Amazon Accelerator Program: Should You Join?
There are many ways to be a part of the largest online marketplace in the world. You could start an Amazon fulfilled by Amazon (FBA) business, become an affiliate through the Amazon Associates program, or publish a book through Kindle Direct Publishing, to name a few.
The Amazon Accelerator program is another avenue Amazon has opened up to allow any budding entrepreneur to leverage its global presence.
It was put into place to help startups get off the ground. With the program, Amazon will promote your products on its marketplace and manage your supply chain for you. It’s an alternative way for startups to get the boost they need to launch their business, as opposed to the traditional methods of crowdfunding, venture capital funding, or bootstrapping their way to profitability.
The program seems enticing for startups and brands looking to sell on Amazon.
According to Amazon, it has a lot of potential benefits. However, there isn’t too much information out there about what Amazon wants in return.
This guide provides full transparency on what the program is and what that entails for wannabe sellers, as well as Amazon.
What is the Amazon Accelerator Program?
Amazon states that the program “enables manufacturers to launch brands and innovative products exclusively on Amazon and provides a path to become an Amazon Private Brand supplier.”
What does that mean exactly?
Amazon aims to use the accelerator program to build private label businesses in it’s marketplace; it’s a chance for Amazon to sell “its own” products, which are provided by private label businesses.
It’s similar to a franchise business, except your business is providing the products and Amazon controls your brand.
It might initially sound like all the spoils go to Amazon, but there are some benefits for you as a member of the accelerator program.
Benefits of Joining Amazon Accelerator
A Testing Platform
Joining the Amazon Accelerator program gives you the opportunity to test launch products on the world’s largest marketplace, meaning you get quick feedback and can judge the market fit of your products quickly.
You provide the products, and Amazon will promote them.
When you launch your products on the platform, the Amazon marketing team will get to work.
They’ll produce content for product pages and provide free pay-per-click marketing on the platform, as well as some social media assistance and email marketing.
Your products will get visibility on Amazon’s homepage when there are holiday sales and on Prime Day.
Additional Tools to Support Your Growth
In ecommerce, online tools are great for helping support growth. To get your products off the ground and build some presence in the marketplace, you will have access to Amazon Vine reviews for free. These reviews usually cost $2,500 per product.
You’ll also get credits to use on Amazon Web Services. Off of Amazon, you’ll get access to a Thinkspace coworking office based in Seattle.
However, these benefits do come at a cost.
Cons of Amazon Accelerator
Loss of Control
By joining Amazon Accelerator, you essentially give up control over your brand. Your products will be sold as Amazon products; thus, you won’t be able to build your own brand.
They’ll have control over the supply chain and product pricing, as well as product promotion through advertising and your product listing page. Essentially, they control how your brand is presented on the marketplace.
Limited to just Amazon
You won’t be able to sell your products on other platforms or through your own website, meaning you can’t create your own following and establish a presence within your niche.
It also means you can’t diversify your business earnings, so you’ll be solely reliant on Amazon sales to support your business—a risky set-up.
Amazon will be the owner of your brand and has the power to remove you from the program. While it can be beneficial for a promising startup to get this launch support, it does come at quite a price.
What’s in it for Amazon?
By taking control of your supply chain, Amazon is able to reduce pricing for your products. The benefit of this is that it allows them to undercut big brands on Amazon and take a portion of their market share. The knock-on effect of this is that it also undercuts brands selling off of Amazon.
There are minimum sales requirements for the program as well, which is Amazon’s safety net—it ensures that they profit from the arrangement.
The main benefit for Amazon and their ultimate goal with this program is to continue to take more market share within the online retail industry. By having control over brands on their marketplace, they have control over their growth in the industry.
Amazon Accelerator vs Amazon Launchpad
Part of Amazon’s mission is to use its market share to support ecommerce startups, and they’ve put programs in place to do this.
Amazon Launchpad is the other main program that helps you launch your business. While both programs operate in similar ways with similar benefits, there are some differences.
Launchpad has its own marketplace on which to sell products.
The product pages have larger images and videos, carousels and hotspot images, comparison tables, and more space for sales copy and product details.
Launchpad vendors also get access to startup growth support with guidance through the process of opening an Amazon account and getting a storefront and product listing pages set up. They can also receive support from other service providers on Amazon for funding, sales, prototyping, manufacturing, and more.
The main difference between the accelerator and launchpad programs is that, with launchpad, you retain control over your brand. Your storefront and products are in your brand’s name, and you maintain control over your supply chain.
The caveat for the launchpad program is that there are the following requirements in place:
- A 5% premium fee added to Referral Fees (which can be reduced to 3% if you exceed $1 million in sales in your first 12 months)
- Your products must retain a rating of at least 3.5 stars from a minimum of five reviews
- You must be enrolled in Amazon FBA with Prime Badging
If you feel that the benefits of the launchpad program outweigh these commitments, then it could be a good way for you to launch or grow your startup.
Is Amazon Accelerator Right for You?
The Amazon Accelerator program can be a good way for you to fire up your business if you feel your business would be suited for it.
If you don’t mind relinquishing control of your brand and would like Amazon to, for the most part, sell your products for you, then this could be the program for you.
It offers a way for you to launch on the world’s largest online marketplace and get specialized exposure to a monthly audience of around 200,000,000.
If you don’t feel this type of program is right for your business and you’re unsure of how to scale your business, then it might be the right time to sell.
Many of our business sellers sell their business to a buyer who has the capacity to take it to the next level. It’s an opportunity for the seller to earn 30–50x their monthly net profit in one transaction while watching the brand they’ve built grow in the market.
The first step to selling your online business is to find out what it’s worth. Complete our free valuation tool to see what you could get for your business.