Seller-Fulfilled Orders Must Now Conform to Amazon’s Returns and Refunds Policy.

We all know that returns for seller-fulfilled orders work quite differently from those sold and shipped by Amazon.

So, to streamline and make the returns experience consistent for all customers, Amazon is updating their Returns and Refunds Policy for third-party sellers who manage their own shipments.

Starting August 1, 2022, seller-fulfilled orders (shipped from and sold by seller), including those not eligible for Prime, will be subject to the same returns policies as Amazon.com.

That means Amazon will automatically approve return requests and issue refunds that fall within their policy. ⚖️ On the one hand, it takes some of the autonomy away from sellers. On the other though, it reduces the work required to process their returns and helps to keep Return Dissatisfaction Rate (RDR) low.

What Has Changed?

Prior to this update, seller-fulfilled merchants could create and implement their own returns policies as long as they are in line with Amazon’s current guidelines:

• Must accept returns within the 30-day return window.
• Seller-fulfilled returns must be returned to the address listed in the merchant’s seller account, not to an Amazon warehouse. That also means merchants might have to shoulder the cost of sending an item back to their address, unless they offer “Returnless Refunds,” which allows them to refund a customer without getting the product back if it costs more to ship than its actual worth, e.g., low-cost items. See Refund Options for more information.
• Must refund the customer within two days of receiving the returned item or offer a replacement.

Having your own returns policy also gives you the opportunity to communicate with the customer to try to fix the issue before resorting to the last step – a refund. However, the Amazon returns and refunds policy update will take that away from you in exchange for what the retail giant believes would be a more streamlined customer-centric buying and returns experience. 🤔

Studies have shown that excellent returns policies can influence new sales, increase customer retention, build brand loyalty, and help retailers gain competitive advantage.

It’s not uncommon for some online shoppers to make multiple purchases to ensure they get the item they want in the correct size–for example, buying 2-3 different sizes of the same t-shirt to ensure proper fit of one while returning the other items that didn’t fit.

Therefore, for these customers, it makes more sense to buy from a retailer like Amazon that can make it easier for them to return items that didn’t work out and receive refunds (partial or full) at no extra cost.

Unfortunately, some third-party sellers with return and refund policies are more restrictive than Amazon, which could be why the eComm giant thought the update was needed. However, rather than Amazon enforcing their policies only on those who violated them, they opted to hit all sellers with this blanket change.

What Happens If You Don’t Conform?

Any returns policies that don’t adhere to Amazon’s will be removed from your Returns Information & Policies page.

You need to be ready to behave accordingly – for example, using good packaging to ensure products don’t arrive in damaged condition, leading to a return request. Otherwise, you may receive penalties that can affect your performance metrics in many different ways.

If you keep getting return, refund, or replacement requests, it increases your risk for A-to-Z guarantee claims and negative feedback, which could impact your Order Defect Rate (ODR). A high ODR (more than 1%) may result in a restriction of your selling privileges, including suspension of seller-fulfilled offers. ☠️

To stay in Amazon’s good graces, you may need to look at your current processes and systems and make sure your staff, including 3PLs and returns service providers, are up to date in preparation for this change, because August 1st is right around the corner. 💪

Related: 6 Causes of Amazon Unfulfillable Inventory and How To Fix Them

As we know, Shopify and Amazon have been sparring in the ring for some time, but with Shopify’s recent acquisition of Deliverr, now the gloves are off. 🥊

Deliverr Acquisition Heats Up Competition Between Shopify and Amazon

Amazon has been going after Shopify’s customers and customer data for some time with their Multi-Channel Fulfillment (MCF) program. They even incentivized sellers last year into the program by handing out restock limit increases.

In case you missed it, we reported back in July 2021 that while Amazon was slashing restock limits for sellers due to capacity constraints, they were at the same time doubling restock limits for sellers who fulfilled their non-Amazon sales through Amazon.

You would think that they would implement more restrictions to further limit the influx of inventory into their already-strained warehouses, but they didn’t. 🤔

What could be the reason behind this?

Data grab

Amazon counts your MCF sales toward your sales velocity, which has a direct impact on your restock limits, something that was hugely important to leverage last year. The added benefit to Amazon is that each time you fulfill orders from Shopify and other channels through MCF, they gain access to velocity and customer data from other platforms, which allows them to size up their competition and to remarket to their customer base. Amazon could also acquire more valuable insights into what products are trending on other marketplaces and use them as additional sources to develop and improve their own private label brands.

Boost fulfillment revenue

Amazon most likely took a profit hit and more importantly, lost access to significant amounts of competitor data when sellers opted out of their fulfillment network due to inventory restrictions. Perhaps, they tried to soften the blow by incentivizing MCF sellers with higher restock limits so that they would keep using Amazon to fulfill and thus increase storage and fulfillment revenue.

Fast forward to April 2022, Amazon announced that they were making moves to go after even non-Amazon sellers, offering to fulfill for Direct-to-Consumer (DTC) merchants via Buy with Prime.

Shots fired. And now, Shopify is shooting back. 🔥

Shopify’s acquisition of Deliverr and plans toward 1- and 2-day delivery hit at the heart of Amazon’s Buy with Prime program.

With Deliverr, “Shopify Fulfillment Network (SFN) will allow all merchants to better align the supply of their inventory with buyer demand as we remove complexity for merchants in one of the most challenging areas they face today: logistics. And soon, we will roll out another powerful feature of SFN called Shop Promise, which will offer reliable two- and next-day delivery options across the US,” said Shopify Logistics Group CEO, Aaron Brown, in a press statement.

💯 Smart move toward Shopify working at offering alternative fast and easy fulfillment for sellers and protecting their data!

I wouldn’t be surprised if they eventually went the way of Walmart and stopped allowing Amazon to fulfill Shopify orders, or, at the very least, pulled API connections to such services.

But will these be enough to loosen Amazon’s grip on the eComm industry? 🤔

As of October 2021, Amazon leads US eCommerce with 41% market share, followed by Shopify at 10.3%, Walmart at 6.6%, and eBay at 4.2%.

Looks like it’s going to be a steep climb for Shopify! But with the addition of Deliverr into their fulfillment network, hopefully it will be enough to spark a change and even the playing field a bit.

Automate Pricing tool finally has a bulk upload option! 🎉

Yes, that’s right. Some sellers may say, it’s about time. 

Instead of adding each product and setting its minimum and maximum price one by one, which is a pain in the neck, Amazon now allows you to apply the following pricing rules to multiple listings at once. 🚀

• Select a single listing or a number of listings
• Set the minimum and maximum prices for your listings
• For sales-based pricing rules, assign a specific number of units you want to sell during a given period to test the right price for your new product or to simply manage your inventory levels. If sales are less than 10 units, you can set to reduce the price by 10%, for example.

Once applied, Automate Pricing will automatically update your prices in accordance to your preset rules. 

You can set the min/max offer for your product around the Buy Box price or your competitors’ so that when it changes, the tool will match, exceed, or beat that price by a certain amount or percentage – yours could be automatically set 5 cents or 3% lower than the prevailing offer to stay competitive, for instance.

⚠️ However, there’s a negative aspect to this competitive lowest-price rule. 

On the one hand, if you suddenly become the only seller, your (low) price may stay the same. This could prevent you from making sales at higher prices unless you were to manually track and update this.

That is one of the cons of using Automate Pricing tool because many repricers will update your offer to the max price automatically if all your competitors ran out of stock, leaving you as the only seller. 

And because you’re selling at a more affordable price, you could sell out more quickly than anticipated, which is probably fine if you’re trying to eliminate slow sellers or products with a limited shelf life.

On the other though, offering the lowest price out there increases your chances of becoming the Featured Offer. And when you do get featured, it boosts your visibility on Amazon, which could then help drive more traffic and sales. 💰

For a smarter repricing strategy, Amazon also lets you review your pricing history for any SKU enrolled in Automate Pricing to track price changes and use business reports to measure success.

In addition, if you’re selling globally, you can adjust the prices of your exports for currency conversion, price increases, and discounts.

Overall, Amazon’s Automate Pricing can be an excellent alternative to paid repricer apps. It’s free for Amazon sellers, and with its new bulk pricing feature, it reduces the time it takes to enroll multiple SKUs to the system and implement pricing rules, making it as efficient as third-party repricer tools.

However, constantly keeping your prices lower than the Buy Box can hurt your profit per unit and increase your stockout risk due to higher demand. Therefore, you may still have to disable pricing rules to manually adjust your prices from time to time.

👆 So don’t cancel your current repricers just yet. Try Amazon’s tool on for size to see if it will actually work well for you. And consider testing Automate Pricing with 5 to 10 listings first to see if it’s for you before applying pricing rules to the rest of your inventory. 
Go to Automate Pricing to get started.

To make room for Prime Day, Amazon has enabled automatic removal of the following inventory starting April 15th:

• Inventory that has been in Amazon fulfillment centers (FCs) for over 12 months and is subject to long-term storage fees.
• Inventory that has remained unsold for six consecutive months and has been in FCs for over half a year.

You can, of course, disable automatic removals for your inventory on the Settings menu of your Seller Account. However, carrying a lot of slow sellers is not ideal.

A high excess inventory percentage and a low sell-through rate can negatively impact your Inventory Performance Index (IPI) score. As of this writing, scoring below 400 could mean Amazon placing limits on your FBA storage capacity. Plus, letting inventory sit for more than six months can also lead to additional storage fees.

Pro tip: Regularly check your Manage Inventory Health report to identify and get rid of slow sellers before they start impacting your IPI score and incurring holding costs.

Recover Value from Your Aging Inventory

Once you’ve enabled automatic removal for your old inventory, you can select any of the following value-recovery options:

Arrange a flash sale
As the April 15th deadline approaches, review your excess inventory that falls into this category and try to move as much of your inventory before this date by having a flash sale. Promote the sale via your email list or social media, drop prices or provide a deep coupon discount. Flash sales may make more sense than a straight return or disposal of inventory which can lead to financial losses.

Include a Return Address to have your inventory sent back to your warehouse
Make sure to provide a valid return address to avoid getting your units disposed of automatically at FBA. If you need to change your return address, do so now to ensure all changes are saved before the disposal start date.

Liquidate to have your inventory liquidated
This option will help you to recover 5% to 10% of your product’s selling price.

Go to Automated Fulfillable Inventory Removal for more information.

In the past two years, Amazon has ramped up its fulfillment capacity to meet high customer demand. Reports show that the eComm giant’s global fulfillment network and data centers grew from 272 million square feet in 2019 to 532 million square feet in 2022. Most of these facilities are located near metropolitan areas so that Amazon can deliver customer orders in one day or less, allowing them to compete with UPS and FedEx.

This unprecedented growth is much in response to what happened in 2020 and 2021. In the last two years, sellers had been subject to strict restock limits due to capacity constraints at Amazon (tough times!). Now, the pendulum is swinging the other direction and this kind of paints a picture of what we’ve been hoping for–that restock limits really may have eased up for a lot of people.

On an earnings call with analysts in November 2021, Amazon CFO Brian Olsavksy stated that Amazon hasn’t had capacity restrictions for the first time in a while. But the commitment to build out a larger network of facilities to store, sort and ship products at breakneck speed came at a cost.

Amazon Grapples With Excess Capacity

Amazon ended up with excess labor, storage space, and transportation capacity amid rising costs and eCommerce growth decelerating after a huge spike in 2020. This has resulted in $2 billion in incremental costs, according to Amazon Q1 Earnings Report for 2022.

To mitigate these costs, the online retail giant is expected to spend less on fulfillment centers this year than last.

Amazon will also try to generate more money from its vast fulfillment network by offering Buy with Prime to non-Amazon sellers, aka direct-to-consumer (DTC) merchants. This new service allows merchants to use Prime’s free two-day and next-day shipping and returns.

So, we went from Amazon turning away huge amounts of our inventory because it only had room for essential goods, which forced us to outsource storage to 3PLs, to now using its empire to fulfill orders for other retail sites.

While these are good profit-recovery measures for Amazon, could there be other reasons they’re doing this? What’s in it for them?

Data Grab

Not only is Amazon using Buy with Prime to potentially boost their revenue and offset some of their expenses, but we might as well say the quiet part out loud here, that this initiative has the added benefit of grabbing customer data, such as consumer names and addresses and potentially even phone numbers and emails as a requirement of shipment handling.

This information would be everything that Amazon would need to launch massive remarketing and retargeting campaigns to your non-Amazon customers if they chose to do so.

Beyond this, Amazon could also gain more insights into what products are successfully selling on other platforms which could act as an additional R&D source beyond the extensive Amazon data that is currently available to it. This scenario would not be out of the realm of possibility based on past history.

Were they to go this route with Buy with Prime, it wouldn’t be Amazon’s first attempt at (allegedly) violating user data privacy. In 2020, the Wall Street Journal reported that Amazon employees used third-party sellers’ data to launch competing products for their own Private Label (PL) business to boost their sales. Although an Amazon spokesperson denied this, and even launched an internal investigation of its PL division, the retail giant failed to provide a copy of its report. This has prompted the House Judiciary Committee to ask the Justice Department to conduct another investigation into Amazon over a possible criminal obstruction.

With that in mind, could this be an under the sleeve motivation for Amazon to attract DTC merchants who otherwise would have no Amazon relationship outside of Buy with Prime? If so, this would allow Amazon to surveil their data, such as sales velocity per SKU and customer details, and possibly use those to their advantage, i.e., fight for more market share.

Related: How a Seller Doubled Their Amazon Restock Limits

Potential Fulfillment Issues

Since Amazon didn’t have enough capacity to fulfill FBA orders for Amazon sellers and now they’re trying to fulfill for others, what headaches are we going to deal with?

On the one hand, it could be a welcome sign that restock limits are gone for good. On the other though, it could not. In July 2021, we discovered that, while Amazon was slashing restock limits for sellers, they were at the same time doubling restock limits for sellers who fulfilled their non-Amazon sales through Amazon.

At the same time they were telling us there was no space for our FBA-fulfilled inventory, they were incentivizing sellers to use their fulfillment network for other sales channels. The only sense it made was from a data grab perspective. Perhaps this was the initial testing ground for Buy with Prime and why so much focus was put into it in a time when FBA warehouse space was supposed to be at a minimum.

With that in mind, it could go either way but it’s worth posing the question:
Is this actually going to backfire and make it more difficult for Amazon to fulfill deliveries to our customers? 🤔

Buy with Prime could be beneficial to multi-channel sellers fulfilling Shopify orders through Amazon, as it might help them maintain or improve their restock limits if that remains relevant in coming months. Sales from multi-channel orders actually contribute to your Amazon sales velocity. So, the more you use multi-channel fulfillment (MCF) for your off-Amazon business needs, the higher your restock limits will be.

However, Buy with Prime is currently invite-only. Amazon could be reaching out to sellers who are currently selling on their retail site as well as selling on Amazon, or they could be focused only on sellers who are not selling on Amazon at all, including people interested in starting to sell on the platform who just haven’t made the move yet. So, again, all of this may partially be a play to try to get them into Amazon itself.

Expect a slow roll out from Amazon, as they’re still trying to see how it goes.

Participating merchants will be able to display the Prime logo and expected delivery date for eligible products on their online retail sites.

Other benefits include:

• No fixed subscription fee
• All fees except storage fees are charged only after you make a sale
• Pricing includes service fee, payment processing fee, and fulfillment and storage fees per unit

The payment processing fee likely means that Amazon’s going to be running payment processes through Amazon Pay, a service that gives your customers the ability to pay with Amazon payment methods rather than entering their credit card on your website.

Upside to Buy with Prime

Not to be a complete doomsday predictor, there are also many benefits to consider with Buy with Prime. Amazon’s Prime shipping program has set up an expectation in the mind of the online shopper that few other businesses can even hope to meet. Buyers expect free, fast shipping and 25% of cart abandonment is due unexpected shipping costs, while lack of express shipping option is another one at the top of the list.

For this reason, Amazon making their fast, free shipping network available is kind of a big deal. A note of caution is that, as opposed to your standard inventory on hand in your single outside fulfillment center, you’ll likely want to have much more inventory on hand in order to meet one or two-day shipping demands as Amazon meets these targets based on the spread of their inventory across the selling region.

The other benefit is borrowing the trust that Amazon has built around its shipping and payment processing. Your buyer does not need to enter his credit card information on your website because it is processed directly from Amazon’s site. This helps to safeguard against another cart abandonment issue which is concerns about payment security.

All of these factors, both the above warnings and benefits, should be weighed so an eyes-wide-open decision can be made on what you feel is best for your business if you are interested in exploring the Buy with Prime service for your off-Amazon fulfillment.

Final Thoughts

Now that its infrastructure has been built out to such a massive degree, Amazon is definitely looking to try to make Prime more of a concrete revenue generation system. While they have been previously focused on the “investment in the future” side of the operation by capturing buyer market share and adjusting consumer expectations regarding shipping cost and time, they seem now to be pivoting towards making it work for them on both the financial and data side of things.

And with the recent additions of dimensional weight calculations and 5% fuel and inflation surcharge, fulfillment fees just got a heck of a lot more profitable for them, all while sellers’ wallets unfortunately take the hit.

It seems like they’re flipping a switch and figuring out a way to make Prime an even more lucrative program for them. Amazon done a great job over the years in focusing on getting those delivery timetables right so that potential merchants and customers change their perspective on what is expected in the market, such as free shipping and fast handling and delivery times – from 2 days to same day, while keeping any other intention behind the strategy a bit more ambiguous.

Amazon has updated its Return and Refund policies in preparation for Q4! 🚚

Extended Returns Window

For US sellers, the eCommerce giant is temporarily extending the standard returns window for early holiday shoppers.

Amazon recently confirmed that it will hold a 2nd Prime Day sale on October 11-12 to give (inflation-weary) consumers a head start on finding and shopping the best deals online.

Most orders have a 30-day return window, but for products bought between October 7 and December 31, 2022, customers can return them until January 31, 2023. That’s a 3 to 4-month extension, which is good for buyers, but some sellers don’t see the benefit of this update.

It could allow unscrupulous individuals to use their products for free for 3 months and return them in January when they’re “no longer wanted or needed”’ – for example, buying Christmas decor in November and then sending it back after the holidays. 🤦‍♀️

But do note that the returns eligibility remains unchanged for all orders, so not all returns will be accepted.

Refund at First Scan (RFS) for Seller-Fulfilled Returns

Amazon is postponing the release of RFS for seller-fulfilled returns in the UK until October 24, 2022. It was supposed to take effect on September 30th.

Initially introduced on May 4th, RFS is part of the Prepaid Return Label program that allows a shopper to receive a refund after their designated carrier has successfully scanned their returned item using the prepaid return label issued by Amazon.

During the scanning stage, sellers have no way of inspecting the item themselves, so the risk of receiving a knock-off version (or worse, a brick!) instead of the original item is high. 😓

If the product is received in damaged condition, sellers can file a SAFE-T claim on their Seller Central account within 60 days of the refund charge. However, this means Amazon may still deny your claim and you will bear some losses. It also means much more manual oversight.

To minimize unnecessary returns, consider employing tactics like having highly detailed product descriptions, images, and product sizes and dimensions or offering live chat support to address customer concerns immediately. 

You can also try to reduce abusive claims by establishing some oversight mechanisms such as manual inspection of returned items, documenting each order (before and after photos), or using signature confirmation on premium products.

⚠️ Proper documentation of orders, from preparation to order tracking to delivery (e.g., signature confirmation on high-value items), is highly recommended to have a solid SAFE-T claim. 

Sellers should be aware of these refund and returns changes and factor these into your cost of doing business this holiday season.

🇪🇺 Twelve civil groups called for the European Commission to reject “outright and in full” Amazon’s proposed changes to its business practices in Europe in order to resolve the two antitrust investigations formally opened by the Commission against the eCommerce giant.

The commitments that Amazon offered including their use of third-party seller data and non-discriminatory access to Buy Box and Prime have been criticized as “weak, vague and full of loopholes” by a dozen civil and digital rights associations, non-governmental organizations and labor unions.

These organizations include:

• Austrian Federal Chamber of Labour (AK Europa)
• Balanced Economy Project
• Digitale Gesellschaft e.V.
• European Public Services Union (EPSU)
• Foxglove
• Goliathwatch
• FairVote UK
• LobbyControl
• Simply Secure
• Center for Research on Multinational Corporations (SOMO)
• UNI Europa
• WEED (Weltwiommitmertschaft, Ökologie & Entwicklung e.V.)

How it All Began

In a press release dated 17 July 2019, the Commission announced its first antitrust investigation against Amazon to examine if its use of data from the independent sellers on their platform have violated the bloc’s competition rules.

Commissioner Margrethe Vestager, who handles competition policy, said she will closely examine the company’s business practices and its “dual role as a marketplace and retailer”, to guarantee healthy retail competition levels, diverse product choices, and competitive prices for consumers in the European market. 

Sixteen months later, the Commission announced in another press release that it has sent a Statement of Objections to Amazon after its initial findings revealed the company had violated the EU’s competition rules by using the private business data of its marketplace sellers to drive Amazon’s own business decisions, resulting in unhealthy, distorted competition. 

Vestager said Amazon utilized big data to “illegally distort” competition in eCommerce markets and take advantage of its market position in France and Germany, its two biggest EU markets. 

The Commission also announced it is opening a second investigation into the company’s potentially biased practices regarding their own product offers and those of sellers who choose Amazon’s shipping services.

The first antitrust investigation stemmed from a sectoral eCommerce review conducted by the EU’s competition division way back in 2015. The Commission itself started probing on whether Amazon sellers were being placed in an unfavorable position by the company in 2018 – given its ability to access their business data. 

Amazon’s Response

Amazon came up with a list of voluntary commitments to adjust its business practices in the EU and address the Commission’s antitrust concerns.

These commitments show Amazon’s determination to end the ongoing antitrust investigations by the European Commission while it is facing increasing criticism and pressure from different law-making bodies all over the world, mostly about the misuse of its independent sellers’ business data for its own profit. 

Should the Commission accept Amazon’s offer, the proposed commitments will be effective for a five-year period and enacted across the bloc except for Italy, which has already fined Amazon over $1 billion for exploiting its position in the market.

Any breach of the commitments will result in the eCommerce giant paying up to 10% of its worldwide revenue as penalty. 

Dated July 7, 2022, the commitment proposal includes changes to:

• Amazon’s use of marketplace seller data. Amazon will not use the data linked to, or sourced from, the business operations of the sellers on its marketplace for Amazon’s own retail business that is in competition with said sellers. 
• Amazon’s Buy Box winner selection and competition. Amazon will be fair to all sellers in evaluating their Buy Box offers; the company will also put a second competing offer to the Buy Box winner that is significantly different from the winner in terms of cost and/or shipping.
• Amazon’s Prime qualifications and shipping. Amazon will establish fair requirements for sellers and products to qualify for the program. Prime sellers will also have the freedom to choose their own courier and discuss matters directly with their chosen logistics provider. The company will also not use any data regarding external logistics providers’ terms and activities derived from Prime.

The Commission sought feedback from the public regarding these commitments from July 14 to September 8.

