Understanding the language of Amazon is half the battle of getting started as a successful Amazon seller. So, we've gathered twelve Amazon terms that every seller, new or old, should be familiar with. Each of these terms has been picked to help you better understand the platform and get the most out of it.
An ASIN, or Amazon Standard Identification Number, is a ten-digit alphanumeric code that Amazon generates for every product being sold through their site. It's how they organize their catalog and keep track of their inventory.
ASINs are important to sellers and their customers because they provide a way for people to find an exact product on Amazon using an advanced search. For example, if you're selling a hairbrush, someone can find your exact hairbrush using its ASIN, whereas searching for "hairbrush" will display generic search results.
You can find a product's ASIN by going to its product page and finding the section of the URL with the product name, followed by "/dp/", which is followed by the ASIN. Like so:
Alternatively, on that same product page, you can scroll down to the box labeled "Additional Information" and find it listed there. ASINs are created automatically when you upload a product to Amazon's catalog, so there's no need to create one.
A SKU (Stock Keeping Unit) is another string of letters and numbers used to identify different products. Unlike ASIN, however, you can create your SKU (pronounced "skew") yourself, giving you a lot of flexibility and power over how it relates to your products.
For example, let's say you're selling green and blue hairbrushes. You can create a SKU using the type and color of the product and combine it with a number that's significant to you (if you were born in January of 1980, your number could be something as simple as 198001). When turning this into a SKU (which has a 40 character limit) it might look something like this:
This makes keeping track of your inventory simple, especially if you're selling on other websites, like eBay. Identical products don't need to have different SKUs (you can use the green hairbrush SKU for 500 green hairbrushes if you want), though each listing is required to have a unique SKU.
You can let Amazon create a random SKU for you, though you'll miss out on being able to tailor it for yourself. If you create your own SKUs correctly, you should be able to create a system that is intuitive and organized.
Fulfilled By Amazon (or FBA) refers to products that are held and shipped by Amazon. You essentially ship your inventory to Amazon's warehouse (for a fee) and they handle the rest of the process for you. It's an extremely simple and powerful way for sellers to use Amazon to their benefit.
Fulfilled By Merchant (FBM) is the alternative to FBA, which means that you are using Amazon's website as a platform for selling your products, but you are still handling the logistics of delivering your products to your customers.
The option you choose will depend on your needs, goals, and resources. FBA is superior for most use cases. If you don't have any logistics resources in place, then relying on FBA is a great option. It's also a customer-friendly option since your products will automatically be added to Amazon Prime. Using FBM, however, you can save a lot of money and keep track of your inventory the way you want to. Some large products are more suited to FBM because the FBA fees are high for these products.
ACoS refers to the Average Cost of Sales, which is Amazon's way of figuring out what percentage of a product's sales went towards advertising. This is determined by adding together all of the money you spend on advertising (keywords, banners, etc.), dividing that number by the amount you made in sales for a product, and then multiplying the answer by 100.
For example, if you spend $50 on advertising and make $100 in sales, then your ACoS is 50%. ACoS is a great way to determine if your advertising campaign is paying off, and if not, to let you know when to rethink your strategy.
Unfortunately, there isn't an ideal ACoS that everyone should strive for (i.e., there is no "Golden Percentage"). Though it would make things simple, every product has a different profit margin, different marketing needs, etc., so each one is going to need a slightly different ACoS to remain profitable. The trick is in figuring out which one is right for you and sticking to it.
Speaking of advertising, it's time to break away from the acronyms for a bit and talk about sponsored products. Sponsored products are products that merchants pay to have show up in the Amazon search results. By paying a fee, you can ensure that nearly everyone looking for a green hairbrush sees yours in their results.
Sponsored products can either be keyword or product related (i.e., you either promote the product when people type "herbal moisturizers" into the search bar or when people search for moisturizing products in general). You can also opt to let Amazon automatically sponsor your product, which means it'll decide which combination of strategies works best.
As you would expect, the more you spend on sponsoring your product, the higher up and more often it will appear in searches. That doesn't necessarily mean that spending a fortune on sponsored products is a good idea (it all depends on what's right for your campaign). Thinking about ACoS will help you determine how much of your budget to allocate to sponsoring your product(s).
