The requirements to be a successful seller on Amazon changed a few times throughout the years.
* Just list your products and earn money.
* Get featured merchant status. Earn money.
* Use the FBA program (let Amazon stop and ship your products). Get automatically featured. Earn money.
* Build your own brand and sell your own (chinese sourced) products. Earn money.
* Be the highest bidder in Amazon Ads and all of the above (WE ARE HERE).
So yes, expect a bunch of ads for the same product just with different brands. This is a fight that Amazon wants to incentivize since now they don't only earn the referral fee (15% or higher on some categories) but they also get the ad fee.
Nowadays most of what you pay just goes to Amazon services. For example the first wooden spatula ad [1] price is $6.90. The seller gets $1.63 [2] for that sale. But it doesn't end there, a first spot ad is well above $1 but let's round it down to $1. All that's left is $0.63, and with that they have to buy the product, ship it to Amazon, and pay their employees.
I think at some point something is going to implode because they won't stop rising their fulfillment pricing (they do it twice a year on schedule). Low cost items just won't be affordable anymore on Amazon.
This is only true for low end products that are easily copied. For higher end products it's still "* Just list your products and earn money."
Or not even that, as many manufacturers of high end products don't even bother listing all their catalogue on amazon.
* Just list your products and earn money. * Get featured merchant status. Earn money. * Use the FBA program (let Amazon stop and ship your products). Get automatically featured. Earn money. * Build your own brand and sell your own (chinese sourced) products. Earn money. * Be the highest bidder in Amazon Ads and all of the above (WE ARE HERE).
So yes, expect a bunch of ads for the same product just with different brands. This is a fight that Amazon wants to incentivize since now they don't only earn the referral fee (15% or higher on some categories) but they also get the ad fee.
Nowadays most of what you pay just goes to Amazon services. For example the first wooden spatula ad [1] price is $6.90. The seller gets $1.63 [2] for that sale. But it doesn't end there, a first spot ad is well above $1 but let's round it down to $1. All that's left is $0.63, and with that they have to buy the product, ship it to Amazon, and pay their employees.
I think at some point something is going to implode because they won't stop rising their fulfillment pricing (they do it twice a year on schedule). Low cost items just won't be affordable anymore on Amazon.
[1]: https://www.amazon.com/Wooden-Cooking-Spatula-Handle-Solid/d... [2]: https://i.imgur.com/kmK8irY.png (the costs include referral fees, storage and handling costs for shipping but not the shipping cost itself, that's paid by the customer either in the order or through their prime membership. They may also get free shipping on bigger orders)