Reasons for Rejection

In a statement, the twelve organizations pointed out that the commitments Amazon offered are susceptible to avoidance and abuse by the company. 

They argued that most of the commitments Amazon offered will be included in the Digital Markets Act (DMA), an upcoming pan-European legislation, that will change the EU’s strategy related to ensuring competition in Big Tech.

DMA will impose certain regulations for “gatekeepers” who are oftentimes accused of misusing data and showing preferential treatment.

Comparing the DMA and Amazon’s offer, the group said the new law – which is expected to take effect next year – is more comprehensive and will be imposed by the Commission instead of Amazon itself. The signatories do not agree that a private company should propose voluntary commitments that resemble the stipulations from an upcoming European law. 

Amazon’s suggested five-year validity period or any time period at all is also deemed “unjustifiable.”

The fact that it is Amazon itself defining the terms of their proposed commitments ultimately undermines the European Commission’s authority, which, clearly, the civil groups have picked up on and are rallying against. 

The group collectively urged the Commission to persist in pursuing its antitrust investigations against the company and enforce the necessary resolutions and sanctions on its own terms. They also requested the Commision to demand from Amazon a separation of its marketplace, retail, and delivery operations to tackle issues relating to its superior position and influence in interconnected services.

Impact on Amazon’s Future Operations

The ongoing EU probe, not to mention the impending US antitrust law called the American Innovation and Choice Online (AICO) Act (S.2992), could have significant repercussions on Amazon’s operations worldwide. ⚠️

These issues could force Amazon to rethink their use and level of access to the private data of their marketplace sellers in the bloc, US, and other regions that may follow suit. 

Should US lawmakers pass the AICO, for example, Amazon could be penalized by the US government and antitrust bodies if found to have used their marketplace seller’s data to produce a similar product to intentionally compete with their third-party sellers. 

Amazon already previously announced the reduction of their private label (PL) catalog items earlier this year due to low sales and possibly to avoid penalties under AICO.

Since its launch in 2009, Amazon’s PL business has been criticized for giving the company an opportunity to compete and highlight their own products over the independent sellers’ on their platform through a manipulation of their own search algorithms.

As a data-driven company, these laws will compel Amazon to rethink its current business model if it wishes to remain a trusted, relevant leader in the eCommerce environment.

TikTok is reportedly preparing to launch live shopping just in time for the holidays. Recent job listings on LinkedIn also indicate the company’s plans to build out its own fulfillment network in the US, allowing them to play in the big leagues. 🥊

An interesting and not totally unexpected play for the platform that practically reinvented the concept of virality, going so far as to spawn the FOMO-fed trend, “TikTok made me buy it.” 

If any platform can make this work for them, TikTok has a better chance than most.

New Disruptor

According to the Financial Times, the Chinese social commerce app is bringing TikTok Shop, a Quality Value Convenience (QVC)-style shopping feature, to North America through TalkShopLive. The two companies are still in talks, which is why no official announcement has been made yet.

TalkShopLive runs an online platform for live streaming and home shopping shows featuring various brands, retailers, and influencers. Once its partnership with TikTok is finalized, it will provide the technology and support that TikTok needs for its live commerce efforts.

Owned by ByteDance, TikTok Shop would enable sellers to advertise and sell products on the short video platform as they stream videos live to their followers. It’s quite similar to how Instagram lets users buy items directly from stores on IG.

TikTok has found massive success in Southeast Asia (SEA) but failed to establish a foothold in the UK in 2021.

If the UK didn’t embrace live online shopping, does this mean TikTok Shop will also flop in the US?

After canceling its plans to expand in Europe, TikTok has instead set its eyes on the land of milk and honey.

However, expanding the business to the US won’t be a breeze. Here’s why:

Live Commerce Struggles to Take Off in the US

As we’ve previously reported, the US live commerce market is still in its early stages and no company, including social media giant Meta, has figured it out yet. 

While live selling worked out great in China with sales estimated to hit $423 billion in 2022, it has failed to attract large audiences in the US, with only $11 billion in sales in 2021. But that didn’t stop US eComm giants Shopify and Walmart from recently investing in live shopping, while Facebook decided to remove its live shopping feature this month.

In a Times post, Ying Zhu, an assistant professor in the Faculty of Management at the University of British Columbia, theorizes that the slow adoption of live commerce in the US is probably because consumers themselves don’t understand how it really works. 

“[Live commerce] is a really good concept,” Zhu added. “But without building up infrastructure and educating consumers, suddenly dropping this idea into the market and expecting it to just be successful is kind of naive.”

But with TikTok’s proven live shopping feature and popularity among more tech-savvy shoppers (aka Gen Z’s), it may succeed in turning things around. 

“TikTok likely won’t ever be an Amazon killer,” Insider analyst Andrew Lipsman says.

“But its unique algorithm could help break new ground in the social commerce space by turning social shopping into a more habitual practice. TikTok is really good at serving up the content that people want based on their behavior,” 

“If it can use its algorithm to tee up the right products,” that could help attract more consumers to the app and increase buys.

TikTok Faces Scrutiny in the US over Data Privacy

Another obstacle to TikTok’s entry to the US is its close ties to China.

A report from Forbes reveals that 300 current employees at TikTok’s parent company, ByteDance, used to work for state media outlets, indicating “significant connections between the app and the propaganda arm of the Chinese government.” 

Some speculate that Beijing could use TikTok to access American user data to manipulate public opinion, and even track the location of its users. 😟

TikTok is currently working with the Biden administration to come to an agreement, under which it would make changes to its data security practices to resolve national security concerns, but the agreement is only in the preliminary stages.

TikTok Plans to Create its Own US Fulfillment Network 

🤔 It is even more likely that TikTok Shop will be pushed through in the US, seeing that the company is already planning on building out its own supply chain infrastructure, as indicated by several new job openings recently published on LinkedIn.

The US is TikTok’s largest market outside of China. No wonder the company’s doubling down on its expansion plans to make the country its next major revenue stream.

In a report from Axios, the new entrant is looking to fill a Logistics Solutions Manager position for a global fulfillment center.

Part of the job description is to “plan and design fulfillment centers and eCommerce logistic solutions that include the transportation of goods, order prediction, and inventory management.”

Other job openings indicate the need for a team responsible for a global logistics and warehousing network.

In sum, live shopping has potential in the US, although getting more people to get used to it is still a struggle for many eCommerce companies. This represents an opportunity for TikTok to bring about improvement in the live commerce market if it can get the approval of US lawmakers and the public. However, concerns about data privacy may delay its launch. 
It’s an exciting time. The eComm cold war between giants is nothing if not wildly entertaining. I, for one, am reaching for my popcorn. 🍿

Amazon may be a formidable player in the logistics space, but for years, they’ve also been one of the more expensive out there, especially during the holiday season when rates nearly triple for standard-size products.

For that reason, many sellers opt to outsource their bulk storage and distribution needs to third-party logistics companies (3PLs) that are typically more affordable than Amazon FBA.

🔥 Well, the game is about to get a little more interesting with the launch of a new low-cost logistics service called Amazon Warehousing & Distribution (AWD).

But looks can be deceiving, especially when you’re not comparing apples to apples. Is AWD really more cost-effective than your 3PL? It depends on your rates. Read on and then weigh your options. 

What is AWD?

It is a storage and distribution solution that gives sellers access to state-of-the-art logistics facilities and services without the hefty price tag that comes with Amazon FBA. Participation is currently by invitation only, so keep an eye out for Amazon updates.

Top features and benefits include:

• Auto-replenishment feature. To avoid stockouts, Amazon will automatically send additional units from AWD to their fulfillment centers (FCs). 
• No restock limits. This is huge because Amazon has just brought back restock limits! With AWD, however, you can circumvent this restriction and not worry about having to jump through a lot of hoops to stay in stock this Q4.
• Integrated supply chain. No need for 3PLs when you have a service provider that will take care of everything for you, from receiving your inventory to storage to distribution to fulfillment.
• Transfer inventory to Amazon and non-Amazon destinations. In 2023, the AWD program won’t just search Amazon warehouses, but can also replenish to other non-Amazon locations, including to fulfill brick-and-mortar stores.
• Pay As You Go Pricing. No hidden costs like early termination fees and only pay for services you use.
• Lower storage and processing fees. This is welcome news for sellers who have been cutting back on spending this year due to rising costs and increasing inflation. According to Amazon, they’ve made changes to their rate card to offer more competitive pricing. For example, based on the updated card rate below, it would only cost you around $24 (non-peak) to store one pallet of standard-size goods per month in AWD (versus FBA’s $47). A standard 40” x 48” pallet (plus 50” overall pallet shipment height) can hold 56 cubic ft, so multiply cubic ft by the current AMZ rate to get your monthly AWD storage fee.

Amazon Warehousing & Distribution Fees

Versus FBA Fulfillment Centers (February 2022 and after)

Storage Month	Standard Size	Oversize
January – September	$0.83 per cubic ft	$0.53 per cubic ft
October – December	$2.40 per cubic ft	$1.20 per cubic ft

Cons of AWD

• You have less control over your inventory. Using AWD basically means turning over a boatload of products to Amazon and hoping that they don’t mess up, e.g., skip over your trailer, swap two trailers with different destination addresses, or lose your shipments. This is why it’s still best practice to have a backup 3PL for emergencies, especially during peak season.
• May not be cheaper than your local 3PL. While $24/pallet may be a savings for some sellers if paying over $20/pallet, that pricing is only between the months of January through September.
  
  Peak holiday storage, however, is where it could become more expensive than your average 3PL warehouse, with a standard 50” stackable pallet clocking in at close to $45 per month.
  
  Of course, that’s still much cheaper than the $133 per pallet equivalent that you’d be doling out at FBA from October to December.
  

You should also look at Processing and Transportation Fees when estimating the difference between using your current 3PL and AWD. If you’re paying $3.60 per carton/case in processing with your 3PL but AWD is offering $2.00 per case, that savings may be enough to offset the additional per pallet storage in peak season.

Of course, Amazon is also sweetening the pot with a waiving of restock limits for any of the inventory held within the AWD network. All these factors will have to be considered when determining whether AWD is right for you. 

Related: How to Ship to Amazon FBA (And Speed Up Check-In Times)

Is AWD Different from Amazon Upstream Storage?

In 2021, the eComm giant rolled out a low-cost bulk storage and distribution program for full container load (FCL) shipments called Amazon Upstream Storage (AUS). 

AWD and AUS share a lot of similar features like auto-replenishment, no restock limits, integrated supply chain, and lower storage costs, but the difference is that you don’t need full containers to use AWD. 

Amazon Continues to Add More Mega Warehouses

Despite posting a $3.8B loss due to excess storage and transportation capacity in Q1 2022, Amazon is still reportedly looking to add:

• A $300 million, 5-story, 3.1 million-square-foot distribution center in Niagara, New York
• A 5-story, 4.1 million-square-foot facility in Ontario, California
• A 5-story, 3.8 million-square-foot warehouse in Loveland, Colorado

If these plans push through, these 3 multi-million-square-foot warehouses would top among the biggest in Amazon’s entire network of 1,200 facilities in the US. 

As of this writing, the largest is a 3.6 million sq ft distribution facility in Mount Juliet, Tennessee.

⚠️ Amazon doubling down on its warehouse expansion plans is a strong sign that AWD is here to stay. 3PLs that are too small to beat Amazon may see themselves joining its vast distribution empire as a partner in the future, while others may struggle to keep their customers if they don’t offer more competitive rates. 

During UPS’s Q3 earnings call, CEO Carol Tome revealed that they expect package volumes will peak a little bit later this year compared to 2021 as customers postpone holiday purchases until Christmas or go back to “more pre-pandemic shopping behaviors,” such as in-store shopping or opting for store pickups. 

Christmas-Like Surge During Q2 2020 & 2021

Before the COVID-19 pandemic, the holiday season used to be the busiest time of year for UPS.

However, when nationwide lockdowns took hold in March 2020 to mitigate Coronavirus transmission, millions of homebound consumers quickly turned to eCommerce for their shopping needs, creating an avalanche of packages that UPS wasn’t prepared for.

During the second quarter of 2020, UPS’s average daily volume (ADV) in the US increased by 22.8% or 21.1 million packages a day. 🤯 And despite experiencing a decline in domestic demand in Q2 2021, the legacy carrier’s ADV was only down by 0.8% during that quarter. 

What happened was people felt highly optimistic about their spending and started holiday shopping earlier than before to avoid delays and missing out on popular items (#FOMO). Many were even willing to shell out extra dollars to receive their packages within 1 to 2 days.

But this year, retailers have a surplus of products and not enough buzz because consumers are now more conservative with their spending in attempts to make ends meet amid a looming recession, marking the end of their 2-year shopping spree.

UPS Predicts Package Volumes will Peak in December

The prediction follows a quarter wherein the company suffered a 1.5% drop in its domestic ADV and a 5.2% dip in its international ADV due to a general slowdown in economic activity (e.g., disruptions to manufacturing output in China).

“In the third quarter, the global economy softened, especially outside the United States,” Tome explained during the quarterly earnings call.

“Softening” is a stage in the economic cycle where a market shifts from rapid growth to slow growth to flat revenue growth.

In retail, if there’s more supply than demand, businesses are forced to offer promotions like deep discounts to win inflation-fatigued customers and boost sales.

Given the current economic situation and retailers facing inventory bloat, we may see more products on sale this Christmas compared to the previous years. 🛍️

In fact, holiday shopping started early at Amazon.

For the first time, the retail giant held a second Prime Day called Prime Early Access Sale that ran from October 11 through 12 to reduce inventory glut. However, reports show that the event failed to best the initial Prime Day launched back in July. 

It could be that customers simply didn’t like the featured products or they wanted to wait for bigger bargains usually offered during BFCM and Christmas.

Either way, UPS is ready for the anticipated package volume surge in Q4, although overall volume in this quarter is expected to decline from 2021 due to contractual agreements with Amazon and Amazon itself bringing more and more of their logistics and shipping into its own growing internal network.

To prepare for the holiday season, UPS is reportedly working with major shippers and looking to hire 100,000+ seasonal workers to ensure timely delivery of packages across the US. It has also recently put shipping limitations on Amazon to make more room for its B2B segment and provide businesses with excellent logistics service during peak. 🚀

Related: 3PL Logistics Backup Plan for Amazon, How to Ship to Amazon FBA (And Speed Up Check In Times)

Amazon is under fire for allegedly copying top sellers for its private label business, manipulating the Buy Box algorithm, and price fixing. 🔥

Using Seller Data to Copy Products

Mounting evidence from investigative reports suggests that Amazon has deliberately utilized third-party seller data, such as sales velocity and customer information, to launch competing products and then rigged search results in their favor. 

In 2020, Wall Street Journal released a report detailing how some Amazon private label employees used data about independent sellers to create knockoffs despite it being both an antitrust and company policy violation. 

Amazon reps have denied these accusations. Former Amazon CEO Jeff Bezos himself told Congress in 2020 that the company forbids its employees from using exploitative practices to boost its private label business.

However, in March 2021, Peak Design company founder & CEO Peter Dering called out Amazon for releasing an imitation of its most popular product, the Everyday Sling Bag. 

In an interview, Dering told CNBC that Amazon “copied the general shape, they copied the access points, they copied the charcoal color, and they copied the trapezoidal logo badge. But none of the fine details that make it a Peak Design bag were things that they could port over because those things take a lot more effort and cost.” 🤦‍♀️

To poke fun at Amazon’s copycat ways, Peak Design posted a video that went viral and was even featured on John Oliver’s Last Week Tonight. The brand’s supporters bombed the knockoff version with negative reviews, forcing Amazon to have it removed from its private label catalog.

Another evidence that could prove Amazon’s anticompetitive behavior is its alleged covert strategy for its Indian marketplace in 2016. 

Published in October 2021, a report from Reuters shows that in India, creating copycats and manipulating search results to put the tech giant’s in-house products at the top were part of a clandestine strategy called the “Solimo” project, which was reviewed by two Amazon execs – Diego Piacentini and Russell Grandinetti – in 2016.

Based on the internal documents examined by Reuters, part of the Solimo strategy was to “use information from Amazon.in to develop products and then leverage the Amazon.in platform to market these products to customers.” The company also reportedly teamed up with the manufacturers of the products targeted for imitation to ensure their quality.

However, Amazon has again denied these claims saying that they are “factually incorrect and unsubstantiated” as Reuters was unable to provide a copy of the internal documents in question. 🤔

Amazon may continue to deny the allegations shown in these reports, but in recent years, more and more independent sellers have come forward to expose the company’s abusive practices. More on that in the next section.

Manipulating the Search Algorithm

According to a report from The Markup, a non-profit newsroom, Amazon places its own products and brands exclusively selling on the platform ahead of third-party sellers, even those with higher sales and customer ratings. 😦

For instance, a coffee grinder seller shared that after Amazon introduced a competing product from AmazonBasics and another from an exclusive brand, the products ranked high on search right away.

He believes that the products rank well because they’re an Amazon brand.

Amazon has long denied that it is giving preference to its own products over independent sellers on its retail site.

“We display search results based on relevance to the customer’s search query, irrespective of whether such products have private brands offered by sellers or not,” Amazon said.

However, the findings in Markup’s report seem to contradict this statement.

Apparently, the researchers could easily tell whether a product was an in-house or exclusive brand because in 7 out of every 10 cases, Amazon would place it first on the search results page.

“These listings are not visibly marked as ‘Sponsored’ and they are part of a grid that Amazon identifies as search results in the site’s source code. We only analyzed products in that grid, ignoring modules that are strictly for advertising.” The Markup explained.

So, it doesn’t matter if you’re a top seller with excellent customer ratings. When predicting the first spot, being an Amazon private label brand or exclusive brand influenced search ranking more than customer reviews or star ratings.

Unfortunately, Amazon making cheaper versions of the best-selling products from sellers and giving higher priority to them can hurt businesses, especially the little guys.

It demolishes the level playing field. And by Amazon eating into your market share, your sales may go down, which has a direct impact on your ranking and your business as a whole.

Price Fixing

Price fixing is an anticompetitive behavior where competitors agree to lower, maintain, or increase prices, thereby taking away the opportunity to compete freely in the market and to fix your price levels based on supply and demand.

On September 14, 2022, California filed a lawsuit against Amazon for forcing sellers and suppliers into inflating their prices. Those who fail to comply (e.g., sellers who opt to offer lower prices elsewhere online) may get penalized.

This has resulted in consumers paying for overpriced products for years, the state claims.

Filed by California state Attorney General Rob Bonta, the lawsuit aims to stop Amazon from “bending the market to its will at the expense of California consumers, small business owners and a fair and competitive economy.”

As usual, Amazon has denied any antitrust violation and claimed that a similar case in the District of Columbia was junked and that Bonta has got it all wrong.

“Sellers set their own prices for the products they offer in our store,” an Amazon spokesperson said in a statement.

“Like any store we reserve the right not to highlight offers to customers that are not priced competitively.”

California isn’t the only one that’s currently suing Amazon over price fixing, though.

In the UK, Amazon also faces a class-action suit to put a stop to its “secretive and self-preferencing” Buy Box algorithm, which the company uses to boost its own products (and sales).

Similar to the California case, this has made customers pay more by hiding better deals.

Seeking $1 billion in damages, the lawsuit will be filed by Hausfeld & Co by October 31st at the Competition Appeal Tribunal.

Sellers and Industry Groups Band Together to Fight Amazon

Many sellers and industry groups like Online Merchant Guild (OMG) have been organizing to launch antitrust probes into Amazon.

For instance, OMG recently won a sales tax lawsuit against Amazon in Pennsylvania court, thereby prohibiting the state and its marketplace facilitator, which in this case is Amazon, from collecting sales tax nexus that online remote sellers supposedly owe from previous years.

Meanwhile, since 2019, a group of sellers led by SmartScout CEO & Founder Scott Needham has been communicating their needs to the Justice Department and the Federal Trade Commission.

In a statement to Business Insider, Needham said: “We’re a group of sellers or kind of a movement,” 

“We are trying to unify the voice and just make sure that us who contribute to the Amazon marketplace are listened to as well.”

That may come true if the US antitrust bill, S.2992, is passed into law.

Amazon has also reportedly reduced its private label catalog due to poor sales and possibly to appease antitrust regulators. The company has also offered concessions to halt two EU antitrust probes, recent moves that could set more pro-seller changes in motion. 🚀

🥊 Macy’s, Pinduoduo, and Google have just joined Walmart and Shopify in battling Amazon for the US market share!

This means greater marketplace diversity for sellers, especially for those who are looking for (cheaper) alternatives to Amazon, which as previously reported, has gotten 30% more expensive in the last two years.

For Amazon, however, tougher competition is an incentive for them to keep innovating (i.e., launch new tools, services, or products) so they can stay in the game and continue capturing more independent sellers and consumers.

Simply put, opening the market to emerging players not only generates more attractive offers, but also breaks up anti-competitive practices. 🔥

Introducing the New Amazon Challengers

Amazon is a global eCommerce leader with a reported revenue of $610 billion in 2021, surpassing America’s largest brick-and-mortar store, Walmart, with only $566 billion. 

However, as big as Amazon is, it doesn’t stop new players from firing onto the scene. 🚀

Pinduoduo
On September 1, Chinese eCommerce giant, Pinduoduo, quietly launched its US online shopping site, Temu, in an attempt to replicate the international success of Shein and AliExpress. The company’s expansion to the US also offers new growth areas at a time when the Chinese tech sector is having a rough year due to the government’s tech crackdown.

We present this new marketplace to sellers not so much to consider selling on the platform, but more to provide a view of what new competition is coming that could steal clicks and purchases from sellers on Amazon.

What to expect with Pinduoduo

• Ideal for discount retailers. To keep the prices low on the platform, Pinduoduo negotiates with sellers to achieve the lowest offer possible. At a glance, the prices on Temu range from $0.99 to $25, making it a good online shopping destination for customers who love a good bargain.
• Extensive connection with manufacturers and merchants. The company works directly with over 11 million sellers from across the globe, which allows them to cut out the middlemen, aka distributors. They also don’t have in-house brands like Amazon does, as all products are supplied by third-party sellers. 
• 10-billion worth of resource packages for Chinese manufacturers. Pinduoduo launched an overseas support initiative that aims to help 10,000 domestic factories sell internationally.

• No warehouses in the US. All products are shipped from China, which suggests delivery may take longer than 2 days. If customers prefer 1- to 2-day shipping, Pinduoduo may not be the best alternative marketplace for them.
• Low margin business. As mentioned earlier, most products on Temu are sold at bargain prices, so depending on market demand, you may make profit, break even, or lose money. In addition, unsold products (let’s say more than 90 days) may be returned to you, and when it does happen, you will sustain a loss. Alternatively, you can try to join Temu’s flash sales to attract more customers. 
• Potential counterfeit issues. In 2018, Pinduoduo was added to the US Trade Representative’s blacklist over suspected fakes. This means you could face the same intellectual property issues that are troubling Shein sellers.

