Smooth product launches are crucial for the success of Amazon vendors. However, Amazon's algorithm does not always order new products. This is where the Amazon Born to Run program comes into play, enabling vendors to tell Amazon how many units of a product Amazon should order. But Amazon hedges against the risk in case the products do not sell.
In this article, we take a look at how the program works and explore its advantages and disadvantages.
What is Born to Run?
With Born to Run (B2R), Amazon has created a program specifically for Amazon vendors. Unlike Amazon sellers, vendors cannot send products to Amazon independently and hope they sell. Instead, vendors rely on orders from Amazon.
It is not uncommon for the order of new products not to be automated by Amazon. This is particularly problematic with product launches. If Amazon does not pre-order the new products, the introduction can be delayed by weeks or months.
Here, the B2R program comes into play. The goal of the program is to support vendors in launching new products. This works by vendors signaling to Amazon that a particular product is expected to sell well. Amazon then purchases the desired quantity of the product.
Using Born to Run
To use the program, you need an invitation from Amazon. This is usually received through your Vendor Manager. Products can then be submitted in four steps under Vendor Central > Orders > Vendor-Initiated Orders > Born to Run. Here, you provide the ASIN and the quantity you want to submit. All ASINs submitted must be created and approved beforehand.
The following restrictions apply to products eligible for B2R:
- The product price must be over 5 US dollars
- No hazardous or oversized products
- Products must be “new” according to Amazon standards, i.e., they must not have been in a logistics center for more than 30 days
- The sum of all active B2R orders must not exceed 50,000 US dollars in merchandise value
Once an offer has been submitted, you can view it under "Under Review" in Vendor Central. In fact, Amazon may reject these orders. The acceptance of the offer generally depends on various factors, especially the profitability for Amazon. Since Amazon also achieves higher sales with more salable products, applications are usually approved.
If the request has been accepted, you will see the approved quantity under “Active offers”. Amazon will then usually purchase the product within the next two working days. The 70-day sales period begins 20 days after the submission date. Under “Details” you will find the sales rate of the submitted Born to Run ASINs.
What happens if B2R products are not sold?
If the specified products are not sold within 70 days, fees apply. Amazon offers two options for unsold goods: return or storage. When submitting the application, you must decide on one of these options.
With a return, Amazon vendors must cover the product costs including standard shipping and handling fees. If you choose this option, Amazon begins the returns immediately after the sales period ends.
Alternatively, merchants can pay a markdown of 25% of the purchase price if Amazon keeps the unsold products in storage. This option has the advantage that the products can still be sold even after the sales period has ended.
Determining the right quantity to offer
For a successful sale with Born to Run, it is crucial to determine the right quantity to offer in advance. Using Amazon Retail Analytics (ARA), vendors can predict future demand for their products and adjust their offer quantity accordingly, regardless of whether the products are new or already sold.
If you also expect an increase in demand due to upcoming marketing campaigns, it is advisable to include the resulting sales increase in your forecast.
Advantages and Disadvantages of Born to Run
By using Born to Run, Amazon vendors can expect the following advantages:
- Accelerated and secure product launch
- Avoidance of 'out of stock' issues
- Positive impact on reach
- Chance of reorders by Amazon
However, the B2R program also poses some challenges. The following disadvantages may arise:
- If the items do not sell completely (within 70 days), fees apply
- Use is only possible by invitation
Conclusion
For Amazon to reorder a product regularly, it must sell well. The Born to Run program allows vendors to prompt Amazon to pre-order inventory without requiring corresponding sales figures.
The Amazon Born to Run program is therefore ideally suited for products that you are confident will sell well. You benefit from a fast product launch and a reduced risk of stockouts. Moreover, Amazon vendors do not have to worry about storage, shipping, or customer service. However, determining the right offer quantity is crucial for success, otherwise avoidable costs may arise.
Frequently Asked Questions about the Born to Run Program
Is Born to Run suitable only for new product launches?
No, the B2R program is also suitable if you believe that the usual quantity of orders should be higher, for example, due to a planned marketing campaign.
What happens if Amazon rejects a 'Born to Run' order?
If Amazon rejects a Born to Run order, it is not executed. Rejection may depend
on various factors, including the profitability of the product for Amazon.
Can I create new ASINs through Born to Run?
No, ASINs must be created and approved beforehand before they can be submitted in the Born to Run program.
What are the consequences of a wrong product quantity statement?
A wrong product quantity statement can lead to you having to take back unsold units and refund the costs. Alternatively, Amazon can keep the unsold products and charge you a storage fee of 25%. Therefore, it is important to carefully calculate the desired quantity in advance.
Why is a sales period of 90 days specified for an order?
The 10-week sales period begins 20 days after the submission date of your order (to account for the lead time for transport) and lasts for 70 days. Hence, a total period of 90 days arises.
Are there additional fees with Amazon B2R?
Apart from the fees incurred by unsold products, there are no additional costs associated with using the Born to Run program.
