…and the top 5 things you need to know about each of them.
This post is by Austin Fisher, Product Manager for SellerEngine’s product research scouting app Profit Bandit. He also works with SellerEngine Services, helping Amazon sellers with listing and account issues.
For those of us who have dealt with Amazon for a while, it was only a few years ago that selling through the ecommerce giant seemed like the wild wild west.
Anyone could start selling and making money. There weren’t many third-party software or service providers, and – most importantly – there weren’t so many rules, regulations and rapid-fire changes to watch out for.
Today it feels quite different. Amazon selling, FBA, retail arbitrage – they’ve all hit the mainstream now. And Amazon has got a lot more proactive in regulating their marketplace.
The evidence for selling on Amazon hitting the mainstream is plain to see. One telling (and a little mischievous!) example comes from Google Trends. 2016 was the first year that more people searched “how to sell on Amazon” than “get rich quick”.
The graph below shows the trend, with interest in selling on Amazon growing rapidly over the last couple of years and hitting an all-time high in 2016.
It’s no coincidence that as Amazon selling hits the mainstream, we’re seeing an increase in the number of major game changers: new rules, regulations, trends, and the proliferation of new software both from third parties and Amazon themselves. These developments are changing the business landscape, making it harder than ever to keep up.
We hope this top five helps you stay on top of these changes, and also serves as a checklist to refer to if you find yourself hit by any of them. So, without further ado, here are my top five concerns that I see Amazon sellers dealing with in 2017, and the top five things to know about each of them. In no particular order…
Major Concern 1. Brand restrictions and ungating
Most sellers know that the rapid proliferation of brand restrictions is Amazon’s solution to the rise in counterfeit products appearing on offer pages. Pay-to-play (paying, for instance, $1500 to ungate a brand), as well as receiving warnings for listing trademarked brands, is just part of the new reality that comes with the maturation of selling on Amazon.
Not all brands are completely gated. With Lego, for example, only the products most at risk for counterfeiting are restricted. Also, some brands restrict the listing of products only for certain conditions (sold as New, for example).
There is no specific requirement when a manufacturer’s authorization letter is required for ungating, but if you are asked to submit invoices instead, here’s what you should know:
Top 5 things to know regarding invoices and brand ungating:
- Make sure the paperwork says “invoice” and not a variation of that (such as “commercial invoice”, “packing slip” etc.)
- Check that the suppliers are easily verifiable (look them up on Google) and are well-trusted in your business network. If they have a brick-and-mortar shop, that’s even better. Also check the authorized supplier list provided by the brand.
- Make sure that the “bill to” field on the invoices clearly displays your company details and address as saved in your Seller Central account. Do not use invoices for products that you bought as an individual and had shipped to your personal address, for example.
- The minimum purchase on all three sample invoices together should be 40 units, spread across at least five different products. The invoices should be as detailed as possible, showing the brand name and not just the model number and variation.
- Anything you put in the optional comment field of the application (only 166 characters long) doesn’t seem to make much of a difference. You could use it to share a shortened URL (using bit.ly, for example) or add something that you feel is relevant about your supplier or your company’s selling activity. Amazon clearly focuses on the invoices, though.
If your application was rejected and you’re about to try again, it’s better to use new invoices rather than amend the old ones (even when that requires buying new stock, with new invoices, just to get you through the ungating process).
Amazon is adding more and more restricted brands to their database, so keep an eye on your notifications in Seller Central. There are also unofficial lists available online, based on other sellers’ reports of the brands that have been flagged for them.
Major Concern 2: At Risk notifications and recovering suspended listings
The Account Health dashboard displays items with inauthentic product warnings and safety incident complaints for the last 180 days.
When the dashboard was implemented, besides showing listing suspensions that genuinely needed to be addressed, it started flagging items that had already been the subject of an appeal. It also included items that sellers never received notifications for.
If you get an ASIN suspended and want to reinstate it, Amazon will likely ask for invoices or safety certificates along with a Plan of Action (POA).
Top 5 things to know when dealing with At Risk notifications:
- We’ve seen sellers with up to 15 notifications in the dashboard, and although you need to address each issue promptly, don’t panic. Even if you have more than one notification in the At Risk section, you can resolve the problem without account suspension.
- Even if you don’t plan to relist your flagged items, appeal to Amazon for each and every notification. You never know when you may want to sell a certain product again.
- While Amazon’s decisions may be inconsistent, having the right approach and writing an adequate appeal will guarantee you the best outcome possible. If you need extra help crafting an appeal, our services and those of other providers exist to help you out. It’s all in the writing.
- If you get any notifications for ASINs that have already been appealed, simply copy and paste the original email that confirmed your right to sell the item in question, and mention the date you received that confirmation. Amazon may flag the ASIN again, even if you’ve been approved to sell it, so keep a record of all your communications. If you receive any notifications for ASINs never brought to your attention before you need to notify the Amazon Seller Performance team immediately. Amazon may acknowledge the message and let it go, or it may ask you for a POA just the same.
- If you’re fighting a notification for inauthentic items: the orders associated with listing suspensions that have never been appealed may be several months old, so it may be hard to locate invoices. But you’re able to submit orders older than 180 days if they are your most recent invoices from that supplier and the quantity on the invoice matches the past sales volume plus the remaining inventory shown in your account.
Major Concern 3: Preventing account suspension
At the end of the day, this is probably the most dreaded issue for Amazon sellers. Sellers need to know what to do to prevent suspension, as well as when the worst occurs and their privileges do indeed get revoked.