Pinduoduo may be a good option for suppliers in China who want to easily connect with US customers. But for Amazon sellers, that means that your suppliers could quickly become your competitors, if they aren’t already.  

Macy’s, Inc.

On September 28, the department store chain officially welcomed third-party sellers to its eCommerce site, macys.com.

Powered by Mirakl, a top online marketplace technology provider, the new digital channel now allows you to seamlessly integrate your products into Macy’s and access tools that will help you to monitor and grow your business.

As of this writing, Macy’s provides customers with 400 new brands, 20 product categories, and sustainable offerings from women-owned and diverse-owned businesses.

Reasons to join Macy’s

• Guided onboarding process. The retailer will work with a select group of sellers and brand partners to ensure they meet Macy’s product and fulfillment standards. They will also offer seller support, training programs, and promotional participation.
• Sellers will be denoted by a badge. A “Shipped by and sold by” badge will be displayed on your product listings to differentiate yourself from other brands and communicate who’s responsible for fulfilling and shipping customer orders.
• Send your products for approval and listing. Similar to Pinduoduo, Macy’s makes the final decision as to which products end up on the marketplace. This helps the company to maintain a well-curated assortment of goods, control product prices, and combat counterfeiting.

Reasons not to join

• Seller-fulfilled orders. As a third-party seller, you’ll be responsible for processing your own orders. If you don’t have the storage space and manpower to fulfill orders yourself, you may need to hire a third-party fulfillment company to pack and ship items for you, which means added costs and complexity to your operations. 
• Fierce competition. Like Amazon, Macy’s has multiple in-house brands that you need to compete with, not to mention the other private label brands from participating third-party sellers. And as the platform owner, they could easily collect and use customer data and analytics to gain an edge over direct competitors.

Advanced sellers may find Macy’s an excellent addition to their multi-sales channel strategy, whereas beginners or smaller businesses may struggle with the downsides of fulfilling orders themselves and competing in a highly competitive marketplace.

Google

Released the same day as Macy’s new digital marketplace launch, Google has nine (9) new online shopping features and tools designed to offer a more efficient way for you to discover and shop products on its search engine. 

Introduced at the recent Search On event, these new features include:

• Search with the word “shop,” followed by brand name, product type and category, among other relevant search terms.
• Shop the look. Find and buy your preferred clothing ensemble (e.g., summer outfit) within Google search.
• Trending products. Check out what’s trending in Search to discover the latest styles, models, and brands.
• Shop in 3D. Engage with 3D visuals of staple products like home goods, clothing, and sneakers as you search them on Google.
• Buying guides. Make an informed buying decision by reading all the relevant information about a product from trusted sources. If you’re looking to buy a road bike, for example, the buying guide feature might display information about the item’s size, weight, materials, fork suspension, wheelset, and so on. Arming yourself with this information will allow you to make decisions with a great deal of confidence.
• Page insights. Find out what other customers think about a product’s pros and cons.
• Personalized results. Enable personalized results on Google to narrow down your search to your preferences and previous shopping habits.
• New filters. Take advantage of dynamic shopping filters to discover what’s popular right now. If you’re shopping for sneakers, you might see filters for “retro” and “white” right below the search bar because those are the hottest styles.
• Suggested styles in Google app. If you prefer mobile shopping, use the Google app to browse through Google’s suggested styles for you. These suggestions will be based on your previous buys and what others have searched (and bought) too. Use the “Lens” feature to expand your shopping options.

Several of these features seem to be making Google a great resource for product research for sellers as well, so this is something to keep in mind the next time you look to find your new best seller.

Reasons to join Google

• Free for sellers. In a blog post, Google states that they have taken two steps to support all merchants: remove commission fees and make product discoverability free for sellers on Search. The tech giant uses a powerful AI called Shopping Graph that allows them to provide customers with relevant shopping information, such as brands, images, videos, product reviews, and inventory data from different sellers. If you have something a customer is looking for, your product ad or listing may show up on search. When a customer decides to buy it on Google, you won’t have to pay any commission fee (versus Amazon’s 8% to 15% fees). 
• Plethora of shopping features and tools. Google is trying to establish itself as the one-stop-destination for customers. That’s why it’s introducing a suite of features designed to quickly sift through over 35 billion listings on the internet and bring a more personalized, immersive, and informative shopping experience. 
• Optimized for Shopify merchants. Google has an existing partnership with Shopify that lets its merchants feature their products across Search, YouTube, Shopping, and more in just a few clicks. This collaboration helps sellers become highly discoverable to different types of buyers (intent buyers and window shoppers, for example), and as a result, drive traffic and boost conversion.

Reasons not to join Google

• Cut-throat competition. If you have a competitive product such as fashion and jewelry, you may experience difficulty in getting your ads to reach your target customers given that there may be thousands of others doing the same exact thing. Conversely, if you have a niche or rare product, you may have a better chance of attracting customers.
• Products could be disapproved or suspended. If you want to sell directly or advertise on Google Shopping, you have to get your products approved by meeting specific attributes and compliance requirements stated in the Shopping Ads policies. What may be allowed on Amazon may be prohibited on Google, so be sure to read up on the company’s product approval process to avoid potential issues that could delay your launch.

In sum, while expanding to new sales channels has its own advantages, it also has a few disadvantages, such as additional costs. It can also complicate your business operations, from sales & marketing (inconsistent messaging on different channels) to inventory management to fulfillment.

If you want to cast a wider net with a multi-channel selling strategy, make sure you understand the risks involved with selling on a particular sales channel. 👌

Related: Amazon FBA Calculator

🤔 Unsure of how best to approach your holiday ad campaigns at a time when 55% of consumers are cutting back due to economic uncertainty? Want expert guidance from the best and brightest in the business? 

From October 25 to 27, live and in virtual access, Amazon is holding its annual advertising conference, unBoxed, at the Jacob Javits Center in New York City, where you’ll:

Learn the Latest Amazon Ads Solutions and Innovations

Similar to Accelerate, the unBoxed keynote will be chock full of new product releases and services so you can equip yourself with the latest knowledge and tools necessary to:

• Smoothly navigate the economic challenges that are affecting consumers and businesses today
• Create engaging assets that resonate with your audiences to help you stand out
• Launch ad campaigns that reach the right customers
• Measure and improve the impact of your ads and channels

Create Meaningful Connections with the Industry Pros

unBoxed is bringing you closer to several industry leaders, including Amazon Ads execs themselves. Take this opportunity to learn about actionable insights to inform your ad strategy. Attend the breakout sessions you need to help you end the quarter on a strong note.

Key topics include the future of advertising, best practices for brands, navigating supply chain issues and inflation, strategies for driving growth during high-traffic shopping events, video advertising, the power of audio storytelling, and more.

Rub Shoulders with other Marketers

On October 26th, unBoxed will have an “After Dark” concert with the American rock band, The Killers! 🤘🔥

Both novice and seasoned advertisers are welcome to attend! 🥳

Whether you’re preparing for a rocky Q4 or just need to stay up-to-date with the latest advertising trends, unBoxed is your chance to learn what you can do with Amazon beyond sponsored ads!

If your brand is looking to expand into display, programmatic, OTT, streaming, or video, then you’ll have a lot to learn at unBoxed. 💪

How to Join

You can join in person in NYC or online via live stream.

• General admission ticket (in-person) costs $349, which includes access to 60+ educational sessions, hands-on training and demos, networking events, breakfast and lunch, and an exclusive musical performance. 
• Virtual admission is FREE, but only provides access to the keynote live stream and select video-on-demand content post-event.

There’s only a couple of weeks left to register. Don’t miss out!

Get your tickets now 👈

To better serve customers during these challenging times marked by record-breaking inflation, the eCommerce giant introduced Amazon Access, a resource hub for easier and more affordable shopping on Amazon.com. 💰

What is Amazon Access?

Amazon Access is Amazon’s newest hub packed with resources to help customers discover ways that they can shop and save more on Amazon. These resources include information on Amazon’s various flexible payment options, discounts offers, and programs designed for a more budget-friendly shopping experience.

The cost-saving features and benefits of the new program include:

SNAP EBT payments

Customers holding a valid SNAP EBT card can now order their essential goods and grocery items from Amazon.com, Amazon Fresh, and Whole Foods Market using their SNAP funds. 

With the exception of customers from Alaska, this option is available for customers from the remaining 49 states. They can also take advantage of Amazon’s fast and free delivery service for qualifying orders.

Amazon Layaway

Amazon Layaway allows customers to pay for their purchases over an extended period of time without incurring huge interest fees or going through stringent credit checks. Under this program, customers only have to pay 20% of their total purchase amount to reserve items and lock in their price. The remaining 80% is then paid over time; product to be delivered once paid in full. 

Prime Access for less

Qualified US customers who receive government subsidy can take advantage of a discounted Amazon Prime membership amounting to only $6.99 per month – an $8 monthly savings compared to the regular Amazon Prime membership cost.

Prime Member discounts

Aside from getting Prime for more than 50% off its current price, qualified customers can also enjoy more discounts on home products, get access to clip coupons, save up to 15% on various products with Amazon’s Subscribe & Save, and enjoy free shipping on auto-deliveries of certain items. 

Pay and pick-up your way

Customers without a credit or debit card can still shop from Amazon.com and pay with Amazon Cash. They can also opt to pick up their goods from an Amazon Hub Locker or Hub Counter. 

30-day free trial

US customers can try out Amazon Access for free for 30 days. After the 30-day period has passed, they can simply register by uploading a valid proof of their identification or government benefits documents.

Why Did Amazon Launch Amazon Access

It probably goes without saying that Amazon came up with Amazon Access not only to serve Prime members but also to gain more customers!

Here are the top three reasons why Amazon decided to introduce this hub at this time:

Increase Prime membership

Amazon Access can be viewed as the retailer’s latest attempt to attract more customers to sign up to Amazon Prime.

By making Prime’s benefits more accessible to a wider range of consumers, Amazon can ensure the program’s profitability. In case you’ve forgotten, the company increased Prime’s subscription fee from $119 to $139 last February (the original fee when it was launched was $79).

Boost 2nd Prime Day profits

In light of the upcoming Prime Early Access Sale, Amazon is also probably looking to maximize its revenue from the two-day sale event. The more customers who are subscribed to Prime by that time, the higher their sales and profits will be.

Response to inflation-weary consumers

Consumers are on the lookout for the biggest bargains and discounts during times of economic turmoil, and this time is no different.

The US inflation rate of 8.3% for August 2022 may have improved from July’s 8.5%, but it was still higher than the forecasted rate of 8.1%. Economists predict an average rate of inflation of 2.4% from 2022 through 2026, with this year being the worst of it. They also expect inflation to return to its normal rate next year and beyond, thanks to the central bank’s interest rate increases. 

Take Advantage of Amazon Access

In these tough economic times, people continue to spend on essential goods, but cut back on wants, or at least wait for the next big sales event. 

But with Amazon Access, the tech giant can make a wide selection of goods affordable, allowing them to encourage more customers to shop on its retail site and essentially help sellers keep making bank.

To finish the year strong, take advantage of the sudden demand increase that Amazon Access may create by offering discounts, flexible payment options, and promotions, especially on basic must-haves. Just make sure you have enough inventory for this new demand to stay in stock. 💪

Related: Inventory-Minded Marketing for Amazon Sellers

🛍️ Holiday shopping at Amazon is starting early this year, allowing customers to reduce the cost of their BFCM and Christmas purchases by taking advantage of the 2nd Prime Day sales event!

What We Know So Far

Amazon announced that its 2nd Prime Day event, dubbed as the “Prime Early Access Sale”, will take place from October 11 to 12, in a move that mimics that of its rivals Walmart and Target.

The new two-day sales event is exclusive to Amazon’s more than 200 million Prime members, and will grant them access to huge discounts on the most popular brands as early as fall, giving them a head start to find and shop the best holiday deals.

The sales extravaganza will also showcase Amazon’s Top 100 list which includes best-selling gift items and amazing deals in electronics, fashion, home, and kitchen products, among other top categories.

The announcement confirms Business Insider’s report just three months prior, when it said that the eCommerce giant was planning to hold another Prime Day event in October.

Why is Amazon Holding a 2nd Prime Day Event?

• Protect its Q4 market share. The competition for sales during the upcoming holiday season is heating up as other retailers announced sale events scheduled earlier than Amazon’s. Walmart’s holiday sale will start on October 1 and will feature thousands of discounts in toys, tech, home, and beauty product categories.
  
  On the other hand, Target will kick off its own two-day Deals Day event from October 6 to 8, offering shoppers “hundreds of thousands” of deals in different product categories plus a price-match guarantee until Christmas eve. 
  
  According to Texas A&M marketing professor Venkatesh Shankar, Prime Early Access Sale represents Amazon’s attempt to “cover its bases” and grab the largest share of consumers’ holiday shopping.

• Offload excess inventory. The fact that there is an oversupply of consumer goods from fashion, electronics, toys, home and other popular categories also fuels the competition between these rival retailers. Due to supply chain challenges, these products, which the retailers ordered to meet their projected customer demand, arrived late and are now stuck on store shelves and in warehouses. These retailers must be feeling the pressure to sell these products fast and replace them with new products for the holiday season and the new year.

• Fill up unused warehouses. Another possible reason is that Amazon is seeking to fill up its empty warehouse space for the coming quarter and so is hoping to invite more sellers to send in inventory. 
  
  Amazon CFO Brian Olsavsky admitted to reporters last April that the company has way too much warehouse space, infrastructure, and staff than the required demand. Amazon has made significant investments in logistics and human resources given the surge in eCommerce during the onset of the pandemic. 
  
  But now, given the record-breaking inflation that consumers are grappling with and the decreasing eCommerce purchases, retailers like Amazon need to be creative in increasing their revenue. Holding these big sale events will allow them to attract more sellers to stock up on their products, which will occupy more space in their warehouse, and increase their fulfillment revenue. 

It is also possible that Amazon is trying to recreate the success of its first Prime Day of 2022 held last July 12 to 13, which saw the company earning $12.09B. 

Related: Walmart and Amazon Battle for Dominance Intensifies

What’s in it for Amazon Sellers?

Sellers may want to take advantage of Prime Early Access Sale to increase their restock limits, which can come in handy for the upcoming Black Friday/Cyber Monday (BFCM) event. 🚀

Just last month, Amazon announced that they are bringing back restock limits in preparation for the Q4 holiday rush. Sellers have been given up to four (4) months’ worth of inventory in FBA fulfillment centers. 

⚠️ However, I wouldn’t recommend maxing out your restock limits for the October Prime event, as it means increased difficulty in restocking until you free up enough storage space for products as limits fluctuate. In turn, this may translate to missed selling opportunities during BFCM and through the rest of the holiday season. 

If you have excess inventory, try getting rid of it faster by offering deep discounts during this 2nd Prime Day. Increasing sales results in a higher sell-through rate, which is a very important metric used by Amazon in determining seller restock limits. 

And remember, the Prime Early Access Sale is expected to be a “high velocity” sales event, so make sure your business and inventory are ready for it! 💪

Related: 3PL Logistics Backup for Amazon, Master Carton Calculator, How to Ship to Amazon FBA (And Speed Up Check-in Times)

Amazon continues to beef up its Buy with Prime business with more marketing capabilities to help non-Amazon sellers drive traffic and increase sales on their own stores. 📈

Buy Ads to Drive More Shoppers to Off-Amazon Stores

The tech giant launched Buy with Prime in April 2022 to allow direct-to-consumer (DTC) brands off Amazon.com to offer free 1 to 2-day shipping, an easy checkout process, and free returns to customers. They do this by becoming these brands’ fulfillment centers. FBA essentially becomes available to non-AMZ sellers. 

That’s right. While you get saddled with restock limits and reduced FBA warehouse space, Mr. Shopify Only seller snuggles up in your spot. 🤔

Participating brands feature a Buy with Prime button on their sites to provide shoppers with a seamless buying experience via Amazon payments and fulfillment.

As Prime benefits are some of the main reasons why customers pick Amazon over other online retail platforms, offering Prime on an eCommerce site can be an effective way to increase conversion.

However, conversion is only half the battle. The other half is expanding your reach and driving new customers to your own DTC site, which many participating sellers are reportedly struggling with. 

To help address this pain point, Amazon is introducing three (3) new marketing solutions that will enable DTC brands to attract and direct more shoppers to their own brand offerings. 

So now, not only are non-AMZ sellers stealing your warehousing space, they’re also stealing your ad space. 

However, it’s not all bad news. This actually could present some interesting opportunities for Amazon sellers to take Amazon traffic into their own websites and finally collect some of that customer information in a way that is TOS-compliant. Read on.

1. Buy with Prime Pages and Sponsored Brands Ads

Amazon invites DTC sellers to showcase their products on Amazon with a Buy with Prime page within an Amazon brand storefront.

They would then create and launch Sponsored Brands ads to attract and drive Amazon shoppers to their products.

Sponsored Brands ads are customizable cost-per-click (CPC) ads that highlight a brand’s logo, headline, and products. They also appear in relevant parts within the Amazon search result pages to help shoppers discover your brand.

When a customer clicks on a Sponsored Brand ad, it directs them to a seller’s Buy with Prime page on Amazon.

From there, the customer can preview the product offerings and decide whether to buy on Amazon or directly from the brand’s website via Buy with Prime.

However, as you can see, this process takes several clicks that may increase checkout friction in the customer’s path to purchase, which could then lead to cart abandonment.

But the good news is that both these DTC Sponsored Brands Ads and Buy with Prime pages are currently in beta. So, expect to see some changes to these features as they go through this testing period.

In a blog post, Marketplace Pulse Founder Juozas Kaziukėnas speculates that non-Amazon sellers might be able to advertise directly in Amazon search results in the future.

We could imagine a world where, when a customer types in “filtered water bottles,” and clicks on the first Sponsored Ad they see, for example, it would take them directly to the brand’s website instead of its Buy with Prime page on Amazon. Amazon would pocket the ad spend and the fulfillment fees and it is possible that they’d throw in an additional referral fee on top of the ad spend, knowing Amazon.

Removing as many steps as possible is key to improving customer experience and ecommerce sales.

2. Amazon-Funded Social Media Ads

With the advent of omnicommerce, people are no longer following a linear customer journey path. Many shoppers now go back and forth between your own website, social media ads, emails, and Amazon storefront to search for and buy products.

For this reason, Amazon is launching a co-branded Buy with Prime social media page and ads on Facebook and Instagram to help Buy with Prime sellers reach more customers at no extra cost. The ads from the Buy with Prime page will also feature specific sellers. This is a smart value add that Amazon is using to attract sellers to the program. 

Suppose a customer sees a Buy with Prime ad featuring your brand on Facebook and clicks on that ad. In that case, they will be redirected to a Buy with Prime page where they can place an order.

3. Buy with Prime Marketing Toolkit

This toolkit provides you with a Buy with Prime badge that you can feature in your media assets, including product pages. It also allows you to market to Prime members on your own website.

In Amazon’s official press statement, Patrick Sean Briseno, eCommerce and marketing manager at Great Circle Machinery shared:

“It’s tough to gain shoppers’ trust to make a purchase on our own website, but the Buy with Prime badge gives them peace of mind knowing their orders are fulfilled by Amazon with the Prime delivery promise.”

Related: Amazon Now Allowing Email Marketing Campaigns to Repeat Customers

Effective Way to Embrace Omnichannel Strategy

Many consumers rely on Amazon through all stages of their shopping journey. So, while you could come up with compelling offers to entice people to shop directly on your website, you could still face an uphill battle when competing with the retail giant.

But with Buy with Prime, along with borrowing trust, you can also use Amazon as an additional marketing and distribution channel to massively expand your reach and fulfill orders for Amazon shoppers, especially the company’s over 200 million Prime members. 🚀

But if you didn’t already consider it, this could also be a backdoor into Amazon getting all those non-Amazon, DTC sellers actually going toe-to-toe with you selling on Amazon itself. I’m sure, for Amazon, it’s just a waiting game. It’s all a bunch of these tiny yeses til Amazon’s got them going all in.

A word of caution for Shopify sellers: Shopify warns its merchants against Buy with Prime as using it violates the company’s Terms of Service. If you’re on Shopify, make sure you understand the risks of participating in the Buy with Program before getting involved. Read this article to learn more. 

Related: Shopify Acquires Deliverr and Takes Aim at Amazon’s Buy with Prime

🆚 For years, Amazon and Walmart have been pulling out all the stops to win customers and sellers. Both retail giants are offering a wide range of products at low prices and ramping up free, 1- to 2-day shipping and return services to maintain dominance.

While Amazon leads US eCommerce, Walmart rules over brick-and-mortar stores. But the battle for dominance intensifies as Walmart encroaches more deeply into eCommerce territory after:

• Launching its own fulfillment service for independent sellers in 2020
• Opening its online marketplace to sellers outside of US in 2021, and more recently
• Extending its display advertising program, Search Brand Amplifier (SBA), to brand owners. SBA displays products at the top of Walmart search results, but this platform was previously limited to eligible sellers and a few suppliers whose ads were managed by Walmart Connect itself or platform partners like Tinuiti. Opening SBA to more eComm businesses and allowing them to launch their own ads will help them connect with millions of Walmart shoppers, making Walmart an attractive (and potentially lucrative) marketplace even for Amazon sellers.

With Walmart going after Amazon’s market share, it’s not surprising to see Amazon unveil new marketing capabilities for sellers during the recently concluded Accelerate event in an attempt to stay dominant.

On September 14, 2022, Amazon announced a new lineup of marketing tools to attract more e-commerce businesses to its marketplace. These include:

• Amazon Tailored Audiences, a free email marketing tool that allows sellers to reach repeat customers
• New Buy with Prime offerings to help non-Amazon sellers capture more shoppers and increase sales
• New A/B testing features, such as title and image notifications and auto-publishing winning experiments
• Additional analytics and data with the enhanced Search Analytics Dashboard, Product Opportunity Explorer, and Marketplace Product Guidance

Interestingly, shortly after Amazon made these announcements, Walmart responded by introducing the updates to its display ad services, Search Brand Amplifier. 🔥

In a press release, Mike Greenberg, Head of Marketplace Walmart Connect, reveals that SBA is coming to sellers in October to help them reach more customers, especially this holiday season. 

New sellers or brands with new products that may not yet have high organic search rankings will benefit greatly from SBA, as it offers them the opportunity to showcase their products in prominent places within search results similar to Amazon’s Sponsored Brand ads.

Brand-registered sellers are eligible for the ad program. You can also take advantage of the following features to help scale your business:

• Faster enrollment with automated onboarding at the Walmart Ad Center
• Additional application programming interface (API) partners to support sellers in China, Canada, UK, India and other countries
• New resources to help sellers optimize Sponsored Search campaigns 

Walmart’s Booming Ad Business

The move to open SBA to marketplace sellers also came after Walmart made $2.1 billion in ad revenue in 2021, which represents an important growth area for the company.

According to Doug McMillon, Walmart’s president and CEO, the ad business played a crucial role in elevating customer experience on the site by highlighting better deals and the right products.

Therefore, “the relationship between digital growth, marketplace growth and advertising is something that we’re trying to take advantage of,” said McMillon.

