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Amazon Seller News

Amazon Seller News: Seller Facts, Blackout Dates, New COO Requirements, Banned HTML, and More…

In this Amazon Seller News update, we’ll be covering:

  1. Leverage the Latest Amazon Features and Metrics
  2. UPDATED: Amazon Faces Backlash for Alleged Abusive Practices
  3. 2024 Insights: Online Consumer Trends You Can’t Ignore for Effective Marketing
  4. Amazon Cracks Down on Suspicious Reviews from Bad Actors, Sellers Express Mixed Reactions
  5. Roundup Post: Amazon Seller Tools Update and New Product Safety Requirements
  6. AI in eCommerce: Trends Redefining Shopping Experiences
  7. UPDATED: Logistics Showdown: UPS and Amazon Battle for Supremacy
  8. Preparing for Change: Higher Fees on the Horizon for UK/EU FBA Sellers in 2024
  9. Major eComm Players Making Big Changes to Take on Amazon
  10. Brace for Higher FBA Fees in 2024
  11. UPDATED: Battle for Last-Mile Logistics Heats Up as Amazon Expands Same-Day Delivery Network
  12. Register for Amazon Seller Wallet By November 30 to Unlock Cost Savings
  13. Updated: Bid for a Higher Inventory Limit with FBA Capacity Manager
  14. Shop Socially: Amazon and Meta Team Up for One-Click Social Commerce
  15. 4 Updates to Amazon Seller-Fulfilled Prime
  16. Updated: New Amazon Features, Updates and Requirements
  17. New Security Issues Leave Many Sellers Vulnerable to Cyberattacks
  18. The Covert Amazon Program That Could Be Costing You Thousands
  19. FTC Proposes a New Rule to Rein In Fake Reviews
  20. How FTC’s Historic Monopoly Case vs. Amazon Might Impact Sellers
  21. Amazon and Flexport Vie for End-to-End Logistics Supremacy
  22. UPDATED: 60-Minute Amazon Drone Delivery is Now a Reality
  23. UPDATED: Amazon Wants to Take a Bigger Chunk Out of Seller Profits with 2 New Fees
  24. Roundup: Upcoming Amazon Changes and Features
  25. Amazon Tries to Increase Revenue from Existing Shoppers
  26. UPDATED: Amazon Faces Tougher Scrutiny Under EU’s Digital Services Act (DSA)
  27. UPDATED: Shopify Looking to Integrate with Amazon Buy With Prime
  28. Updates to Amazon Return, Refund, and Reimbursement Policy
  29. Amazon is Testing A New Way to Show Product Reviews
  30. Amazon Delays Delivery Date Based Reserve Policy for Some UK Sellers After Backlash
  31. Amazon Working to Bring USPS Ground Advantage to its Buy Shipping Service
  32. Amazon Feature Updates: 3 New Seller Tools and Product Recall Reporting Page
  33. UPDATED: UPS Workers Ready to Repeat 1997 Mass Walkout Over Pay, Work Conditions
  34. Amazon Offers New Fulfillment Fee Discounts on Select ASINs
  35. Sellers Cry Foul Following Amazon’s Decision to End FBA Small and Light
  36. Aggregator Shakeups and Shifts in Strategy
  37. UPDATED: Amazon Taps into $100B Retail Media Market, Invests in New & Cutting-Edge Ad Platforms
  38. FTC Lawsuit Alleges Amazon of Tricking and Trapping Customers into Recurring Prime Subscriptions
  39. Clash of the Titans: Walmart and Amazon Battle for Dominance Intensifies
  40. 4 Major Changes Coming to Amazon
  41. Amazon Delivery Drones Off to a Rocky Start
  42. Shein Moves Into the US Market, But May Struggle to Recruit 3P Sellers
  43. A Purge Could Be Coming for Fake Reviews on Amazon
  44. 25% Growth Rate: Euro B2B Opportunities Expand on Amazon
  45. UPDATED: Amazon Hopes to Restore Consumer Confidence with $1.2B Anti-Counterfeit Initiative
  46. Amazon Announces Further Cuts Amid Economic Uncertainty
  47. Amazon Attempts to Close Loopholes with New Shipping Policy
  48. Updated: Are You Prepared for the Updated Amazon Returns and Refunds Policy?
  49. Updated: Amazon UK Workers to Launch Historic Strike in Early 2023
  50. Amazon Highlights ‘Frequently Returned’ Products You Should Think Twice Before Buying
  51. Amazon Braces for Slowing eComm Growth in 2023
  52. Boost Sales with These New Amazon Seller Tools
  53. Amazon Fees Changes for UK & EU Multi-Channel Fulfillment Orders
  54. Foreign Amazon Sellers Are Closing the Competitive Gap with ChatGPT
  55. Shopify Acquires Deliverr and Takes Aim at Amazon’s Buy with Prime
  56. Amazon Warehouse Automation Increases Concerns over Job Loss and Product Selection Inaccuracy
  57. The Latest Update to Amazon’s Automate Pricing Features
  58. Walmart Launches B2B eCommerce Site to Rival Amazon and Shopify
  59. Prepare for These 6 Major Changes to 2023 Amazon UK & EU FBA Fees
  60. Amazon Automatic Aging Inventory Removal Starts April 15
  61. Amazon Tweaks Logistics Strategy to Streamline Operations
  62. Amazon Makes Play Toward Offering Prime for Non-Amazon Orders
  63. Shipping FBA Inventory from China to UK with SEND: What Could Possibly Go Wrong?
  64. Sellers Feel the Squeeze After Amazon Announces US MCF Fee Hike
  65. Walmart Launches New Ways to Find and Buy Products
  66. 4 New Amazon Seller Tools to Accelerate Business Growth
  67. Amazon Will Pay Customers $2 per Month to Track Their Ad Data
  68. Updated: EU Advised by NGOs to Refuse Amazon’s Flawed Proposal for Antitrust Settlement
  69. Amazon Announces Unbranded Packaging for MCF Orders
  70. Amazon Storage Limit Manager: Would You Pay for Extra Storage Space?
  71. Updated: Bad Actors Book Multiple Inbound Amazon Delivery Dates to Create Scarcity
  72. Is Amazon Prepared for the Holiday Rush?
  73. Amazon Hikes FBA Fees Again: What This Means for Your Business
  74. TikTok Gears Up for US Market Entry
  75. Amazon Aggregators: Comments and Concerns
  76. eComm Players Dial Up Rivalry Ahead of the Holiday Season
  77. Amazon UK At Risk for Box Shortages During BFCM
  78. Updated: Amazon Enters the 3PL Space with New Amazon Warehousing & Distribution Program
  79. What Amazon’s New Merchant Cash Advance Program is Going to Cost You
  80. Amazon to Shut Down Appario Amid Allegations of Circumventing Indian Law
  81. UPS Braces for Holiday Delivery Surge in December
  82. Should You Be Selling on These New Sales Channels?
  83. New Ad Strategies for Winning the Holiday Season
  84. Amazon Unveils New Affordable Shopping Hub Just in Time for Holidays
  85. Amazon to Hold Prime Early Access Sale on October 11-12
  86. Non-Amazon Sellers Are Now Stealing Your Ad Space
  87. Amazon To Increase UK Multi-Channel Fulfillment Fees By November 12th
  88. Amazon Now Allowing Email Marketing Campaigns to Repeat Customers
  89. Financial Win for FBA Sellers in PA Court
  90. Boost Conversions with Amazon’s New A/B Testing Features
  91. Amazon FBA Deadlines for Sending In Q4 Inventory
  92. Software Updates For September 2022
  93. Gloves Off: Shopify Warns Sellers Against Amazon Buy With Prime
  94. Amazon Brings Back Restock Limits to Prepare for the Holiday Rush
  95. New Amazon Badges Increase Discoverability and Allow for Values-Based Buying
  96. Royal Mail Strikes to Disrupt Mail and Deliveries Across UK
  97. Amazon’s New Holiday Surcharge Takes Another Bite Out of Seller Profits
  98. Amazon Attribution Update Makes for a More Effective Sales Tool
  99. Software Updates For August 2022
  100. Amazon Releases Inventory Ledger to Streamline Inventory Data Reports
  101. Updated: Amazon Suspension Risk For The Uninsured
  102. Amazon Plans to Hold 2nd Prime Day in October
  103. UPS Shipping Limits for Amazon Threaten to Delay Holiday Deliveries
  104. Shopify Shares Down By 14% After Laying Off 10% of Their Employees
  105. SoStocked Joins the Carbon6 Family Shortening the Timeline to Future Innovations
  106. Shopify Introduces YouTube Shopping Integration to Compete in Live Commerce
  107. Amazon Continues to Dominate B2B While Shopify Plays Catch-Up
  108. Freight Disruption at Port of Oakland as California Truckers Protest AB5
  109. Amazon Reduces Their Private Label Catalog Amid Mounting Regulatory Pressure
  110. Discounts on EU/UK Amazon Partner Carrier Fees
  111. Amazon Intros New Hack to Find High-Demand, No-Competition B2B Products
  112. Software Updates For July 2022
  113. Amazon’s Recent Ban on Mylar Bags and Other Potentially At Risk Products
  114. Reduce Losses Due to INR Scams with Amazon’s Signature Confirmation
  115. Amazon Implements Size Normalization to Ensure Consistency Across Detail Pages
  116. Why Amazon Wants You to Lobby Congress: What Is S.2992?
  117. New EPR Compliance Obligations for Amazon Germany Begin July 1st
  118. Software Updates For June 2022
  119. Amazon Adjusts Fees For Remote Fulfillment With FBA
  120. Amazon Removal Order Fees Get More Expensive
  121. Amazon Implements Surcharge on Aged Inventory Starting May 15th
  122. Software Updates For May 2022
  123. Amazon Updates Their Age-Restricted Bladed Products List
  124. New Product Dimension Attributes for 255 Product Types
  125. New Shipping and Storage Changes Coming to Amazon
  126. Amazon Hits US & EU Sellers With Fuel And Inflation Surcharge
  127. Software Updates For April 2022
  128. Emerging Amazon Marketplaces: UAE and Saudi Arabia
  129. Free Amazon Master Carton Calculator Tool To Optimize Your Packaging
  130. Amazon and EIT Climate-KIC Offer Financial Boost to Sustainable Startups
  131. Qualify for Rebates and Free Liquidations with the Updated FBA New Selection Program
  132. New Dimensional Weight Fees Placing Further Strain on Profit Margins
  133. Amazon Closing Shipping Loopholes May Wreak Chaos for Some Sellers
  134. Amazon Removes “Tons” of Supplement Offers Due to Non-Compliance with New Product Requirements
  135. UPDATED: Claim Reimbursement for Losses Caused by Amazon
  136. UK Launches Export Support Service to Help Businesses Sell Goods Abroad
  137. Three SoStocked Software Deals For New Years (Now Thru January 7, 2021)
  138. Important Update To Restock Limits And IPI Threshold
  139. Use Amazon’s Delivery Promise Tool To Monitor Your FBM Performance
  140. Amazon Storage Limit Updates
  141. New And Improved Amazon HTML Editor + HTML Converter Tool
  142. Send Holiday-Themed Emails To Amazon Followers Through December
  143. Borrow Up To 100K With The Amazon Community Lending Pilot Program
  144. Amazon Has Worked To Smooth Out Climate Pledge Certification
  145. Updated: Amazon Compliance Reference Tool To Ensure Products Meet Requirements
  146. Distribute Your Inventory Across Multiple FCs At No Extra Cost
  147. Beta Amazon Upstream Storage Program Eliminates Restock Limits
  148. Amazon Hikes Referral And FBA Fees For 2022
  149. Amazon Updates Program Policies
  150. Amazon Increases FBA Capacity and Restock Limits
  151. Amazon Launches New Dashboard for Returns Performance
  152. The End Of Rebates, Two-Steps URLs, & Other Search Rank Manipulation
  153. New Carrier Tracking Requirements & Improving OOS Listing Discoverability
  154. Amazon Releases Free Product Research Tool Named ‘Product Opportunity Explorer’
  155. New Documentation for Supplements Required to Avoid Listing Removal
  156. Amazon Inventory Deadlines For Q4
  157. Delivery Time Accuracy With New Amazon Shipping Settings Automation Tool
  158. China’s Widespread Power Cuts Further Strain Global Supply Chain
  159. New Changes To Removal Of Aged Inventory
  160. Amazon Egypt Now Open For Business
  161. Why Have Amazon Sellers Suffered a Significant Drop in Restock Limits?
  162. SoStocked Prices Increasing After Friday, September 17th, 2021
  163. Amazon Search Shadowban For Products That Violate Title Guidelines
  164. Your Amazon Posts Can Now Appear On Your Product Detail Pages
  165. Amazon Grade And Resell Program Rolled Out To Reduce FBA Waste
  166. Amazon Overhauls Its A-to-z Guarantee Policies To Streamline Damages Claims
  167. Now Factor Restock Limits Into Forecasts
  168. Streamline Shipments With “Send To Amazon”
  169. Changes To Amazon Professional Selling Plan Fees
  170. Automated Amazon Stranded Inventory Removal
  171. Typhoon Wreaks Supply Chain Havoc On China’s Eastern Coast
  172. Country Of Origin Now Required For Amazon Products
  173. Prevent Customer Complaints By Putting Seals On Consumables
  174. New Amazon Brand Referral Bonus Program For Amazon Sellers
  175. Four New Certifications Could Qualify You For Climate Pledge Friendly Badge
  176. Amazon IPI (Inventory Performance Index) Update
  177. Potentially Lower Fulfillment Fees Spells Good News For Amazon Sellers
  178. Big News: Sellers Can (Again) Contact Customers About Bad Reviews
  179. Amazon’s APRL Scheme Leaves Sour Taste In Sellers’ Mouths
  180. Blackout Dates: China’s Dragon Boat Festival
  181. Amazon Global Program: Sell Worldwide With No Added Fees
  182. Set a Faster Default Handling Time
  183. Amazon Product Description HTML
  184. Amazon Prime Day 2021 Check-In Dates
  185. Amazon 2021 MCF Fees and Features
  186. 2021 Amazon Restock Limits Update
  187. CBP Announces New Customs Requirements For Low-Value Shipments
  188. Five Seller Facts from Bezos’ Final Shareholder Letter as Amazon CEO
  189. All ASINs Now Require Melting Temperature Attribute
  190. RIP Early Review Program
  191. VAT Services Even When Outside EU
  192. Unsuitable Inventory Policy
  193. Amazon’s New Automated Pricing Tool
  194. A/B Testing Product Images Available
  195. New Shipping Data Requirements
  196. Amazon “Review Commenting” Updates
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Leverage the Latest Amazon Features and Metrics