Top 5 things to know for preventing suspensions:
- Prioritize each notification and warning message from Amazon. Don’t think that just because other sellers seem to be getting away with things that you’re being asked not to do, that this means you can go on ignoring these alerts.
- Make sure you know and trust your sourcing methods and supply chain. If you don’t feel like you’re getting the right documents you need from your suppliers, such as itemized invoices, then switch fast. Whether it’s authorized dealers, property rights owners, or manufacturers… you need to trust and understand what’s going on with the products you’re trading.
- Commingled inventory, and the shared responsibility that comes with it, can get you in trouble and is a risk that maybe isn’t worth taking. There is simply less risk with the labeled inventory option.
- Be more demanding with metrics like ODR (Order Defect Rate), cancellation rate and valid tracking rate. Make sure you monitor and improve these.
- Stay fresh by continuously researching comments made by buyers in reviews, feedback and emails. Also stay on top of changes to Amazon’s guidelines and restrictions. Check product reviews to see if you need to correct anything with your current listed inventory. Finally, don’t hesitate to create new product pages if you have items that are a mismatch with live listings.
Major Concern 4: Recovering a suspended account and writing appeals
This is probably the one where many sellers will seek outside professional services. Whether you choose this route or not, it’s still good to understand what is required and what best practices exist with regard to appeal-writing.
Top 5 things to know about recovering a suspended account:
- There’s a 17-day window allowed before submitting your first appeal. If you’ve already hit that button and they ask for more information, there’s no time limit whatsoever. Make sure to research any ASINs that were mentioned, and research the sales history and feedback from customers. Was this a one-time event like a damaged shipment that generated a lot of complaints? Or something more recurring that you need to change?
- After checking the obvious (i.e. orders, feedback, notifications), check whatever else could be an indicator. Some of the best places to look are product reviews, your returns, your supplier’s background, and your internal product-quality and condition-verification procedures.
- Create an organized outline for your POA so when you write it, you will have included all the important content. Once you know what the problem was, explain that you understand the issue clearly for Amazon. If you want them to give you another shot, you have to prove that you have an actionable plan, and that you won’t repeat the same mistakes. Highlight corrective and preventative measures for every one of the issues you identified.
- Make changes ASAP so you can tell Amazon you’ve already started fixing the problem. It could be a series of small changes, like upgrading your inventory management system, or as big as switching couriers and suppliers.
- Once you hit that “Appeal Decision” button, it’s time for the waiting game again. It can take weeks for Amazon to give you the green light, so try to stay on top of your customer communication and performance metrics until then, however long the downtime. While you’re on standby, continue putting into practice what you’ve set out to do in the Plan of Action, so that Amazon’s verdict doesn’t catch you off-guard.
Major Concern 5: Unknowns and potential problems just around the corner
We’ve covered four concrete seller concerns for 2017, but what’s coming next? Here we speculate on five potential issues that could affect sellers in the not-too-distant future!
Five things to consider about the (near) future:
- Is the end of retail arbitrage at hand? The fact that Amazon is gating brands, creating more invoice requirements, and making it harder in general to sell, makes some people think the end is nigh for this business model. It may even be possible that Amazon will consider all “re-sold” items as no longer eligible for New condition. Still, consumers want good deals, and this may allow savvy sellers to engage in retail arbitrage on other ecommerce sites. Also, it’s possible that sellers could list items as “Used-Like New”, if Amazon does away with the ability to resell retail items as New.
- Are price wars and the race to the bottom going to become an increasingly major problem? In 2016, Amazon released a free repricing tool of their own in Seller Central. Unfortunately, the way it was designed can accelerate the rate at which prices drop, compared to third-party repricing software. If two sellers use Amazon’s repricer and try to get, for example, the lowest FBA price, their prices will not lower incrementally. Rather, both prices will instantly drop to the price determined by one of the sellers’ minimum prices. The more sellers that use Amazon’s repricer, or other simple tools that don’t raise the price when possible, the more that we’ll see drastic price-dropping being a problem. Third-party software providers will need to continue to move towards intelligent repricing solutions, that are capable of detecting competing repricers and price wars. This way they can react to price changes more intelligently and prevent unintentional races to the bottom.
- How will economic changes like Brexit affect sellers? This one is impossible to predict, but the key thing to realize is that currency fluctuations are already impacting people. The actual changes that will come after the two years are up, and Brexit takes full effect, are hard to predict and we’ll have to wait and see what happens with changes to taxes and tariffs.
- How will new policies and trends affect product sourcing from China? Sourcing from China is getting more difficult, because Chinese businesses are catching on to how to use Amazon’s infrastructure themselves and cut out the middleman. Another clear concern is if the new U.S. executive administration places high tariffs on Chinese imports, then it could become near-impossible to sell many products.
- Unknown unknowns: what about unforeseeable issues that cause major disruption? By definition these are impossible to predict, but here’s a final thought. There are always going to be major changes that may disrupt or completely cripple certain business models, but these changes will also open up new opportunities for sellers that take challenges head-on and adapt. We wish you the best luck in 2017!
If you have questions about anything you’ve read in this post, or if you are interested in our software or services, please contact SellerEngine here.
The Profit Bandit scouting and product research mobile app helps sellers avoid sourcing products that have various restrictions, including brand restrictions, as it display alerts for items that can’t be listed. SellerEngine’s services team help sellers with performance, warnings and suspension issues.