Aside from generating revenue, the ad business will also provide Walmart with valuable insights into the way customers shop on the site.

In fact, Walmart has recently added Innovation Partners to its ad network to connect advertisers with potential customers on TikTok, Snapchat, and Roku. Through this new program, you can:

• Serve ads on popular social media platforms, including TV streaming site Roku
• Create engaging shoppable videos via Firework and TalkShopLive
• Measure your advertising campaign’s impact on your sales

Innovation Partners seeks to help sellers connect with Gen Z shoppers. But for Walmart, it allows them to take a crack at the elusive US live commerce market, which no other retail company, even Amazon, has figured out yet. For instance, Shopify’s attempt found them partnering with YouTube while Amazon released Amazon Live. 

If Walmart succeeds, it would give them a huge competitive advantage over their rivals. 
Amazon’s $31 billion ad business may be far up there with behemoths like Google and Meta, but with Walmart’s growing ad network, the competition will only get tougher in the future, especially as the lines continue to blur between in-store and online shopping. 💪

Amazon just announced another fee increase that may whittle away at your profits just in time for the holidays. 💸 

Amazon said that they will be increasing the multi-channel fulfillment (MCF) single-unit-order fulfillment fees beginning 12th of November this year. The price hike will apply to all parcel size tiers and already includes the additional fuel and inflation costs. 

The retail giant explained the increase mirrors the surge in order fulfillment and logistical costs, and will allow them to keep on providing the same high-speed delivery and high-quality service their customers expect. 

This is the latest in the seemingly never-ending fee increases Amazon imposes on its independent sellers.

If you have been following our posts for some time, you may remember the Amazon Fee Stack, the term we’ve assigned to the incremental but regular fee increases that Amazon has been making at the expense of the sellers’ profit margins. 

⚠️ Constant price hikes, even if they are only small in amount, can have a negative effect on your bottom line.

When you add them all up, you may be surprised at just how much they amount to. And when you add these higher fees on top of all the other increasing operating costs of your business, you may be shocked to see how little is left for your business to operate sustainably.

UK MCF Fees Before November 2022

Amazon actually reduced their MCF fees for specific size categories beginning on April 26, 2021.

For the large envelope 960g size tier, for example, the MCF fees for Standard and Expedited Delivery dropped from £3.93 and £4.95 to £3.39 and £4.10, respectively.  

But starting from May 12, 2022, Amazon added a 4.3% fuel and inflation fee to the existing FBA fulfillment fee per-unit rates in the UK and other European countries and territories. MCF, in case you’ve forgotten, is a division under the FBA Program.

UK MCF Fees After November 2022

Have a look at the table below to see the difference between the old and new MCF rates per unit for local and international deliveries. Keep in mind that these rates apply to standard shipping, not expedited shipping.

	Local shipping		Cross-border shipping
	Domestic, Multi-Country Inventory, Pan-European		European Fulfillment Network
Size tier	Before November 12	After November 12	Before November 12	After November 12
Small envelope to 80g	£3.15	£3.31	£4.59	£4.96
Standard envelope to 210g	£3.30	£3.45	£4.74	£5.12
Large envelope to 960g	£3.39	£3.48	£5.10	£5.51
Standard parcel to 1.4kg	£3.65	£3.91	£7.75	£8.37
Standard parcel to 6.9kg	£4.95	£5.90	£11.73	£13.07
Standard parcel to 11.9kg	£6.38	£7.34	£12.75	£15.41
Standard oversize to 2.7kg	£6.48	£7.13	£13.82	£14.93
Standard oversize to 29.76kg	£9.28	£9.45	£19.53	£21.09
Large oversize to 31.5kg	£13.77	£14.50	£28.66	£30.95

For local shipment, sellers will have to pay an extra £0.09 to £0.96 per unit – depending on the size of the product – after the MCF fee adjustment takes effect on November 12. 

Following our large envelope 960 g size tier example, Amazon increased the MCF rate per unit by 2.69% from £3.39 to  £3.48, or an additional £0.09. If your item falls under the standard parcel to 6.9 kg size tier, expect to fork out an extra £0.95 per unit as the rate jumped by 17.51% from £4.95 to £5.90.

On the other hand, cross-border shipping will incur higher rates – between £0.37 to £2.66 more per unit. From £5.10, the new rate for an item under the large envelope 960 g size tier will be £5.51 – an increase of £0.40 or 8.03%.

If your product is categorized under the standard parcel to 6.9 kg size tier, you’ll see an increase of £1.34 or 11.42% as the old rate of £11.73 rose to £13.07.

These small increases, while seemingly negligible at first, can be significant enough to shrink your profits and test your business’ level of resilience.

Multi-Unit Order Discounts

The good news is Amazon still seems to be listening to sellers when it announced the launch of multi-unit order discounts, as suggested by the sellers themselves.

Sellers who ship multi-unit orders will enjoy lower per-unit costs, resulting in savings averaging to 25.2%. If you want to save more and/or offset the higher MCF fees, you may want to consider taking advantage of this new offer by creating multi-unit or cross-selling offers on your UK marketplace listings. 

Check out the table below to see the difference between the local shipment fees for single-unit orders and multi-unit orders.

Aside from this new discount, Amazon also shared three developments geared towards boosting their sellers’ business growth:  

• Launch of unbranded packaging for UK sellers, available for free
• Reached over 99% on-schedule delivery rate
• Allocated for the expansion of fulfillment center capacity

Read more on these in the updated MCF rates announcement under the section “What am I getting for these higher rates?” (Yes, that really is the name of the section.)

Keep your head up and your margins down.

Amazon makes huge strides in its Manage Your Customer Engagement (MYCE) tool to help brand-registered sellers expand their email marketing reach. 🔥

Amazon Tailored Audiences

On September 14th, at its annual seller conference, Accelerate, the eComm giant unveiled Amazon Tailored Audiences, a free email marketing tool within MYCE, which allows sellers to set up email promotional campaigns for three new audience types.

Aside from brand followers, you will now be able to send email marketing messages to your:

• Repeat customers. Customers who have ordered your products more than once in the last 12 months.
• Recent customers. The most recent 20% of shoppers who have bought from your registered brand.
• Biggest spenders. The highest spending 25% of your customers in the last 12 months.

Other features include:

• Option to select a specific audience type
• Enhanced email templates
• Custom HTML content
• Monitoring tools to track your campaign’s key performance metrics like emails delivered, open rate, click-through rate, opt-out rate, sales, and conversion

With expanded email marketing capabilities, you will have more control over how you engage your customers, build brand loyalty, or increase product visibility and sales – for example, remarketing to recent buyers, allowing for more specific messaging and upselling. 🥳

Amazon is Breaking its Own Rules

As you know, Amazon has strict guidelines for communicating with buyers to prevent fraud and unethical competitor actions.

For example, you may only send Permitted Messages to previous customers and those who have contacted you about buying a product. Or, as mentioned earlier, send marketing emails to your brand followers, making it difficult for you to build and maintain long-lasting relationships with other types of audiences.

But with the launch of Tailored Audiences, the rules have changed. Amazon may have decided to make this move to:

• Boost sales after the eCommerce boom has finally slowed
• Reduce pressure from antitrust regulators by adopting a more collaborative approach with third-party sellers

There’s one drawback, however. Directly sending promotional emails to more customers could lead to a lot of spam. If you send too many emails, people may get overwhelmed and decide to unsubscribe. A high opt-out rate may result in Amazon reducing your campaign reach or suspending your campaign. ⚠️

Be sure to follow customer engagement best practices to minimize your opt-out rate and to stay compliant with Amazon’s communication guidelines.

Amazon Tailored Audiences is currently in beta and is expected to roll out more broadly in 2023. Check out Customer Engagement Tailored Audiences for more information.

On September 9, 2022, the Commonwealth Court of Pennsylvania released an order prohibiting the state’s Department of Revenue (DOR) from pursuing Amazon FBA sellers for sales tax nexus owed from previous years. 🎉☝️

This means less financial burden to bear especially amid the mounting Amazon fee stack moving into the fourth quarter! 

What is Sales Tax Nexus?

In tax law, nexus describes the level of connection between a business and a taxing authority such as Pennsylvania’s DOR. Nexus specifically applies to businesses with little to no physical presence in a state, aka out-of-state online sellers, who meet certain criteria such as having physical inventory in the state – as is the case with FBA warehousing – or who exceed a set level of sales or number of transactions within the state.

Until a nexus is established, a state cannot impose its sales tax on a remote seller.

The US Constitution provides two clauses to determine a nexus:

• The Due Process Clause which requires a definite or minimal connection between a state and the business it seeks to subject to sales tax
• The Commerce Clause which requires substantial presence 

Nexus determination may vary by state, but it generally requires that an entity such as your Amazon business must meet the following conditions to be considered to have a connection or presence in a particular state.

• You maintain a place of business
• You employ workers or salespeople
• You store merchandise in a warehouse
• You engage in an activity related to leasing or servicing of property

The third bullet point puts FBA sellers in a very tricky situation because Amazon distributes their inventory across multiple states.

Suppose Amazon stores a portion of your inventory in a state where nexus laws are enforced. In that case, the retail giant may be authorized to collect taxes on your sales in that state and remit them to the revenue department on your behalf. Or, depending on the nexus provisions of the state, the tax man may require you to pay directly.

For years, Amazon has resisted calls from state governments to charge sales tax to keep the prices of goods on their platform more affordable than brick-and-mortar stores. Both parties have engaged in a long, arduous debate over whether online sellers having a physical presence in a particular state through FBA (i.e., storage and distribution centers) causes them to have a nexus. 🤔

In a 2017 New York Times post, Amazon reportedly found a loophole that allowed them to collect sales tax only when the order came from their own inventory, e.g., customers buying from AmazonBasics, not from third-party sellers who account for 60% of Amazon’s total sales. This action basically left sellers to charge and remit taxes on their own. 🤦‍♀️

Many sellers found this action unfair and self-serving, claiming that they don’t have control over which warehouse location(s) Amazon selects to store their goods. Besides, Amazon is the owner of these warehouses, which establishes their connection with the state.

Therefore, out-of-state sellers, whose only connection to an Amazon warehouse is their inventory, should be exempted from sales tax. 

Unfortunately, the loophole has resulted in millions of dollars in uncollected sales tax revenue and states aggressively pursuing sellers (instead of Amazon) for back taxes they presumably owe. 😓

Paul Rafelson, Director of Online Merchants Guild (OMG), said he believed that some states were chasing after sellers for back taxes to prevent a clash with Amazon. 

States Started Taking Action

To close any loophole and protect their budget, several states have passed nexus laws, aka Amazon laws. These laws seek to remove the burden and cost on out-of-state FBA sellers to charge and remit sales and income taxes.

Some states have also used different approaches, such as increased reporting requirements on retail companies and implementing certain mechanisms (e.g., concessions or state agreements) to collect back taxes that sellers owe.

As of this writing, Amazon now collects and remits for many states, but not all of them. Florida, for example, still requires third-party sellers to pay directly. Either way, this puts an end to tax-free online shopping on Amazon and places more strain on sellers and consumers.

👌 This is why getting the Pennsylvania (PA) court to side with FBA sellers is a pivotal moment, as groups like OMG could leverage this win as precedent to challenge other similar Amazon laws. It could also pave the way for more states to stop pushing for more e-commerce taxation.

Dispute Over Obligations to Pay PA Sales Tax

In OMG (a group of Amazon sellers) vs. Hassell (Secretary of Revenue), the PA court found that:

“The Revenue has failed to provide sufficient evidence that non-Pennsylvania businesses selling merchandise through the FBA Program, and whose connections to the Commonwealth were only shown to be limited to the storage of merchandise by Amazon in one of Amazon’s Pennsylvania warehouses, have sufficient contacts with the Commonwealth such that Revenue can mandate they collect and remit sales tax pursuant to the Tax Code.”

Simply put, any attempt to collect sales tax from out-of-state FBA sellers is considered illegal in Pennsylvania. 🚨

This legal battle within the Keystone State has been going on since 2012, when non-PA online retailers, including Amazon, agreed to voluntarily collect and remit sales tax on their internet, catalog, and telephone sales. However, this state agreement did not apply to FBA sellers.

In 2018, Amazon entered into a new agreement with the state to collect and remit sales tax for FBA sellers. The remittance also included taxes the retail giant failed to collect before 2018. 

Furthermore, representatives from the DOR handed out Business Activities Questionnaire Requests to members of the Online Merchant Guild. These forms indicated that they may have a physical presence in PA that would subject them to sales tax and personal income tax. In addition, the DOR provided voluntary compliance services to assist the Guild members in paying back the taxes owed.

In 2021, OMG filed a lawsuit with the Pennsylvania Court to stop DOR’s attempt to request payment from its members, stating that it violated their civil rights.

When asked about the impact of the PA’s ruling on nexus with other states, OMG Director Rafelson told EcommeceBytes that “Basically all of that tax nonsense for the last five years, and even going forward was bogus and unconstitutional. Of course, this is one state ruling, but it is a first state ruling.” 🔥

Amazon continues to roll out new tools to help you manage and optimize your content more efficiently! 🚀

Unveiled at the Accelerate event on September 15, you can now use these new A/B Testing features to update your product listings with winning content. 🤩

• Title and image notifications. Run A/B tests on your titles and main images to see which version performs best. You will also receive an alert for content that’s too similar to your existing content so you can make the necessary adjustments to ensure maximum conversion. 
• Recommendation system for images and titles. Review Amazon’s best recommendations for product images and titles to increase your conversion rate.
• Auto-publish winning content. Amazon will automatically publish title and image experiments that are at least 66% better than the other versions, thereby reducing the time spent updating your product listing. 

With these new Manage Your Experiments features, it’s now easier to test more content and convert traffic from hundreds of millions of Amazon shoppers.

Go to Manage Experiments to get started.

📢 Amazon just dropped the deadlines for checking in your Q4 2022 inventory! It’s time to get into gear if you want to stay in stock during the holiday season.

Make sure your inventory arrives at FBA ahead of the following dates:

• November 2nd for Black Friday and Cyber Monday
• December 1st for Christmas

☝️ Also, keep these public holidays in mind when creating your shipping plans or securing delivery appointments with FBA to avoid receiving delays.

• October 10th: Canadian Thanksgiving Day
• November 24th: US Thanksgiving Day
• December 24th: Christmas Eve
• December 25th: Christmas
• December 26th: Boxing Day – Canada
• December 31st: New Year’s Eve

Be Mindful of Your Restock Limits

As previously reported, Amazon recently brought back restock limits to prepare for this year’s holiday selling period. 

All sellers will be allowed to store at least four months of inventory in FBA fulfillment centers. However, those who already have a high utilization rate might not be able to restock additional units, unless they make more space for their inventory. 

Before sending in your shipments, be sure to check your Restock Inventory report to avoid maxing out your restock limits overnight, which can lead to stockouts on best sellers. ☠️

But if you’re currently facing restock restrictions with no clear way around them and want a quick solution, consider enrolling in Amazon Warehousing & Distribution program to leverage its no restock limits benefit.

Alternatively, follow my in-depth guide to improving restock limits or join my live webinar to learn what you should do right now to prepare for Q4. 🔥

Related: How to Ship to Amazon FBA (And Speed Up Check-In Times), Amazon Freight Forwarding Tips to Avoid Stockouts, 14 Mistakes Sellers Make When Shipping to Amazon FBA

Here’s what’s new this month!

Thank you for your patience! We are happy to announce that we have opened up SoStocked worldwide with the new Amazon SP-API!

You can turn on new marketplaces and start tracking your inventory across all your stores. Some of the newer marketplace additions include Australia, Abu Dhabi, Dubai, India, Japan, and Singapore.

To turn on a new marketplace, simply go to the Settings page, Connected Stores, Connected Amazon Stores. From there, you can connect to a new region of your choosing. Follow our how-to video for more details. 

If you have any questions, feel free to email us at [email protected]

🥊 Shopify’s fight to maintain and increase their eComm market share continues, as the Canadian company recently issued warnings that are bound to cause sellers to reconsider Buy with Prime, Amazon’s new service offering fulfillment and checkout to Direct-to-Consumer (DTC) businesses that don’t even sell on Amazon. 

Protect Your Shopify Store Against Fraud

According to Marketplace Pulse (MP), Buy with Prime badges started to appear on a few Shopify stores back in June.

This new service offers a way for non-Amazon sellers to attract new customers to their stores by offering 1-2 day shipping and secure, trusted payment processing through Amazon Pay.

How do sellers enable Buy with Prime on their sites?

First, you need to receive an invitation from Amazon to sign up. Once signed up, Amazon will send you a few lines of code that you need to embed in your product template to display the Buy with Prime button.

Sounds harmless, right? Shopify thinks otherwise. 🤔
In an article posted by MP on September 1st, Shopify has reportedly sounded the alarm about the potential security issues that you could face when installing the Buy with Prime button code in your store. 🚨

The code includes an “Unsupported external checkout script” that violates the platform’s Terms of Service (ToS). It takes the checkout process outside of Shopify, thereby disabling Shopify Fraud Protection against fake orders, which can result in chargebacks, which can then lead to financial loss.

Shopify’s ToS states:

These are the account terms that Amazon’s service supposedly violates.

Shopify also warns that Buy with Prime could steal your customers’ data and cause incorrect charges – for example, discounts not applied correctly due to a technical glitch or Amazon themselves incorrectly charging your customers.

While you may still opt to install the unsupported script, you must agree that Shopify will not be liable for any fake orders, illegal valuable data extraction, or incorrect charges conducted through Buy with Prime. 

My prediction however, if they’re smart, is that Shopify will update its ToS to ban Buy with Prime altogether, following the example set by Walmart.com. We may see that they even develop a script that removes the Buy with Prime code snippet from even appearing on your product pages. I’d put money on it eventually going this way.

Amazon’s Response to Shopify’s Claims 

In response to the accusations, Amazon reps said that they developed the new fulfillment service to serve Prime members no matter where they shop online. And while they do collect data via Buy with Prime, they use the information to improve the service for sellers and customers. Uh huh… Makes sense. 🤔

As for providing a safe and secure payment processing platform, Amazon Pay is equipped with the same fraud protection technology used on Amazon.com. In addition, sellers also have full control over how much they charge their customers.

But those statements don’t exactly excuse them from other anti-competitive allegations like data grabbing, which I believe is the clandestine intent of Buy with Prime to Amazon. ⚠️ More on this in the next section. 

Amazon’s Data Grabbing History

As we’ve reported on in the past, Amazon is no stranger to data grabbing, which involves harvesting valuable information about web users which can then be used for a variety of purposes.

The data collected from customers and competitors, including third-party sellers, could then be used to create unfair competitive advantages. 

Here are just a couple of the data grabbing opportunities available to Amazon:

• Multi-Channel Fulfillment (MCF). Each time Amazon sellers complete orders from Shopify and other eCommerce platforms through MCF, Amazon gains access to their sales velocity and customer data (name, delivery address, contact details, among others) from those sites. This allows the tech giant to watch their competitors closely and remarket to their customers through relevant product ads across the internet.
• Buy With Prime. Similar to MCF, Buy with Prime also has the added benefit to Amazon of data grabbing, but this time from non-Amazon seller Shopify merchants fulfilling orders through Amazon. Beyond grabbing customer information and retargeting, they could use the harvested data as additional product research and development information to create their own products for their in-house brands and launch retargeting campaigns to attract Shopify audiences.

✊ In a move to protect their data and market share, Shopify acquired Deliverr, a fulfillment operation with the capacity to offer 1-2 day fulfillment for merchants across multiple sales channels, including Amazon, Walmart, Etsy and social commerce sites like Facebook, Tiktok, and Google.

Therefore, with Shopify’s revamped fulfillment network, merchants will be less likely to need to use Buy with Prime and risk exposing their sensitive data to Amazon.

Shopify is certainly holding its own against Amazon’s advances and has really been making some impressive moves in defense of their own market share. But the battle rages on and I for one am busting out the popcorn. 🍿

🚨 After not having capacity restrictions for the better part of 2022, on August 29th, sellers woke up to just that with an announcement from Amazon that they are, in fact, bringing back restock limits to prepare for Q4!

With this update, all sellers will be allowed at least four (4) months of inventory in FBA, which completely contradicts recent moves they’ve been making to entice eCommerce sellers that are not even selling on the Amazon platform to use FBA Prime fulfillment services – all signs pointing to Amazon not being worried about running out of space after nearly doubling their fulfillment network during the pandemic. 😓

The announcement also came after the launch of Amazon Warehousing & Distribution (AWD), a low-cost upstream storage and distribution program that could rival independent 3PLs. 

One of the selling points of this new service is that you can send inventory to an AWD facility without any storage limits. Interesting timing… 🤔

They also boast lower storage and transportation costs, making it an attractive logistics option for sellers who may want to bypass the current inventory restrictions without leaving the Amazon fulfillment network, and possibly to keep costs down amid rising FBA fees.

So, coinciding the return of restock limits with the launch of AWD seems like a deliberate move by Amazon to:

• Make sellers more reliant on their storage, distribution, and fulfillment network. Otherwise, if sticking with your 3PL, you’ll be dealing with low restock limits leading to stockouts. You may have to run flash sales to sell through your slow-moving inventory that’s clogging your storage limits, pay hefty removal fees to get rid of extremely slow sellers, or cancel your FBA shipping plans to make room for products within your restock limits.

• Take more customers from Shopify and other 3PLs. In April 2022, Amazon rolled out Buy with Prime to offer fulfillment services to non-Amazon sellers, taking direct aim at Shopify. The Canadian eComm giant then fought back by acquiring Deliverr in order to offer 1- to 2-day shipping to marketplace sellers, going toe-to-toe with Amazon’s Prime services.

But if everything works out in Amazon’s favor, they will be able to generate more revenue for their fulfillment business arm, which recently grappled with excess capacity and massive financial obligations associated with maintaining facilities they no longer need as economies reopen.

It’s unfortunate (but not surprising) that the cost of Amazon’s over-expansion is, more and more, trickling down to sellers. While AWD can be a good way to avoid restock limits, it is still in its early stages and may not be as seamless as one could hope. We saw how Amazon handled its logistics last year!

Handing over months’ worth of inventory to Amazon may be risky given that they’re not exactly immune to shipping delays and mistakes, especially during congestion times.

So, proceed with caution, weigh your options carefully, and don’t ever let anyone have all your stuff! Especially not Amazon. Be sure to check out Amazon Restock Limits Tips and Updates for more information and sign up to get notified when new restock updates drop!

Amazon continues to usher in a more values-based shopper experience by spotlighting small business and minority-owned brands through new Amazon badges. 🙌

US-based small businesses and artisans may qualify for and apply to this certification program by registering with Brand Registry or Amazon Handmade. It is currently being tested and allows for clearer identification and transparency as to the brands behind the listings.

