Amazon FBA Updates: Say Goodbye To This Customer Feedback Feature

Amazon is removing the feature allowing anyone to comment on a product review, per a Business Insider report. Amazon officially retired the feature on December 16th, 2020.

What relevance does this have for sellers?

Many sellers utilized this feature to respond to customer reviews as a form of customer service.

Furthermore, this likely signals more changes to come, as Amazon noted the development of other opportunities to connect with customers.

Following the update, a few sellers have received emails notifying them of change:

Dear seller,

You’re receiving this email because you recently left a comment on a review.
While reviews and feedback are important to our customers and sellers, the comments feature on customer reviews was rarely used. As a result, we are retiring this feature on December 16, 2020.

We’re committed to your continued success and will innovate and develop other opportunities for you to connect with customers.

Thank you.
Amazon Services

Initially, the removal of this feature has been poorly received by sellers.

“Just like removing customer contact information from the order information page, this makes it harder for good sellers to provide top-notch customer service,” stated one concerned Redditor.

However, the update changes the buyer-seller communication experience, but doesn’t end it. Recently, Amazon FBA updates appear to be centered around the buyer-seller communication process.

Sellers and buyers can directly communicate in the Buyer-Seller Messaging Service. Even so, this service permits direct messages to customers and not visible to prospective customers.

As a result, sellers should continue to monitor Seller Central updates as more information becomes available. As mentioned by Amazon, we’d expect more policy or feature changes concerning buyer-seller communication.

What can you do?

Potentially, your listing copy may be a way to address this obstacle effectively. How so?

Let’s put ourselves in the customer position for a situation. You’re looking to purchase a product, but have reservations due to a recent negative review or stream of bleak reviews with a common theme. In the past, the seller could provide help to quell concerns from prospective customers.

Your listing copy can address these issues without replying directly to the review. If customers are misusing your product in a way that could lead to negative reviews, you might be interested in addressing the issue in the product description.

Of course, making changes to your listing copy results in a temporary decline in ranking. So it may not be worth revising your copy after each negative review. But if a review is affecting your conversions, it might be worth the short-term hit.

Did you ever use this feature? How does this change your selling experience? Drop a comment below and let us know how this affects your selling experience.

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Selling on Amazon vs eBay: Which Is Better?

Online Shopping is seeing year after year growth.  In fact, Retail e-commerce sales worldwide are forecast to nearly double between 2016 and 2020.  If you’ve thought about selling online, now is the time to ride the e-commerce wave to boost revenue.  But which online marketplace should you invest your time, resources, and products?  Should you diversify or go all in on one?  While there are several online marketplace options to sell, we’ll specifically be comparing selling on Amazon vs eBay in this post.

AMAZON SELLERS VS. EBAY SELLERS

In this year’s letter to shareholders, Amazon announced that, “Over 300,000 U.S.-based SMBs started selling on Amazon in 2017.” That’s a lot of new sellers on the platform, and that doesn’t even capture the individuals sellers and larger brands who are all rushing to list their product in Amazon’s ecommerce catalog.

Amazon Sellers

Amazon’s brand awareness as the go-to online store with lightning fast deliveries and excellent customer service draws shoppers like a giant consumer magnet. And that makes it very appealing for sellers. So appealing that many sellers on the platform do not sell their product anywhere else. But with more and more sellers jumping on the platform, competition has increased. And that means customer expectations have increased too.

It’s not enough to ship a product from your garage and have it arrive a week after purchase. Customers want their orders at their doorstep tomorrow. And they want that product to be quality. If it’s not, one bad review can knock down your rating and potentially your conversion rate and your ranking.

Overall, what this more competitive landscape means for the type of sellers on Amazon’s platform is that they are becoming more and more higher-caliber. They are becoming more and more competitive. Those who succeed and win a good ranking position know how the platform works, and they know how to succeed.

eBay Sellers

eBay sellers on the other hand span a wider range. Unlike Amazon, there are not large brand names on the platform. But there is a wide spread of seller types from large, competitive sellers with some brand recognition to the online-yard-sale individuals who are selling single items they are trying to get rid of.

While Amazon sellers battle the high expectations of customers on the Amazon platform, eBay sellers battle quite the opposite: the idea that all items on eBay are used or second-hand. This is probably one of the reasons that eBay sellers list their products on multiple marketplaces. eBay attracts a different kind of customer too, which lends it to certain products more than others.

AMAZON CUSTOMERS VS. EBAY CUSTOMERS

In the selling on Amazon vs eBay discussion, both have unique customer bases that set them apart and make them more or less favorable to certain products. Before you decide where to list your product, you’ll want to make sure that there is good demand for it with the customers on the platform.

