Back in 2015, Amazon Exclusives launched with just 15 sellers. By the end of 2016, it was host to more than 600 brands with 20,000 items, and sales that grew by 250%. At first glance, it seems like joining the Exclusives Program is a sure bet toward growing your brand’s sales on Amazon, but like all major decisions, the step should only be taken if you’re fully aware of what both you and Amazon get out of the collaboration.
In short, Amazon asks for a higher fee, and makes brands promise that they will remain exclusive to the platform. The fee is 5% over category fees across the account, and they request a minimum of six months of exclusivity. In exchange, Amazon promises four primary benefits:
Tools to help brands increase the discoverability of their products, which, according to Amazon, saves marketing costs.
Promotional “levers” that give brands access to email campaigns, unique deals, giveaways, branded content, and more.
Enhanced protection from unauthorized and counterfeit sellers.
Fulfillment by Amazon, which allows you to leverage Amazon Prime to deliver products within two days.
Even when we try to describe the give-and-take of this program in simple terms, it becomes clear that there’s a ton of variables that brands need to seriously consider. To help you make the determination yourself, let’s walk through as many of these variables as we can, and discuss whether they’re pros, cons, or somewhere in the middle.
The Exclusives Program in detail
Unique access to Amazon’s popular, respected platform: During a recent survey, it was found that Amazon was the most popular online marketplace in the U.S., and the most popular for sellers based on profitability, customer service, communication, and ease of use. Brands that buy into the Exclusives program will have unique access to an online selling system that is the most popular and most well-respected in the United States. Conclusion: pro.
Above: Chart from https://www.statista.com/
Spotlight on the Amazon Exclusives front page: By sending clicks straight through to the featured brand’s storefront, the Spotlight feature enables up-and-coming brands to overcome the “cold start” issue that traps many brands trying to launch unique and innovative products. Conclusion: pro.
A+ content on all listings: Under the Exclusives program, all of your brand’s listings will be allowed to use full HTML components, such as charts, high-quality images, videos, and more. The ability to create A+ content is usually only an option for Vendor Central accounts. Conclusion: pro.
Additional brand protection: As with all its sellers and their offerings, Amazon is heavily invested in preventing counterfeit products, but the Exclusives program also offers additional help with preventing unauthorized sellers as well. Because Amazon work closely with Exclusive brands, it claims to be better able to understand when unauthorized sellers step in, and will be more willing than usual to take corrective action. Conclusion: pro.
Help in building a brand story: Every brand in Exclusives gets a dedicated Amazon Account Manager, who acts as an extension of the brand’s team and helps develop marketing materials that help sell not just the products, but the brand itself. For example, Amazon Exclusives recently put their Spotlight on Uncommon Thirds, a brand that is focused on “core values of quality, natural fibers, & ethical manufacturing.” No doubt their Account Manager helped with some of that marketing push! Conclusion: pro.
An easy application process: Amazon wants to make applying for Exclusives as easy as possible, and that’s why brands are flocking to it. They’re looking for unique products and unique brand stories, so keep that in mind if and when you decide to apply. Members of the Exclusives team are also constantly searching for innovative products and reaching out to sellers. Conclusion: pro.
Fulfillment via Amazon Prime: Because all products are fulfilled by Amazon, you’ll be able to get your brand’s products into a buyer’s hands in only two days. That’s far better than most Marketplace sellers, who’re charging additional fees but have even slower shipping. Plus, outsourcing your fulfillment will make your logistics easier to manage. Conclusion: pro.
Exclusivity with Amazon: As we mentioned before, Amazon asks for “exclusivity” when it comes to selling your products. What does that mean, exactly? Well, it’s only exclusivity for a matter of months and only for selling via online marketplaces—you’re still allowed to sell your products via your own website and your own physical stores. Given that this program is designed for newer brands who probably have much less access to these other outlets, exclusivity may matter less. Still, remember that making an exclusive deal means you might lose out on other interesting selling opportunities. Conclusion: con.
Exclusives is only compatible with some brands: Exclusives is only available for 3rd Party Sellers on Amazon, which means that those with an existing vendor relationship—those already on Vendor Central—aren’t able to join. This means that Exclusives really is meant for up-and-coming brands with little current Amazon leverage. Conclusion: con.
Added fees: Amazon adds a 5% fee on top of the standard revenue share on all products within the account. These fees are tied to revenue, so it’s not like taking out a loan, and it’s good to know that Amazon will have a vested interest in helping your brand perform well. But reducing your margins by another 5% is a big jump, so you should put some serious thought into whether you get your money’s worth going with an Exclusives account. Conclusion: con.
Putting all the pieces together
Mark Cuban, the famed businessman and entrepreneur, says, “The Amazon Exclusives program exposes brands to new customers and handles much of the logistics. That back-end support is critical for companies that want to grow.”
Cuban’s advice can be worth a lot of money—see no further than the Shark Tank TV show for examples of how much equity people are willing to give away to have him become a partner—but we always think it’s best for brands to consider their own unique situation closely.
Make sure you understand how each of the variables pointed out above will affect your business, both positively and negatively. And remember that even items listed above as a pro might not actually help you much or could even hurt you, depending on your situation.
That said, our analysis shows that the Amazon Exclusives program is generally worth the cost for new and existing brands who are willing to shrink their margins a bit in exchange for access to unique Amazon marketing tools, a massive marketplace, and the impressive perks of being in Amazon’s favor.