New Badges to Highlight Small Businesses

• Black-Owned Business Badge. In celebration of the Black Business Month and the 1st year anniversary of Black Business Accelerator, Amazon launched a new badge that will make it easy for shoppers to find Black-owned businesses on the retail platform. This badge tells people when a product offer they’re looking at is sold by a Black-owned business. Aside from search, the badge will also be visible to customers when they’re on a Black-owned product detail page.
• Small Business Badge. You’ve probably heard of the Small Business Badge, but it’s worth repeating here in case you missed it.

Amazon introduced the small business badge earlier this year, announcing, “We’re starting first by testing the Small Business badge on a subset of eligible product detail pages in the U.S., and plan to scale further as we learn how the badge can best help customers discover small business products they love.”

Making good on the promise, it is now possible to apply for one of several of these new badges on the Add a Certification page. 👌

Other certifications that may be of interest to you include:

• National Diversity Certifications for Women-Owned Businesses, Veteran-Owned Businesses, Economically Disadvantaged Women-Owned Business, LGBT Business Enterprise, and more.
• State Diversity CertificationsState Diversity Certifications
• Climate Pledge Friendly Badges

♻️ We previously featured the Climate Pledge Friendly Badges in another post, specifically highlighting Amazon’s own Compact by Design program.

In this competitive landscape, it’s important to take any advantage you can and these badges are beginning to allow us “little guys” to start differentiating ourselves from the big brands that are sometimes harder to compete with. 💪

As buyers increasingly become socially conscious and begin to realize they can reinforce their values through their buying habits, Amazon seems to be attempting to humanize the shopping experience and community sellers may reap the benefits. 🔥

UPDATE 08/23/2022: Amazon just announced that they will extend delivery date promises to Amazon customers for seller-fulfilled orders during the Royal Mail strikes. The planned 4-day protest is expected to cause UK-wide postal disruptions, prompting the retail giant to create a contingency plan to minimize customer dissatisfaction that may impact seller account health.

⚠️ In one week, over 115,000 Royal Mail workers will go on strike over pay, which could jeopardize deliveries and collections across the UK. If you haven’t done so already, it’d be wise to find an alternative carrier ASAP to avoid delays or lost parcels in the coming weeks.

When is the Mass Walkout Happening?

The Communication Workers Union (CWU), a group that represents British postal workers, recently announced that they will stage four days of industrial action, a protest against low pay and poor working conditions, on the following dates:

• August 26, Friday
• August 31, Wednesday
• September 8, Thursday
• September 9, Friday

The August Royal Mail strikes are also set to coincide with:

• Crown Post Office protest on the 27th. Employees who work in 114 Crown Post branches will stop work again in an escalating fight over pay. The staff rejected and took industrial action against the 3% pay offer and £500 lump sum by the Post Office last month because it wasn’t enough to improve their living standards, especially at a time when inflation is at 10.1%.
• Strike at Port of Felixstowe from August 21st to 29th. Around 2,000 dockers at UK’s largest container port will protest for 8 days over poor pay. Transport economists at MDS Transmodal estimate that this week-long industrial action could put $4.7B in trade on hold, potentially delaying the arrival of goods expected to go on sale this holiday season. Companies that rely on the port like Amazon, Mars Foods, GSK, and General Mills will all be impacted.
• Bank Holiday in England and Wales on the 29th. This is a public holiday that gives workers a long weekend to make the most of the summer season.
• Supply Chain & Admin action on the 30th. Union members whose jobs are related to supply chain and administration will also walk out at the end of this month in hopes of getting a fair pay increase for their hard work and dedication.

These additional walkouts could lead to an even bigger postal disruption. 😩 And if the planned protests go ahead, collectively it would be the largest summer strike ever held by postal workers in the UK, according to CWU.

Postmen walking out of their jobs on the 26th of August means you’ll have to make sure customer orders or any additional inventory must get picked up before the 25th. It’s also best to notify your customers of expected delays due to the protests. Because even if collected, they won’t be delivered right away, which could create a massive backlog of undelivered items.

Additionally, Post Office walkouts and the Bank Holiday coinciding with the Royal Mail strikes may also exacerbate the situation. So, experiencing shipping delays even after the industrial action in September is highly likely.

Certain items are at even bigger risk of being delayed during the strikes because Royal Mail will prioritize special deliveries, medical prescriptions, COVID testing kits, and tracked shipments over letters and normal parcels to minimize the impact of the upcoming disruption.

Main Reasons Behind the Postal Strikes

Postal workers are threatening to walk out of their jobs in a dispute over pay amid soaring inflation.

According to CWU, the Royal Mail leadership has presented an offer worth up to 5.5% for their workers, which they have broken down to:

• A 2% pay raise, which is too low when inflation is predicted to hit 13% before the year ends
• A £500 incentive in 2023 for reaching “unattainable” targets
• An additional 1.5% “signing away our terms and conditions” bonus

Therefore, for the union, there was never a 5.5% pay increase put on the table, resulting in approximately 97.6% of postal employees voting in favor of industrial action. 💪

Scottish Regional Secretary of CWU, Craig Anderson, told BBC that “a fair offer from our perspective would be for them [Royal Mail] to sit back round the table with us and actually look at where or what comes out at the moment with a cost-of-living crisis, where the company’s been with the profits that they’ve made, and actually start negotiating on a percentage pay raise that reflects that.”

In 2021, Royal Mail raked in £758M in profit and handed over £400M to shareholders, and £2M in bonuses to 2 CEOs and finance executives, while many employees overwhelmed by the rising costs were forced to rely on food banks to feed their families. 😓

In a report from Bloomberg, Royal Mail argued that it will suffer a full-year loss in the event of mass walkouts by their workers over several days. The negative impact of the strikes on the company will only make pay increases less affordable and therefore, could lead to layoffs.

But CWU General Secretary, Dave Ward, said, “Nobody takes the decision to strike lightly, but postal workers are being pushed to the brink. There can be no doubt that postal workers are completely united in their determination to secure the dignified, proper pay rise they deserve. The CWU’s message to Royal Mail’s leadership is simple – there will be serious disruption until you get real on pay.”

Royal Mail said it remains open to negotiate with the union to “try and avert damaging industrial action.”

Prepare Your Business for the Upcoming Disruption

With one week left before the protest, both Royal Mail and CWU only have a small window of opportunity for negotiations. So, it would be best to put some contingency plans in place now to minimize shipping and delivery delays in the event of strikes.

Here are some tips:

• Keep some buffer stock in your 3PL or supplier’s warehouse and transfer only when needed.
• Consider sending additional units via small parcel delivery for faster FBA check-in times.
• Ship parcels with alternative couriers, such as DHL, FedEx, DTDC, and UPS. While typically more expensive than Royal Mail, they will try to get your items picked up and delivered to customers on time. Plus, deliveries will not be limited to health essentials like what UK’s postal office is planning to do. For letters, consider UK Mail, Citipost Mail, The Direct Mail Company, or Whistl as alternatives.
• If shipping costs are too expensive, try to reduce your packaging to achieve smaller dimensions and pack as many units per carton as possible. Consider using a Master Carton Calculator to find your ideal carton configurations.

Related: Amazon FBA Freight Forwarder Tips to Avoid Stockouts and Reduce Costs

🚨 Fulfillment costs continue to climb as Amazon has just announced a new holiday surcharge that will be applied to core FBA, apparel, and dangerous goods from October 15, 2022 to January 14, 2023.

Sellers will now pay an average of $0.35 per unit sold via US and Canada FBA on top of all other applicable charges plus peak holiday storage surcharge of $2.40 per cubic foot. 😩

This is the first time the eComm giant has raised fulfillment fees for Q4 in order to deal with soaring inflation. Though on January 15, 2023, the fees will revert back to current levels according to Amazon. 🤞

The Mounting Amazon Fee Stack

We’ve recently been “lovingly” referring to Amazon’s extensive fee increases as the Amazon Fee Stack. What we’re referring to is the series of seemingly small fee hikes that yet are leading to significant increases when all added up. Also known as “death by papercuts”.

Unfortunately, when costs are greater than your total sales, your profit can turn negative, so it’s crucial to learn how much you’re actually paying in fees in order to protect your margins.

According to Marketplace Pulse, Amazon has raised their fulfillment fees by more than 30% since 2020.

It is true that the past two years have seriously challenged the eComm giant, rirst with supply chain disruptions, followed by record-breaking inflation rates. The company also sunk a lot of money into its warehouse expansion efforts to keep up with the surge in eCommerce demand.

“At a certain point, you can’t keep absorbing all those costs and run a business that’s economic,” Amazon CEO Andy Jassy told CNBC in an interview in April.

Dealing with these macroeconomic factors, however, has led Amazon to apply:

• An average of 4.4% fulfillment fee increase for all standard size items and around 28% removal fee hike across all categories in June 2021.
• Approximately 7.5% increase for small standard and 2%-12% increase for all standard and oversize categories in January 2022. Amazon has also started using dimensional weight to calculate the billable weight for large standard-size and oversize items, which contributed to these fee increases.
• 44% to 61% removal fee increase in January 2022.
• 5% fuel and inflation surcharge in April 2022.
• Aging inventory surcharge in May 2022.
• FBA Canada and Mexico remote fulfillment price adjustments in June 2022.
• Holiday peak fulfillment fee, which would increase FBA costs temporarily by more than 30 cents.

Below is a table showing the historical increases for standard size and oversize items. You can easily see how the various fee changes over the years (2019 – 2022) impact your margins.

Standard Size

	Small 6 oz or under	Small 12 oz	Large 1lb	Large 3lbs	Large 3lbs to 20lbs
2019	$2.41	$2.48	$3.28	$5.26	$5.26 + $0.38 above the first 3lbs
2020	$2.50	$2.63	$3.48	$5.42	$5.42 + $0.38 above the first 3lbs
2021	$2.70	$2.84	$4.25	$5.68	$5.68 + $0.30 above the first 3lbs
2022	$2.92	$3.07	$4.52	$5.79	$6.13 + $0.30/lb above first 3 lb
April 2022 (base rate + 5%Fuel and Inflation surcharge)	$3.07	$3.22	$4.75	$6.08	$6.44 + $0.32/lb above first 3 lb
2022 Holiday Peak, including fuel and inflation surcharge	$3.28	$3.43	$5.06	$6.60	$6.96 + $0.32/lb above first 3 lb

Oversize

	Small	Medium	Large
2019	$8.26 + $0.38/lb above the first 2 lbs	$9.79 + $0.39/lb above the first 2 lbs	$75.78 + $0.79lb above the first 90lbs
2020	$8.26 + $0.38/lb above the first 2 lbs	$11.37 + $0.39/lb above the first 2 lbs	$75.78 + $0.79lb above the first 90lbs
2021	$8.66 + $0.38/lb above the first 2 lbs	$12.20 + $0.39/lb above the first 2 lbs	$76.57 + $0.79lb above the first 90lbs
2022	$8.94 + $0.38/lb above the first 2 lbs	$12.73 + $0.44/lb above first lb	$82.58 + $0.79/lb above first 90 lb
April 2022 (base rate + 5%Fuel and Inflation surcharge)	$9.39 + $0.40/lb above first lb	$13.37 + $0.46/lb above first lb	$86.71 + $0.83/lb above first 90 lb
2022 Holiday Peak, including fuel and inflation surcharge	$10.44 + $0.40/lb above first lb	$15.99 + $0.46/lb above first lb	$89.33 + $0.83/lb above first 90 lb

Clearly, there has been a steady increase in Amazon fulfillment fees since 2019. The pandemic and its aftermath have presented certain economic conditions that induce the online retail giant to introduce multiple surcharges in 2022, making fulfillment cost per item significantly more expensive in August than in January.

While inflation and holiday surcharges are only temporary, the latter, we are predicting, is most likely going to be a yearly fee similar to what major carriers have been doing. In fact, the US Postal Service has already requested a temporary price hike for Q4 to help cover additional handling costs, while the UPS and FedEx are expected to follow suit shortly.

Like the online retail giant, you can’t keep absorbing these increasing fees. Therefore, at some point, you might also have to raise your prices to stay profitable. Or even better, learn some strategies for recovering more of your profit to stay resilient throughout the rest of the year and beyond.

Great news for sellers using Amazon Attribution to drive external traffic to Amazon! 🥳

The tech giant has reportedly rolled out a new Amazon Attribution feature that will replace the previously featured competitor ads placed at the top of your listing with other popular products from your own store. 🔥 This means an increase in brand awareness and new cross-selling opportunities within your catalog, which may help boost conversion and minimize Advertising Cost of Sales (ACOS) for off-Amazon traffic.

Currently in beta, the new feature is available to sellers utilizing Amazon Attribution with Google Ads through January 2023.

What Prompted This Update From Amazon?

Brand-registered sellers use Amazon Attribution (AA), a free advertising tool, to track and measure the performance of their off-Amazon efforts, giving them insights into which channels are best for their business. They also utilize the Brand Referral Bonus (BRB) program in conjunction with AA to earn, on average, a 10% discount on referral fees associated with the sales generated from off-Amazon ads.

🤔 It makes sense for Amazon to incentivize sellers willing to drive external traffic using AA because they are more likely to continue driving that traffic if they can see that it is working for them. Without that visibility to measure against, they might abandon external traffic campaigns that are actually working for them. Attribution helps to prevent this from happening.

⚠️ However, there was a major flaw in the program.

Prior to the update, when a customer is directed to a listing from Google Ads, the first thing they see at the top of the screen are ads from competitors. This essentially resulted in sellers paying for Google ads that simply drove traffic to their competitors. 🤦

To prevent this from happening, some sellers started sending traffic to their brand Storefront instead of driving it to a specific product page. However, the former doesn’t convert nearly as well as the latter, as the shoppable content customers see may not be related to what is being advertised on Google. Some may get confused and leave the store, while, less often, others may end up browsing through and buying more than one of the seller’s products.

💪 The bottom line is sellers did not want to be twice-burned by wasting ad dollars and sending their potential customers into the arms of their competitors.

Amazon Has Finally Listened

“Now in beta, when brands use Amazon Attribution to direct their non-Amazon marketing to their product detail page via Google Ads, customers will see a new section at the top of the page labeled ‘Other popular products from this brand.’ This new feature is meant to help increase brand awareness and promote new selling opportunities by showcasing three additional products from the brand.” Amazon said in an email sent out to its brand partners on August 9.

Making this change also shows Amazon’s desire to strengthen its partnership with sellers conducting off-Amazon marketing campaigns. Now, they can bring more customers to their target listing when utilizing Amazon Attribution with zero competitors at the top section of the page, which should help increase sales through conversions and cross-sells while decreasing Amazon fees. 💰

However, note that your BRB rate may vary by product category and marketplace. As of August 2022, Amazon US is the only marketplace that rewards sellers with a 10% bonus, whereas Canada, Mexico, EU, among others simply have the tracking capability.

It’s possible that Amazon would lower the BRB rate for the US marketplace from 10% to 5%, or to 0% eventually. But the opposite scenario could occur too, in which Amazon offers BRB to sellers from other marketplaces in the future.

Overall, Amazon Attribution can be beneficial to your business. Not only does it help increase conversion and potentially lower referral fees through BRB, it also improves your on-Amazon organic ranking, leading to more sales.

So, sellers who adopt this program early could gain a huge competitive advantage over those who don’t. And the good news is that Amazon Attribution has only just begun and as the eCommerce landscape continues to change, sellers and SaaS companies alike, in conjunction with Amazon Attribution, will continue to find new ways to make external traffic more measurable and impactful within the Amazon seller toolbelt. 🚀

Related: Amazon Budgeting & Advertising Tips with the Customer Journey Principle

We are excited to fill you in on all of the new changes in SoStocked, so let’s get right to it…

We are excited to announce that SoStocked has recently become a part of the Carbon6 family! This is very good news for you, our SoStocked users!

Our roadmap and vision for SoStocked haven’t and won’t change. This will only help us to get there faster. Now with Carbon6, we have many more resources at our disposal to catch up on some backlogged development. You can look forward to a smarter, more integrated, efficient, and profitable way to run your eCommerce business, something that we’ve needed for a long time now. Carbon6 was brought together by entrepreneurs who want to empower entrepreneurs. The group of like-minded eComm advisors and industry-leading software tools who have come on board is what made it a great fit for us.

The SoStocked team and leadership aren’t going anywhere. The team that you have come to know and love will still be here for you. In fact, several SoStocked execs are even stepping into advisory roles within Carbon6 to help bring more value across the entirety of the Amazon seller journey. We truly believe in Carbon6 and what we can accomplish together. Our mission has always been to change the face of operations and profitability within the eCommerce industry. With Carbon6 we can do that. They truly stand behind and support our vision and can provide the team and resources to help us go further.
This is a pivotal success for SoStocked. We are very grateful to all of our users who have helped us along the way and we can’t wait to see all sellers benefit from our coming together!

Migrating from the old Amazon MWS programming Interface (API) to the new Selling Partners API that is required in order to add these additional selling regions has been a huge undertaking and we appreciate your patience. Our development team has worked hard to do an entire overhaul of the SoStocked system to make this process not only possible but fast and reliable, and the best inventory management tool worldwide. We are in the quality assurance phase and we are set to release the new regions later this month.

Shopify is on track for Q3! Yes, we thought this would have happened much sooner, too. We have been testing Shopify in beta for a while now, with distractions like Amazon restock limits and new API out of the way we are almost set to roll out this new marketplace. With the help of the Carbon6 additional resources, the focus is on training a larger software development crew and getting Shopify out of beta and released quickly.

Simplify the way you view all your inventory movements! 🚀

Amazon UK announced the roll out of their new Inventory Ledger report that will help you check your Amazon-fulfilled inventory more efficiently.

This all-in-one report offers you:

• A comprehensive and full view of your FBA stock and its movements. You can now see your beginning inventory balance, shipments to Amazon fulfillment centers (FCs), purchase orders, returned items, settlements, reconciliations, removed products, and closing balance – all from one place.
• Historical movements of your FBA inventory during the last 18 months, including event type, product name, quantity, unique product codes, FC transfer updates, location (country or name of warehouse), and disposition (products sold, returned, removed, disposed of, damaged, lost, and found).
• A list of your reimbursements. However, reimbursements for lost or damaged products may take up to 45 days to show up on your account.

You can use the new Inventory Ledger to also spot any discrepancies in your inventory balances that could have occurred in the previous months, thereby affecting the accuracy of your data in the report window.

For instance, discrepancies could occur due to human error or warehouse theft. If it goes undetected for months, it could lead to significant profit loss.

• Keep an eye on your available (and unfulfillable) stock by expanding the dates of your ledger to get a detailed view of your inventory movements in Amazon FCs and to reconcile inventory balances.

The Inventory Ledger receives updates every 24 hours and essentially replaces these six older inventory reports:

1. Daily History
2. Monthly History
3. Inventory Adjustments
4. Event Detail
5. Inventory Reconciliation
6. Received Inventory

Amazon said that the six reports will no longer be used beginning the 30th of September 2022.

Related: Types of Inventory that Amazon Sellers Should Know About

UPDATE 08/02/22: A win for sellers! Amazon has reversed its recent policy change requiring sellers earning under $1M in sales to obtain a $0 deductible insurance plan citing the challenges they face in procuring zero-deductible policies as the primary reason for the reversal.

Less than 2 months ago, we told you about changes to the A-to-Z Guarantee. Well, a lot has changed in that short time.

This is important, so pay close attention. Amazon may restrict you from certain selling categories or even suspend your account for non-compliance of this policy.

You can read the full policy on Seller Central, but the cliff’s notes are this: if you’ve sold $10,000 or more in any one month, you need business insurance of at least $1 million in aggregate. Previously this was set as any seller who hit $10,000 for any 3 consecutive months.

Further, it is not enough just to have it. (I’ve had this insurance since I started selling in 2014.) You now need to ensure Amazon is named as an additional insured by way of a certificate of insurance.

I’m not done yet. You also need to provide Amazon with proof of this insurance by uploading the certificate into your Seller Central account.

Do this by going to Settings > Account Info > Business Insurance and then following the steps to submit your proof of insurance.

Now, if you’ve already had a certificate of insurance created for Amazon in the past, that likely will not be valid as Amazon has changed it’s requirements for what may be listed on the additional insured certificate. If you do not have the name listed correctly, your proof of insurance will be rejected.

The name to be listed on the certificate is:

“Amazon.com Services LLC., and its affiliates and assignees”

Anything else will be rejected. You also need to meet the minimum requirements for coverage. For full details on exactly what you need, check out Amazon’s insurance requirements page.

You can usually just send this list of requirements to your insurance provider and they can provide you with what you need. But move quickly as, since this policy took effect on September 1st, 2021, so you technically have until September 30th to submit your insurance before your account or selling privileges are at risk.

For most sellers who already have this insurance, getting a certificate is usually quite easy, taking only a matter of hours to receive from your provider via email.

But for those who need a new policy, this may prove challenging, especially as all other sellers on Amazon are likely attempting the same just now.

You may, however, try using the new Amazon Insurance Accelerator program where Amazon has teamed up with insurance providers to make the process of acquiring insurance smooth and easy for sellers.

It has always been good business for any company to be properly insured, now Amazon makes it a verifiable requirement. For more on what types of insurances might be valuable to eCommerce sellers, check out our blog post on Amazon Seller Insurance Tips.

Leaked files seen by the Business Insider (BI) show that Amazon may be planning a second Prime Day in the fall to boost growth.

Amazon Is Looking to Replicate Prime Day 2022 Success

Prime Day 2022 results are out, and Digital Commerce 360 estimates that the eComm giant made $12.09B globally during the 2-day extravaganza that ran from July 12 through 13.

That’s up 8.1% from last year’s $11.19B, and is considered as the “biggest” in history. Based on Numerator Prime Day 2022 Insights, most purchases were basic must-haves, such as household items, consumer electronics, and health and beauty.

Rising costs did impact customers’ buying decisions, though. The report shows that 58% of products sold for under $20, while only 5% sold for over $100, as many tried to beat inflation by prioritizing their needs over wants.

Moreover, 34% of Prime Day 2022 customers said they waited for the event to buy a specific product at a discounted price, while 28% ignored a good deal because it wasn’t a necessity. Inflation also forced 22% of customers to compare prices with stores outside of Amazon before placing an order.

This spending habit may continue through to Q3/Q4, as the Fed continues to raise interest rates and inflation is likely to remain above target until 2024. Therefore, people may be looking to use Amazon to stock up on essentials or buy holiday items at discounted prices before they get even more expensive by Q4.

Prime Early Access Sale

The next 2-day sale event that will be held in October is reportedly being named the Prime Early Access Sale. The exact date is yet to be determined.

“This event is one of the best deals events of the year and Prime members would be crazy to miss it,” one document said.

The BI report also says that the eComm giant has already started asking sellers to send their special promotion deals for the event, which is expected to feature promotions for sneakers, TVs, and other basic items. Prime members may also be given early access to such deals, specifically Prime-eligible Lightning Deals on Amazon.

Prime Early Access Sale may be Amazon’s way to preserve its growth through economic uncertainty and regulatory pressure.

Q2 2022 earnings results show that while the company exceeded Wall Street expectations for the second quarter with a reported revenue of $121.2B, up 7% from last year and well above the $119B projection, it did suffer a loss once again, this time for $2B in Q2.