Amazon Customers

Amazon is the most popular online store in the United States, according to Statista. It has by far the largest market share for ecommerce. So who are these Amazon customers? Compared to customers on other ecommerce platforms, they are generally more educated and more well-off than the average American. Here are the four most distinguishing traits of Amazon customers:

  1. Younger. According to Digital Commerce 360, over 50% of Amazon shoppers are under the age of 45. Prime customers tend to be even younger than the average Amazon shopper, with 18 – 34 being the most Prime-heavy age group.
  2. Higher Income. Amazon customers are predominantly male and tend to have higher incomes. Amazon captures 90% of the 50 – 100K income shoppers, and 89% of the 100K+ shoppers. And even for shoppers with an income under 50K, Amazon still captures 73% of the market.
  3. Bigger Spenders. Prime members are especially keen on Amazon’s free 2-day shipping and tend to buy more than non-Prime members. And with Prime membership in 64% of US households, that means Amazon customers are spending more on the platform than ever before.
  4. Trust the Amazon brand. Amazon customers trust the Amazon brand for quality products, timely delivery, and excellent customer service if anything does go wrong with an order. Amazon customers are also sometimes unaware that they are even purchasing from a seller at all. Thinking rather that they are purchasing “an Amazon product.”

Overall Amazon has captured most US shoppers, especially those under 45 years old, making over 50K. And since their customers do tend to be wealthier, they come with higher customer expectations. This is especially true of Prime members, Amazon’s biggest shoppers. The Amazon brand is one that customers deeply trust and masks the marketplace experience for customers by providing them with fast shipping and incredible customer service.

eBay Customers

eBay, though not as popular as Amazon, continues to be a big player in ecommerce. According to Statista, “In the first quarter of 2018, eBay reached 171 million active users.” And though smaller than Amazon’s customer base, 171 million is still undeniably significant. Here are the four most distinguishing traits of eBay customers:

  1. Older. eBay customers tend to be older than Amazon customers, with 61% over the age of 45. Like Amazon, they tend to be mostly male.
  2. Medium income. While an exact income range for eBay customers is hard to pin down, it seems to generally be lower than the average income for Amazon customers.
  3. Deal hunters. eBay customers also tend to come in with the expectation that they will pay less for the item they are looking for. While Amazon used to be a lot more competitive on price, customers, especially Prime customers, seem to be willing to pay more for the convenience of 2 day shipping and a wide-reaching catalog.
  4. Less trust in eBay brand. eBay customers do not trust in the eBay brand name in the way that Amazon customers trust the Amazon brand name. Rather, they trust the brand of the seller they are purchasing from. The expectations for customers satisfaction are put on the seller rather than on eBay as the platform.

Overall, eBay is still a significant size market that is more popular with older shoppers, especially those over 45. Since their customers tend to be of average means, they are more motivated to find the best price and pay less for the item they are looking for.  eBay customers are much more aware of eBay as a marketplace than Amazon sellers and trust the brands of the sellers they purchase from rather than eBay’s brand.

AMAZON PRODUCTS VS. EBAY PRODUCTS

The types of products that customers buy on Amazon and on eBay are different. Each platform has its own strengths and draws shoppers for those specialties. It’s important to know these comparisons when weighing up selling on Amazon vs eBay.  

Amazon Products

Amazon’s catalog has 562 million products in its catalog with Clothing, Shoes & Jewelry being the biggest category by far. Amazon’s top selling categories are:

  • Consumer electronics
  • Home and kitchen
  • Publishing
  • Sports and outdoors

eBay Products

eBay’s catalog has well over 1 billion live listings. According to the site, some of its best selling products include:

  • Electronics
  • Fashion
  • Video games
  • Collectibles

While both sites sell electronics and fashion items, Amazon sells far more books than eBay. Amazon also sells more Sports and Outdoor equipment whereas eBay sells more collectible items. Shoppers looking for unique, vintage, or antique items will look to a platform like eBay. And shoppers looking for books, outdoor equipment, and items that they need to arrive quickly will look to Amazon.

AMAZON FEES VS. EBAY FEES

As we look at fees in the selling on Amazon vs eBay comparison, the associated fees are a crucial factor.  We’ve written a fuller blog focused on Amazon seller fees, but we’ll give an overview of both here.

Amazon Fees

Amazon fees vary depending on how the item is sold. There are two main ways to sell a product: as an individual or as a professional. An individual is anyone selling less than 40 items a month. Think college students selling their used textbooks. Professional sellers are those looking to supplement or replace their income, including retail arbitrage sellers, online arbitrage sellers, wholesale sellers, and private label sellers.

