We’ve dug into this topic before; asking how 1P sellers are treated vs third party. We uncovered that there appears to be an obvious bias in ranking for products that Amazon sells and fulfills. However, the question has still remained as to how significant ranking appears to be affected by fulfillment type at all.
In order to determine this we looked at the top 15 results on the first page of a number of popular search terms. We analyzed 267 keyword phrases for a total of 4,005 listings. The logic was, the listings on page one as a whole typically represent larger sales volumes and therefore could tell us if there was any obvious anomalies with regard to fulfillment type.
In line with marketplace-side statistics, we discovered that 59% of page one results tended to be sold by a third party seller and fulfilled by Amazon. Our previous research did uncover a seeming bias in TOP (as in number one and top three) rankings for first party sellers and Amazon themselves, but on the whole this 60% figure appears consistent with the fact that over two thirds of the marketplace is dominated by third party sellers.
This also makes an interesting case for the rumor that FBA listings tend to get rank juice. While it is understandable that they wouldn’t always be able to compete with Amazon’s own products, it stands to reason why these Prime eligible listings would outperform merchant fulfilled items.
It has often been speculated that FBA listings rank better and sell better than merchant fulfilled products. However, numbers are rarely produced to support sweeping claims. When we analyzed the data we saw the answer and it is rather staggering.
Merchant fulfilled listings (or FBM) accounted for only 6% of page one results in our sample. Meaning there are very few merchant fulfilled listings ranking anywhere near top spots. In fact, of the 267 keyword phrases we looked at, only 21 of them had FBM listings within the top three results. That’s about a half a percent. Some entire keyword categories don’t even have FBA sellers. Things like coffee tables and folding tables are all either FBM or 1P, yet even for those products none of the top ranking listings are merchant fulfilled.
However, if you look at a poll conducted by Webretailer and ChannelAdvisor, you’ll see that over 70% of sellers utilize the FBA platform. If we extrapolate that across the whole marketplace, and add in our own research that uncovered almost a third of products on Amazon being sold by the ecommerce giant themselves, that leaves close to no participants fulfilling their own merchandise.
So it may not be that merchant fulfilled listings can’t rank, but rather that there aren’t any TO rank.
1P, No Buy Box, Etc.
Everyone else that wasn’t FBA or FBM was lumped together, making up the remaining 35% of our sample. This is consistent with the one third-ish of all top ranking listings being controlled by Amazon findings we uncovered before.
Now we won’t broach the topic of the advantages or disadvantages of fulfillment types, as that has been covered many times by many other people. It does beg the question, however; why do so few people FBM? I mean, surely after a brand or company is large enough, they have their own distribution networks that are more affordable than Amazon’s restrictive fee structure.
Perhaps, though, when a company gets large enough for that, they get wooed into the Vendor program. As if Amazon is making a concerted effort to quell merchant fulfilled operations on its platform. This sounds entirely like a conspiracy theory that could provide a paranoid rabbit hole for us to fall into. Best not take THAT blue pill.
What Does This Mean for Your Business?
This information doesn’t change much, but it does help us further refine the similarities between successful, third party brands. By exposing these similarities, we can hope to emulate their success. So far, we see that FBA is wildly in trend. So much so that, fulfilling by merchant may not be a sound choice, even in the best of shipping arrangement conditions.
That doesn’t mean you shouldn’t engage in it at all. But certainly test both to see which performs the best for YOUR business.