By holding another mega sales event in October, Amazon could drive more sales. It may also help them to attract more subscribers to its Prime program.

What Does this Event Mean for Sellers this Black Friday/Cyber Monday (BFCM)?

A Prime Day-like event in October may throw a wrench into your BFCM plans. It means bracing yourself for:

• Added competition. Competitors may use this Prime Early Access Sale to launch their products into top ranking positions before the holidays.
• Potential shipping delays. More packages will keep fulfillment centers and carriers extremely busy as early as October, making the supply chain situation worse.

It would be best to have a plan that will help you to stay flexible on the days leading up to and during BFCM. Consider monitoring Prime Early Access deals and see if you can make adjustments to your own BFCM deals to capitalize on lessons learned during that preview. You might also want to start launching your BFCM promos earlier than your target date (e.g., first week of November) to benefit from the sudden shopping rush that Prime Early Access Sale may create.

Related: Amazon FBA Freight Forwarder Tips to Avoid Stockouts and Reduce Costs

⚠️ Brace for potential delivery delays in Q4 as UPS places shipping limits on Amazon to pursue more profitable shipments, such as B2B.

Sudden Drop in eCommerce Parcel Volume

After experiencing a surge in revenue and parcel deliveries in 2020 and 2021, the average US daily volume for UPS dropped 4% during the second quarter of 2022. The unexpected drop was greater than expected as eComm delivery growth has finally slowed.

“The fear is that, after a strong 2-year period, UPS could see revenue growth waver thanks to high inflation. We can expect parcel volumes to decrease in line with consumer spending,” said Senior Analyst at Third Bridge, Patrick Donnelly.

The company’s decision to put limits on Amazon’s package volume also contributed to the decline, according to CEO Carol Tome. The eComm giant is UPS’s largest customer, accounting for 13.3% of its total revenue in 2020 and 11.7% in 2021. However, by throttling Amazon’s delivery volume, it will now only make up 11% of UPS revenue by Q4.

“We’ve contractually agreed on what makes sense for us versus what makes sense for them. That means that the volume and revenue for Amazon is coming down,” said Tome.

The shipping restrictions also came after Amazon launched Buy with Prime, which allows non-Amazon sellers to leverage 1- and 2-day shipping through its own fulfillment empire. Although Amazon’s logistics service is expanding rapidly and could potentially surpass UPS, the eComm giant still relies on the legacy carrier to carry out millions of last-mile deliveries for them.

In addition, with fewer parcels coming in, UPS has more Q4 capacity it can use to “go out and win’’ new customers.

Therefore, entering into a mutually beneficial agreement on what Amazon parcels UPS delivers versus what is fulfilled in-house definitely makes a lot of sense.

Putting More Focus on B2B Deliveries

Despite the decline in its core domestic unit, UPS’ per-package revenue grew 11.9%, thanks to price hikes and putting limits on discounts usually given to bulk customers.

UPS also plans to focus on B2B shipments to make up for the eCommerce slowdown. In 2019, the carrier’s B2B delivery volume grew 3.4%, representing an important growth area for the company. However, in 2020, its growth stalled when stay-at-home orders were implemented across the country to mitigate Coronavirus transmission. Since most office buildings were unoccupied, and thus a reduced need for essential business items and shipping services, buyers had to cut back on spending.

But as COVID restrictions ease up across the globe, UPS expects more and more B2B buyers will revert back toward spending on services.

Effects of UPS Shipping Restrictions on Sellers

• Shipping delays. With limited UPS services available to Amazon sellers, we might see shipping delays during the Prime Early Access Sale in October, Black Friday/Cyber Monday in November, and the holiday season.
• Sellers might have to seek alternative options or backup carriers such as 3PLs or Shopify’s Shop Promise to continue offering speedy shipping to customers. While Amazon has sunk a lot of dough into its warehouse and transportation this past year to keep up with demand, it still depends on UPS to deliver millions of packages to homes. So, without UPS in their back pocket, Amazon might find it difficult to handle shipping during the holiday rush.
• Amazon might bring back restock limits even if mildly. Amazon does have a lot of storage space that they invested in, but congestion may become an issue in Q4 due to these shipping concerns. Hence why, placing inventory restrictions on sellers before the holiday rush may be utilized as a means to control the influx of inventory into their fulfillment centers. This is a long shot based on what we know about their new, bolstered warehousing network but something not to be ruled out based on their faltering shipping infrastructure.

💡 To prepare for potential shipping delays, consider keeping some buffer stock in your 3PL warehouse or with your supplier and sending additional stock into FBA as needed. You could also switch over to FBM in order to fulfill orders yourself or use Amazon Upstream Storage to circumvent restock limits if imposed. Securing early delivery appointments with FBA is also crucial to avoid check-in delays, so be sure to discuss your options with your 3PL or preferred carrier.

Shopify suffered a major blow as shares of the company dipped by 14% on Tuesday. 📉

Earlier that day, Shopify founder and CEO Tobi Lütke sent a heartfelt memo to the company about the immediate changes regarding their personnel.

“Shopify has to go through a reduction in workforce that will see about 10% leave by the end of the day,” Lutke wrote.

⚠️ The company’s global workforce of more than 10,000 will now be downsized to around 9,000, as most of their staff with hiring, support, and sales functions will be let go. Those found to have redundant and extremely specialized roles and teams that had functions not closely related to product development but were still previously helpful for the company – will also be laid off.

A Costly Miscalculation

Lütke admitted that he made the wrong bet regarding Shopify’s manpower expansion.

In the same memo, he explained that based on the available data before the pandemic started, they made a bet that the ecommerce boom would persist and the money going to e-commerce than traditional retail stores would surely shoot up by 5 or 10 years.

To match their forecasted exponential growth, they expanded and hired more employees. But now, the data shows otherwise.

The line graph on his memo shows the growth of e-commerce adoption descending to “where pre-Covid data would have suggested it should be at this point.”

“Ultimately, placing this bet was my call to make and I got this wrong,” he wrote.

The New Reality

The Canadian ecommerce company joins the 140+ American tech companies who have collectively laid off more than 30,000 of their employees so far this year.

Tech – which is one of the industries that emerged as a winner during the pandemic – is now one of the hardest hit sectors of 2022.

The continuous lockdowns during the first two years of the pandemic plus the health scare caused by a novel virus forced consumers to conduct their day-to-day activities within the confines of their own homes.

The demand for tech products like laptops and tablets used for online schooling and remote work, and services like live streaming and online shopping skyrocketed, prompting the tech companies to rapidly expand to cope up with their anticipated, long-lasting growth. As a result, the stock prices of these tech companies also ballooned.

That explosive growth is now showing signs of decline as the world is transitioning back to face-to-face classes and work. Travel restrictions are being lifted and consumers are allowed to shop in malls again.

LinkedIn’s principal economist Guy Berger shared his observation with Yahoo Finance last week.

“Tech just kept hiring and rising and rising at least through the end of last year. Now [tech] is coming down much faster. It’s almost like a boomerang in that it went up faster and is coming down more sharply.”

As Infrastructure Capital Management CEO Jay Hatfield points out, “It’s a liquidity and pandemic-driven bubble.”

The layoffs happening across the sector seem to show that the companies that enjoyed initial success early on in the pandemic (and quickly expanded as a response to that) may have overestimated the duration of that success, not to mention their ability to sustain their growth.

Now, there is a need for them to recalibrate as the new reality continues to evolve.

Reasons for the Layoffs

The spike in layoffs during the mid-year may have something to do with the tech companies wanting to sort out their plans and resources before Q3 ends. 🤔

The high-risk stocks of these tech giants have also been battered by significant macroeconomic factors such as the incessant lockdowns in China, Russian invasion of Ukraine, Federal Reserve’s doubling of interest rates, record-high inflation, and fears of a recession.

In addition, some tech companies also cited the current macroeconomic environment and their goal to prudently manage their expenses are the reasons why they are trimming down their workforce.

In the case of Shopify, their recent $2.1B acquisition of Deliverr – an eCommerce fulfillment company – may be another reason behind the layoff. It is likely that the company is downsizing to reshuffle their resources towards their fulfillment network so they can compete better with Amazon’s Buy With Prime.

In all fairness to Shopify, they are not the only company to miscalculate and overestimate their projections regarding the e-commerce boom during the pandemic.

eCommerce giant Amazon made the same bet (and mistake) when it increased its employees to 1.7 million, only to lower it to 1.6 million in the next quarter.

Amazon stock prices also dropped by 10% after the company reported a $3.8 billion net loss – its first loss since 2015 – in April this year. Amazon CEO Andy Jassy shared the loss is attributed to the pandemic and ongoing war in Ukraine, though how that latter could be is unclear.

There’s no way to fully predict what will happen next in the tech sector, but one thing’s for sure: these companies need to remain agile and strategic if they want to withstand and overcome these inflationary economic shifts. 💪

It’s been a challenge keeping this under wraps but we’re finally ready to announce that SoStocked has recently become a part of the Carbon6 family. The SoStocked team and leadership aren’t going anywhere. In fact, several SoStocked execs and I are even stepping into advisory roles within Carbon6 to help to bring more value across the entirety of the Amazon seller journey.

Our roadmap and vision for SoStocked haven’t and won’t change. This will only help us to get there faster. I have always held fast to the mission to change the face of operations and profitability within the eCommerce industry. With Carbon6 we can do that. They truly stand behind and support our vision and can provide the team and resources to help us go further. Big things are coming!

I can’t divulge much quite yet, though I have hinted at such things in the past, but know that our focus on profit optimization and recovering margins won’t stop at reducing stockouts and holding costs.

Helping sellers to succeed by staying in stock and keeping more of the money you make is a major goal shared by both SoStocked and Carbon6.

Our new partnership also comes with a new look:

We truly believe in Carbon6 and what we can accomplish together. I’ve personally developed a strong relationship with their core executives, especially their CEO, and have had deep insight into their mission, road map, and team.

At the heart of Carbon6 are entrepreneurs who believe in empowering entrepreneurs. The mentality of being seller-first and team-oriented, coupled with the eComm advisors, industry-leading software tools, and passionate SaaS founders who have come on board are really what made it a great fit for us.

Believe me, there are many SaaS tools, major thought leaders, and top sellers that you know and respect joining this mission; several that have not even been announced yet. I’m excited for what’s coming. They truly have assembled a dream team.

You can look forward to a smarter, more integrated, efficient and profitable way to run your ecommerce business, something that we’ve needed for a long time now.

Much more will be revealed soon. It’s going to be a game-changer, and I’m eager to see all sellers benefit from our coming together.

Exciting times ahead,

Chelsea Cohen
CEO & Co-Founder, SoStocked

Canadian tech giant Shopify continues to challenge Amazon’s dominance over the US eCommerce market, from acquiring Deliverr to offer 1- to 2-day shipping to recently teaming up with YouTube to allow merchants to directly link their stores and sell products on the video platform.

Shopify Gets on the Live Commerce Trend

On July 19, Shopify launched YouTube Shopping to make it easy for sellers to manage and sell merchandise across their YouTube channels. 💪

Key features include:

• Connect your Shopify store to Youtube.
• Display your merchandise on YouTube in three different ways: livestreams, on-demand videos to show products in the end screens or in a product shelf below your videos, and a dedicated store tab to feature all your shoppable content.
• Access to live shopping tools that will allow you to tag and pin products at key points during a livestream.
• YouTube Shopping API automatically syncs your inventory data with Shopify so that shoppers can see whether a product is in-stock or out of stock in real time.
• If eligible, you may opt to enable on-site checkout so that shoppers can buy items directly from your YouTube channel. Read Buy on Google to learn more.
• Manage YouTube Shopping orders, returns, and payments, as well as monitor your key performance metrics for your live streams directly from your Shopify account.

As of July 2022, YouTube Shopping is available to Shopify sellers worldwide. However, they will need a minimum of 1,000 subscribers to use it.

👉 Check out the full list of requirements to see if you’re eligible.

A Move to Compete With Amazon

Shopify has been steadily merging live shopping elements into its platform over the last few months.

Back in March, the company launched Linkpop, a link-in bio tool for influencers. This tool allows people to promote links to their own website, YouTube channel, and other pages and simultaneously advertise their Shopify products that their followers can buy without leaving the link-in bio page instead of clicking on a separate URL that directs them to a different website.

One month later, Shopify acquired Dovetale, an influencer marketing tool that helps sellers recruit and manage their own brand ambassadors and influencers. The eCommerce giant had also recently hired Yeezy General Manager, Jon Wexler, to lead its Creator and Influencer Program.

These recent moves suggest that Shopify wants to position itself as the main live commerce platform for both sellers and content creators, rivaling Amazon Live, which potentially is now the biggest competitor after TikTok canceled its live commerce expansion plans in the US and Europe due to poor sales.

Live commerce is booming in China with sales expected to reach $423B by 2022, but only $11B in the US in 2021 and $25B by 2023. Nevertheless, these surveys show that there’s a growing interest in live shopping among US consumers. 🤔

And so, the two eComm giants are fighting to grab a share of the growing market that’s seen as the future of retail by Facebook, Twitter, among other social media sites.

However, Amazon is reportedly struggling to be the first to make live commerce happen in the US due to its lackluster content (not entertaining enough) and poor online presence (little or no interest from shoppers), according to Marketplace Pulse Founder and CEO, Juozas Kaziukėnas.

Perhaps Shopify could succeed where Amazon failed by using a live commerce-focused platform like YouTube Shopping coupled with robust influencer marketing efforts that include Dovetale and Linkpop. Sellers would be able to easily find and manage their influencers on Dovetale, offer an easy checkout process via Linkpop or YouTube’s on-site checkout, and host livestreams on YouTube, for example.

YouTube already has a captive video-viewing audience, whereas Amazon is trying to retrain their customers to consume video content that is somewhat hidden on their site. It’s been an uphill battle for AMZ to try to shift the platform to being more social whereas Shopify is going straight for the jugular with YouTube and link-in bio plays.

That said, it’s a very exciting time for consumers, but challenging for sellers, as they attempt to spend a lot of resources trying to create an attractive product selection, provide a seamless live shopping experience, and produce engaging content with influencers. Luckily, Shopify could potentially make all of that easier with their suite of live commerce apps and partnership with YouTube. 🔥

Seven years after its launch in 2015, Amazon Business has grown to be the leading B2B online marketplace for business buyers. 🚀

In its first year, the eComm giant made $1B from selling office supplies. In year three, the annual sales reached $10B, which drew the attention of Bank of America securities analyst Justin Post.

“While Amazon Business is just beginning to establish itself, Bank of America projects there is a total addressable market for e-commerce B2B of $1.4 trillion by 2021, which is nearly double the firm’s estimated $761 billion market for consumer e-commerce. Essentially, the market potential for Amazon Business is about twice the potential for its core retail business,” Post said in a statement to CNBC in 2019.

This massive growth estimate represents a great opportunity for Amazon. Bank of America projects that the company will hit $41.B in 2022 and potentially double that with around $83.1B by 2025. 🤯

If Amazon stays on track, it would singlehandedly account for the rapid growth of online B2B marketplace sales, essentially cementing its claim to be the go-to B2B channel for corporate buyers, resellers, schools, hospitals, governments, and institutional markets (e.g., non-profit organizations).

Amazon’s Plans for B2B eCommerce Success

In a blog post published by the US Chamber, Rob Green, Director and GM for AMZ Business, shares how Amazon plans to dominate the US B2B procurement market:

• Take the fundamentals of the customer experience – pricing, selection, convenience, and bring this to business procurement.
• Provide a wider selection of B2B goods by introducing new product research tools to help selling partners to find high-demand products that businesses look for but are currently not available on Amazon.
• Simplify the buying process by introducing a variety of payment options, B2B pricing optimization, supplier consolidation tools, and exclusive business pricing and discounts on 5 million products.
• Offer Business Prime and free one- or two-day shipping.
• Provide access to advanced analytics and purchasing policy control tools.

Recent Efforts to Attract More Business Buyers

On July 18, Amazon launched a marketing campaign “Buy smarter. Dream bigger.” demonstrating its capabilities to track essential business items for corporate buyers who rely on these goods to keep their businesses (and workforce) up and running, whether it’s paper products, pens, printers, ink cartridges, face masks, disinfecting wipes, or pantry goods.

While essential, procurement of these items has been difficult over the past few months due to the impacts of the pandemic on the supply chain.

With Amazon’s improved B2B arm, however, it would provide a platform where buyers can efficiently manage the complexities of procuring and shipping by tracking spending, purchase orders, and inventory levels all in one place. This essentially makes Amazon Business a one-stop-shop for a company’s needs for office supplies from multiple merchants.

But long-time rival Shopify wants to challenge that with its new B2B eCommerce tools and features.

Shopify Enters B2B to Grab a Piece of the Pie

Shopify announced on June 22 that it will be focusing on B2B commerce, primarily to compete with Amazon and increase revenue after losing $1.5B in the first quarter of 2022.

The Canadian eComm giant will introduce new tools designed to make it easier for wholesalers to sell in bulk and manage procurement in one place. These tools will also allow them to easily integrate with their own enterprise resource planning software.

In a statement told to Financial Times, Shopify President, Harley Finkelstein, sees this move as an opportunity to fight for a bigger market share and to not just “go after Direct-to-Consumer businesses, big and small, but to now go after wholesale business, which is a huge untapped market.”

With this move, Shopify stands toe-to-toe with Amazon Business, which takes the competitive rivalry between the two tech giants to a new level. As previously reported, Amazon launched Buy with Prime to open its fulfillment services to non-Amazon sellers, taking aim at Shopify’s customer base.

In response, Shopify acquired Deliverr to be able to offer 1- to 2-day shipping to merchants. The Canadian company also recently rolled out YouTube Shopping to enable sellers to upload their stores onto YouTube and set up live shopping videos, allowing them to compete with Amazon Live.

🤔 Curious to see how all of this will unfold! Amazon may already be too big to fail at this point, but it would be great if Shopify could shake things up a bit to make the market more competitive for sellers and consumers.

Watch out, folks! 📢

More shipment delays may be expected as more than a hundred protesters – composed of truck drivers who own and operate their own rigs – descended upon the Port of Oakland on Monday to challenge the California Assembly Bill 5 (AB5).

The protests prevented other trucks from entering the port, resulting in port congestion and halting operations for one of the busiest ports in the US. And disruptions may continue until the U.S. Supreme Court grants judicial review of the controversial state law.

What Is AB5?

The California Assembly Bill 5, also known as the gig worker law, is a law signed by Governor Gavin Newsom last September 2019 affecting independent contractors doing business in California. The law took effect four months later, resulting in countless independent contractors or workers belonging to the gig economy to be reclassified as employees.

The law aims to prevent companies from exploiting workers who categorize their staff as independent contractors instead of employees, and thus, withhold from them their mandated rights and benefits such as receiving minimum wage and paid sick leaves, among others.

The law intends to regulate companies that employ independent workers in huge numbers such as app-based delivery and ride-hailing service providers like DoorDash, Lyft and Uber. These companies opposed AB5 from the start, and with the support of more than half of California voters, succeeded in overriding it with Proposition 22, which designates their drivers and workers as independent contractors and not employees.

Why Are The Independent Truck Owner-Operators Against It?

Under AB5, trucking companies must reclassify and treat all their drivers as their employees. This is problematic for the independent truckers who value the flexibility of the current set-up: trucking companies deal with the port and all the paperwork and the independent drivers just procure and deliver the goods.

As independent service providers, the only way they can still make use of their rigs is for them to establish their own trucking company and deal with all of the legalities, paperwork, and headaches of running a trucking business.

Given this unfavorable situation they are in, the strike may be their last-ditch effort to express their disagreement over the new law. On June 28, the U.S. Supreme Court declined to listen to the challenge raised by the California truck drivers regarding AB5.

How Will The Strike Affect Sellers?

The Port of Oakland ranks among the top ten busiest container ports in the United States, where over 99% of the container goods headed for Northern California are loaded and shipped out. The protesters account for 90% of the port’s business, highlighting the scale of the disruption their strike has on the economy of the state.

As a result of the port being extremely congested – authorities were able to negotiate with the protesters to let ten trucks enter the port every half hour – the supply chain of affected businesses suffered greatly.

For the countless business owners who rely on the trucks to deliver their stock, the strike is very bad news for their operations and ultimately, their bottom line.

Delayed arrival of goods translates to delayed shipping of orders, poor customer experience, negative seller reputation, and potentially lower sales – not to mention capital tied up for a longer period of time. Marketplace sellers are also facing an increased risk of stockout as the strike hinders the usually smooth passage of goods and quick replenishment of supplies.

As every business owner knows, a delay in one part of the supply chain will have a domino effect along the rest of the line. It will take a significant amount of time before the port gets decongested and its operations resume as normal.

Related: How to Ship To Amazon FBA (And Speed Up Check-In Times)

What Can Be Done To Alleviate These Supply Chain Challenges?

While waiting for the authorities and the independent truck owner-operators to arrive at a resolution, you may want to go into solution mode and research ways to minimize your risk for these shipping delays.

Choosing a reputable 3rd-party logistics (3PL) provider could offer you more flexible and cost-effective delivery methods.

Preparing air freight, while more costly, could help you to avoid stockouts that could hurt your rankings.

What Else Can We Expect?

While AB5 applies only to the state of California, companies and business owners from other states who hire independent contractors may want to keep themselves updated about any legislative developments concerning the gig economy and gig workers. For example, the states of Illinois, New Jersey, and New York may enact similar laws in the near future so there certainly is a risk that this problem could spread if things go that way.

Amazon is reportedly reducing the number of items and categories under its private label (PL) business by more than half due to poor sales, and as we assume, the impending antitrust bill. 🤔

Inflation Takes its Toll on Amazon and Consumers

The decision to scale back Amazon’s PL selection came after a profitability review by Dave Clark, former head of Consumer Business for Amazon. While the PL segment offers a wide range of products to customers at affordable prices, it only accounts for 1% of the company’s total retail sales, a stark contrast to the 10% target set by former CEO, Jeff Bezos, a few years ago.

Clark also wanted the PL team to focus on better-selling essential items instead of products that didn’t meet the profit threshold. And this proved to be a good strategy, as Prime Day 2022 customers kept much of their purchases to basic goods, such as household items, health and beauty, and consumer electronics.

⚠️ In fact, Numerator found that 5% of Prime Day products sold for over $100, while 58% sold for below $20. Additionally, a little over a third of customers waited for Prime Day specifically to buy a certain product at a much lower price, while 28% passed on a great deal because it wasn’t essential, indicating that people would rather prioritize their needs than wants, a shopping behavior that may continue through to Q4.

Amazon’s reported $3.8 billion net loss in the first quarter of 2022 (their first loss since 2015) may have also been one of the deciding factors. Amazon CEO, Andy Jassy, has attributed part of the company’s shortfall to reduced online consumer spending, Rivian’s shrinking valuation, and added costs in the form of excess fulfillment and transportation capacity.

Increasing Pressure from Antitrust Regulators

According to Wall Street Journal (WSJ), the eComm giant may also exit the private label business altogether to address regulatory pressure and possibly to avoid potential hefty fines ahead of the impending US antitrust bill targeting Big Tech.