Individual Seller

  • Per-item fees
  • Referral fees
  • Closing fees

Referral fees depend on product category but are typically 15% with a minimum fee of $1.00. See the full list of referral fees by category here. Closing fees are $1.80 per item sold and apply only to media items such as books, DVDs, music, software & computer/video games, videos, and video game consoles.

Professional Seller

  • Professional account subscription
  • Referral fees
  • Closing fees
  • Shipping fees (if applicable)

A professional seller account is $39.99/month and replaces the per-item fee charged to individual sellers. Referral fees depend on product category but are typically 15% with a minimum fee of $1.00. See the full list of referral fees by category here. Closing fees are $1.80 per item sold and apply only to media items such as books, DVDs, music, software & computer/video games, videos, and video game consoles. Some professional sellers use Amazon’s fulfillment program (Amazon FBA) to store, pack, and ship their products to customers. FBA has its own fees, which you can see here.

eBay Fees

eBay fees are seemingly less complicated than Amazon fees. But eBay is set up for individual sellers with individual items more than it is set up for sellers with multiple skus (stock keeping unit) and multiple items for each sku. There are two main fees that eBay charges sellers:

  • Insertion or listing fees
  • Final value fee

The insertion fee works a little differently depending on how you are selling your products. If you are selling individual products auction-style, eBay gives you 50 free listings per month with a $0.35 insertion fee after your 50th item.

If you are listing a product with a fixed price and hundreds or thousands of items in stock, eBay will charge you an insertion/listing fee up front and every 30 days until all items sell out or you or eBay closes the listing.

The amount you pay for this insertion fee is calculated based on what eBay calls the total start price of the listing. The total start price is the sale price of the product multiplied by the number of items available for sale. So if you’re selling a $15 t-shirt and have 1,000 on the listing, the insertion fee will be based on a start price of $15,000.00.

The other main fee that eBay charges is a final value fee. The final value fee is a percent of the final amount the buyer pays, including shipping and handling but not tax. Final value fees are typically about 10% with a cap of $750.00. So if a customer purchases all 1,000 of your $15 t-shirts, your final value fee would be capped at $750.00 rather than being the full $1,500.00.

eBay also charges a few additional fees:

  • Listing upgrades
  • Select category fees

Sellers have the option to pay small fees for listing upgrades like bold font, subtitles, international site visibility, dual category inclusion, Gallery Plus, and Listing Designer. These fees depend on the price of the item and the duration of the upgrade. See all options here.

eBay also charges additional fees for items sold in certain categories, including motor vehiclesreal estate, and select business and industrial items.

Who Should Sell on eBay

Because eBay is a smaller marketplace, it is a great way to get your feet wet with e-commerce. You can start selling on eBay with a lot less money, and drop shipping is a viable option. Customer expectations on eBay are lower, and eBay as a platform is more lenient when it comes to requirements for listing your product and customer satisfaction.

Who Should Sell on Amazon

Because Amazon is a bigger marketplace, it is more competitive. That means the cost to compete is higher but also that the reward for success is higher too. There are thousands of product markets that see healthy sales every month where competition is still low. And if you are lucky enough to find one of these markets, the rewards for performing well on Amazon are greater than they will ever be on eBay.

If you have a smaller budget and are thinking of drop shipping, Amazon is probably not the place for you. With high customer expectation, Amazon has strict requirements for their sellers. If you find yourself with too many unhappy customers and late orders, you could be off the platform.

But if you have a bit more of a budget to work with and are looking to sell a large volume of products to a large audience (especially if you are looking to utilize Amazon’s FBA program), selling on Amazon is the way to go.

Recap

Selling online is a huge opportunity for business entrepreneurs.  As you research selling on Amazon vs eBay, you’ll want to know the buyer demographics, marketplace strengths, fee comparisons, and the seller options available to you.

  • Amazon buyers have generally higher income and are younger while the average eBay buyer is older and looking for a bargain.
  • eBay is more lenient with a lower barrier of entry while Amazon is more competitive but with a higher potential for sales
  • eBay has fewer fees than Amazon and will generally be more profitable but requires you to be more hands on with the whole process.
  • Amazon buyers expect higher quality and faster shipping while eBay buyers sometimes assume the products are second hand or less quality.

 

FBA vs FBM: A Full Comparison for Amazon Sellers

FBA is Fulfillment by Amazon. FBM is Fulfillment by Merchant. But what exactly does this mean?

