Selling on Amazon: Amazon Marketplace vs. Amazon Product Ads
What’s the difference between Amazon Product Ads and the Amazon Marketplace?
I’ve discussed before the differences between marketplaces and comparison shopping engines.
In Amazon there are two ways that merchants can advertise their products:
1. The Amazon Marketplace (a cost per acquisition marketing program).
2. Amazon Product Ads (a cost per click marketing program).
Proceed with Caution
Managing accounts on Amazon takes time and knowledge on the part of the seller. Amazon has particular requirements for its Marketplace and Product Ads listings for both feed format and account management. Considerable time and knowledge are necessary to manage these campaigns. Still interested? Keep reading to learn how to list on the Amazon Marketplace and place ads on Amazon.
The Amazon Marketplace
The Amazon Marketplace is one of the most well-known marketing channels for online retailers. To list products on the Amazon Marketplace, sellers are required to set up an account, and send Amazon a product feed. Marketplace listings are the seller results that appear when a query is typed into the search box. 
Unlike Amazon Product Ads, the Amazon Marketplace program does not link shoppers to a merchant’s site, as all transactions are performed on Amazon.com. Within the Amazon Marketplace program, there are two ways in which you can sell your products.
1. Fulfillment by Amazon
Merchants that participate in the Fulfillment by Amazon program send their inventory to an Amazon warehouse, where Amazon stores the merchant’s inventory for a monthly fee, which varies dependent on size. Amazon then fulfills orders placed directly on Amazon.com or fulfillment requests that merchants submit for sales not on Amazon.
Merchants that participate in the Fulfillment by Amazon program are also eligible to be highlighted in Amazon Prime, an Amazon customer loyalty program that offers free two day shipping on all qualifying orders.
2. Selling on Amazon
Another marketplace option involves selling products through the Amazon Marketplace, but the seller handles fulfillment. The transaction still takes place through the Amazon website, but sellers are responsible for shipping products reliably and on time. Sellers who do not fulfill purchases on time are susceptible to negative review.
Amazon Marketplace Fees
Amazon charges sellers 3 ways for listing its products on the Amazon Marketplace.
1. Amazon charges 6-25(25 percent of Kindle accessories) percent of sale revenue made on each purchase.
2. A .99 cent fee is levied on each transaction for all sellers, excluding Pro Merchant Subscribers who pay a monthly subscription fee of 39.99.
3. The Seller is required to pay a base closing fee, also waived for Pro Merchant Subscribers who sell in categories other than books, CDs and Vinyl, Videos, DVDs, Video Games, Software, and Computer Games.
Amazon Product Ads
Sometimes sellers cannot list products on the Amazon Marketplace. This can arise due to many issues, such as gated categories, or feeds without UPC codes. Amazon Product Ads is a viable alternative to the Amazon Marketplace, which still allows merchants to list on Amazon. Merchants can set up an Amazon Product Ads accountin much the same way as the Amazon Marketplace, through submitting a detailed product feed, and filling out some basic seller information. Amazon Product Ads are the less known links at the bottom of the search result (SERP) pages, labeled as Product Ads from External Websites.
Or become product pages themselves when no marketplace inventory is available.
Unlike listings on the marketplace, Product Ads listings link shoppers directly to the seller’s site, where the transaction takes place. This gives sellers the ability to grow their email lists, increase the lifetime value of those customers, and gives their brand more visibility.
Amazon Product Ads Fee
Amazon Product Ads charges merchants a cost per click or CPC to list their product ads on Amazon.com. For each click thru on an ad, the merchant then pays a pre-determined click charge. Merchants can monitor ad spend by using a maximum bid, or a daily budget. To increase visibility, merchants can also increase the CPC bid on products.
Amazon Product Ads or the Amazon Marketplace?
In the video below, our CEO Rick Backus outlines the differences between the Amazon Marketplace and Amazon Product Ads:
If you are unsure of which selling method to use, or do not know if you are eligible to sell on the Marketplace, contact Amazon Seller Support.
Which selling method do you use on Amazon? What issues/solutions have you found to selling on Amazon?
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