Although Amazon has denied this in a statement to WSJ, it’s not beyond the realm of possibility for them to close their PL business or at least make a concession (e.g., end data grabbing), considering they recently offered to stop anti-competitive practices in Europe in an attempt to halt two investigations.

In the US, Amazon’s private label business has been under scrutiny from lawmakers (and third-party sellers) since its launch in 2009.

Amazon has flooded the marketplace with 243,000 products across 45 different PL brands, allowing them to directly compete and even prioritize their own offerings over third-party sellers’ by manipulating the search algorithms to drive customers toward AmazonBasics and other in-house brands.

In one of its investigative reports, WSJ also revealed that some PL employees spied on sellers and collected their sensitive data to develop their own brands that resembled original items, thereby undercutting sellers on Amazon.

Under the proposed antitrust law, S.2992, these practices would be considered anti-competitive, and therefore subject to injunctions and penalties.

As sellers, perhaps we could take Amazon’s move to reassess their PL business to reduce regulatory pressure as a win and a step toward leveling the playing field. 💪

Related: Why Amazon Wants You To Lobby Congress: What is S.2992?

Possibly some good news for UK/EU sellers… 🇬🇧🇪🇺

From July 2022 to April 12, 2023, you can take advantage of the following fee reductions:

• Average 20% decrease on partner carrier fees for Small Parcel Delivery (SPD) and pallet shipments in the UK. For instance, shipping parcels with a partner carrier like UPS from a local address in the UK to a UK fulfillment center.
• Average 50% discount on partner carrier fees for pallet shipments and SPDs sent to FBA in France, Germany, Spain, and Italy.

The fee reductions sure sound attractive, especially with the recent increases in shipping and FBA fulfillment costs.

🤔 Why the sudden generosity? This move might be Amazon’s attempt to:

• Encourage sellers to use partner carriers versus non-partner carriers to recover the money they sunk into infrastructure following the logistics dumpster fire that was 2020. Amazon reportedly suffered a massive US$3.8 billion loss in Q1, which was partially driven by US$6 billion in added warehouses and transportation costs. This is the first down quarter Amazon has reported since 2015.
• In addition, based on the discounts more sellers who were fulfilling by FBM may be enticed to sign up for the partner carrier program due to the savings discounts, which may also help Amazon to fill underused warehouse space in Q3 and Q4.
• It could also help soften the impact of fee hikes on sellers, and in return, prevent them from raising their product prices too quickly, something that Amazon may be mindful of based on the slower sales growth in 2022.

All this aside, however, UK sellers who have done mock shipments tell a different story. Instead of getting a lower shipping fee, they saw a considerable price increase due to the high fuel surcharge.

To cover their bases, Amazon did mention that the final fee may vary depending on the shipment quantity, packaging weight and dimensions, and other applicable rates, and that rates are subject to change. So, I guess the sellers complaining about increased prices fall under the “subject to change” category then. 🤷‍♀️ Essentially, the conclusion becomes that your shipping fee could still stay the same as before, could go down, or unfortunately, go up substantially from the last time you used the program. 🤦‍♀️

Read the Amazon Partnered Carrier Program Overview to learn more.

💡 If you need to reduce shipping costs to stay profitable, try to keep your packaging compact by removing excess air from your products, minimizing their cubic dimensions, using lighter materials, avoiding excessive amounts of internal packaging materials, and more.

Lastly, use our Master Carton and Pallet Calculator to determine your optimal carton/pallet load capacity and reduce your total cartons and pallets per order.

Want to expand your catalog with new B2B products? 💰

Amazon just launched a new ASINs Recommendations Page for its selling partners in the UK. Designed to help you find your next best seller, the page offers a list of products that many business customers are looking for but aren’t currently available on Amazon.

It also provides you with recommendations that are specific to your store’s product category, allowing you to add new versions of existing products or simply add new items that align with your brand. Not all categories will be represented, of course, as it is B2B-focused.

😩 From there, you’d of course have to find suppliers for your target B2B products and may even have some Amazon-imposed restrictions to overcome, such as compliance requirements and brand approval, especially items that belong to certain gated categories.

As this is a new feature that hasn’t yet been mainstreamed into the seller community, and if the tool does what Amazon claims it does, you could become the first (and for a time only) seller to spot a gap in the market and come up with an offer to fill that gap, which is a step toward market domination. 🏆

Go to ASINs Recommendations to get started.

We hope everyone is having a fantastic and profitable summer so far and getting ready for Prime Day! We have some big, exciting changes coming to SoStocked very soon so be sure to follow along with our updates. Here’s what we have this month…

With this new feature you can merge multiple shipments together into one. Logistics and shipping plans can change fast, so we’ve got you covered. It used to be that if you had separate shipments that needed to be merged you would have to delete them and rewrite a new order.

Now you simply select a PO, Edit Order, go to Merge Shipment and you can select which shipments (or POs) you would like to merge.
You can even choose to merge all products from the PO or select which specific products you wish to merge!

For those who haven’t used the new automated seasonal spikes feature, this allows you to set automatic seasonal ups and downs month to month, bi-weekly, or even weekly, based on past sales curves. SoStocked will find the annual average daily sales for the product, indicate which time periods extend above or below that average, and then allow you to input trend settings above or below those projections.

This algorithm is always looking for a “new normal” or an average velocity to compare your seasonal ups and down to. However, there was an anomaly occurring where if you turned this feature on when your product was having an abnormally slow month (or for example, you have a new product you just launched) then it was presenting a crazy high velocity as your future seasonality projection. So our dev team solved the problem by creating an exception in that first month. There’s a bit of math involved, so get more details on this exception see this video here.

To learn more about the seasonality feature see this tutorial.

You might have heard about this new API around the Amazon community. Just in case you don’t already know what it is, here is a brief explanation.

First, API stands for Application Programming Interface. In layman’s terms, this allows 2 applications or softwares – like SoStocked and Amazon – to talk to each other.

SP-API is a new type of API for Amazon. The SP part stands for Selling Partner. SP-API is the next generation or new version of API for Amazon. They have been using MWS (Marketplace Web Service) for years and now they are launching SP-API as an evolution of MWS. The new SP-API is needed for SoStocked to connect with the newer marketplaces such as Australia, India, Japan and Dubai.

Here at SoStocked, we are ready for the new global API. Our international currency and exchange rate options (find out more here) along with this new SP-API, will create a streamlined SoStocked experience for selling across the globe.

We have been patiently (or not so patiently) waiting for Amazon to do what they need to do to allow us to integrate with the new SP-API system. We heard positive confirmation that they have a deadline to get this done by July 31st. So get ready folks, it’s almost here!

Amazon just announced that multicolored and non-transparent Mylar bags must be pulled out from their store effective August 5, 2022. 😲

Affected FBA sellers with leftover stock of these bags in Amazon warehouses are advised to file a request for removal no more than 30 days after the announcement was made in order to have their unsold Mylar bags returned to them.

Mylar Bags Affected By the Ban

Mylar bags – resealable foil pouches commonly used for food storage – come in clear, single color, and multicolor options.

⚠️ The ban only applies to Mylar bags that are non-transparent or multicolored, as these items fall under Amazon’s list of “Products associated with drugs and controlled substances.”

Transparent and single-color Mylar bags are still allowed to be sold in the store.

This can be a big blow to affected sellers as they will also have to shoulder the new (and much higher) removal fees issued by Amazon earlier this year on top of dealing with unsold inventory. 😟

Amazon didn’t share any details on how these types of Mylar bags ended up on their list of prohibited drug-related products, but it probably has to do with the 2017 case of Stashlogix.

These multi-compartment storage bags with odor-proof features and UV-proof jar containers were seized by the federal government after classifying it as drug paraphernalia. Mylar bags are also smell-proof, which make them suitable containers for marijuana and other illegal substances. 🤔

Mixed Reactions From Sellers

The general sentiment among sellers regarding this vague policy is confusion. Amazon didn’t even specify whose “regulatory requirements” they are following in implementing this ban and why. Some sellers believe Amazon is simply looking out for itself and lessening its risk for legal issues arising from the misuse of the product.

Other sellers think the government is to blame for this sudden ban, while some sellers see this policy as illogical, asserting that banning these bags is not the solution to drug abuse and that how people choose to use these bags is completely up to them.

A few sellers have also expressed their concern as to which product will be targeted next by Amazon. 🚨

In 2018, seemingly innocuous products like Safe Cans (for hiding small items like keys), Stash Car Key Safe (with a secret pill box), and boxer shorts (with secret pockets) were removed from Amazon UK, because some buyers reportedly used these items to smuggle illegal drugs into festivals. 😓

With that in mind, if you’re selling products cleverly designed to store small valuables, you may want to evaluate your catalog and perhaps hold off sending too much inventory to FBA to protect yourself from paying hefty removal fees should Amazon suddenly decide to ban them in the future.

Related: Amazon Compliance Reference Tool to Ensure Products Meet Requirements

Have you ever issued a refund to a false Item Not Received (INR) claim? 🤔

INR scam, or Lost Parcel scam, is when an abuser submits false claims for a refund or replacement order – for example, claiming that the product they bought online did not arrive (although it did), which gives them a reason to ask for a refund.

Unfortunately, sellers bear the cost of refunds and/or replacements. And to add insult to injury, abusers may also leave a negative review, which can put a ding on their Order Defect Rate report.

So, to help reduce lost parcel claims, Amazon launched a new service called Signature Confirmation.

Starting June 23, 2022, you can pay for this service in Buy Shipping when you choose shipping for items at risk of being reported as “lost” or “not received”.

Signature Confirmation Core Capabilities

• Amazon spots orders that qualify for signature confirmation by assessing the value of the item ordered, delivery issues, and delivery address.
• Orders that are likely to be reported as lost will show up on your account’s Manage Orders page > Order Status > Signature Confirmation Recommended. This recommendation feature comes free of charge.
• Should you decide to follow Amazon’s recommendation, an additional fee, between $3 and $6 per order, will be applied to your shipping cost to cover the implementation of the service.
• Signature-confirmed orders reported as INR or lost parcel will undergo additional checks by Amazon. If the buyer can’t prove otherwise, he or she won’t get a full refund or replacement order. However, if a refund is granted without your involvement and you disagree with Amazon’s decision, you may file an appeal to resolve the issue.

Downsides of Signature Confirmation

While Signature Confirmation serves as an extra layer of protection from abusive claims, some sellers think that Amazon’s current shipping services already provide the coverage they need for delivery issues.

With rising shipping costs and Amazon fees, it is perfectly understandable why some would be reluctant to pay for another service. Unless, of course, the buyers themselves feel the risk of loss justifies the cost of the additional signature confirmation fees.

However, a few sellers are worried about receiving complaints or negative feedback from customers who don’t want signature confirmation on their orders, either because it is inconvenient (delivery point might be too far from home or they weren’t at home) or it prevented those with malicious intent from carrying out their INR abuse scheme, so they might retaliate by leaving a 1-star rating. Although you can do something about the negative feedback, Amazon may still refuse to delete it.

What the eComm giant could do to deal with this fairly is to:

• Give sellers the option to cancel orders identified as high risk without it affecting their account health.
• Set a specific minimum dollar amount for orders that must have signature confirmation to ensure seller INR protection so as not to require signature confirmation on lower value items.
• If a buyer is identified as a high risk, obligate them to pay for signature confirmation.
• Automatically notify high-risk buyers of their signature confirmation requirements. This way, sellers won’t have to message them directly and risk sending/receiving messages too late, causing an upset buyer and ultimately negative feedback.
• Protect sellers from INR claims and negative feedback without the need for appeal.

There’s no denying that the new service could benefit third-party sellers, in that it would help reduce INR claims by identifying high-risk orders and allowing them to add signature confirmation to those orders. 👏

However, it is not cheap and it doesn’t 100% protect you from customers who might blackmail you with negative feedback if you refuse to remove signature confirmation. Your metrics might even take a hit if you cancel orders. 😓

Until these concerns are addressed, it would be best to limit the use of signature confirmation to extremely high-value items for added protection.

In yet another move to provide customers with a more consistent shopping experience, Amazon has standardized the size and quantity information format for several product types.

What is Size Normalization?

It is about making sure that data types like the size and quantity information of a particular product sold by different sellers are organized to appear similar across all search and detail pages, i.e., each data type has the same content and format.

As a result, it reduces inconsistencies and buyer confusion that usually lead to cart abandonment. After all, there’s a saying that goes, “the confused person never buys.” 👌

So, the thought process behind this is that size normalization may help to increase sales, and would create a more positive customer experience.

It could, however, have the opposite effect on your sales if you are priced high within your market. I personally know that I often use the price per quantity, i.e. price per ounce, etc, to help inform my own buying decisions, so as a consumer, I do see this as a good thing but can see, as a seller, how it might cut both ways.

How Size Normalization Works

Amazon applies normalization rules to your products to reformat “Size” details whenever possible.

Suppose there are two sellers who have listings for the same quantity of soda. However, each seller uses a different value on “Size” – one offer being 24 Count and the other 24 Count (1 Pack).

In that case, Amazon’s Size normalization rules will instead identify (and display) the more accurate information based on this formula:

’unit_count’/’number_of_items’ + < unit_count.type >
+
(“Pack of” + number_of_items)

Therefore, if Unit Count = 24 Count and Number of Items = 1, Amazon will determine the size value as “24 Count (Pack of 1).” This standardized version of the ‘Size’ for this product will be visible to buyers.

Make sure to update the quantity information for all of your products to prevent Amazon from removing “Sizes” that don’t conform to the new format or appear inaccurate.

👉 Go to Size Normalization FAQ Page to learn how to update your products with the required attributes.

When corporate tech giants like Amazon come directly to the sellers to try to get them to lobby Congress for or against something, it’s time to take a closer look at their ulterior motives.

With every piece of news that comes from Amazon, I always like to ask, “What’s in it for them?”

Well, this one had my alarm bells blaring! 🚨

I had to dig into all the dirty details of this news announcement, so here’s what’s happening and what I think is really going on… 🕵️‍♂️

What is The American Innovation and Choice Online Act (S.2992)?

Passed by the Judiciary Committee on January 20, 2022, The American Innovation and Choice Online Act is the newest antitrust legislation with bipartisan support (Republicans and Democrats sponsor a bill together for the common good). It targets Big Tech firms, such as Amazon, Meta (formerly Facebook), Apple, and Alphabet (parent company of Google) for potential antitrust and consumer choice violations.

The bill is sponsored by Senate Judiciary Committee Antitrust Subcommittee Chair, Senator Amy Klobuchar (D-MN), and full committee Ranking Member, Senator Chuck Grassley (R-IA).

It is also co-sponsored by Senators:

The fact that S.2992 is a bipartisan effort co-sponsored by an ideologically diverse group of Senators is a sign that there’s a growing momentum in Congress for antitrust violations to be punishable under federal law (if enacted).

The bill poses a challenge to the ecosystem business model of Big Tech firms that encourages users to utilize an interlocking suite of products or tools owned by the same company. In a report released by the Judiciary Committee, it showed that these tech giants regularly conduct anti-competitive practices to maintain monopoly or control over their respective industries.

A good example would be Amazon accessing and exploiting your seller data to create and launch competing products for their own brand. 😓

To Whom Does the Bill Apply To?

S.2992 applies to any “website, online or mobile application, operating system, digital assistant, or online service” that:

• Allows a user to generate or interact with content on the website
• Facilitates online selling among third-party sellers or customers, e.g., Amazon
• Or, one that enables user searches that show huge amounts of information, e.g., Google

But as of June 2022, the current draft is only limited to the biggest online platforms, also known as covered platforms, with:

• At least 50 million US-based monthly active users (or 100,000 US-based business users)
• Annual US net sales greater than $550 billion
• Tech platforms that serve as a “critical trading partner” for its business users

Therefore, this bill would certainly apply to Amazon, Apple, Alphabet, and Meta.

What Happens When it’s Passed into Law?

If enacted, federal antitrust agencies, Federal Trade Commission (FTC) and Department of Justice (DOJ), would have the authority to enforce the violations below and issue injunctions and penalties against the guilty party.

Under the bill, it would be unlawful to give “preference to the products, services, or lines of business of the covered platform operator over those of another business user on the covered platform in a manner that would materially harm competition,” the Justice Department explained.

For instance, Amazon could be found in violation of this law if they had algorithmically placed their branded products in more prominent places in the platform or if Amazon was found guilty of stealing your supplier information to create a knock-off version of your product.

The bill could also prohibit Amazon from exploiting the Buy Box feature, which they could use to promote their own products and directly compete with resellers. Many of us have been affected by the online retail giant essentially breaking its own rules to maintain dominance in the marketplace that they currently share with us.

Clearly, both wholesale and private label sellers feel the hurt of Amazon’s anti-competitive behavior. But if the bill is passed into law, it would potentially squash that. This could be one of the biggest reasons why Amazon would want to call out for sellers to lobby against it – though, it may be against sellers’ best interest and in Amazon’s interest more than not. ⚠️

Under Section 3: Unlawful Conduct, the bill would also create the following violations:

1. Limiting another business’s products or services to compete against the covered platform’s. This means Amazon cannot apply their policies unfairly against sellers that rely on the platform to do business with customers. For example, if a new private label brand was eating into Amazon’s market share, the bill would prohibit them from selectively implementing some policy to ban it from the marketplace.
2. Carrying out the covered platform’s Terms of Service (ToS) in a discriminatory way among similarly situated business users. We had a competitor “review stacking,” which means they were adding (completely unrelated) reviews from “dead products” to their own product listing. For a kitchen product, there were reviews about dog leashes, DVDs, books, and even exercise equipment that were added to the listing. Not only did this increase the total number of reviews on the listing, it also changed the total star rating from 4 to 4.5 stars!
   
   The seller was essentially stealing sales from us by lying about his review status. 🤦
   
   We reported this violation numerous times and each time the seller would get the reviews stripped and then a few days later, his listing would be “stacked” all over again. He would never get shut down for violating ToS, and it was a vicious cycle. And yet other sellers’ listings were suspended for much less inflammatory violations.
3. Restricting the capacity of business users to utilize different platforms’ hardware, software features, or operating systems. This provision most likely applies to Google and Apple with their suite of interoperable devices. For example, Apple AirPods are fully interoperable with iPhones through a chip that supports Siri, a communication feature that’s exclusive to the Apple ecosystem, and Bluetooth. Via Bluetooth connection, Samsung, Sony, and other smartphone brands are fully interoperable with AirPods. However, according to tech expert Aurelien Portuese, 1st-party devices (AirPods to iPhone) will always be more interoperatable than 3rd-party devices with operating systems. Therefore, under this bill, other smartphone manufacturers could use interoperability issues with Apple and Apple refusing to open up their platform to make 3rd-party devices more interoperable, as potential grounds for litigation. Unless perhaps, the restriction is absolutely necessary (see #6), e.g., to protect Apple’s trade secrets and patented technology.
4. Conditioning access to the platform or preferred status or placement on the platform on the purchase/use of other products or services offered by the covered platform that isn’t exclusive to the covered platform itself. This violation could impact Amazon’s Prime shipping, a service that makes FBA products eligible for free 1-2 day shipping. The bill would mandate the eComm giant to allow other carriers to fulfill Prime orders. Amazon says such a mandate would make delivering on their 1-2 day shipping promise “difficult” and “potentially impossible in practice,” possibly because they wouldn’t have full control over carriers outside of their own shipping network.
   
   But then again, Seller-Fulfilled Prime already exists for those who are not using FBA, so Amazon is full of it if they are trying to claim opening up Prime to other carriers would be a tragedy.
   
   Last time I checked, the Seller-Fulfilled Prime program was still operable and has not been canceled. If it had been canceled due to lack of success, then, there might be an argument to be had there. The sheer fact that Seller-Fulfilled Prime is still in operation is essentially an admission that this point can actually be adhered to. In my view, this is a disingenuous play from AMZ to try to gain support from sellers. 🙄
5. Using internal data obtained from the activities of a business user, including interactions with customers, to boost the sales of the covered platform’s own products. According to the National Association of Wholesaler-Distributors, Amazon gathers vast amounts of competitively sensitive data from third-party sellers, including product details and transaction data around product prices and customer information. The eComm giant then exploits this sensitive data to launch their own competing products to undercut sellers on the platform.
6. Restricting or prohibiting users from uninstalling applications that have been pre-installed on the covered platform or changing default settings on the website that geared customers or users towards products offered by the covered platform, unless necessary.
7. Retaliation against business users or customers who raise concerns with antitrust authorities about any potential violations.

If found guilty, the violator could face a financial penalty of up to 15% of its US revenue. 😲 No wonder Amazon and other Big Tech CEOs themselves have descended on Washington recently to influence the members of Congress to oppose the bill, CNN reports.

Supporters of the Bill

Bill sponsors, industry groups, and other supporters of S.2992 argue that the antitrust legislation would address many long-held problems with tech companies allegedly committing restrictive, self-preferencing practices online.

It would also ensure:

• Entrepreneurs and small businesses still have the opportunity to succeed in digital markets (Sen. Klobuchar)
• Large online platforms and other tech companies will be held accountable if they behave in a discriminatory manner (Sen. Grassley)
• Help level the playing field for small business owners, i.e., prohibiting Big Tech from using the intel data they collect from users on their websites, apps, or platforms to create unfair competitive advantages. (Sen. Lummis)

By combating these anti-competitive practices, covered platforms and their business users would be able to provide customers with better user experience and more product offerings with competitive prices.

Groups and Critics Who Oppose the Bill

Amazon, Apple, and other pro-tech groups such as the Information Technology and Innovation Foundation (ITIF), Chamber of Progress, TechNet and the Computer & Communications Industry Association oppose the bill – as expected, so no surprise there!

The opponents of the bill argue that it is:

Vague and overly broad with multiple ill-defined legal terms
For example, covered platforms are allowed to take “narrowly tailored” actions as an affirmative defense, which means the restriction committed was reasonably necessary for legal reasons, to protect user privacy and data security, or to maintain or improve the “core functionality” of the platform. However, the term “core functionality” isn’t well-defined in the bill. This could lead to disputes as covered platforms develop or already have existing products and services that they may claim are “core” to their business model.

Rushed
Industry groups have argued that S.2992 has not received the traditional hearing process that other antitrust-related bills have in the past (e.g., giving the members and the public an opportunity to debate the impacts of the bill before advancing it to the floor for the Senate to vote for its rejection or approval).

Carl Szabo, Vice President and General Counsel at NetChoice said that “rather than opening the floor to public input, the bill’s sponsors rushed through legislation. Lawmakers should stop this backroom wheeling-and-dealing and instead take the input of economists, experts, and businesses to better understand the impact of this rushed legislation.”

This is something that I personally can’t disagree with. It is unfortunate that if the bill passes, it may embroil Amazon in a world of unnecessary legal battles that we may see the financial brunt of. But if it fails, I wonder when we might ever find another chance to advance some of these pro-seller actions.

