Maybe you got an email recently from Amazon about the Selection by Amazon Physical Stores (SAPS program). This is an invite-only program, which means that it’s hard to pinpoint how long it’s been around. But we wanted to give you the breakdown on what this program is and how it works.
We read through all of the boring documentation for Amazon SAPS so you don’t have to (although, maybe you should anyway). And here’s what we found.
What are Amazon Physical Stores?
Amazon owns and operates a number of physical stores. If you go to this link, it would appear that when Amazon refers to Amazon Physical Stores, they’re talking specifically about Amazon Go, Amazon Fresh, and Amazon Style.
These stores have locations all over the place, and as far as stores with Amazon branding, these are the best established. However, these aren’t the only stores that Amazon owns. Although they’ve seen varying success, Amazon’s tried a number of different stores in the past, such as 4 Star Stores and Amazon Books.
Amazon also owns Whole Foods and has partnerships with loads of different companies that all have physical store locations. So although Amazon SAPS seems to indicate Go, Fresh, and Style locations, it’s not out of the realm of possibility that other stores could be involved in the mix.
But we’re getting a little ahead of ourselves here. Let’s back up.
What is the Amazon SAPS Program?
The Amazon SAPS program is basically a consignment program by Amazon. Your products are owned by you, but sold by Amazon in their stores.
When you enroll in the program, Amazon moves your units from FBA warehouses to their physical stores for purchase. When a customer checks out, Amazon “purchases” the product from you and sells it to the customer. It really is like Amazon offline.
Enrolling in the program doesn’t guarantee that your products will be placed in the store. Instead, enrollment just means you’re okay with Amazon selling your product in their stores.
If your product doesn’t sell, Amazon just sends it back to the FBA warehouse. No harm no foul. And at the time of writing this article, there are no extra fees associated with the program. So you’re not paying to have Amazon move your product back and forth.
Amazon also pays you according to the price you set in Seller Central, so you’re not losing out on profit with the program.
The benefits of this program are pretty great:
- Increased Visibility: Because the product is in a physical store, you can get in front of customers who might not have searched for your product, but who might be interested.
- Less Competition: There just aren’t as many products in a store as there are online. So you’re not competing against as many sellers in physical stores.
- Better Shopping Experience: There’s no denying that actually being able to see and hold the product in person is a better experience than having to purchase it online before seeing it. And since Amazon’s physical stores have the same return policy as Amazon.com, there’s only upside for the customer.
- Profit Margins: There are no extra fees with the program, which means that your profit margin is the same as an organic sale online.
This seems like all upside. Better exposure and experience, and increased sales. So you gotta ask…
What’s the Catch?
Amazon SAPS looks like just a normal consignment agreement on its face. But when you look deeper, things get a little weird. Let us explain.
Amazon says they “will compensate you based on the offer price you set for the item in Seller Central, and standard referral fees will be applied.” However, they also say that they can “set the customer price and be the seller of record for all SAPS Products sold to customers in Amazon Stores.”
So Amazon’s not actually selling the product for you. They’re purchasing the product first, then selling it to the customer. But that happens in one transaction. And that seems weird.
If Amazon will compensate you according to your offer in Seller Central, why would they also want to set the customer price? The only way this would benefit Amazon is if they raised the price of the product. But that’s a little antithetical to how Amazon usually handles things.
At very least, if you wholesale your products to retailers or distributors, Amazon is not going to honor any sort of MAP policy. They reserve the right to set the price without any restrictions.
We’ve worked with brands on Vendor Central, and increased control for Amazon typically does not end well for the brand. So we’re skeptical of how Amazon handles the sale of products in their stores.
But we’re not big into FUD here at BLAZON, so here’s the silver lining:
Assuming Amazon does honor your offer on Seller Central for the Amazon SAPS, it’s probably a good program to try. And if it doesn’t work out, you can un-enroll at any time.
According to Amazon, that unenrollment process takes about two weeks to complete. But that’s really not too bad.
Should You Try Amazon SAPS?
In our view, there seems to be very little downside to the Amazon SAPS program, so if you get invited, it’s worth a shot.
Either way, it’s unlikely that Amazon SAPS will dramatically change your sales on the Amazon platform one way or another. This program is a little thing, but the little things add up.
You can check if you have been invited to Amazon SAPS by going here: https://sellercentral.amazon.com/gc/saps/about
If that link just takes you to the Seller Central home page, then you haven’t been invited. If that takes you to the program page, then you’ve been invited, and you should go back through your emails to accept the invitation.
But the Amazon SAPS program is just one of many things that brands should be doing on Amazon. There are loads of other things that you should be considering to boost sales. In fact, we put together a list of programs you should start with if you’re stuck on the Amazon platform.
And if you’re finding you need some expert help, reach out to us. We’d love to help out.