Amazon has implemented a new program designed to make the process of launching new products quicker and more straightforward for vendors. The Born to Run Program offers vendors the ability to sell off large initial buy quantities to Amazon in exchange for full return rights and an investment in the platform’s marketing services.
Below is a full outline offering vendors a peek into what they can expect throughout the process of involvement in the program. The benefits are numerous and the terms generous; provided you have a product that you’re proud to stand behind, you may stand to benefit tremendously from Amazon’s latest effort to ease vendors’ workloads.
What is the Born to Run Program?
Amazon designed its Born to Run Program in order to expedite the traditionally slow process of product launches on the platform. Through the program, vendors will be eligible to choose their initial ten-week inventory positions for new product launches.
The program offers vendors unprecedented benefits. What has traditionally been a slow process centered around gathering positive reviews and sales numbers has now been simplified– and that means vendors can spend more time doing valuable work rather than pushing for sales and stressing over how product is moving.
Newer vendors, especially, stand to gain a tremendous amount of leverage if the program pans out. Product launches without sales velocity can be a nightmare on their own; but when you’re using a platform like Amazon to attract customers, you also have to grapple with convincing Amazon your product is worth purchasing and keeping in stock. The Born to Run Program will solve these issues without driving vendors into the ground.
One of the hardest things to do, right out of the gate is to “prove” to Amazon that a product has sales potential. This is where Born 2 Run plays a huge role at product lifecylce introduction on Amazon.com – Michael Morgan
What are the Benefits of the Program?
There are various reasons that may lead vendors to take interest in the program. Chiefly amongst them are:
- Familiarity with their own product line
- Born to Run offers vendors the opportunity to take advantage of this personal knowledge; if vendors are confident in their product and their market, they can translate that into larger initial buy quantities
- Benefits of a fully-in-stock launch
- This makes it easier for individual ASINs to reach sales maturity quickly; traditionally, challenges with stock levels can be a hindrance on this front
- AMS support
- AMS offers vendors effective tools to help them stand out amongst competition and push traffic to branded pages; vendors can even introduce their products right next to competing items just before customers reach the point of conversion
The Nitty Gritty
Vendors who take part in Born to Run will have the freedom to select their beginning ten-week inventory position for new launches in exchange for two things:
- Full return rights applied to any unsold products from the ten-week inventory position (otherwise known within the program as the Launch Buy Quantity)
- Investment in Amazon Marketing Services (AMS) support worth 10% of the Launch Buy Quantity’s total cost on the launch ASIN
For example, imagine a vendor was on the cusp of releasing a brand new line of shoes and wanted to take part in the Born to Run program. If the vendor knew the shoes would sell for $20 per unit, they could have Amazon buy 1,000 units through Born to Run. This would translate to a $20,000 total Launch Bay Quantity cost.
Because Amazon would then take on both financial and inventory risks regarding the shoes, the vendor would need to offer up something in return. Therefore, the vendor would be required to invest $2,000 (or 10% of the Launch Bay Quantity’s cost) and sign off on return rights for inventory that went unsold after ten weeks.
The Terms Behind the Terms
A vendor’s ten-week “return timer” will begin on the same day that the ASIN they’ve signed up for the program is in-stock and buyable on Amazon’s platform. After exactly ten weeks have passed from this date, Amazon will have the right to return unsold inventory to the vendor.
In the event that the ASIN sees quality sales traction during the course of its ten-week run, Amazon systems will often opt to buy into that ASIN normally. Born to Run is just a jumpstart for launches and exposure; Amazon wants to help vendors launch potentially successful products quickly– and they obviously want to keep successful products around.
Requirements for Joining Born to Run
Currently, the Born to Run program only requires three things of vendors:
- The total product cost of the launch buy quantity (LBQ) cannot exceed $50,000
- The ASIN must not:
- Have a product cost of less than $5/unit
- Already have been in-stock at an Amazon fulfillment center for over thirty days
- Be heavy or bulky
- Vendors must utilize AMS for at least ninety days prior to signup
Participating After Joining
Participating in the program is a breeze once requirements are met. Amazon even touts that participation should take no more than twenty minutes of a vendor’s time. In order to utilize the program, vendors only need to follow four key steps:
- Fully set up the ASIN on Amazon
- Reach out to your VM for a Born to Run Intake Form
- Fill out the Intake Form
- Return the form to your VM for approval
- Deal with policies
- After VM approval for the LBQ, you’ll receive a Born to Run policies contract via email; this contract will outline return rights and details concerning the 10% AMS investment
- Sign and return the form to your VM for approval
- A purchase order will be created with whatever amount of products was agreed upon as the LBQ
- Once the product achieves in-stock status on Amazon, you’ll have ten weeks for the LBQ to sell through
- If any inventory remains unsold following the ten-week timeframe, it will be subject to a return to you at full cost
If you’re interested in taking advantage of Amazon’s Born to Run Program – or you want to learn more about other ways that Amazon is helping vendors make sales– contact Clickmattic today. Our Amazon account management services are second-to-none and have been carefully tailored to ensure they offer your business the most impactful benefits possible.
Marketing on Amazon can be a challenge; but when you team up with us it doesn’t have to be.