Headline search ads are another advertisement for Amazon sellers that appears in the Amazon search results. The difference between headline search ads and sponsored products is in the placement. Headline ads appear at the top of listings, while sponsored products show up in the actual search results.
Headline ads have the benefit of being distinct from the other products and ads being shown to a shopper. Aside from the word "Sponsored," sponsored product ads look like any other search results. Headline ads, on the other hand, are prominently displayed and more aggressively pushed to shoppers. They also allow for more branding.
This makes these kinds of ads extremely valuable to Amazon sellers. It's a way to secure prime (no pun intended) advertising space that sets you apart from your competitors. Headline ads also allow you to feature multiple products at once.
Amazon's Brand Registry is a way for manufacturers of a specific product to control the way that product is sold on Amazon.
The brand registry tells Amazon you are the true owner of the listing and gives you control over it. You can use it to report counterfeiters selling your products, make corrections if people are trying to update your listing without your permission, and more. The brand registry reflects your product page onto any other listings that sell your product. For example, say you've paid for professional photos of your product and have them featured on your product page. Using the brand registry, you can automatically update the product pages for your product across all sellers with these same photos, giving your brand consistency.
For manufacturers, this gives you a lot of control over your product and how it's perceived by online shoppers. If you've invested a lot into your product page and advertising, we recommend using the brand registry. Note that you need to have a registered trademark before you can use the brand registry.
Like an ASIN, a UPC (Universal Product Code) is a unique string of numbers used to identify a product. More specifically, UPCs are the numbers that make up the barcodes you see on every product you purchase, whether online or at a store.
Unlike an ASIN, though, Amazon will not automatically provide you with a UPC. Instead, you'll have to purchase one from a UPC supplier. You can purchase one directly from GS1 (the official source for barcodes, which Amazon checks all UPC codes against) or from a third-party provider at a much, much lower price. Speedy Barcodes and Snap UPC are both known for being reliable alternatives to GS1.
It's important to note that not every product requires a UPC on Amazon. Books, for example, use their ISBN instead of a UPC, while DVDs and videos don't require any kind of product code. You can see if your products require a code (and what kind) by clicking here. Note that EAN codes are pretty much the same thing as UPC codes but for European sellers.
Amazon's ToS (Terms of Service) is a list of rules put in place to regulate Amazon sellers. If you're a seller, you need to be familiar with Amazon's ToS or you risk accidentally breaking a rule. Breaking Amazon's ToS is a serious affair, and it can result in having your shop, products, and privileges permanently removed from the site.
The Terms of Service may seem complicated when you first start going through them (it spans 17 pages of rules) but the rules themselves are easy to understand. Just find the ones that apply to you, learn them, and when in doubt, consult the ToS!
One of the most common points of confusion sellers run into with the ToS is with emailing customers. Many think they can't email their customers at all, while others don't realize that the type, content, and amount of emails they send are all regulated. If you regularly email your Amazon customers (or want to start emailing them), make sure you learn the ToS before continuing.
The Buyer-Seller messaging service is a way for Amazon sellers to contact their customers without infringing on their customers' privacy. All emails, both from the seller and the customer, are protected via encryption, so you never know your customers' email addresses, and vice versa.
The main uses for the Buyer-Seller messaging platform are to give sellers a way to answer customer questions and complete orders. Marketing emails and other kinds of messages are generally prohibited to prevent sellers from harassing Amazon customers.
There are several benefits to using the Buyer-Messaging service. For one, it condenses all of your Amazon emails into a single space, making them easier to keep up with. It also keeps a record of all of your email correspondence, which helps settle disputes with customers.
A+ Content, which was formerly known as Enhanced Brand Content (EBC), is a way for Amazon sellers to display their products in a more eye-catching, visually appealing way. You've likely seen EBC/A+ Content on Amazon before. Normally, there's the typical Amazon product page, with a couple of photos on the left side of the screen and a description on the right side with bullet points.