Amazon is rolling out key features to enhance the seller and customer experience. We will dive into these features and what you need to know and can expect from them. 

Highlights include the Build Your Brand page which introduces new metrics to empower sellers with insights to strengthen their brand strategies, instant replacements for seller-fulfilled returns and a dedicated page for recalls and product safety alerts in EU customer accounts.

We also touch on the new Ships in Product Packaging program for fee savings and increased sustainability and the Premium Navigation Carousel offering a smoother customer browsing experience.

Read on as we take a deeper dive into these new features!

1. ‘Your Recalls and Product Safety Alerts’ Page for EU Customers

Amazon has introduced a new feature enabling customers to access product recall and safety details for items bought through its online platform. While Amazon already notifies customers about recalls and safety alerts, the website now includes a dedicated page for customers to conveniently check these updates in one location.

When an alert is issued, customers will receive an email containing information and a link to the ‘Your Recalls and Product Safety Alerts’ page on their account. This page provides additional details, including options for refunds, returns, or repairs. This service aims to streamline the recall awareness process for Amazon customers, eliminating the need to rely on external websites for such information. The feature is now accessible to users across Europe.

What does this mean?
By directly notifying consumers on product safety recalls and alerts, Amazon aims to offer improved protection, potentially minimizing instances of injuries attributed to unsafe products that sneakily make their way to the EU marketplace through Amazon.

Related: Recalls and Product Safety Alerts Page for US Customers

2. New Metrics on the Build Your Brand Page

Explore four (4) new metrics for evaluating your brand’s performance on Amazon, including:

  • Branded Search Ratio: This refers to the proportion of searches that include a specific brand’s name compared to overall searches related to a particular product or category. This metric helps brand owners understand the frequency with which shoppers specifically search for their brand when looking for a particular type of product. A higher Brand Search Ratio indicates that the brand is more top-of-mind for customers in that product category, reflecting strong brand recognition and engagement. Brands can use this metric to assess their visibility and popularity within Amazon’s marketplace.
  • Star Rating: This metric reflects the average rating given to a product by customers who have purchased and reviewed it. The rating is typically displayed as a set of stars (ranging from one to five), with a higher number of stars indicating a better overall customer satisfaction. It serves as a quick visual representation of a product’s popularity and quality based on the experiences of previous buyers.

Related: Amazon is Testing a New Way to Show Product Reviews, Amazon Cracks Down on Suspicious Reviews from Bad Actors, FTC Proposes a New Rule to Rein in Fake Reviews

  • Brand Conversion Rate: This metric refers to the percentage of visitors who not only view a brand’s product but also make a purchase. It’s a crucial metric in assessing the effectiveness of a brand’s presence and the ability to convert potential customers into actual buyers. A higher Brand Conversion Rate indicates that a brand is successful in turning product visibility into actual sales, reflecting positively on its marketing strategies, product quality, and overall appeal to customers.

Related: How to Improve CTR & CVR

  • Repeat Customer Ratio: A metric that calculates the percentage of customers who make repeated purchases from a brand over a specific period. It provides insights into customer loyalty and the ability of a brand to retain its customer base. A higher Repeat Customer Ratio indicates that a significant portion of customers is returning to make additional purchases, highlighting brand loyalty and satisfaction. This metric is valuable for businesses seeking to understand and enhance their customer retention strategies.

Related: Amazon Now Allowing Email Marketing Campaigns to Repeat Customers

Leverage these metrics to:

  • Gauge the effectiveness of your sales funnel strategies and observe how customers interact with your brand across their journey.
  • Evaluate the significance of shopping engagements (e.g., purchases, live streaming, ad click-throughs, and newsletter subscriptions) by analyzing sales over a 12-month period.
  • Fine-tune your organic marketing and advertising strategies within Amazon to connect with a broader audience and fortify your brand.
  • Keep a close eye on your performance in relation to your product category and competitors at each phase of the buying process.

Access detailed insights by visiting the Build Your Brand page within your Amazon Seller Central account.

Related: The Power of Comprehensive Amazon Brand Strategy: Insights & Examples, How to Use Amazon Attribution to Measure the Impact of Your Marketing Campaigns

3. Instant Replacements for Seller-Fulfilled Returns

Effective February 12, 2024, customers now have the option to initiate an immediate replacement for items dispatched through the Prepaid Return Label program. In cases where they receive a damaged, defective, or incorrect item, they may choose an instant replacement for free.