We all want to make money. And most of us would like to do it from the comfort of our home. Or, if you’re like me, from a warm sandy beach. Just look at our Google search suggestions below, and it’s pretty clear that we, as a general population, are looking for a great opportunity to make some extra cash. 

While it may not be for everyone, selling on Amazon is a great way to make money. With the right strategy, tools, and mindset, selling on Amazon can be made simple. There are a few different ways to sell on Amazon, including Fulfilled by Merchant (FBM), Fulfilled by Amazon (FBA), Vendor Express, and Vendor Central. Today, we’ll compare FBA vs FBM by going through the pros and cons of each. When we’re finished, you’ll have a good understanding of the differences between Fulfilled by Amazon and Fulfilled by Merchant. Let’s jump into FBA vs FBM.

What is Amazon Fulfillment By Amazon?

FBA means Fulfilled by Amazon. “You sell it. We ship it” in Amazon’s terms. With FBA, the seller stores products in Amazon’s fulfillment centers where Amazon will pick, pack, and ship those products. How does FBA work? As the seller, you’ll set up FBA in your Amazon account. Create your product listings, prepare your products, ship your products to Amazon, and let Amazon pick, pack, and ship your items as customers order your products.

Amazon FBA Pros:

  • Prime eligibility. Your products are automatically eligible for Amazon Prime free two-day shipping and other Prime benefits such as free shipping and increased chances of winning the Buy Box. With Prime, you’ll likely sell more inventory, since your product is associated with Amazon. The Reputation Institute named Amazon the #1 most reputable global company among the American general public, so it’s safe to say that shoppers typically trust products fulfilled by Amazon itself.
  • Hands-off fulfillment. Focus on important aspects of your business without worrying about fulfilling orders. FBA provides a simplified process of hands-offpacking and shipping. Amazon will also store your inventory in its warehouses, so that you’re not stuck with hundreds to thousands of units scattered across your living space.
  • Buy Box advantages. The Buy Box is the CTA (Call to Action) that leads Amazon shoppers to purchase the product on the product listing. The Buy Box is found on a product page and contains the price, shipping information, seller, and an “add to cart” button. When multiple sellers are selling the same item, one seller will “win” a purchase made on the Buy Box, while other sellers can be found underneath the Buy Box. When Amazon shoppers buy a product, they do so through the Buy Box 82% of the time (as opposed to the “Other Sellers” section). This is why it’s so crucial to win the Buy Box as often as possible. When you’ve got the Buy Box, you’ll likely get the purchase. Many factors determine who wins the Buy Box: from seller rating to order defect rate to customer response time. One of the biggest factors in determining who wins the Buy Box is fulfillment method. Generally, an FBA seller can set a slightly higher price than an FBM seller and still win the Buy Box.
  • Multi-channel fulfillment. Access fast, trusted shipping by Amazon for orders made from other sales channels. Amazon will store your inventory in its fulfillment centers and will pick, pack, and ship them to customers when products sell on your own site or other e-commerce sites. This makes integrating FBA into other channels fairly effortless. Amazon handles the details to save you time, so that you can focus on your business.
  • Lower shipping rates. Depending on the size and weight of your product, the fees associated with selling FBA will typically be smaller than shipping costs you’d spend fulfilling the orders yourself. Amazon is the largest online retailer in the world, and with that comes pretty drastic shipping discounts. Take advantage of those discounts by fulfilling through Amazon. As an example, to ship a 4 pound toaster from San Francisco to New York City in 2 days with USPS, it’d cost $20.05. Talk about crushing margins! With FBA, you simply ship your products to the Amazon warehouse and let Amazon handle the rest of the fulfillment process.

Amazon FBA Cons:

  • Additional fees. FBA fees include fulfillment fees, monthly inventory storage fees, closing fees, and order handling fees. Depending on the product’s category, you may run into a few additional fees, such as a high volume listing fee. You’ll also need to consider the cost to ship the product to Amazon’s fulfillment centers. On top of that, you may run into long-term storage fees and Q4 storage fees.
  • Limited access to inventory. Because your inventory is in Amazon’s fulfillment centers, you’ll have limited access to your products. Inventory can also be harder to track without a hand in the process. Further, if inventory issues arise, you must rely on Amazon to resolve the problems or have inventory shipped back to you.
  • Tax Obligations. Contrary to what you may think, Amazon does not automatically collect sales tax for the seller. To enable tax collection on purchases, sellers have to provide their state tax registration numbers for each state they want Amazon to collect tax for. Sellers can then enable Amazon sales tax collection within the Tax Settings in Seller Central. Amazon will store the inventory in many warehouses across different states, which will constitute a sales tax nexus (or significant presence) in those states. If a seller has a sales tax nexus in a state, he or she has to collect sales tax from people who buy the product and live in that state. As an FBA seller, It’s important to understand your tax obligations.
  • Preparing products. Labeling products can be a tedious process, especially for newbie Amazon sellers. Each unit must be labeled so that the correct item can be picked up from Amazon’s inventory and shipped to the customer. There are two kinds of barcodes that you can use to identify your products: manufacturer barcodes or Amazon barcodes. However, Amazon does provide the option for eligible products to have Amazon apply barcodes for you for a per-item fee, called FBA Label Service. You can also speak to your supplier and have them label for you to help save on these costs.
  • Multi-channel fulfillment is pricey. If you choose to use FBA multi-channel fulfillment, you’ll incur some additional, hefty fees