A+ Content, on the other hand, spices things up a bit by allowing you to create a page full of photos, text, and interactive content that stands out from the standard product page design. On an A+ Content page, you can scroll down and see much more information on a particular product (the Amazon Echo page is a great example).
Anyone with a product registered with the Brand Registry can use A+ Content for free, so if you aren't taking advantage of it yet, it's time to set it up!
A9 is an Amazon subsidiary that handles the algorithm needs of the platform. Like Google, Amazon's website needs to be able to interpret millions of user requests, sort through millions of products, and match these two as quickly and accurately as possible.
Generally, people interchange A9 with Amazon's search engine, which is built by the A9 subsidiary. However, the A9 search algorithm is used by other retailers as well for helping customers search through their inventory.
Understanding the A9 algorithm is important for ensuring that your products are showing up in Amazon searches. Otherwise, you seriously hinder the discovery (and subsequently sales) of your products. A great place to start learning about the algorithm and how to use it to your advantage is by looking for resources related to A9 SEO (search engine optimization).
In simple terms, the Buy Box is the little box over on the right side of your product page, which has buttons for “Buy Now” or “Add to Cart” (or “Add to Basket” if you’re in the UK). It’s sometimes known as the Featured Offer box, and it helps customers buy your product without having to click around as much, which in turn helps boost sales.
For more details on the Buy Box and how to win it, check out our Buy Box 101 article to learn everything you need to know.
The Amazon’s Choice tag was originally added to make it easier for customers to purchase items through Amazon Echo. It’s obviously hard to sort through products with a voice search, so Amazon needed a way to make it quick and easy.
With some exceptions, for whichever keywords someone uses to search, one of the top results will have the Amazon’s Choice badge on it. Amazon selects these items to match their ideal combinations of competitive pricing and a great seller rating. Amazon also prioritizes items able to ship today, meaning you need to be Prime-eligible to qualify.
The big upside of the tag is that it shows up for one of the top listings when you search for something on the mobile app or web browser too. This tends to boost sales for the seller who gets the badge. The downside of this is that because the algorithm can be gamed, sometimes you see some questionable products win it.
Amazon’s gotta make money somehow, right? The referral fee is the fee they take (as a percentage) per sale, based on your product category. A good chunk of this is the referral fee they take for hosting your product. The vast majority of shoppers these days are much more likely to trust Amazon over other websites, so Amazon is able to charge a bit for it.
Amazon makes this guarantee to customers to protect their purchase when buying from third-party sellers like you and me. They guarantee that the items a customer orders will arrive in the condition described, and the delivery will be on time. This means merchants need to uphold a high standard of product quality and delivery. It also means failure to uphold these standards means you’ll have your product returned, which is part of what makes it so helpful to use FBA (since they take responsibility for shipping times, and any damage occurring while in their possession).
This is the product page (your listing) where your customers first land on when they click your product in their search results. Here they can read details about your product, view images and videos, read reviews, and even see what questions have been asked about your product. Don’t underestimate the value of this page – it’s the center of your whole Amazon marketing strategy.
Your sales revolve around driving people to this page, which means a few things. For starters, the text on your page needs to help entice your customer to buy. You also need to strategically use keywords to help new customers find your page when they search, both in your pay-per-click (PPC) ads, and for your unpaid search traffic.
If you have any familiarity with SEO (Search Engine Optimization), the concept is comparable between Amazon and Google, but both have some huge differences. To learn more about this and about optimizing your listing, check out our step-by-step Amazon listing optimization guide.
This is a review that shows up with the “Verified Purchase” badge, which indicates Amazon has verified that the person who wrote the review actually bought the product, and that they didn’t get the product at a huge discount, such as with a coupon. It usually takes up to 72 hours for AMZ to verify the review, so you might not always see it immediately.
Verified reviews are weighted more heavily by Amazon’s algorithms when they look at your review count, so all things being equal it’s better to have a verified review than an unverified one. Yes, you read that right. Not all reviews are given the same weight!
Ever notice how customers can vote on whether they found a review helpful? The more people find it helpful, the more weight that review has. Newer reviews also have more power than older reviews, partly because merchants may have changed their product or shipping practices. Believe it or not, reviews that go into more detail are also given a higher weight.