How it Works

  • Customers must send back the original item within 30 days of receiving the replacement. Failure to do so makes you, the seller, eligible for automatic reimbursement.
  • If the buyer returns an original item in a used, damaged, or disparate condition from what was initially dispatched, you can file a SAFE-T Claim to initiate a reimbursement.

This change ensures that customers follow a standardized process when returning products, applicable across all of Amazon’s fulfillment options.

Related: Claim Reimbursement for Losses Caused by Amazon, How to Fix Amazon Unfulfillable Inventory, Maximize Gains and Minimize Hassle with Amazon Reimbursement Services

What Sellers Say

Sellers, as per the comments, have various concerns and criticisms about this new policy. These include:

  • Loss of Control: Sellers express frustration about Amazon taking control of return and replacement processes, believing they are better equipped to handle these aspects of their business.
  • Abuse of Returns: Some are concerned that this policy may lead to increased abuse of returns, with customers potentially requesting replacements without valid reasons, leading to financial losses for the sellers.
  • Impact on Order Defect Rate (ODR): Many question whether this new policy will affect their ODR, potentially causing issues for their metrics and overall performance on the platform.
  • Logistical Challenges: Sellers highlight the logistical challenges and delays associated with waiting for returned items, impacting the time it takes for orders to clear and for sellers to receive reimbursement.
  • Unavailable Replacements: There are concerns about the possibility of replacements not being available. If a replacement is not in stock, it could create challenges for sellers, impacting their ability to fulfill orders. For example, those who sell artisanal/handcraft and rare book products may find it difficult to provide instant replacements.
  • Risk of Fraud: Many express concerns about the potential for fraudulent claims, as the instant replacement system may make it easier for customers to exploit the process and keep both the original and replacement items.
  • Inconsistent Safe-T Claims Process: Sellers criticize the SAFE-T claims process, mentioning denials for high-valued items and claiming it lacks consistency. They argue that having the opportunity to handle customer service directly could prevent such issues.
  • Impact on Small Businesses: Some sellers believe that these changes disproportionately affect smaller sellers who may find it challenging to absorb the financial impact of (multiple) instant replacements. 
  • Lack of Opt-Out Option: Sellers request the ability to opt-out of this policy, emphasizing the importance of having control over their own return and replacement procedures.
  • Poor Communication: Some feel that Amazon’s communication and implementation of new policies are lacking. They express frustration about not being adequately informed or given sufficient time to adapt to changes.

Overall, sellers seem to be critical of Amazon’s instant replacements policy, citing concerns about potential abuse, loss of control, and increased complexities in handling returns and replacements.

Related: Maximize Gains and Minimize Hassle with Amazon Reimbursement Services, Tips to Improve Customer Experience and Reduce Returns

4. Lower FBA Fulfillment Fees with Ships in Product Packaging

Launched February 5, 2024, the Ships in Product Packaging (SIPP) program, formerly known as the Ship In Own Container (SIOC), is Amazon’s latest custom-branded packaging solution for FBA sellers.

With this program, FBA sellers now have the freedom to ship products in their existing packaging without any additional materials added by Amazon, hence, the cheaper FBA fulfillment rates for SIPP-certified packages.

Eligible sellers may be entitled to a fulfillment fee discount ranging from $0.04 to $1.32, depending on item size and weight. In addition, by minimizing packaging materials, Amazon will be able to optimize truck space, thereby reducing the number of trucks needed, ultimately lowering carbon emissions.

Pros and Cons

The launch of Amazon’s SIPP program has elicited a range of sentiments among sellers. Let’s explore the general sentiments and some of the highlighted pros and cons as expressed by sellers in the news announcement’s comments section.

Pros

  • Cost Savings: potential for reduced FBA fulfillment fees
  • Customization: ability to customize branding and packaging for a more personalized customer experience.
  • Enrollment Control: convenience of being able to enroll and unenroll products at their discretion.

Cons

  • Packaging Concerns: Numerous sellers express concerns about packaging integrity, citing instances where the packaging may be damaged during shipping, potentially impacting the product.
  • Auto-Enrollment Issues: Sellers report instances of auto-enrollment for their entire FBA inventory without explicit consent, leading to frustration.
  • Perceived Inadequate Discount: Some sellers believe that the offered discount is not substantial enough to justify the effort and costs associated with complying with SIPP requirements.

In sum, the sentiment seems mixed, with sellers appreciating the potential cost savings but raising valid concerns about the practical implications and the program’s impact on packaging integrity.

For more details about the program and to enroll your products, visit the SIPP enrollment page.

Related: How to Choose the Right Amazon Master Carton Size and Type, Pallet Calculator to Optimize Load Capacity

5. Redesigned Premium Navigation Carousel

Amazon unveils an upgraded version of the Premium Navigation Carousel module within the A+ Content Manager, providing sellers with an enhanced platform to showcase their products through immersive media and enriched descriptions. This ensures listings are not only more visually engaging but also offer improved clarity to potential customers.

The enhanced module boasts upgraded features, such as “clickable tabs that are highlighted in a translucent overlay on the product visuals.”

This design facilitates smooth navigation and thorough exploration of product details. In the mobile interface, customers can effortlessly swipe horizontally on the image or engage with the redesigned tabs for an intuitive browsing experience. Desktop users, too, benefit from consistent and user-friendly navigation by utilizing the revamped tabs or arrows within the carousel. 

Optimization Opportunity for Sellers

By harnessing the capabilities of this upgraded navigation carousel, brands stand to elevate the visibility and visual appeal of their listings. Here’s a breakdown of the new feature’s advantages:

  • Improved Means of Showcasing Products: Present your products in a visually captivating and informative manner. This entails spotlighting diverse use cases and features, serving not only to capture customer attention but also to effectively communicate your unique selling points. 
  • Strategic Upselling Opportunities: The redesigned carousel opens avenues for sellers to maximize revenue by strategically featuring higher-value products. This allows for the artful placement of complementary items or upgrades, enticing customers to delve into additional product offerings.
  • Seamless User Experience: The updated module comes equipped with intuitive navigation features, ensuring a smooth and engaging shopping experience across various devices. This heightened usability is poised to elevate customer satisfaction, translating into increased conversion rates for sellers.

This redesign is an effort by Amazon to enrich the customers’ overall shopping journey. By embracing these latest updates and leveraging the advanced features, sellers can carve out a distinctive brand image, boost sales, and maintain a competitive edge on Amazon.

Go to the Premium A+ Module Guide for more details or visit A+ Content Manager to get started.

Related: 5 Best Amazon Listing Optimization Tips to Prevent Account Suspension, 5 Top Strategies for a Winning Amazon Product Launch

UPDATED: Amazon Faces Backlash for Alleged Abusive Practices

Amazon Faces Backlash for Alleged Abusive Practices

UPDATE 02/15/2024: In recent legal battles, Amazon finds itself entangled in two separate class-action lawsuits, both shedding light on alleged deceptive practices that have drawn the ire of consumers.

The first lawsuit, filed by California residents Jeffrey Taylor and Robert Selway, accuses Amazon of utilizing an algorithm to favor pricier products, impacting search results and the coveted “Buy Box.” Simultaneously, the second lawsuit revolves around a significant change to the Prime Video service, where the retail giant introduced ads and charged an additional fee for an ad-free experience.

Algorithm Favoring Pricier Goods

Filed in the US District Court in Western Washington, the first lawsuit accuses Amazon of violating WA state law by utilizing an algorithm to intentionally promote costlier items in its “Buy Box.” The proposed class action suit claims that Amazon’s algorithm prioritizes more expensive products over relevant items with lower prices and faster delivery times. 

The suit also claims that Amazon used its algorithm to boost sales of costlier goods sold by participants in its Fulfillment by Amazon (FBA) network, which includes third-party sellers. Additionally, the lawsuit alleges that Amazon shoppers overwhelmingly choose the company’s product recommendations, even if they are not the lowest-priced options.

As a result, “consumers routinely overpay for items that are available at lower prices from other sellers on Amazon—not because consumers don’t care about price, or because they’re making informed purchasing decisions, but because Amazon has chosen to display the offers for which it will earn the highest fees,” the complaint said.

This case follows a similar thread to the Federal Trade Commission’s (FTC) lawsuit filed five (5) months earlier in the same federal district court. The agency accused Amazon of employing anticompetitive and unfair strategies to maintain a monopoly, including preventing rivals and sellers from lowering prices and stifling innovation.

The potential financial liabilities Amazon may face remain uncertain, but could be substantial. Approximately 80% of the retailer’s customer base, amounting to 300 million subscribers, is believed to be from the US, and these customers are claimed to have overpaid on the majority of their purchases for the past seven years. In 2023, Amazon’s US sales surpassed $574 billion.

Related: Amazon Faces Tougher Scrutiny Under EU’s Digital Services Act

Prime Video Changes Lawsuit

In January, Amazon implemented a significant change to its Prime Video service by introducing ads and offering customers the option to remove them for an extra $2.99 a month on top of their regular subscription fee.

The class-action lawsuit, filed in California on February 9, claims that this change was deceptive and unfair, violating state consumer protection laws. The case argues that Amazon falsely advertised its Prime Video service as “commercial-free” for years to induce consumers to purchase its Prime subscription.

By introducing ads and requiring an additional fee for an ad-free experience, the plaintiffs argue that Amazon breached Washington’s Consumer Protection Law and California’s Unfair Competition Law, which prohibits “unlawful, unfair, or fraudulent” business practices.