Still, both majority and minority floor leaders took advantage of the bipartisan support (thus getting a 16-6 vote) for the bill to pass it during the committee markup, the final step a committee takes to push the bill to the Senate chamber.

It will hurt American consumers
The Chamber of Progress recently said that the bill would “break popular consumer products,” specifically Amazon Prime, as it could become illegal due to the bill prohibiting Amazon from giving preference to those sellers who use their services–for example, displaying a Prime badge on certain products could create an unfair advantage over non-Prime items. (But, again, Seller-Fulfilled Prime should be able to combat this argument.)

To influence the public and lawmakers, the industry group has also been running an online ad saying “Senator Klobuchar wants to erase Amazon Basics,” according to Reuters. However, if Amazon was not worried about Amazon Basics not “playing fair” they wouldn’t be running these ads. This is a sure sign that we have Amazon’s number when it comes to their true motives toward lobbying sellers against this bill. 😏

A representative from Amazon wrote that the bill also threatens to destroy two of the things consumers love the most about Amazon:

1. The wide selection of products with low prices made possible by opening the eComm platform to third-party sellers. However, this argument does not hold water, as the bill doesn’t seem to aim at the heart of the 3P sellers, but rather Amazon’s own offerings. As previously discussed, the bill would prohibit Amazon to prioritize their own store branded products that they typically offer at cheaper prices. Unless, of course, this is a veiled hint that Amazon would rather become the sole seller on the platform.
   
   If that was the case, I’m sure this could create one hell of a vacuum that would splinter Amazon’s business to (1) another buying platform that included 3P sellers and (2) Amazon would become nothing more than a giant Amazon brand website. It is an empty threat by the online retail giant, but an interesting road to hypothesize down.
2. The promise of fast, free shipping through Amazon Prime. Again, FBA isn’t the only way to offer Prime shipping. Seller-Fulfilled Prime also offers 1-2 day shipping, unless Amazon suddenly stops offering this program to force sellers to go back to using FBA. But wouldn’t that be considered an anti-competitive behavior under the S.2992 bill?

Amazon reps also claim that putting these restrictions on only the biggest covered platforms gives “preferential treatment to other large retailers that engage in the same practices.”

They argue that the bill targets only one retailer, Amazon, by requiring an annual US net sales of at least $550 billion to qualify for regulation. Therefore, it would not cover Walmart and Target. But perhaps, that’s likely the point. I personally haven’t heard of Walmart and Target doing what Amazon has been doing. Perhaps when they get closer to the $550B mark, they’ll start thinking about taking the dark turns that Amazon’s been winding down. However, IMO, it would be good to lower that threshold to rope them in as well.

Many Sellers Refuse to Rally Behind Amazon’s Call to Oppose the Antitrust Bill

Dharmesh Mehta, Amazon’s Vice President of Worldwide Selling Partner Services, took to Seller Forums to encourage everyone to reject the antitrust legislation that could “harm small businesses, American consumers, and Amazon.”

However, the lobbying didn’t appear to go as intended. Many sellers replied to the announcement saying they support the bill. 👏

Third-party sellers account for 60% of Amazon’s total retail sales. But in the last few years, they’ve expressed frustration over the fees they pay to sell on the platform, fear of being suspended for little or no reason, and the platform’s inability to eliminate returns scams and bad actors (e.g., fake reviews and listing theft).

No wonder many sellers felt the need to take back control by supporting a bill that could shake up Amazon. 💪

• “Yes, I’m going to oppose that Amazon will be prohibited from undercutting, manipulating the buy box, and instituting restrictions on certain listings that unfairly bar me from selling an item. Yup, writing to my senator right now.”
• “Any informed seller is going to support massive action taken against Amazon in the antitrust arena. I am personally sick of the condescending posts by Amazon management directed at us. We are not morons and know how to read and think for ourselves.”
• “This bill is 100% pro seller. I am definitely going to call my representatives and ask them to please pass the bill! It is not going to jeopardize our ability to sell on Amazon. It’s going to give us sellers a fair shake and restrict Amazon from purposely prioritizing their products over ours. Amazon is trying to do to us what they did to those who wanted to unionize.” 👌
• “If Amazon wants my support, it will have to level the playing field, be fair, be honest and most of all be good to its workers and sellers. I oppose this email because it urges sellers to go against the creation of laws that will help level the playing field. I support better laws for Amazon, Amazon Workers Unions and Sellers.”
• “As much as we love Amazon, there must be regulation and oversight at some point. If this is passed it doesn’t mean 3P sellers will be hurt, but that Amazon and big tech cannot favor themselves 100% of the time. Small businesses struggle to keep up with low costs offered by big box stores so anyone agreeing S. 2992 is a good thing is looking out for small business and their fellow sellers. Big tech should not be favored 100% of the time.”

But obviously, not every seller expressed support for the bill. Two commenters said that the proposed legislation could hurt them just by jeopardizing the marketplace.

• “I can’t predict the future, and so neither can the gang in Washington. I can tell you that this bill is bad news for Amazon, bad news for Amazon customers, and if you think that doesn’t mean bad news for Sellers, then you must not be a third-party Seller.”
• “I understand the sentiment, but being permanently put out of business would probably hurt you more. There is a time and place to air our grievances with Amazon. They deserve it plenty. But this is not that time. Let’s not cut off our nose to spite our face.”

Another seller believes that Amazon isn’t really against S.2992.

• “Read the post and read it again. Bottom line is Amazon wants the law to also cover its physical competition – WalMart. That may be a fair criticism, but stop the hysterical nonsense. Ironic to see Amazon whining about a law intended to prevent it from unfairly taking small seller data to create competing products to wipe out the small seller is bad because it doesn’t prevent WalMart from doing the same.”

You can read the entire discussion here.

Playing the Waiting Game

There are faults with the proposed law and it’s not black and white but there are serious reasons for AMZ to be concerned and they absolutely aren’t altruistic. This law could be a major shake-up and none of us can say whether that would be in a good or bad way. 🤔

But the idea that Amazon would shatter their cash cow – third-party business – is a naive one. While they are threatening it, they know that to do so would destroy them, too.

It could mean more fees funneled down to us sellers to try to squeeze some of us out, though. Anyone who understands economics even a little bit knows that costs trickle down and any costs Amazon incurred would likely find its way down to us and to consumers, but would the benefits outweigh the risks? Who knows. 🤷

In closing, the bill is fundamentally good for 3P sellers, but there’s not going to be a clean line on this thing.

We’ll have to take the good with the bad if this ends up passing and, maybe only one thing is for certain, it’s going to make for an interesting time if it does.

If that’s the case, I suggest we all buckle up!

This announcement is for UK/EU sellers with listings on Amazon.de (Germany). 🇩🇪

In a move to comply with the upcoming changes to the Extended Producer Responsibility (EPR) Packaging Law in Germany, Amazon has started checking seller compliance with this environmental policy. 👀

Effective July 1, 2022, all packaged goods distributed in Germany, including those available for purchase on Amazon.de and other eComm marketplaces, must be registered in the LUCID Packaging Register. This process enables you to put your product packaging (see infographic below) into circulation and share the costs of recycling them.

Previously, this registration requirement only applied to sellers subject to system participation, a process that requires them to enter into an agreement with a Producer Responsibility Organization (PRO) who will collect their packaging from customers and take care of its sorting and recycling for a fee.

⚠️ IMPORTANT: If you fail to register, your listing will be blocked on Amazon.

Note: As of June 15, 2022, the eComm giant has already started blocking non-compliant listings to ensure it doesn’t violate the amended EPR Law that comes into force on July 1st. You can view your listing status on your account’s Manage Inventory page>Inactive (Blocked). Read on to learn how to become EPR-compliant.

What is EPR?

EPR is an environmental protection strategy to reduce waste from a product and its packaging by making all producers, including online sellers or importers, responsible for the entire life cycle of the packaged goods they sell, from introduction to the market through to disposal, including waste collection and recycling of cartons, bubble wraps, foam fillers, among other packaging materials.

How to Comply with the EPR Packaging Law?

EPR guidelines differ by product category: (1) packaging and (2) Electrical and Electronic Equipment such as batteries. This article focuses on your compliance requirements for packaging, which under Germany’s updated EPR law, you must:

Register in the LUCID Packaging Register

Register as a “producer” and enter the requested information to get a LUCID number. You can do this process yourself through this link (free of charge) or sign up for a paid service called Amazon Solutions for EPR Compliance.

After completing registration, you will receive a LUCID number that you’ll need to submit to Amazon (see Step #2). You’ll also need this registration number to enter into a system participation contract with a PRO in Germany, if necessary (see Step #3).

Again, a PRO is a company who will act on your behalf to administer an EPR-compliant waste recycling program, including calculating the costs incurred for the collection, sorting, and recycling of your product packaging.

Send Your LUCID Number to Amazon

Once registered, make sure to submit your LUCID number to Seller Central.

Amazon may also contact you for further verification or additional information. For instance, if your packaging is subject to system participation, a representative may reach out to validate your LUCID registration details.

If Required, Enter into a System Participation Agreement

In Germany, packaged products that accumulate as waste with consumers after use are subject to system participation.

If you’re responsible for items that are subject to system participation, you need to pay a fee for the recycling of your waste materials. The rates depend on the type of packaging material (typically a few cents per kilogram).

Work closely with your packaging suppliers, FBA representatives (if fulfilling via FBA), and PRO to accurately identify your packaging volumes. Consider using this Packaging Volume Calculator to determine your fees.

⚠️ IMPORTANT: If system participation is required, packaging volume and fee calculations may take a few of weeks (up to 20 days for some sellers). Amazon also needs 5 business days to verify your LUCID registration details during this process. So, if you haven’t registered yet, act now to prevent getting your listings blocked.

Conversely, if your packaged goods are not subject to system participation, you don’t need a system participation contract. However, you’ll still need to register in LUCID.

Read this checklist to learn more.

Report Your Packaging Volumes

Send your packaging data reports and pay fees to your designated PRO regularly.

Go to EPR Requirements: Packaging in Germany for more details.

Final Thoughts

♻️ Compliance with the EPR Packaging Law is a move toward more sustainability in eCommerce. It is going to be an added expense that your business will have to absorb or offset elsewhere. I suggest checking out our master carton calculator to see if there are ways you can optimize efficiencies elsewhere to help to recover profit in other parts of your business to make up for the added costs of EPR.

It may also be a good time to see if reducing your product packaging can help to reduce your potential PRO fees.

On the brighter side, the EPR law helps to lessen your environmental impact, and can also offer good business opportunities. Marketing your product as eco-friendly can help you to stand out among your competitors, thereby attracting new (eco-minded) customers and potentially driving more sales.

Related: Is Amazon Climate Pledge Worth it For Sellers?

Continuing to be the best inventory management software is our passion! We’re always open to your suggestions and to making our tools more useful for you. With that being said, here is what is new and improved this month. Let’s dive in!

The new automated seasonal spikes feature is officially up and running, available to all accounts. You find it in your Forecast page under the forecasting settings.

With this feature, you can set automatic seasonal ups and downs month to month, bi-weekly, or even weekly, based on past sales curves. SoStocked will find the annual average daily sales for the product, indicate which time periods extend above or below that average, and then you can input trend settings above or below those projections.

Did you launch a new product and you have no month to month sales pattern data on which to base your sales projections? No problem! Select historical seasonal trends for other products within your catalog and use those same trends for your new product. Group together multiple seasonal product trends for more intricate forecasting. Our new seasonality feature will find an average of that grouping to apply to your new SKU.

You can also set different seasonality for each marketplace separately, US, EU, etc. to create the most accurate forecasting for every product in every marketplace.

You might have heard about this new API around the Amazon community. Just in case you don’t already know what it is, here is a brief explanation.

First, API stands for Application Programming Interface. In layman’s terms, this allows 2 applications or softwares – like SoStocked and Amazon – to talk to each other.

SP-API is a new type of API for Amazon. The SP part stands for Selling Partner. SP-API is the next generation or new version of API for Amazon. They have been using MWS (Marketplace Web Service) for years and now they are launching SP-API as an evolution of MWS. The new SP-API is needed for SoStocked to connect with the newer marketplaces such as Australia, India, Japan and Dubai.

Here at SoStocked, we are ready for the new global API. Our international currency and exchange rate options (find out more here) along with this new SP-API, will create a streamlined SoStocked experience for selling across the globe.

We have been patiently (or not so patiently) waiting for Amazon to do what they need to do to allow us to integrate with the new SP-API system. We heard positive confirmation that they have a deadline to get this done by July 31st. So get ready folks, it’s almost here!

It has been a lot of work getting all of the details aligned to integrate Shopify into our system. But the SoStocked development team has continued to work with our beta testers to get this platform into action. There have been some major changes to the software on the back end that will support the new SP-API coming up as well as integration with Shopify and other stores, so you will be able to track sales, shipments and inventory levels for your off-Amazon forecasts too! So stay tuned!

US NARF sellers, brace yourselves for another fee adjustment! 😁

Those who participate in Remote Fulfillment with FBA, also known as North America Remote Fulfillment (NARF), will see a rate increase starting June 30, 2022. This move is in response to the rising costs of storage, fulfillment, transportation, and customer service across the US, Canada, and Mexico.

😤 The new fee adjustment will also include dimensional weight (DIM weight) to reflect the latest FBA fee structure. This means the greater of the unit weight (aka actual weight) or DIM weight will be utilized to determine your shipping weight and fees for all product size tiers.

Updates to the Remote Fulfillment with FBA Fees

The Table of Fees below shows the latest fee changes:

Canada

Based on the new fee structure, here’s how DIM weight pricing will impact your margins.

Let’s assume your large standard size product only weighs 3 lbs, but the dimensional weight is 9 lbs. In that case, you are going to be charged CAD $13.90 + $0.80/lb above first 3 lbs (x6) or CAD $18.70/unit. Before the update, you would only have paid CAD $12.79/unit.

So, with DIM weight pricing, you’re paying Amazon CAD $5.91 (approx. $4.70 USD) more than you’d paid previously. 😦

Mexico

Using the previous example, shipping a large standard size unit that weighs 3lbs, but the DIM weight is 9lbs is now going to cost you MXN $224.07/unit versus the previous rate of MXN $159.70 (based on unit weight), a MXN $64.37 increase – or approximately $3.30 USD.

Although Amazon says that these rate adjustments are not above industry-average increases for fulfillment services, we all know that being charged based on DIM weight is quite a big deal for sellers with thin margins. 🤔

And as we’ve previously reported, some sellers within our SoStocked community have reported seeing their FBA fulfillment fees climb by $1 per unit. One seller even saw a 94% increase in fulfillment fees. So, if you’re already dealing with slim margins, increases like these can quickly make your products unprofitable.

Related: How to Increase Your Profit Margins

Beware of Automatic Enrollment in Remote Fulfillment With FBA

Amazon may start automatically enrolling sellers into its Remote Fulfillment program. 😦

On the news announcement page, some sellers reported receiving a notification about “Automatic Enrollment in Remote Fulfillment” on the Seller Central home page with the option to opt out before the service goes live.

If you don’t opt out before the start date, your products will most likely become available for sale on Amazon.ca (Canada) and Amazon.com.mx (Mexico), which means added fees!

This auto-enrollment might be a gradual roll out, but it’s crucial to be aware of these things as early as now. Forgetting to opt out of a paid service you don’t need or want could result in Amazon eating into your profits, which is pretty similar to what’s happening with their aging inventory removal services.

In case you’re not aware, Amazon has recently increased their removal/disposal fees, and in April, they said that they will automatically dispose of aging inventory to make room for Prime Day. What’s suspicious about this is that around the same time Amazon raised their removal order fees, they also applied stricter automatic removals, including adding an additional surcharge on aged inventory. 🤔

Overall, Amazon FBA fees continue to climb despite many sellers reacting strongly against the price hikes. I recommend implementing some profit recovery strategies to protect your margins, if passing those fee increases on to your customers isn’t an option right now. 💪

Make sure to also read our blog posts that mention these profit recovery strategies to learn more.

Related: Master Carton Calculator to Optimize Packaging and Reduce Shipping Costs, FBA Fee Calculator to Calculate Profitability, Inventory-Minded Marketing for Amazon Sellers, How to Reduce Excess Inventory

In case you missed it, Amazon recently adjusted its Removal and Disposal Order Fee Structure in response to the rising costs. 😩 The price increase took effect on January 18, 2022, but it kind of slipped through the crack for some, as sellers were all up in arms over the impacts of the new FBA dimensional weight fulfillment fees on profit margins. So, that gave a really good distraction to the removal and disposal order fee adjustment.

💡 Let’s shed some light on the significant changes we’ve seen in the new removal order fee structure, which actually go hand-in-hand with the new FBA fulfillment fees changes.

First, let’s take a quick look at this side-by-side comparison of the old and new removal order fees.

As you can see, the updated fee structure is fairly straightforward. There’s a column for size tier, shipping weight, and the corresponding rates – the same details we’ve had years before, except prices have obviously increased at the rate of between 44%-61%. Still, you can come into the page and easily understand the costs associated with removing your inventory from FBA, right? Not so fast!

We wanted to take a closer look because we had a suspicion all wasn’t as it seemed, and, sadly, we were right.

According to the FBA Removal Order Fees page, Amazon uses your product’s Size Tier to calculate your removal or disposal fee per unit.

For removal orders, there are only two product size tiers – Standard Size and Oversize/Special Handling Items.

Here’s where it gets a bit sneaky. Each tier is based on unit weight, product dimensions, and, you guessed it, the dimensional weight of your packaged item. Amazon now factors dimensional weight (DIM weight) into its product measurement categories, a change that directly impacts your removal order fees, which is quite a big deal. And unfortunately, disposal fees are also charged in the same way.

DIM weight pricing is applied when the product’s DIM weight is greater than the unit weight. Packaged items with larger dimensions occupy more trailer space, which carriers could use to fit in more boxes, so they wanted to be compensated for that. That means you’re essentially paying for the amount of space your package takes up when the DIM weight is greater than the actual unit weight.

Suppose your standard-size product weighs 3 lbs, but the DIM weight is 6 lbs. In that case, you’re going to be charged $1.51 + $0.63 per lb above 2 lbs (x4) based on the new fee structure. 😦

Here’s a quick calculation:

$1.51 + ($0.63 per lb x 4) = $4.03 per unit removed

With dimensional weight in this example, you’re paying $1.89/unit more than you would pay just using unit weight.

Indeed, removal fees are getting much more expensive!

Before the price increase, it would have only cost you $0.67 + $0.35 per lb or $1.02 to remove a standard-size item based on unit weight. That is an almost 300% increase in removal fee costs! 

The fact that they rolled this out at the same time as releasing the new DIM weight fulfillment fee structure that made so many products unprofitable and then made it so painful to remove that inventory is pretty mind-boggling!

Another thought is that they may be pushing sellers to use liquidation versus removal as the fee structure certainly incentivized that course of action. More on that below.

This is also another reason for sellers not to send all of your new product inventory to FBA immediately. If you are not confident that you will be able to sell through that inventory, holding the bulk of it at a 3PL may be the best move for you. Perhaps that’s exactly what Amazon had in mind with this policy change, making it unbelievably uncomfortable for you to hold dud inventory at FBA. Restructuring your inventory strategy just got that much more vital.

Bottom line is, being charged based on DIM weight could lead to a considerable cost increase for some sellers.

Within the SoStocked community, for instance, some sellers have reported seeing their FBA fulfillment fees increase by $1 per unit. One seller even reported a 94% increase in fulfillment fees. These types of increases are quite substantial for sellers with slim margins.

Think Twice Before Removing Your Inventory

If you have enabled automatic removal of your aging inventory, you might not be aware of the new rates that Amazon is charging you. Interesting that around the same time Amazon increases the removal order fees structure, they also implement more stringent automatic removals. 🤔

Amazon is just whittling away at our profit every way they can. First, these dimensional weight changes. Then, they hit sellers with a 5% fuel and inflation surcharge in April. A few weeks later, they implemented a surcharge on aged inventory. ⚠️

These fee increases are getting out of control. Unfortunately, it’s these tiny little things that will end up really taking a bite out of your profits and making some products unprofitable.

So, before going through removal orders or automating your inventory removals, make sure you’re aware of these new fees so you can run some numbers first. Sometimes, it makes more business sense to try to recover some profit by liquidating your dead stock rather than just shipping it back to you.

Profit Recovery Strategies

If your excess units or slow sellers are still in sellable condition, consider the following profit recovery options:

• Running a flash sale such as Amazon Lightning Deals or Amazon Outlet Deals
• Liquidating slow sellers through the FBA Liquidations Program, which only charges $0.25 to $1.90 (+ $0.20 per lb above first 2 lbs) processing fee per unit, plus 15% referral fee.

However, if none of these options are worth the effort, then your next best move is to create a removal or disposal order for your excess inventory.

Other Ways to Keep Costs Low 💰

If you need to cut costs to offset the added Amazon fees, try to rethink your packaging and shipping practices. It would be best to keep your product packaging compact by downsizing your jar sizes, vacuum sealing to size-down bulky items or in other ways reducing packaging size in order to achieve the smallest dimensions possible.

Then, use our Master Carton Calculator to find your optimal carton and pallet load capacity per order to reduce shipping costs across several different facets of your supply chain.

And if you’re planning to replace your slow sellers with new, more lucrative products, use our FBA Calculator to determine their profit potential. This calculator includes the 2022 Amazon Fulfillment Fees Policy to calculate DIM weight and select the greater of unit weight or dimensional weight, thereby ensuring the accuracy of your fee calculations based on the latest Amazon policies.

Related: Inventory-Minded Marketing for Amazon Sellers, Amazon Restock Limits Tips and Updates, 6 Causes of Amazon Unfulfillable Inventory and How to Fix Them

⏰ Time to move your slow sellers out of Amazon FBA!

Effective May 15, Amazon will impose an additional storage fee on inventory that has been sitting in its warehouses for 271-365 days. This surcharge will be applied on top of your regular monthly storage fees. Previously, aged inventory fees were charged after 365 days, so this 271-365 day fee window is a new, unwelcome addition for sellers.

Here’s how the aged inventory surcharge will bring about more fees (and burden):

The fee increase may seem small, but when combined with the recent fulfillment fee changes and 5% fuel surcharge, the total costs could be large enough to put an uncomfortable dent in your profits.

With less than 2 weeks until the new surcharge hits sellers, it’s probably best to either put your excess units on sale or use Amazon’s FBA Liquidations Program to recover 5%-10% of its average retail price.

Although you won’t be able to recoup all of your money, liquidation is better than having your excess inventory disposed of or returned to you at an extra cost if you have no means to sell them on other eCommerce platforms.

Most importantly, adopting a system we call Inventory-Minded Marketing can help you to ensure you do not have overstock emergencies at day 271.

Moving forward, try to minimize your storage costs by keeping an eye on all your SKUs in Amazon, specifically slow sellers. Consider using the new Manage Inventory Health report (formerly known as the Inventory Age Report) or your SoStocked dashboards to efficiently manage your FBA inventory. They all provide more up-to-date information than Amazon’s previous reporting systems, namely the Inventory Health, Inventory Age, and Excess Inven