If you’re using FBA, this is where your products live. These are the warehouses Amazon uses to store products before shipment, and where you’ll store your inventory until it gets ordered. Amazon has tons of fulfillment centers across the US, which allow them to deliver products to the end customer at impressive speeds.
This is how Amazon is able to guarantee 2-day shipping through Amazon Prime (and often even faster than that). Using these centers is much easier than storing and shipping products yourself, and takes a lot of the logistical issues off your plate so you can focus more on marketing your products.
If you’re a regular Amazon shopper you should already be familiar with Prime, but we’re including it just in case. Amazon Prime is a membership that gives benefits to customers, like free fast shipping for eligible purchases, but also gives access to some other features like streaming media and exclusive shopping deals.
Products that are eligible for Prime get a little Prime badge or logo next to them, which customers now associate with fast free shipping. Prime-eligible products are much more tempting for customers, so if you want to get more sales (and a bunch of other little perks), we highly recommend using FBA (Fulfilled by Amazon).
While it’s easier for your product to qualify for Prime when you’re using FBA, it’s not impossible to do it yourself. Seller Fulfilled Prime is a form of FBM (Fulfilled by Merchant) in which you sell directly from your warehouse but still get the Prime badge and associated perks. If you’re leaning towards handling shipments yourself, you’ll want to learn more about Seller Fulfilled Prime.
Fairly self explanatory, but this is how Amazon divides products based on shared characteristics. Categories include Books, Fine Art, Office Products, Sports, and much more. Each category differs in terms of competition, profit margins, consumer demand, and even whether or not you need Amazon’s approval to sell within it.
Note this last point: some categories are known as Gated or Restricted, meaning you can’t sell in that category without Amazon’s approval. Some products are banned outright. Read our Gated and Restricted Categories post for more information about these categories.
Check out Amazon Seller Central’s Overview of Categories to get a better understanding of each category and its selling guidelines. If you’re deciding on which category you want to sell in, you’ll need a really good sense of the product demand and level of competition within the category. Product research tools come in handy for this.
These are the four main types of business models on Amazon. For a detailed breakdown of each one and how much they cost to get started, check out our explanation of Amazon business models.
For now, here’s a quick summary: With retail arbitrage, you buy discounted products from retailers and resell them online. With wholesaling, you buy products in bulk, often from manufacturers or suppliers, and resell them (at better profit margins than with the first option). With dropshipping, you never hold inventory: you list the product and advertise it, then order it from your supplier to be delivered directly to your customer upon purchase.
Private labeling, also known as brand ownership, is a little different than the other three. This involves you creating your own unique branded product (sometimes just slapping your own brand on a virtually identical product to what’s on the market), and having the manufacturer make it for you. This business model is the most expensive to start, but has by far the most benefits and greatest odds of long term success. If you’re curious, learn how to start a private label here.
The words duty and tariff are often used interchangeably, and despite some small differences between them, they both refer to taxes imposed on the international transport of goods. There are fees to import a product into most countries, and many countries even have export taxes when you ship your goods from there.
Many Amazon sellers choose to save money by importing their products from foreign manufacturers, such as those in China, India, or Mexico. Sourcing from abroad is great for getting your products at a low cost, but with the extra fees it may not always be as cheap as it looks. These fees vary by country and can get a little complicated. If you’re like many merchants who want to avoid the ever-growing tariffs on Chinese products, check out our list of countries to source products from, which includes the pros and cons of each.
A good ecommerce supply chain works like a well-oiled machine, and freight forwarders are a big part of that. These are the people who take your product from your factory overseas and transport it to the US (either directly to FBA or to a location of your choice).
Shopping around for the right freight forwarder can make your business run much more smoothly and profitably down the road, so don’t just rush into choosing one.
Read our freight forwarding 101 article to learn more about what freight forwarding is and what it entails. If you’re ready to shop around and pick a company, read about how to select a freight forwarder.
The landed cost is simply the cost per unit of a given item, plus its freight charges and duties. If you’re still trying to wrap your head around all the numbers to calculate your costs, use our free FBA Fee Calculator, where you can plug all your costs in and see what your typical costs and profits would look like for a given product.