Adding to the controversy, Amazon has reportedly removed Dolby Atmos and Dolby Vision from Prime Video. Now, access to these features comes at an additional cost of $2.99/month for users opting to eliminate ads. 

The lawsuit seeks $5 million in damages, restitution, and an injunction preventing Amazon from engaging in similar alleged behavior in the future.

Final Thoughts

These dual lawsuits mark another chapter in Amazon’s legal battles, reflecting the increasing scrutiny faced by the tech giant. As consumers and regulators alike raise concerns over anticompetitive practices and deceptive changes to services, Amazon finds itself in the crosshairs of legal challenges that could reshape its business practices and potentially impact the broader eCommerce landscape.
The outcomes of these lawsuits will be closely watched, as they may set important precedents in the ongoing debate over the responsibilities and accountability of major tech companies.

UPDATE 07/26/2023: A win for UK sellers! 🇬🇧💪

Amazon on Wednesday offered concessions to the UK Competition and Markets Authority (CMA) to settle an open antitrust probe.

In 2022, an investigation was launched by the CMA against Amazon, with claims asserting that the retail giant was engaging in practices that exploited its dominant market position, particularly concerning its marketplace operations.

The focal points of the British regulator’s inquiry revolve around three key aspects.

  • The questionable methods employed by Amazon to gather and utilize data from third-party sellers, and whether the company uses this intel to gain unfair competitive advantage in deciding what products to sell (for its own brands, for example) and how to set prices.
  • The investigation also centers on scrutinizing how the eligibility criteria for selling under the Prime label are established. Prime offers certain benefits, such as free and fast delivery, that are only available to Prime members, putting non-Prime users at a disadvantage.
  • Amazon’s “secretive and self-preferencing” process for selecting products in the “Buy Box.” The company uses a set of (undisclosed) criteria to determine which products are granted the coveted position of being the first choice in the “Buy Box.” For customers, this box holds prime real estate on product pages, offering convenient “Buy Now” or “Add to Basket” options exclusively from a particular seller, which could be Amazon itself.

To address these concerns, Amazon has offered to:

  • Restrict its use of data concerning marketplace sellers. By doing so, the retail giant aims to prevent any unfair advantage for its own retail business over other sellers within its marketplace.
  • Treat all products equally when Amazon decides which ones will be featured in the Buy Box. This proposal, if accepted, will grant sellers a fair opportunity to have their product offers prominently showcased in the coveted box, even when contending with Amazon’s own product offerings.
  • Allow sellers to directly negotiate their preferred shipping rates with Prime delivery service providers so that they can offer affordable delivery fees to customers.
  • Together with CMA, appoint an independent trustee to conduct regular compliance monitoring

The CMA is currently engaging in a consultation process regarding Amazon’s offers, prior to reaching a final decision on their acceptance. If accepted, Amazon would dodge yet another big antitrust case in Europe.

In December 2022, Amazon reached a final deal with the European Commission over similar antitrust investigations into its use of seller data, Buy Box algorithm, and eligibility criteria for Prime, thereby avoiding a fine of up to 10% of its total revenue.

Amazon may have survived these EU antitrust cases unscathed, but a bigger threat looms over its US eCommerce operations with the Federal Trade Commission (FTC) finalizing a lawsuit that could break up the company. See report below.

UPDATE 06/29/2023: Amazon could soon face a major antitrust lawsuit as the Federal Trade Commission (FTC) inches closer to taking action. 🥊

FTC chair Lina Khan and her team of investigators have dedicated months to finalizing a complaint against the dominant eCommerce firm. The complaint alleges that Amazon manipulates its influence by favoring third-party sellers who utilize its logistics services while penalizing those who opt not to, as reported by Bloomberg.

The agency is also currently conducting an inquiry into an algorithm responsible for selecting brands to feature in the highly sought-after “Buy Box” on Amazon.com. This means that if there are multiple offers on the same listing, one seller’s offer is given priority over others, allowing consumers to effortlessly add to cart in a single click, streamlining their shopping experience.

The anticipated antitrust lawsuit is similar to a 2020 report presented by a subcommittee within the US House, in which Khan was listed as a team member. These allegations also align with a concurrent antitrust lawsuit in Europe, accusing Amazon of granting preferential treatment to sellers utilizing its fulfillment services and leveraging sellers’ sales data to bolster its own retail operations.

In the event that the Commission successfully provides evidence of Amazon engaging in deliberate market manipulation within an industry where it possesses monopolistic influence, it opens the possibility for advocating for the company’s dissolution or restructuring. This stance also indicates Khan’s reluctance to accept concessions from Amazon – something that the company did to resolve the EU antitrust case.

Amazon reportedly reached a settlement where they agreed to modify their Buy Box practices and impose limitations on the utilization of data obtained from 3rd-party sellers on their online EU marketplaces.

However, when it comes to the US market, Khan has expressed clear opposition to adopting similar compromises. During her testimony to a Senate committee last year, she firmly stated that the FTC would strongly oppose and disapprove of such legal remedies.

This forthcoming lawsuit is not the first encounter between the FTC and Amazon.

Over the past couple months, the agency has initiated three distinct and unrelated cases against the eComm giant.

Amazon Braces for the Massive Antitrust Case

When Khan took over the FTC in 2021, she initiated a new approach to the agency’s antitrust probe of Amazon. She actively contributed to formulating key interrogative points for the investigative team, personally selected John Newman as co-lead investigator, and re-interviewed nearly 30 individuals employed by the retail giant.

Khan’s stringent stance and handling of the Commission earned her the ire of Amazon, accusing her of showing bias, and thus must recuse herself from the case. Amazon also tried to derail antitrust investigations by allegedly launching an offensive against the tech-focused antitrust legislation proposed by Congress, a source told Bloomberg.

In 2022, Amazon and other big tech firms invested $20 million in lobbying efforts, alongside initiating an ad campaign and mobilizing sellers in the home states of lawmakers to publicly resist the proposed bills.

Aside from criticisms, Amazon has also poached former FTC employees to gain intel, the NY Post reported.

According to informed sources, the former FTC officials who left the organization to pursue opportunities at Amazon have been greatly influenced by Khan’s distinctive managerial style.

Khan’s leadership approach has generated discontent among FTC employees, with certain staff members characterizing the 34-year-old chair as an authoritative figure with a management style that is deemed “tyrannical” and “abusive” according to the above referenced article.

“If people are displeased with leadership, it makes you more inclined to listen to offers,” former FTC chair William Kovacic told the NY Post.

While the ex-FTC employees are prohibited from working on the case, they can share insights into “key players, who is making decisions, the mood of the agency, prevailing attitude of enforcement, overall sense of how stretched an agency is in using resources, and many people they can deploy on a given matter,” Kovacic said.

All of this shows Amazon’s profound concern regarding the challenges posed by the FTC. The anticipated antitrust case accusing Amazon of playing favorites, in particular, holds the potential to have significant ramifications for the company. The outcome of this legal battle has the power to change the eCommerce landscape moving forward.

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. 🚀

Amazon Cracks Down on Suspicious Reviews from Bad Actors, Sellers Express Mixed Reactions

In a recent move to enhance the integrity of its review system, Amazon appears to have initiated an automated process to remove product reviews from buyers who have been found to violate the platform’s customer review policy

Below is an email screenshot shared by a seller on social media. Several other sellers confirmed that they had also received similar messages from Amazon. The email stated that Amazon took action to remove product reviews from bad actors.

Sellers previously reported receiving such notifications back in October 2023, as seen on this YouTube channel hosted by My Amazon Guy. Another related report came out in December on the popular forum site, Sellers Ask Sellers. Interestingly, in May 2023, Amazon quietly removed hundreds of thousands of reviews from some of its own Amazon Basics listings, a move that at that time suggested that a purge could be coming soon for fake reviews. Five months later, the Federal Trade Commission (FTC) proposed a rule on fake reviews. If enacted into law, it will give the courts the authority to impose a hefty fine of up to $50,000 per violation on non-compliant individuals and possibly, eComm platforms themselves.

Aside from minimizing regulatory risk, Amazon’s recent move also aims to protect sellers from unfair practices, such as buyer extortion and fake reviews. However, this development has sparked diverse reactions among sellers who have received notifications regarding the removal of reviews associated with rule-breaking buyers.

In the comments section of this YouTube video, one seller expressed optimism, stating, “I hope they are working on cleaning up bad buyers. All they need to do is complain and get the right customer rep, and their account will be reinstated.” This seller highlights a longstanding concern among Amazon sellers about the potential misuse of customer service channels by buyers with malicious intent.

Another seller raised the issue of buyer extortion, stating, “Buyers know that feedback and reviews are important for a brand owner. All they need to do is leave a bad review/feedback, and most likely, they will get a refund. Some will even reach out and contact you, stating they will leave a bad review if they don’t get a refund or discount.” This practice of leveraging reviews for personal gain has been a challenge for honest sellers (and customers) on the platform.

While some sellers welcome Amazon’s efforts to remove bogus reviews and address buyer misconduct, there are concerns about the potential for errors in the automated process.

One seller commented, “It’s helpful until Amazon AI makes a mistake like they always do and tags your buyer account with nefarious reviews, leading to the suspension of your seller account.”

The lack of transparency in the removal process also raises concerns. Another seller from lamented, “I have received this as well. Unfortunately, we aren’t told what the review was.” This lack of information leaves sellers in the dark about the specific issues leading to the removal of reviews, making it challenging for them to address any potential underlying problems.

