Amazon is always on the hunt for successful businesses with the potential to expand and diversify its already vast portfolio. For this purpose, it recently launched a program that attends to the strategic needs of smoothly running businesses with very little representation on the marketing front and named it the Amazon Accelerator Program.
Do you want to know more about this Accelerator program and if it is suitable for your Amazon FBA business?
If yes, then you have come to the right place. Keep reading until the end to find answers to the following questions:
Without further delay, let's begin.
The homepage where Amazon catalogs its own private label brands, including the ones acquired through the Accelerator Program
The Amazon Accelerator Program is specifically designed for Private Label businesses to partner with Amazon. This program is Amazon's way of expanding its own Private Label operations as a seller. In exchange for higher sales, more successful promotional strategies, and Amazon's assistance, these sellers become third-party suppliers for Amazon.
In other words, Amazon chooses a successfully running Private Label startup and partners with its owner to sell the product more effectively exclusively on Amazon and ultimately under the brand name of Amazon.
In short, one can describe the journey of a Private Label brand through the Accelerator Program in three steps.
The Amazon Accelerator Program cost is an additional 7% of the enlisted referral fees on the Amazon Fee Schedule. It is worth mentioning that Amazon charges a referral fee between 8%-15% (depending on the product category) on each item sold by a seller.
Also, note that once you enroll a seller account in the Accelerator Program, the program fee will apply to all the products listed on your account.
After wrapping our heads around what the Amazon Accelerator Program essentially is, let’s try to understand its criteria for enrollment.
This program is primarily about Amazon finding businesses with high sales volume but lacking brand recognition. Amazon boosts their sales by selling the products under its own brand name, with the seller acting as a third-party supplier.
To join the Accelerator Program, you must be mindful of the following requirements.
Amazon is more likely to invest its money where it sees potential. Therefore, businesses with annual revenue higher than $1M are usually its main target. With its in-house advertising prowess and marketplace domination, Amazon has the ability to turn those one million revenues into five or ten million.
By partnering with Amazon, you will enjoy perks like solid legal representation, steady returns, excellent promotion, and guidance from skilled professionals as well as smooth management of your business.
However, Amazon demands a commitment from Private Label brand owners: they will be required to dedicate 5% of their revenue to paid advertising on Amazon.
Any seller interested in enrollment in the Amazon Accelerator Program must sign up for Fulfillment by Amazon (FBA).
FBA is the first choice of many Amazon sellers. This is because it improves the business's performance by smoother inventory management. Amazon also looks into only those businesses that use FBA instead of managing their inventory individually.
Although this is the main requirement, it is important to note that Amazon allows sellers to switch to the Fulfillment by Merchant (FBM) business model when the FBA inventory runs dry.
All the businesses enrolled in the Amazon Accelerator Program will be required to stay exclusively on Amazon. Any business that does not agree to not doing business outside of Amazon cannot sign up.
Fortunately for the people who do not fulfill the criteria of Amazon Accelerator, it is not the only startup booster program initiated by Amazon.
While Amazon Accelerator paves the way for a partnership between successful sellers and Amazon, another program called Amazon Launchpad focuses on relatively new and comparatively smaller businesses.
This section will give you an idea of how Amazon Launchpad works and how it stacks against the Accelerator Program.
Amazon Launchpad is a booster incubation program designed to target innovative businesses on Amazon. It primarily promotes new businesses with excellent growth potential but lacks the required kickstarter campaign.
The Launchpad offers a wide range of services to boost the sales of a business. These services include:
Amazon boosts your business by advertising it through email promotions, banner ads, and other promotional tactics that attract more people to your product. This visibility can result in successful sales for an innovative, fresh business.
Just like the Amazon Accelerator Program, the Launchpad also offers access to a data analytics tool that works like Google Analytics. This data analytics tool helps you collect and analyze data to better understand your customer's expectations of your business. In addition, the Launchpad Program package also includes an improved seller page through personalized product listings, promotional support, and even help with financial management.
Amazon requires the businesses enrolling in the Amazon Launchpad to have the following qualities:
We have listed the main differences below to give you a quick differentiation between the Amazon Launchpad and Accelerator programs.
Amazon Accelerator caters to successful businesses with high sales and low promotional activities that are willing to sell exclusively on Amazon. In contrast, Amazon Launchpad focuses on innovative and marketable products.
Amazon completely takes over the business in case of enrollment in the Amazon Accelerator Program, whereas the businesses registered on Amazon Launchpad still get to make their own decisions.
Amazon Accelerator Program charges an additional 7% premium fee on the referral fee of the enlisted product. On the other hand, the Amazon Launchpad program has a 5% additional fee which can be reduced to 3% in the case of $1M revenue generation in the first 12 months of the program.
In the case of signing up for Amazon Launchpad, Amazon will ensure transparency by prohibiting unauthorized sellers from selling the same product as your business. In this way, you can protect your brand from being copied.
This service is not available in the case of Amazon Accelerator, mainly because, in that case, Amazon sells the product under its own label instead of scaling these businesses as individual Private Label brands.
The Amazon Accelerator may be your best choice to amplify your already successful Amazon business further. Let's look at some of the significant benefits of the Amazon Accelerator Program.