What is Amazon Fulfillment By Merchant?

FBM means Fulfilled by Merchant. With FBM, the seller lists the product on Amazon and handles storage and all aspects of order fulfillment. How does FBM work? As a seller, you’ll set up an Amazon account. Create your product listings and store, pack, and ship the products as customers order them on Amazon. You’ll take responsibility for any late, missing, or damaged arrivals.

Amazon FBM Pros:

  • Hands-on fulfillment. With FBM, you have more control over inventory, and some sellers certainly see this as a benefit. You store, pack, and ship products, so you can access your inventory whenever you need it. This allows you to take more ownership of the actual fulfillment process.
  • Fewer Amazon fees. Selling FBM, you’ll skip out on paying the fulfillment fees and storage fees associated with selling FBA. You’ll still incur referral fees and closing fees.
  • Opportunity for Prime. Seller-Fulfilled Prime allows all Amazon sellers to access FBA benefits without the increased FBA fees. The criteria for approval to Seller Fulfilled Prime is pretty extensive, and includes having good standing with a Professional Account, existing premium shipping order volume and outstanding performance metrics.
  • Slightly higher margins. Because you’re paying fewer fees without having Amazon fulfill the orders, you’ll likely make slightly more on each sale (depending on the product). However, you’ll likely drive less sales, especially if you’re not Prime. Over half of Amazon shoppers are Prime, and many times they’ll want Prime products, since they’re paying annually for free two-day shipping.

Amazon FBM Cons:

  • More responsibility. When selling FBM, responsibility falls on you. Packaging, shipping, managing inventory… It’s all you. This can be a pro for some sellers, but it gets pretty daunting with high volume products. You’ve got to be on the ball all day, every day, including weekends and holidays. Amazon isn’t there to take the blame if something goes wrong, so be ready to stay on top of everything.
  • Not automatically eligible for Prime. While you can be Prime using Seller-Fulfilled Prime, Amazon will make you work for it. And, you’ll have to constantly stay on top of your game to keep your seller metrics clean.
  • Buy Box is harder to win. Because fulfillment method is a major factor in determining who gets the buy box, FBM sellers will have a harder time getting and keeping the buy box than FBA sellers. FBM sellers may have to set a lower price to win.
  • Overhead costs. – While you won’t pay fulfillment and storage fees selling FBM, you will likely have more overhead costs, including your own storage, fulfillment, and shipment expenses.
  • Missing out on Prime members. Because over half of Amazon shoppers are Prime, 2-day free shipping with Prime is often a purchase criteria. Without being Prime, you’re missing out on many customers who many have purchased your product if it were Prime. Again, you can enroll in Seller-Fulfilled Prime, but it’s a sizable task.

Should I use FBA or FBM?

FBA vs FBM: “Which is better for me?” FBA is typically best for high volume, large margin products. This type of fulfillment is for sellers who are ready/willing to drop the selling price to the lowest possible profit point if need be. FBM is generally good for smaller scale, small margins products or one-offs. Fulfilled by Merchant allows sellers to take control of the fulfillment process without crushing small margins. 

Ultimately, there’s no perfect formula when it comes to FBA vs FBM, and it’s up to you and your business’ needs. If you’re still not sure which fulfillment method to utilize, reach out to a Amazon Seller Coach, who will be happy to assist you throughout the entire process at no cost to you. So, are you thinking about selling on Amazon? Make sure you do your research, so you don’t get into a bad product market. Check out Viral Launch’s Amazon market research tool, Market Intelligence, for extensive real-time and historical data you’ll need to make informed sourcing decisions.

FBA vs FBM: Infographic


When it comes to FBA vs FBM, which do you prefer? We’d love to hear from you in the comments below. 

Related: 
Free Amazon FBA calculator
How to Sell on Amazon: The 3 Keys to Success
6 Amazon Keyword Research Tips from a Listing Specialist