Despite the challenges, some sellers view the crackdown positively. One seller remarked, “It’s a warning to let sellers know that they’re becoming more aware of fake reviews and taking action. It’s generally good news. Sure – we want fake reviews removed from our listings and more so – bad sellers’ listings.”

As Amazon continues to refine its review removal process, sellers are hopeful that these measures will contribute to a fairer and more trustworthy online marketplace. However, the platform must balance its efforts to combat misuse with transparency and accuracy to ensure a positive experience for both sellers and customers.

Related: A Purge Could be Coming for Fake Reviews on Amazon

Roundup Post: Amazon Seller Tools Update and New Product Safety Requirements

Interesting updates are on the horizon for Amazon sellers. From a new line of credit offering from Amazon Lending and SellersFi to enhanced seller dashboard features, Amazon has released a range of tools to support the online selling journey.

Amazon Lending and SellersFi Line of Credit Solution

Qualified US sellers now have the opportunity to seek a line of credit (LOC) through SellersFi to support and expand their businesses.

Formerly known as SellersFunding, SellersFi is a global financial tech firm that provides financial solutions tailored for ecommerce entrepreneurs. Beyond providing funding and payment solutions, analytics and business insurance, SellersFi also offers services that were traditionally exclusive to banks, such as term loans.

Amazon Lending x SellersFi LOC Solution Features

  • Credit Limit: Qualified sellers have the chance to request a credit line with a maximum limit of up to $10 million. This substantial funding is designed to facilitate business expansion, new product launches, additional ad efforts, and assist with effective inventory management.
  • Flexible Repayment Terms: Acknowledging the diverse requirements of various businesses, the credit line offers customizable repayment terms. This adaptability allows you to align your financial commitments with specific business cycles and cash flow needs.
  • Interest-Only Period: To better accommodate the fluctuating cash flow patterns of sellers, SellersFi features an option for an interest-only period (the borrower’s only required to pay the interest on the borrowed amount during the specified interest-only timeframe). This choice alleviates the initial repayment burden, providing you with additional flexibility to foster growth.

Is LOC for You?

Of course, it goes without saying that only you have the ability to determine what financial funding is best for your business but here are some things to consider. 

This financing option proves particularly advantageous for ecomm businesses grappling with unpredictable cash flow. In situations where funds are not readily available, such as when ordering in advance for peak periods like Q4, the risk of stockouts and missed sales opportunities arise. Given the frequent occurrence of cash flow challenges in the ecommerce landscape, having a revolving credit facility becomes invaluable, offering on-demand access to funds during emergencies.

In addition, LOCs serve as an excellent solution for sellers with brief operating histories or less-than-ideal credit standings. Typically provided by non-bank financing entities, often referred to as fintech lenders, these LOCs present a streamlined solution for online application processes and securing working capital. However, they may come with interest rates significantly higher than traditional banks.

Currently, SellersFi is accessible to sellers operating on Amazon’s US platform. Sellers can assess their eligibility and submit applications directly through Amazon Lending.

Related: 5 Amazon Inventory Financing Options for Sellers

Update Your Listings with Supported Document Types by Feb 26

Starting from January 29, 2024, sellers seeking to upload product documentation to Amazon product detail pages will encounter restrictions. Amazon has announced this measure as part of its initiative to standardize product listings, streamlining the process for customers to access information about products. As a result, specific document types will no longer be supported by the platform.

“From January 29, 2024, you won’t be able to upload or edit the following unsupported document types on your product detail pages: 2D CAD, 3D CAD, Application Guide, Brochure, Comparison Chart, Compatibility Guide, FAQ, Size Guide, Specification Sheet, and Product Documentation.”

While existing unsupported document types will remain visible on product detail pages, Amazon has clarified that as of February 26, 2024, these document types will be removed both from product detail pages and Seller Central.

To quickly adapt to this change, sellers are advised to either transfer information from unsupported document types to the product description or re-upload content using a supported document type. As an illustration, Amazon suggests moving an “Application Guide” to a “User Guide” to ensure compliance with the updated guidelines.
For additional details and a complete list of supported document types, visit the About Product Documents page.

EU General Product Safety Regulation (GPSR) Update

Prepare for the impending GPSR update if you are an Amazon seller in the EU and Northern Ireland, as it is poised to enforce substantial requirements for a new requirement being introduced December 13, 2024.
Amazon, through an official communication on Seller Central, has highlighted the significance of this regulation for sellers dealing with most non-food consumer products. The GPSR update aims to elevate product safety standards and strengthen consumer protection in the market.

What to Expect

  1. Meet the current labeling and traceability requirements: Non-food products are required to adhere to prevailing labeling and traceability standards to ensure straightforward recognition and compliance with safety regulations.
  2. Assign a Responsible Person: A Responsible Person serves as your Northern Ireland/EU compliance representative for each product to manage regulatory adherence and act as a designated contact.
  3. Implement a comprehensive product labeling system: Products are required to display the contact details of the Responsible Person, manufacturer, and, if relevant, the importer. Additionally, the labeling should include information such as the product’s type, batch, or serial number. 
  4. Label products with safety information and warnings: Provide product safety information and warnings in the language corresponding to the country of sale, ensuring thorough communication with consumers.
  5. Display complete product label and safety information in online listings: Showcase the details of the Responsible Person, including their information, the manufacturer’s name, and contact details. Additionally, a product image and other identification details should be included. And as previously mentioned, include warning and safety information in the language corresponding to the country where the product is being sold.

What Some Sellers Have to Say

The sentiments expressed in the announcement post revolve around concerns and challenges faced by sellers on Amazon due to the implementation of the GPSR update in the EU and Northern Ireland, set for December 2024. Many are apprehensive about the practicality of the new regulations, especially regarding the need to update listings with responsible person information, safety details, and images.

Sellers express worries about the potential difficulties in updating listings, particularly for those who source products from manufacturers or wholesalers. Questions are raised about the manufacturer’s role in “labeling the products in the way which it will need to be labeled” and the implications if they fail to do so. 

In addition, there’s a shared concern about the potential impact on sales, especially if listings are not updated in time, and questions about the possibility of selling non-compliant products in the UK. Some sellers suggest that Amazon should introduce an option to remove or block listings for Northern Ireland if they don’t meet the new regulations.

Overall, the sentiment reflects a mix of uncertainty, frustration, and a call for clearer guidance and support from Amazon.

To ensure a seamless transition, Amazon encourages sellers to promptly address the initial four requirements. Additional guidance on fulfilling requirement #5 will be released by Amazon in Q1 of 2024, assisting sellers in updating their online listings and achieving full compliance.
For a more in-depth understanding and detailed guidance, visit the GPSR page on Seller Central.

Related: Unlocking European Ecommerce: A Comprehensive Guide to Global Ecommerce for US Sellers

New UK FBA Returns Dashboard Features

Amazon recently unveiled enhancements to its UK FBA Returns dashboard, introducing features aimed at offering you more detailed insights into customer return trends.

These updates are designed to help you gain a comprehensive understanding of “return grading results, refunded products and products that have been returned to Amazon warehouses,” enabling you to make informed decisions and refine your manufacturing, sales and reverse logistics strategies.

The newest FBA Returns dashboard update includes the following additions:

  • Identification of Frequently Returned Products: You now have the ability to pinpoint products that are returned most frequently. This feature assists in addressing specific items that may require attention in terms of quality, accuracy in description, or meeting customer expectations.
  • Detailed Return Reasons: Understanding the reasons behind product returns is crucial. The dashboard now provides detailed insights into the primary reasons for returns, allowing you to stop recurring issues.
  • Insights Breakdown by Product: Insights are now available at the product level, offering a granular view of return patterns for individual items. This facilitates targeted strategies to reduce returns on a per-product basis.
  • Customizable Reports: Generate customizable reports focusing on return trends, providing flexibility to concentrate on specific areas of interest or concern tailored to your unique needs.

This update represents a huge stride in Amazon’s commitment to enhancing the seller experience by providing reporting tools and data. Sellers leveraging these new returns dashboard features can better understand return trends, contributing to more effective management and optimization of their Amazon businesses.
To access these features, go to the FBA Returns dashboard on Amazon Seller Central.

Related: Tips to Improve Customer Experience and Reduce Returns

Identify Demand for Your Products in EU and Japan with this New Dashboard

Planning to expand in EU and Japan marketplaces? 

Amazon recently rolled out a new addition to its Marketplace Product Guidance tool — the Similar Products Dashboard. This tool empowers sellers by providing vital product insights, aimed at helping them understand and capitalize on product demand within the European and Japanese markets.

Compare Product Prices

Compare the prices of up to five similar products to gain competitive edge in crafting effective pricing strategies. This feature proves especially advantageous for sellers seeking to align their pricing with top competitors in Europe and Japan.

Moreover, the dashboard delivers invaluable data insights concerning sales and performance trends. These insights play a crucial role in granting sellers a good understanding of the market landscape, making swift and informed decision-making possible.

Reach International Customers

An additional noteworthy aspect of this update is the introduction of the Similar ASINs dashboard. This feature provides a concise overview of potential offers, greatly assisting sellers in expanding their global selling endeavors.

Overall, the dashboard can be a useful tool for sellers aspiring to broaden their influence and thrive in the global marketplace. Visit Similar ASINs Dashboard within Seller Central to explore the dashboard’s features. Alternatively, you can go to Marketplace Product Guidance or more details.

Check Subscribe and Save Eligibility for Your FBA Products

Amazon has introduced a new self-service feature that allows FBA sellers to instantly check the eligibility of their products for Subscribe & Save. This feature eliminates the need for sellers to contact support, streamlining the process for quick and efficient eligibility verification.