Amazon launches your product as one of its own, resulting in a massive customer base overnight. Being featured on Amazon’s Our Brands page improves sales manifolds. This greater number of sales translates into increased customer feedback and suggestions, which means you can further enhance your product per customer requirements.
Apart from improved visibility on Amazon marketplaces, you also get access to different Amazon tools like product performance analytics to see sales growth records and results of social media and email promotions.
Amazon also gives you access to Amazon Web Services. In addition, if you are based in Seattle, you can also work in Amazon's free coworking space as a member of the Accelerator Program.
Amazon provides legal support to the businesses enrolled in Amazon Accelerator Program. Its team of attorneys will provide guidance through different legal issues, the acquisition of trademarks and patents, etc.
The Amazon Accelerator Program can prove to be a useful option for Private Label brands to experiment further and improve the quality of their product. Amazon has earned the trust of millions of people, which means that the customers are not afraid to try any new projects launched under the umbrella label of Amazon products.
Amazon Vine is a successful way of acquiring product reviews from the most reliable reviewers on Amazon. Typically, Amazon charges $200 for each Amazon Standard Identification Number (ASIN) enrolled for Amazon Vine.
By joining the Amazon Accelerator Program, you can access the Amazon Vine for free.
If you think there are no drawbacks to using the Amazon accelerator program, it is because we have yet to list them. Although this program has both advantages and disadvantages, the former may be dominant over the latter.
When you sign up for the Amazon Accelerator Program, Amazon practically takes over your business instead of making you a partner. So it could definitely be a point of concern for many sellers.
Amazon takes care of the supply chain, manages the inventory, handles promotional activities, and deals with customers. Some might see this as an advantage. However, this is equivalent to giving up control of one's business to business owners who have worked hard to build their own brand.
Once you have joined the Accelerator Program, Amazon does not let you sell any product outside of Amazon. This means that you rely entirely on the e-commerce giant for your sales and cannot run a separate website for your brand. Again, this means giving up the control of a brand you built from scratch.
As the Amazon teams redesign your business strategies, they may also change your product prices. This means that you cannot decide your product margin and may face a cutback with the money you make. However, you will simultaneously see an increase in the sales of your product as well.
This is probably one of the major drawbacks of joining the Amazon Accelerator Program. According to different sellers, the contract also includes a clause allowing Amazon to purchase a business of interest for an insignificant amount, usually around $10,000.
In this case, the seller will work as Amazon's product supplier for two years after the contract. Once the specified period is over, Amazon is free to source its products from other suppliers.
For sellers who do not want to separate themselves from their brands, this can mean a loss of the brand for a temporary boost in product sales. If this sounds concerning, you should reconsider joining the Amazon Accelerator.
The major takeaway from the Amazon Accelerator pros and cons is that while Amazon gives you a lot of assistance for the promotion and scaling up of your business, it asks for one thing in return: the control of decision-making for your business.
If you are ready to give up some of the freedom of running your business for its growth, success, and expansion, this program can prove to be your best friend.
Before signing off, let's answer some frequently asked questions about the Amazon Accelerator Program.
Amazon Black Business Accelerator (BBA) is a program launched to incubate and scale Amazon startups owned by the US-based black community with a professional seller account.
The program offers assistance with capital in the form of $3,000 invested in advertising to expand a brand's customer base. Moreover, it provides free product imaging services for businesses enrolled in BBA.
Amazon also offers completely free mentorship to black entrepreneurs for the first year. The expert teams on Amazon help these business owners polish their product showcasing, customer management, and product promotion.
Interested business owners can join the Amazon Accelerator Program by going to their enrollment page. The page contains two separate sections of a survey form. The first section requires basic information about the business owner (business email, name, contact, job title, company name, and annual revenue).
The second section requires information about the business, its products, target customers, and further details.
As a private label manufacturer, if your focus is promoting your product and expanding sales instead of building a brand, the Amazon accelerator may be your go-to program. The Accelerator Program will give you the management and promotional plan required to scale your business. In addition, Amazon will expose your product to a massive number of customers, resulting in greater revenue.
However, it is not the best choice for sellers that want to build an authentic brand reputation outside of Amazon. If you do not want to give up the control of your business to Amazon, you should not sign up for the Accelerator Program.
Both programs are remarkably similar, with only a few fundamental differences. For instance, the Amazon Accelerator Program partners with businesses with high revenues and a more robust customer base. On the other hand, the Amazon Launchpad Program concerns innovative, fresh businesses with a lesser focus on the marketing front.
Depending upon your type of business, you can enroll in the Launchpad in case of a new, small business. Your business will be polished and promoted by professional, skilled teams.
On the contrary, if you are willing to fulfill the requirements of the Amazon Accelerator Program, such as allowing Amazon to reset the product prices and sell it under Amazon's label, you can join the Accelerator Program. It will significantly boost your sales.
Amazon Accelerator can be a good choice for a Private Label manufacturer looking for a way to boost their product sales without focusing on the brand reputation. As your business is already stable and making a good profit, you can take full advantage of the benefits offered by the Amazon Accelerator Program to scale further and enhance your business.
However, if you want to own your brand and be solely responsible for decision-making, prices, and customer service, then this program is not the right option for you.
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