MODULE

1.09 Essential Amazon

Terms Glossary

A helpful reference 3PL - Third-Party Logistics

list of Amazon selling
terms and acronyms They will organize all the shipping and logistics into

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Amazon (or another platform)

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▶ A company that handles warehousing and fulfillment

▶ Great for storing inventory somewhere other than Amazon

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• For example, storing 5k units at a 3PL may be less expensive than
storing at Amazon, especially if sell-through is slow. Then, gradually

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send batches of units from your 3PL to Amazon

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▶ Can also ship to other fulfillment channels (like Shopify)
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▶ Can also put packaging together for you

▶ See our recommended 3PL companies

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Alibaba - Chinese sourcing marketplace

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▶ Possibly the largest sourcing website in the world

▶ Has suppliers from around the world - not just China

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▶ Only about 10% of factories in China are on this site for a variety of
reasons - meaning it’s still a good idea to visit China or other potential
sources in person
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▶ Great starting point for sources for new sellers

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▶ Easy to source

▶ Caveats:
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• Lots of competition since this is an easy and accessible

sourcing marketplace
• Larger order quantities required, often 1k units or more

1 Essential Amazon Terms Glossary

Module 1.09

Aliexpress - Smaller version BSR - Best Seller Rank

of Alibaba ▶ Publicly visible “ranking”

▶ Marketplace also by Alibaba ▶ Shows how well your product is selling in

▶ Smaller orders allowed a category compared to other products

▶ Generally higher price/unit • Applies to main and sub categories

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▶ Brand analytics (if your product is brand

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ASIN - Amazon Standard registered) show you what keywords people
Identification Number use to find your item

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▶ Unique identifying code assigned to items ▶ Don’t worry too much about using this as a

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by Amazon success metric since it measures unit sales, not
▶ Used in their catalog money. Worry more about sales and profits,

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not unit volume
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Backend - control panel of your
Amazon seller account Child - a variation listing
▶ This is a variation of a product
▶ Seller Central administrative control panel
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▶ For example: a parent listing is a backpack, and

▶ This is where you manage everything: listings,
the child listings are the different color options
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pricing, marketing and ads, download reports

of the backpack
and analytics, view sales, etc.
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▶ Customers never see this, hence “backend” Containers - giant metal boxes used
in shipping
Brand gating - protection of
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▶ 20 foot and 40 foot varieties - 40’ most common

brand exclusivity
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▶ Everything is loaded into one to ship overseas

▶ When a brand is gated, Amazon prevents all but
authorized sellers from selling products ▶ When discussing shipping quotes or order
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of this brand quantity, sometimes it’s discussed by container

capacity (aka how many units will fill up
▶ You can request it, but generally Amazon assigns
a whole container)
brand gating on a very limited basis
▶ Typically not shipped on pallets in containers
▶ Big brands like Nike or Apple use this to help
prevent counterfeits

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CTR - Click-Through Rate Feedback - There are two types:

▶ The percentage of how many people actually
Seller feedback and
click on your ad out of how many people see Product feedback/Reviews
your ad
▶ Customers leave product reviews about
▶ Allows you to gauge how well your ad is your products

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performing ▶ Customers leave seller feedback about
you as a seller

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Disposal - Extra inventory that you

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▶ Seller feedback:
want to get rid of
• Customers rate your service as a seller
You can request that Amazon destroy the

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(communication, time to ship, if item
inventory or donate it to charity is as described, etc.)

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• Keep this above 98%, or you risk issues
EXW - Exworks
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like losing the buy box

▶ You’re responsible for the shipping process from ▶ Product reviews/feedback:

the moment it leaves the factory to when it
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• Critical for the health and sales of your listings

arrives at its destination
• Indicated by the number of stars out of 5
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▶ Responsibilities include transfer fees, shipping on your Amazon listing

costs, insurance, customs, etc.
• Extremely crucial metric
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• Keep above 4.0 stars at all times

FOB - Free on Board
if possible; > 4.5 even better
▶ As opposed to EXW, FOB means the factory
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pays for shipping and insurance from the

factory to the port
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• i.e. Shanghai factory says FOB Los Angeles,

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meaning they’re responsible for shipping and

insurance from Shanghai to LA

• Once it reaches LA, you’re responsible

for shipping and insurance from LA to its
destination (your warehouse,
FBA warehouse, etc.)

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FNSKU - Amazon barcode • Example: you call your freight forwarded to

Unique product identifier, assigned let them know that your shipment is ready in
by Amazon Shanghai. They’ll handle everything in transit,
then contact you when the shipment is about
▶ You can opt to use the product’s existing UPC to be delivered to your door/warehouse/etc.
instead, but then you risk They then let you know how much you owe

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“commingled” inventory for customs fees, etc.
• Commingled = other sellers’ inventory mixed

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▶ They can help ship directly to you, directly to an
with yours (aka if two other sellers are selling
Amazon warehouse, and more
the same product, all of your inventory is

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pooled - difficult to control quality of what your ▶ See our list of recommended freight forwarders
buyers receive this way)

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▶ Using FNSKU instead of UPC is highly recommended
Hijacker:

▶ Amazon provides FNSKU labels, which you can
print and use to cover existing barcodes
on a box
• Alternately, have your factory print the FNSKU
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Another seller who tries to take over
or piggyback on your listing
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▶ Hijackers sell the same product (one they bought
from you, often at a discount; or if not your

barcode directly on the box private label, they also bought inventory) or a
• OR, have Amazon label the boxes themselves similar product (counterfeit, slightly different
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once they arrive at their fulfillment center version, etc.)