The new feature operates around the clock, providing sellers with 24/7 access to check the eligibility status of their FBA products at any time, offering convenience and autonomy in managing their Subscribe & Save offerings.

To utilize this self-service feature, sign in to Amazon Subscribe & Save > navigate to the “Check Subscribe & Save eligibility for FBA products” section > Enter the relevant product details and receive confirmation of the eligibility status within seconds.

Set a Window to Auto-Approve Buyer Cancellation Requests

You now have the capability to establish a specified time frame within which buyers can autonomously cancel their seller-fulfilled orders without requiring your intervention.

To illustrate, if a two-hour Buyer Auto-Cancellation Window is configured and a buyer decides to cancel their order within this timeframe, Amazon’s system will automatically cancel the order without requiring you to manually process the cancellation request within the designated window.

Conversely, if the cancellation request is initiated after the predefined time window elapses, the buyer must then formally submit a manual approval request, which you can then review and approve.

Note that once an order has been confirmed as “shipped” by the seller, buyers lose the option to cancel the order on their own.

Crucially, cancellations initiated by buyers within the configured Auto-Cancellation Window do not contribute to your order cancellation rate metric. This new feature aims to streamline the cancellation process for both sellers and buyers, enhancing efficiency and reducing the manual workload for sellers.

It May Not Be for Everyone

While the new feature minimizes the need for manual processing of cancellation requests, some sellers in this forum site express skepticism and caution regarding the use of this feature.

One seller voices strong opposition, stating they would never use such features, expressing concern about canceled orders, emphasizing the potential trouble it could cause. The seller illustrates a scenario where they might immediately ship orders within the cancelation window. It would not be possible then to inputting tracking numbers for shipped orders that may now be canceled without the seller’s knowledge. This could result in orders disappearing from the seller’s queue, leading to potential confusion and frustration.

The comments collectively convey apprehension about the unintended consequences of the Buyer Auto-Cancellation Window feature. Concerns revolve around the potential impact on order processing, tracking, and overall seller experience.

While some sellers express openness to the concept, others emphasize the need for caution, especially for those who do not use Amazon Buy Shipping and may face challenges in tracking and managing canceled orders effectively.

To learn more about this new functionality, go to the Cancellations FAQ section or access the General shipping settings within your Amazon Seller Central account. 

Related:4 Updates to Seller-Fulfilled Prime, New Amazon Features, Updates, and Requirements, Upcoming Amazon Changes and Features

UPDATED: Logistics Showdown: UPS and Amazon Battle for Supremacy

Update 01/14/2024: FedEx has just entered the end-to-end logistics arms race with its own ecommerce platform, fdx

In a corporate news post dated January 14th, the legacy carrier revealed plans for a groundbreaking ecomm platform set to debut this fall. This “data-driven commerce platform” promises comprehensive ecommerce solutions, empowering online sellers to seamlessly handle shipments, customer sales, fulfillment, and returns.

What is a Data-Driven Commerce Platform?

FedEx’s recent announcement is brimming with marketing jargon, emphasizing terms like “data-driven” and offering an “end-to-end ecommerce solution for businesses of all sizes.”

In ecommerce, data-driven management simply means using the data collected by a company to improve customer relationships. In FedEx’s case, participating sellers can leverage the carrier’s extensive logistics network and “insights from moving 15 million packages per day” to make smarter supply chain decisions (e.g., provide accurate parcel delivery dates, more cost-effective shipping routes), thereby allowing them to build stronger connections with customers.

While the announcement lacks specifics on how it plans to compete with Amazon, FedEx highlighted the utilization of its services like ShopRunner, acquired by FedEx in 2020, to enable sellers  to connect with customers, display estimated delivery times, manage shopping carts, track packages, assess the carbon emissions impact, and handle returns.

More importantly, FedEx emphasized that its focus is not on entering the marketplace business to serve consumers directly, but rather to provide sellers with digital capabilities they need to enhance their customers’ shopping experience.

What does this mean for Amazon? More competition.

This strategic move intensifies FedEx’s ongoing competition with Amazon, which saw the company opting not to renew a 2019 contract for the said rival. Amazon reciprocated by briefly barring Prime deliveries via FedEx during the holidays, citing performance issues. 

FedEx and UPS have both faced challenges from Amazon, with the ecomm giant surpassing them in US home package deliveries in 2022. This shift occurred shortly after Amazon developed an extensive logistics network utilizing third-party contractors. See report below.

Shared Opinions on FedEx’s Strategic Move

In the comments section of The Verge’s post on the topic, readers express a mix of skepticism and frustration regarding FedEx’s venture into e-commerce to compete with Amazon.

Complaints about the carrier’s past experiences, such as difficulties with returns and delivery mishaps, raise doubts about its end-to-end logistics capability. Some believe that FedEx’s sometimes inconvenient handling of certain packages may hinder its competitiveness, contrasting it with UPS. 

Others, however, welcome the prospect of increased competition for Amazon, hoping it will lead to improved service quality and customer experiences. A recurring theme is the need for reliable and customer-focused services, with varying opinions on whether FedEx can effectively challenge Amazon in the ecommerce arena.
As of this writing, fdx is presently undergoing a private preview, with an anticipated broader launch scheduled for the fall of 2024. Sellers interested in participating can express their interest through a registration form. Additionally, the company did not specify any brands currently involved in the pilot program.

The logistics industry, valued at $1.5 trillion, has traditionally been dominated by a select few major players such as USPS, FedEx, and UPS. However, over these last few years, Amazon has emerged as the frontrunner, surpassing both UPS and FedEx in parcel volume for 2022.

What was once dismissed as a legitimate threat by FedEx CEO Fred Smith has not only solidified its dominance but has also set new records, delivering an astounding number of packages across the United States.

This marked a pivotal moment in the ongoing competition for parcel delivery supremacy in the the country. UPS in particular, far from conceding defeat, is gearing up for a formidable counterattack, unveiling strategic initiatives to regain its foothold in the rapidly changing logistics arena.

Amazon’s Rise

The ascent of Amazon is nothing short of extraordinary, considering that as recently as 2014, it held no stake in the US parcel delivery market. The company relied entirely on legacy carriers such as FedEx and UPS for its delivery needs.

In the years that followed, Amazon made multi-billion dollar investments in constructing a massive fulfillment and logistics infrastructure, including warehouses, trucks, planes, and an extensive fleet of delivery drivers. By bolstering its in-house shipping capabilities, Amazon gradually diverted its business from reliance on other carriers.

The divergence in strategies became even more apparent when FedEx severed ties with Amazon in 2019. This move allowed FedEx to concentrate on optimizing its operations and enhancing profitability.

In 2022, UPS put shipping limits on Amazon to put more focus on B2B deliveries as eCommerce growth slowed down, allowing the eCommerce titan to win more marketshare.

Over the last three years, Amazon’s share of deliveries has steadily increased. From holding zero stake in the logistics market in 2014, the company grew to grab 21% market share in 2021, closely trailing UPS at 24% and surpassing FedEx at 16%. USPS, meanwhile, maintained its dominance with 38%.

Amazon’s rise led to a reshaping of the delivery service hierarchy, albeit with USPS still the top player, delivering packages for the three logistics giants.

Presently, the retailer continues to transform shipping from a mere cost center into a revenue-generating asset by extending its logistics empire as a service to non-Amazon eCommerce businesses.

Amazon’s Record-Breaking Delivery Numbers

Before Thanksgiving this year, Amazon had already achieved a remarkable feat by delivering more than 4.8 billion packages in the country. According to documents reviewed by The Wall Street Journal (WSJ), the company’s internal projections anticipate reaching a staggering 5.9 billion deliveries by the end of 2023.

To put this into perspective, Amazon shipped 5.2 billion packages in the previous year, underscoring the significant growth and efficiency of its delivery network.

As can be recalled, Amazon recently reached its fastest Prime delivery speeds ever, which Doug Herrington, the CEO of Worldwide Amazon Stores, attributes to the strategic overhaul of the retailer’s fulfillment model.

Herrington highlights the pivotal shift from a national fulfillment network to a more regionalized model as a key factor in this achievement. Amazon now operates its delivery network from 8 regions covering seperate geographical areas. Approximately 76% of all US orders now are fulfilled from the region in which the order originated. These strategically located facilities are stocked with a diverse array of products, facilitating prompt delivery to nearby locations while maintaining the ability to dispatch items efficiently to transfer between regions based on location demand.

Beyond the structural changes, Amazon has implemented a series of enhancements to its last-mile delivery process. This includes:

By shortening the distances certain products need to travel and making improvements to the Partnered Carrier program, Amazon has not only achieved ultrafast delivery but has also managed to curtail transportation costs, further solidifying its commitment to efficient and cost-effective logistics solutions.

Related: Amazon Enters the 3PL Space with Amazon Warehousing and Distribution

Comparative Analysis with UPS and FedEx

For context, UPS has acknowledged that its domestic volume for the current year is unlikely to surpass the 5.3 billion packages delivered in the previous year. This total includes packages delivered to customers through collaboration with the postal service. In the first nine months of 2022, UPS handled approximately 3.4 billion parcels domestically.

FedEx, on the other hand, reported that its domestic Express and Ground parcel volume reached around 3.05 billion for the fiscal year ending May 31, 2023. While FedEx and UPS have consistently downplayed the importance of engaging in a volume race, and have instead put more focus on delivering more profitable parcels, Amazon’s ascent to the top cannot be ignored.

