amazon passes the proceeds to you and allows you to sell the product. On the other hand, the FBA program gives sellers the chance to price products and own transactions, then Amazon fulfills the shipping process of products.
Are you confused? Don’t be.
In simpler terms: FBA acts as a prerequisite for the SBA program. Amazon manages the packing and shipping after you create the listing of items. You can store your products in the warehouse, where employees pick, pack, and ship the items to the customer. Amazon also handles other concerns, like returns or product inquiries.
Pros of SBA
Here are a few upsides to enrolling in the sold by Amazon program:
- Taxes – Amazon handles the sales taxes or issues a tax-exempt certificate. In other words, no icky paperwork for you to fill out.
- No cost – You can join the program for free. Amazon takes out deductions after you start selling stuff.
- Streamlined prices – Amazon sets the most competitive prices for products, meaning you don’t have to waste as much time or effort managing different sales.
- Selection – You can choose which products you want as a part of this program. You can have several or only a couple.
- Listing optimization – The program only controls pricing, so you can continue to optimize as you see appropriate.
- Assurance – Buyers appreciate getting authentic Amazon products. Amazon is a respected site that millions of people use every day for big and little purchases.
Cons of SBA
What about the downsides? Nothing’s perfect:
- Minimum gross proceeds – Amazon sets a minimum return for a sale, so you might see low margins per sale. Additionally, this number isn’t fixed. They review products after six months. Then, Amazon decides to change the amount, and you don’t have a choice in the matter. The only option if you’re dissatisfied is to unenroll your products.
- Limited benefits – SBA doesn’t guarantee more sales since Amazon is more concerned about the buyer than the seller. SBA may not meet all of your business requirements and you’ll still likely have to spend money on Amazon Advertising.
- Publicity – You don’t have the chance to earn as strong a brand reputation, even if SBA allows you to sell products at a premium price.
Overall, we can’t say whether or not most sellers benefit from the SBA program. Sellers must decide if this works for them with lots of planning and determining what product to post on Amazon. The good news is that most of us reading are likely buyers and not sellers. If you are selling on Amazon, be sure to check out our Amazon ➡️ Google Sheets integration.
But you still want to be aware of where your purchases come from. Look at the next section for more insight into some downsides of ordering online and how it affects your purchase.
Counterfeit, Unregulated, and Hazardous Items
You want to be safe when you order from Amazon. A huge downfall of the Amazon selling tag is that many items aren’t regulated for health or safety standards. You don’t want to buy products from sketchy third-party vendors. Nonetheless, Amazon fails to ensure the quality or guarantee of some places.
Prime items, or the items shipped and sold by Amazon.com, are appealing. But they could have issues. Our advice? Buy directly from authentic manufacturers. This is especially important if you’re buying something expensive.
While we established that these programs are great for some small businesses, sellers give utter control to Amazon, handling all aspects of the sale, warehousing, and shipment. Third-party merchants send their products to warehouses, reaching a broader audience.
With that in mind, Amazon is all about speed. So, products get mixed no matter who the individual sellers are. Think about it this way; counterfeits can mingle with authentic products without any protection. Amazon wants to deliver the best products, but selling a few bad apples here and there affects businesses.
Users post negative reviews of counterfeit products on the original page instead of accusing the profiles that planted them. Therefore, counterfeits damage authentic brands with complaints that the product isn’t as expected.
Enrolling in Prime doesn’t prevent these risks either. Amazon hosts over three million marketplace sellers. Amazon houses and ships countless items from various brands daily. So, it’s no wonder counterfeits can sneak in here and there.
Things To Keep In Mind
Buy exclusively from the real Amazon store. Double-check that you get a product that’s shipped and sold by Amazon. This means the product comes directly from Amazon Retail via Vendor Central or Vendor Express.
Amazon has a stronger hand in setting the price and sending the product. That said, you may still encounter issues with counterfeits. Items are combined by barcode, coming from the brands or other distributors. Employees grab the product that you order from a close warehouse. You could end up with a third-party product, which may or may not be authentic.
You should limit purchases to products sold by the brands from an authorized account. Or other businesses that have a partnership with Amazon. The good news is that the return process is simple if you get a fake product. When you buy from the manufacturer, they handle fulfillment, and you may not get the answers you want.
You’ll also generally be safer if you’re purchasing products with a long track history on Amazon. Use an Amazon sales estimator to get an idea how many units a product is selling given its BSR (best seller rating).
Review your order before buying from Amazon. If you change the size or color, the purchasing location could change too.
So, What Does “Sold by Amazon” Mean?
So, What does “Sold by Amazon” mean really? It is another way of verifying that you’re getting a good product from the warehouse. You might encounter issues with the order, but it’s less likely than when dealing with a third-party vendor. When you order online, you might run into problems, but it’s easier to deal with Amazon customer service than reach an elusive business.
You could always resort back to old-fashioned shopping and get out of the house. If you haven’t had good experiences with a certain product, maybe it’s time to go in-person shopping instead of scrolling and clicking to add items to your cart.