(for a fee) ▶ These are notorious on Amazon

▶ Having your products in the brand registry can

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Freight forwarders: help protect you, as you can file complaints

with Amazon
Companies that handle all of the shipping
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logistics from your factory to the • Patents, copyrights, trademarks, product

destination differentiation can also help
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▶ Some people use UPS, FedEx, DHL, etc. for air ▶ Hijackers can harm you by stealing sales
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▶ However, if you do large shipments, you’ll most
likely ship by sea or air freightFreight forwarders
handle shipping paperwork,
customs clearance, etc.
• They can take some of the buy box time
away from you
• They can undercut you
• They can sell authentic damaged product or
subpar counterfeit product that will hurt your
brand reputation

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Keywords and search terms: LTL: Less than Truckload

Are words and phrases relevant ▶ Shipping term (typically for palletized product)
to your product for how much space a shipping container takes
up if less than a full container
▶ Keywords are relevant terms to describe
▶ For example: if you ship 4 pallets, this does not
your product

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fill the container to capacity - this is LTL
▶ Search terms are what customers enter in the • So as not to ship a near-empty container,

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search bar when they’re shopping. This is what they will fill the container with other people’s
they will use to find your product shipments too

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▶ More expensive than FTL (full truckload)
Landed cost:

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▶ When you’re starting out, your shipments
The total cost to make and transport your
probably won’t fill a whole container

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product from the factory to the Amazon
warehouse (or end destination)
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MAP: Minimum Advertised Price
▶ Landed cost includes manufacturing costs,
▶ Retailers cannot advertise a brand’s product
shipping/freight costs, freight forwarder fees,
below a certain set price - the MAP
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packaging costs, customs, taxes, etc.

▶ Retailers CAN sell below MAP - they just can’t
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▶ Essentially, all of the costs that went into getting

advertise that they are
your product to its final destination - this is much
• This is why sometimes you see “add to cart to
more than just the cost to manufacture
see price” when shopping online
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Listings:
MOQ: Minimum Order Quantity
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Your product page (or brochure) on Amazon

▶ This is the minimum quantity a factory will
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▶ Your product page serves as your advertisement produce in one order

▶ Listings include all the information you can enter ▶ Not always firm - you may be able
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to describe your product to your customer: to negotiate lower

• Product title • i.e. MOQ of 1k units to 500 units

• Product descriptions ▶ MOQs are often lower outside of the US

• Product photos and higher within the US

• Product videos

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MSRP: Manufacturer Suggested ▶ Includes benefits such as free fast shipping,

Retail Price music & other media, grocery delivery,
discounts at Whole Foods, and more
▶ Often used as a marketing tool
▶ Free fast shipping is what applies to you as
▶ i.e. set your MSRP to $20 on Amazon then sell
a seller - Prime members are spoiled
for $15 so that customers think they are getting
and impatient

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a 25% discount

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Profit margin: your profits after
Multi-Channel Fulfillment:
costs are factored

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Selling through multiple channels
▶ Selling price less all of your fees and costs
▶ You can use your FBA account to make sales

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(manufacturing & shipping costs (landed costs),
through other storefronts (such as Shopify)
marketing fees, storage fees, etc.)

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▶ Amazon will directly ship the order to the
▶ This is different from contribution margin,
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customer, even if they ordered elsewhere
which is only sales price less cost to make
(such as Shopify)

▶ Other 3PLs (not just Amazon) will do this too ROI: Return on Investment
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▶ Indicates how quickly your money is

Prep Center:
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working for you

Prepares your products for fulfillment ▶ This is critical, especially because sometimes you

▶ Labeling or bundling
have good profits on a product, but not good ROI
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▶ Try to have labeling and bundling done at the

factory unless absolutely necessary Removal Order:
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When you have returned inventory shipped

▶ For example, if your bundled items are coming
back to you
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from different manufacturers and being shipped

to the Amazon FC
▶ When a customer returns an item and/or Amazon
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decides inventory is unsalable

Prime:
▶ Turn off automatic removal orders in your
Amazon’s subscription membership with settings, so that Amazon doesn’t ship one or two
several key benefits packages to you constantly - have them hold
▶ Prime Membership can be purchased at a
unsalable inventory instead and then ship larger
monthly or yearly fee less frequent quantities back to you

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Restricted: UPC/EAN: Universal Product Code/

Some items are not allowed to be sold European Article Number
on Amazon ▶ Unique product identifier that work worldwide

▶ Hazardous goods ▶ Obtained from 3rd party companies

▶ Some medical products

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VAT: Value Added Tax

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SKU: Stock Keeping Unit ▶ Depending on the foreign country, different

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▶ This is a code you determine that identifies your “taxes” might already be
products in your inventory part of the price

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▶ Amazon will assign one randomly if you don’t ▶ Applies primarily outside of the US
▶ It is better to assign SKUs yourself with a

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▶ You will have to remit that amount if you are
sequence that makes sense to you
selling those countries
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• Especially important for sellers on multiple
platforms/channels

▶ Include variations
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▶ Example: if you are selling shirts in multiple © Freedom Ticket, All rights reserved.
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colors and sizes, SKUs could be: Shirt-S-Red, No part of this document, including the text, data, graphics, inte-
Shirt-M-Red, Shirt-L-Red, Shirt-S-Blue, etc. rior design and cover design, may be reproduced or transmitted
in any form without explicit consent from Freedom Ticket.
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Ungated: Prior permission given

to sell in certain categories
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▶ Some categories require permission, such as

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most collectibles (i.e. coins, fine art, memorabilia),

automotive parts, etc.
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▶ Being “ungated” gives you permission

▶ When starting out, avoid these categories

7 Why Selling on Amazon is a Good Opportunity