UPS Counters Amazon’s Dominance with Bold Moves

The battle for supremacy in the logistics arena has reached new heights, with UPS actively positioning itself to dethrone Amazon.

Beefing Up its Returns Network

The legacy carrier recently acquired Happy Returns, a reverse logistics company, thereby adding over 10,000 box-free locations to its US returns footprint, one of the keys to building a robust logistics business.

Why it matters?

  • Shoppers seek returns that are simple, convenient, and free of hassle, often influencing their buying choices based on a store’s return policy. Consumer reseach reveals that 87% of online shoppers deemed free returns as a crucial factor in their purchasing decisions, ranking it as the most preferred return option. Notably, over 30% of the respondents acknowledged their likelihood of abandoning a brand due to the absence of convenient return methods. Additionally, 70% of individuals engaging in online shopping expressed willingness to pay more for convenient returns experience and that brand loyalty increases with the offering of more eco-friendly and sustainable processing.
  • With merchandise returns approximating 8.5% of overall retail sales in 2023, UPS aims to address the rising costs for retailers by optimizing return processes and minimizing environmental impact.

The acquisition also allows UPS to compete with Amazon’s evolving return policies, emphasizing the importance of easy returns for increased shopper loyalty.

In a blog post, Happy Returns outlined its plans to amplify and expedite its returns process through a strategic collaboration with UPS. The company highlighted the appeal of UPS’s substantial capacity and operational efficiency, emphasizing that while UPS manages millions of packages daily, Happy Returns processes a comparable volume in just one month.

In addition, UPS’s expertise in box-free, in-person drop-offs through a third-party network with prominent brands and its utilization of automation at its package sorting facility in Louisville, Kentucky, adds an additional layer of advantage to this partnership.

Happy Returns, now part of UPS, offers a convenient solution for retailers and consumers, leveraging over 5,200 UPS neighborhood store locations for returns processing, providing a hassle-free experience.

Offering a Major Pay Bump

In August 2023, UPS reached a landmark five-year agreement with the Teamsters Union, heralded as a ‘new benchmark in the labor movement.’

The agreement between the legacy carrier and the Union resulted in salary increases for all 340,000 package handlers and delivery drivers within the supply chain company. Full-time drivers are now earning approximately $170,000 annually in pay and benefits.

Every UPS union worker is slated to receive a $2.75 per hour salary increase this year, followed by incremental wage raises totaling $7.50 per hour over the next five years. These adjustments will elevate UPS’s average top rate for its unionized full-time drivers to $49 per hour, establishing them as the highest-paid delivery drivers in the United States.

This development brought positive news for UPS drivers, and predictably some Amazon Delivery Service Partner (DSP) drivers are now contemplating a potential shift to UPS, given these recent improvements in compensation.

The hiring website for Amazon’s DSP program outlines that drivers under this program can anticipate a workload of 40 hours per week, comprehensive benefits, competitive compensation, and access to a vehicle, among various other offerings.

Two drivers, in conversation with Business Insider, indicated that their hourly wages now stand at approximately $18 following recent pay raises, a stark contrast to UPS’s $49/hour rate for full timers.

“I think it puts Amazon in this situation where they’re going to have to decide if they want to keep quality drivers or not,” a delivery driver told the news outlet.

Suppose DSP drivers start shifting over to UPS, the legacy carrier will likely gain a competitive edge (vs. Amazon) in growing their labor force toward handling increased shipment volumes, enhancing efficiency, and potentially offering more diversified and flexible services. For example, some vehicles may be optimized for last-mile delivery in metropolitan areas, while others may be designed for long-haul transportation.

The larger fleet allows UPS to optimize routes, improve reliability during peak periods, and strengthen its market share and competitive positioning. This advantage may lead to strategic pricing, increased brand trust, and a broader geographic reach, influencing the dynamics of the logistics and package delivery market.

Looking Ahead

Amazon’s reported figures encompass only packages that the company handles entirely from start to finish. In contrast, UPS includes packages they give to the postal service for the final leg of delivery in their volume calculations. This distinction emphasizes Amazon’s end-to-end control and streamlined logistics process.

But according to JP Morgan analyst, Brian Ossenbeck, despite the company’s dominance in last-mile delivery, it has not managed to replicate the expansive global coverage or the complementary aspects of operations exhibited by both UPS and FedEx.

Ossenbeck emphasizes this distinction, stating, “Amazon excels in the one-way network, efficiently delivering goods at accelerated speeds, but it lacks the equivalent level of pick-up and delivery coverage found in its counterparts.”

Nevertheless, Amazon’s surpassing of UPS and FedEx in parcel volume for 2023 signifies not only a milestone for the company but also a transformative moment in the competitive landscape of the last-mile logistics industry. The eCommerce giant’s relentless pursuit of excellence and innovation has propelled it to the forefront, cementing its position as the country’s premier delivery service.

Related: Amazon and Flexport Vie for End-to-End Logistics Supremacy, Battle for Last-Mile Logistics Heats Up as Amazon Expands Same-Day Delivery Network

Preparing for Change: Higher Fees on the Horizon for UK/EU FBA Sellers in 2024

Amazon just announced the upcoming fee changes for UK and EU sellers. In many places, the announcement cited increased cost of improved, faster shipping service to customers as the reason for the fee increases. It was also stated that these 2024 fee changes were designed to reduce “our collective costs.”

While there are some fee reductions in fulfillment, there are others that, in many places for many sellers, will more than offset any savings provided. 

Sellers in the comments section of the announcement post expressed frustration and concern about Amazon’s latest round of price hikes. Many mention the impact on their businesses, including the previous loss of Small & Light, being forced use of Amazon Buy Shipping, and increased Royal Mail prices, leading to decreased profitability.

Some sellers are considering diversifying their sales channels due to these challenges, while others criticize Amazon’s customer expectations and support quality despite implementing a yearly increase in fees. Overall, sentiments reflect dissatisfaction and a sense of financial strain caused by the fee changes and evolving policies.

2024 EU FBA Fee Changes at a Glance

  • While many FBA fulfillment fees are increasing in many countries and across the European Fulfillment Network, domestic fulfillment fees in Germany, France, Italy and Spain will not change.
  • Seller return, disposal and liquidation fees to undergo a major changes beginning February 5, 2024. Local return-to-seller fees will increase and most cross-border returns will do the same with the exception of a couple of lower tiers.
  • Amazon introduces a new returns processing fees for high-return-rate products without addressing within the policy any accountability for fraudulent customer returns or Amazon-at-fault returns. Effective October 1, 2024.
  • The monthly storage fees for peak and non-peak periods will increase on average by 10% starting March 1, 2024.
  • On February 15th, the aged inventory surcharge to increase by over 100% for most tiers.
  • On June 1, 2024, Amazon will implement new fee tiers for the storage utilization surcharge, extending its application to Professional sellers exceeding a storage utilization ratio of 22 weeks.
  • There is no “inbound placement fee” similar to what US sellers have experienced.
  • It appears that the low-level inventory fee is only relevant to pan-EU inventory.

FBA Fee Changes: The Yearly Seller Squeeze

The FBA fees remain steady in Germany, France, Italy, and Spain. Yet, in the UK, the Netherlands, Sweden, Poland, and Belgium, the domestic fees will experience a per unit shipped increase, ranging from:

  • £0.08 to £0.09 for Standard Envelope
  • £0.2 to  £0.23 for Small Parcel
  • £0.19 to £0.35 for Standard Parcel
  • £0.26 to £0.48 (+ £0.01 per increase kg) for Standard Oversize
  • £0.54 to £0.72 (+ £0.01 per increase kg) for Large Oversize

Meanwhile, rates remain unchanged for Small Envelope and Special Oversize. Moreover, 

the Remote Fulfillment fee for shipments from France, Germany, Italy, and Spain to the UK will be lowered, whereas the fees for the EU Fulfillment Network and Remote Fulfillment from the UK to the EU will remain the same.

However, all of the EU fulfillment fees, come with caveats that you will want to be aware of in the footnotes of each rate table, including Amazon reserving the right to make fee adjustments within the EU network when foreign exchange rates change. 

Refer to the rate table for details on these adjustments.

Pan-EU Low-Level Inventory Fee

Commencing April 1, 2024, a low-inventory cost coverage fee will be imposed on standard-size products fulfilled through the Pan-European FBA (Pan-EU) program when inventory units fall below 28 days relative to shipped units in Germany, France, Italy, and Spain. 

As explained in our 2024 US FBA Fee Changes blog post, the low-level inventory fee is a fulfillment charge tied to the total days of supply at FBA, distinct from a storage fee. It is incurred only upon selling your inventory, triggered upon the fulfillment of the penalized units. The fee ranges from €0.06 to €0.54 per unit.

According to Amazon, the low level inventory fee is charged only when both the long-term (last 90 days) and short-term (last 30 days) historical days of supply are less than 28 days; otherwise, sellers won’t face this fee. For instance, if your product’s short-term historical days of supply surpass 28 days while the long-term historical days of supply is below 28 days, the low-inventory fee will not be applicable.

The following sellers are also exempted from this fee:

  • Professional sellers who are new to Pan-EU (for the first 365 days after the first Pan-EU active date).
  • Seller-FNSKUs that are new to Pan-EU (for the first 180 days after the first Pan-EU active date).
  • Pan-EU seller-FNSKUs with less than five weekly units sold across Pan-EU stores in Germany, France, Italy and Spain.

To avoid or minimize the impact of this fee, enhancing the accuracy of your demand forecasts to prevent low inventory levels will be crucial. You may also want to consider adjusting advertising or pricing temporarily to navigate potential surges that can lead to stockouts or low-inventory fees.