We’re back in the land of acronyms for a moment here. The MSRP is pretty straightforward: it’s the price that a given manufacturer recommends their products are sold at. It’s not always visible, but if you set your price lower than the MSRP, your product page will have a List Price (MSRP) next to your price. The list price will have a strikethrough to show that customers are saving money by choosing your product.
If you’re a tech person or have any experience as a software developer you probably already know this one. An API is essentially the code that allows two pieces of software to interact and exchange information.
In practice, you may use something like Selling Partner API (SP-API), which is an evolution of Amazon’s older API known as MWS.
Amazon’s APIs enable you to access tons of analytical data through your Seller Central account, and to integrate your Amazon account with third party services such as applications to manage your inventory, automatically adjust your product pricing, or track sales metrics.
Thankfully, unless you’re a developer, you don’t need to understand APIs very much in order to use them.
This is another term that’s used widely outside of Amazon, and any of our business major and MBA readers are sure to know it. The term is pretty self explanatory, and is used in contrast with B2C, which means Business-to-Consumer (or Customer).
Amazon merchants primarily sell B2C, but you can qualify to sell to businesses as well. Selling to businesses works a bit differently than selling to shoppers, but it can be a wise strategy for sellers in certain categories, such as office supplies.
This is a feature that lets customers subscribe for regularly recurring deliveries of a given product, in exchange for savings of between 5 and 20 percent. You can find it in the same spot as the Buy Now or Add to Cart button in the Buy Box, and customers have to opt out of it if they want to make a one-time purchase.
Tons of shoppers use this feature, and can help you a lot if it applies to you, because once customers choose to subscribe to a product, they only need to make the “To Buy or Not To Buy” decision once.
When customers have to decide whether to buy from you each time they need a product, the odds increase significantly that they will choose to buy from someone else (or not buy at all). A subscription means when you get regular purchases from the same customers, you lose fewer customers over time. The bad news is subscriptions don’t really work for every category (good luck getting people to subscribe to your lamp). However, if you can manage to qualify for Subscribe & Save, you should.
Customers can find different types of deals around the Amazon.com website and the mobile app. Examples include Deal of the Day and Lightning Deals. Amazon occasionally tests new deal types, and sometimes discontinues others. Each deal works a bit differently, but the general idea is discounting your product to increase sales.
The main variables for deals are the length of time they’re up for, and how prominently they’re featured to customers.
Lightning Deals cost quite a bit to run, and get mixed reviews from merchants. Some sellers find them extremely effective, but many sellers end up losing a good chunk of money without much return.
Deal of the Day is similar, but lasts the whole day rather than mere hours. Sometimes you can qualify to show up under other discount sections when you meet the criteria and offer a competitive price, but you won’t get the same level of premium placement that you would with a Lightning Deal.
Amazon sets a high standard for who qualifies for these, so you’ll need to maintain a good seller rating with good shipping times, among other factors. Check out Seller Central Help sections and learn how to make your products eligible for deals if you want to take advantage of this. You can tell when a product is eligible for a deal under the Eligible ASINs section of the Deals Dashboard.
If you’re looking for other ways to generate sales using discounts, you may want to check out Snagshout. The main perks of Snagshout are that you can get more sales and reviews, but it’s also a useful tool for collecting user-generated content (UGC), which can be great for your marketing, your Amazon listing, and your social media promotions.
Upselling a customer is when you encourage them to buy other items from you, such as upgrades, accessories, add-ons, or other items. The end result for you is more profit, and the end result for the customer (hopefully) is that they get more items they enjoy, especially things that help them get more value out of your product.
Upselling is a great way to boost your profits, but remember to do it tactfully and with some restraint. Nobody likes to be spammed, and if you pester customers with upsells, your seller reputation might suffer for it.
Understanding these terms (and the rest of Amazon's lingo) is a great way to start improving your skills and success as an Amazon seller. Like anything in life, the more you invest in your Amazon shop, the more you will get out of it. Don't hesitate to dive deeper into each of these topics and start using them to take your Amazon store to the next level!