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With over 2 million third-party businesses selling their products and services on Amazon, the platform is rapidly expanding worldwide. Amazon has initiated an Accelerator program to assist these startups and private label sellers in the manufacturing and marketing process. In this program, you pay Amazon for the services, and it handles the rest of your business needs.
Amazon brings another similar program, the Launchpad, to help fresh sellers showcase their products and grow their brands using marketing tools. But how to choose the right program for your needs? This is what we will help you decide with this article. We will start by explaining the Accelerator program in detail and then look at Amazon Launchpad vs Amazon Accelerator to spot the differences. So, let's get started!
- What is the Amazon Accelerator Program?
- What are the Benefits and Drawbacks of the Amazon Accelerator Program?
- How Much Do You Need To Pay for the Amazon Accelerator Program?
- Who Can Enroll in the Amazon Accelerator Program?
- How to Sign Up For the Amazon Accelerator Program?
- Is it Worth Joining the Amazon Accelerator Program?
- What is the Amazon Launchpad Program?
- Amazon Launchpad vs. Amazon Accelerator - Differences and Similarities
- Wrapping Up
What is the Amazon Accelerator Program?
Amazon Accelerator is a special program for small to medium-sized businesses to launch their products. It helps manufacturers and third-party owners to partner with Amazon and sell their products under the brand.
Amazon exclusively owns and sells the products registered with this accelerator program by offering onboarding assistance, marketing services, and a large base. Also, it lets the sellers become an Amazon Private Supplier by supplying the products to Amazon brands while the platform handles all the other processes.
When Amazon acquires products from these private suppliers, it can potentially skip the research and development stage of a conventional e-tail business. In this way, it promotes potentially profitable products of the private label brands, expanding its marketplace.
On the other hand, the brands under the Amazon Accelerator program get unjustified priority over the other existing sellers. This is alarming for independent sellers who might get removed from the platform at any time.
What Are the Benefits and Drawbacks of the Amazon Accelerator Program?
Like most seller programs, Amazon Accelerator comes with certain pros and cons. In terms of comparison, Amazon Accelerator brings short-term advantages but long-lasting pitfalls. Here's an overview of its benefits and drawbacks:
Amazon Accelerator Benefits | Amazon Accelerator Drawbacks |
Your products are displayed prominently on the front, unlike the curated marketplace provided by Launchpad. All products under the accelerator program are promoted on Amazon's ‘Our Brands’ page. | You have limited control over your brand since your products are exclusively sold on Amazon, which imposes strict production timelines to manufacture and package the items. |
You get more space and flexibility to experiment with your ideas. As Amazon manages your business dealings, you can focus on improving your product by testing different variations without landing on risks. | Amazon sets the prices of the products. |
Amazon takes care of all your logistical needs, handling the supply chain management. | You are bound to sell your products only on Amazon with no options for externally expanding your business or diversifying your revenue. |
Amazon provides marketing tools, analytics, and an assistance team, similar to Launchpad's marketing package. | Amazon doesn't provide you access to the customers’ data, so you don’t have any information in case you leave Amazon and start working independently outside the platform. |
You get free space in Amazon's Seattle office. | Amazon can remove or disqualify you from the program at any time. |
You can access Amazon Vine for free to handle customer feedback in both Accelerator and Launchpad programs. | Amazon makes you sign a purchase clause that provides them the right to buy the brand. |
If we analyze the benefits listed above, the biggest advantage is the freedom to experiment with your products without damaging your business or losing your customers because Amazon manages your business practically.
Plus, Amazon takes care of all the shipment and logistics, which saves time and hassle. Moreover, you get a complete marketing package that helps you grow your customer base incredibly.
As for the drawbacks, Amazon holds the exclusive rights to your product for the short-term benefits you get. You pay a sizable amount to Amazon to assist you grow your brand. Therefore, you must consider these factors when you decide to sign up for an Amazon accelerator program.
How Much Do You Need To Pay for the Amazon Accelerator Program?
Amazon Accelerator program is targeted to promote the products and boost the sales of small to medium-sized businesses by offering them a solid platform. Sellers who sign up for the Accelerator program pay the referral fee described on the Amazon fee schedule and an additional 7% program fee.
If you sell any products from the Clothing, Footwear, Accessories, Handbags, or suitcases range that fall under the Fashion category, you have to pay an additional 7% on top of the referral fee mentioned on the Amazon fee schedule for Clothing and Accessories.
Also, if you have a brand that comes under the Seller Central account and you sign up for the Accelerator program, you will have to pay the program fee.
Who Can Enroll in the Amazon Accelerator Program?
Amazon Accelerator program is for established or small businesses interested in marketing their products to a large market base. It is ideal for sellers who want to grow their brand through Amazon's portfolio and need help with marketing to develop and launch new products.
Here are the bare minimum criteria you need to follow to participate in the Amazon Accelerator program:
- You can potentially hit $1 million in revenue in annual sales.
- You must maintain stable inventory levels constantly to satisfy customer demands.
- You must commit yourself to pay 5% of the revenue on Amazon’s paid advertising services.
- You need to offer Fulfilled by Amazon (FBA) for all your products and Merchant fulfilled method only when the inventory runs out.
If you fail to meet any of the points listed above, you can't qualify for the Amazon Accelerator program.
How to Sign Up for the Amazon Accelerator Program?
If you qualify for the Amazon accelerator program, you can easily enroll through its official landing page. Simply click "Sign Up" to fill in the required details in the survey. You will have to provide information about you and your business before you proceed.
The survey is designed in two sections, and the first page contains questions related to the basic contact details, such as the company name and contact information. Meanwhile, the other page inquires about your business, the type of products you sell, the location of your warehouse or factories, and the Amazon marketplaces you want to target.
Once you fill out and submit the survey, Amazon will evaluate and analyze your information. If you pass and qualify for the next stage, you will be contacted by Amazon for the next phase. Usually, sellers receive a response within a few weeks, but it might vary in different cases.
Is It Worth Joining the Amazon Accelerator Program?
If you have an established brand or at least maintained a good sales track in your sales category, the Amazon accelerator program can work for you. Also, if you are a manufacturer targeting production or a private label brand, it would be a good idea to join the Amazon accelerator.
On the other hand, if you are a new seller or a small business owner who wants to grow your brand, market your product, or increase your customers with Amazon's marketplace, the Amazon Accelerator might not help you much. It is because Amazon would sign up for your brand and own exclusive rights over your products at a much lesser rate than the worth of your brand.
However, if you plan to experiment, innovate, and launch a new product range, the Amazon Launchpad program will be more suitable. But you must explore Amazon Launchpad vs Amazon Accelerator properly and also weigh your goals before signing up for Launchpad, as it comes with a 1-year contract, a 5% premium, and longer payment cycles.
What is the Amazon Launchpad Program?
Amazon Launchpad is a program for startups with unique products to support them in building brand awareness. It promotes your products on the "Unique Finds Storefront" to attract interested customers and grow your business on the platform.
With Amazon Launchpad, businesses can access premium A+ content, Amazon Imaging services, and other specialized tools. Moreover, sellers retain control over their brand, and no unauthorized individuals can sell the same products on the platform.
Amazon Launchpad vs Amazon Accelerator - Differences and Similarities
Amazon Launchpad and Amazon Accelerator have been primarily introduced to assist sellers. However, both cater to the needs of different types of brands.
The below table compares the Amazon Launchpad vs Amazon Accelerator properties in detail:
Amazon Launchpad | Amazon Accelerator | |
Targeted for | Startups with hot-selling and innovative products | Manufacturers and private label brands interested in selling their products on Amazon exclusively |
Eligibility criteria | - Operating for less than four years - Average ranking of 3.5 stars - Made 5M sales in the last 12 months - Received a minimum of 5 reviews - Adopted FBA with Prime Badging | - Generate a minimum of $1 million in sales - Commit a 5% of revenue to regularly spend on paid Amazon advertisement - Offer FBA - Maintain healthy inventory levels |
Seller fees | 5% premium on the referral fees mentioned on the Amazon Fee Schedule | 7% premium on the referral fees mentioned on the Amazon Fee Schedule |
Customer feedback | Access to Amazon Vine | Access to Amazon Vine |
Level of Control | Your products remain under your brand name, which you control completely. | You become a nameless franchise where Amazon manages the supply chain and other operations |
Additional exposure | Holds a dedicated marketplace within Amazon | Has no dedicated page, but it shows the products in the Our Brands category |
Brand gating | No unauthorized sellers are allowed to sell the same product | No brand gating |
With the Amazon Launchpad vs Amazon Accelerator debate above, this high-level view of the differences clarifies the roles of the two and defines the conditions where they work well. Therefore, you must pick the program that favors your brand's needs.
Wrapping Up
Amazon offers different programs to help sellers promote their brands on the largest retail platform. Amazon Accelerator and Launchpad are two such programs designed to facilitate sellers on the platform. The Amazon Accelerator program suits the needs of private label brands willing to give exclusive rights to Amazon, whereas the Amazon Launchpad works for startups with innovative products. Therefore, consider the above Amazon Launchpad vs Amazon Accelerator comparison and choose the one that aligns with your business model on Amazon.