Go to FBA Inventory to keep an eye on your historical days of supply.

Monthly Storage Fee Changes

Effective March 1, 2024, there will be an increase in monthly storage fees for oversize products and clothing, shoes, and bags from January to September. Additionally, monthly storage fees for all products, except dangerous goods, will increase from October to December.

Amazon will also introduce new fee tiers to storage utlization surcharge on June 1, 2024. From having 3 fee tiers (below 26 weeks, 26-39 weeks, and 39 weeks), professional sellers may now be charged a fee if their utilization ratio falls between 22-52+ weeks of total catalog-wide volume. 

Meeting the criteria for the surcharge means it will be added to your base monthly storage fee, leading to an increase in total storage costs. 

This surcharge is based on the daily average volume, meaning the total amount of storage space that your FBA inventory occupies in FBA. As this is not on a per SKU basis, only sellers with very low volume or very high stagnant inventory will likely face this fee.

January-September Storage Utilization Surcharge

October-December Storage Utilization Surcharge

FBA Aged Inventory Surcharge

Another fee that’s tied to your storage is the aged inventory surcharge, which is set to increase by a little over 100% on February 15, 2024. This fee applies to inventory that has been stored over 270 days at FBA.

Pro tip: Check out our Attack of the Fee Stack white paper to learn how to minimize or avoid these storage-related fee increases.

FBA Return to Seller, Disposal and Liquidation Order Fees

Starting on February 5, 2024, seller return fees will get more expensive by around 40%.

Return to Seller Fees

Disposal Order Fees

Liquidation Processing Fees

This fee is on top of Amazon’s 15% liquidations referral fee, which is calculated based on the item’s gross recovery value, while the liquidation processing fee is based on the item’s size and weight.

Related: 5 Best Options to Quickly Liquidate Amazon Inventory

Pan-EU FBA Oversize Eligibility Updates

Effective July 1, 2024, Amazon will revise the Pan-EU FBA surcharge eligibility for oversize products.

This surcharge is currently applied to the local fulfilment rates for the fulfilment of all oversize items via the Pan-EU program. Luckily, it could be waived in France, Italy and Spain if the eligible inbound destination is the same as the country of sale. Germany used to be exempt from this fee but will now see oversize surcharges if inbounding into a country different than the country of sale. 

Failure to inbound Pan-EU inventory in the eligible sales country may prompt Amazon to distribute your units among EU fulfillment centers or fulfill remotely from enabled countries, incurring higher operational costs and slower delivery speed.

According to Amazon, eligibility will be based on “a new metric called the historical inbound-sales quantity.” It’s defined as the difference in the historical inbound receive quantity and the historical sales quantity for a given seller-FNSKU in a Pan-EU store. For a given store, the surcharge will apply to Pan-EU shipped units that are sold in the following week, only if the long-term (last 150 days) and short-term (last 30 days) historical inbound-sales quantity is less than zero.”

Sample calculation below:

If both the long-term and short-term historical inbound-sales quantity of the product sent in France are below zero, you will likely incur the Pan-EU oversize surcharge.

Pan-EU store: FranceSize tier: Large oversizeShipping weight: ≤ 9.76 kg
Historical inbound-sales quantityHistorical inbound-sales quantity: < 0Long-term historical inbound-sales quantity: < 0Short-term historical inbound-sales quantity: < 0
Total fulfilment feesStandard FBA fulfilment fee: €20.60 per unit (standard rate for the size tier and shipping weight)
Pan-EU surcharge for oversize items: €2.96 per unit (rate for < 0 historical inbound-sales quantity)
Total new FBA fulfilment fees: €20.60 per unit + €2.96 per unit = €23.56 per unit

To mitigate or eliminate the Pan-EU surcharge for a product with a historical inbound-sales quantity below zero, Amazon recommends adjusting your inbound destination. This may help to adjust the long or short-term quantity to a positive, so that the Pan-EU surcharge won’t apply. 

Other Upcoming Changes

  • Returns Processing Fee. On October 1, 2024, a returns processing fee, ranging from £1.71 (small envelope) to £36.87 (special oversize) per unit, will be imposed for high-return-rate products across all categories, excluding clothing and shoes. (Clothing and shoes returns processing fees will apply for each unit returned as usual.) This fee aims to manage operational costs and minimize waste, and is applicable only to products exceeding a specified return rate threshold within each category.

    The return rate assess the monthly fees based on the number of shipped units per product within that month compared to the number of returned products within that month and the subsequent two months. For example, October fees will be assess by reviewing returns in October, November and December.

    The initial charge is scheduled between December 7th and 15th, 2024. In October, you will be able to go to FBA Customer Returns dashboard to review your product’s return rate. Given the effective date of this fee change, sellers will have Q1-3 to optimize their product catalog to reduce returns liabilities. However, rate thresholds will not be revealed until August 1, 2024 and the dashboard won’t be available until October 1st.
  • FBA New Selection Program Changes. Set to take effect on March 1, 2024, Amazon will continue to offer up to 10% rebate on sales of eligible brand-registered parent products that are new to FBA. The retailer will also provide sellers with eligible oversize products with rebate benefits on up to 50 units (previously 30 units) per parent product. A lower IPI score for eligibility will also soon apply, from 400 down to just 300.
  • Lower FBA Fees for Ships in Product Packaging (formerly Ships in Own Container). Items approved for this program will enjoy reduced FBA fees automatically. Amazon may certify products if their packaging aligns with program guidelines, or items can be enrolled when packaging is adjusted to meet these criteria. Click here to view the updated rates.

Final Thoughts

In light of this announcement, sellers are urged to strategize and optimize for these shifts to maintain profitability amid changing policies.

While all of these fees add more complexity to an already labyrinthine web of FBA expenses, if you look a little deeper, you will see the need for continued focus on storage and shipping optimization as Amazon takes a more laser targetted approach to cost offsets. Rather than higher fulfillment costs across the board for all products and sellers, brands are beginning to be hit with fees based on more complex inventory behaviors.

Navigating through new fees and price hikes demands heightened attention to inventory management. From Low-Inventory-Level fees to expanded Storage Utilization Surcharges, balancing understocking and overstocking in FBA becomes even more crucial to avoid incurring added costs. Precise insights into sell-through rates and demand are essential for optimizing costs amidst these FBA adjustments.

Major eComm Players Making Big Changes to Take on Amazon

Update 12/12/2023: Amazon is opening an innovation hub in Shenzhen, China’s Silicon Valley, to help Chinese sellers reach global customers, and simultaneously thwart the rise of eComm challengers Temu, Shein, and TikTok Shop in the US.

Establishing a Foothold in China’s Silicon Valley as Rivals Gain Momentum

During the Amazon Global Selling Seller Conference held in Shenzhen on Tuesday, Amazon revealed the inauguration of its inaugural Asia-Pacific innovation center in Qianhai, marking a significant milestone as the company’s first-ever tech hub globally.

The center will serve as a hub for Amazon Global Selling’s industrial organizations, third-party service providers, supply chain experts, and suppliers to help sellers in the region “build brands, promote products and digitalize operations,” essentially taking aim at the third-party seller marketplace of Shein and Temu.

During the conference, AGS conducted a comprehensive review of the progress and accomplishments of Chinese sellers on Amazon over the past year. Additionally, it unveiled its strategic roadmap for 2024, comprising five key business strategies, along with the introduction of an array of new tools and enhancements to seller services.

As part of its expansion initiative, AGS announced the establishment of five regional centers strategically located in East China, South China, West China, North China, and Central China. 

Adding Brazil to its roster of destinations for Chinese sellers, Amazon intensifies its presence in Latin America, sparking heightened competition. Shein, a fast fashion giant, designated Brazil as its manufacturing and export hub for the region in April. Concurrently, Temu, an emerging online shopping platform under Pinduoduo, established its footprint in the country in June.

Amazon is also taking it a step further by making Supply Chain by Amazon, the company’s automated suite of supply chain solutions, accessible to Chinese sellers.

Fueling the Rise in Power of Chinese Amazon Sellers

These strategic moves align with Amazon’s recognition of the expanding potential within the “Made in China, sold on Amazon” market.

In the period leading up to the end of September, the eComm giant witnessed a surge of over 20% in the number of items sold by Chinese sellers, with a nearly 30% increase in the number of Chinese sellers achieving revenue of US$10 million.

Moreover, Marketplace Pulse reports that nearly 49% of the top Amazon sales are from China compared to 32% two years ago.

This influx of emerging Chinese sellers is steadily gaining traction as Chinese sellers have increased their market share of Amazon GMV by 8% over the last 5 years from 20.4% in 2019 to 28.4% in 2023.

Apart from the detrimental impact of increasing competition on US sellers, the growing presence of Chinese brands exacerbates the prevalence of counterfeit goods on the platform, and potentially, subject even more honest sellers to abusive practices by bad actors.
What’s even more concerning is that counterfeiting has the potential to erode buyer confidence in the marketplace’s product authenticity over time. Overall, this trend serves as a compelling wake-up call for American brands, urging them to proactively establish and maintain their presence on Amazon, increasing the necessity to scale faster and more efficiently.

Amazon is facing tougher competition from retail rival Walmart and the rapidly spreading popularity of Chinese online shopping apps Temu, TikTok and Shein.

Dubbed Amazon challengers, these companies have reportedly been accelerating their efforts to grow their ecommerce marketplace by providing third-party sellers with extensive resources to sell and deliver products to customers.

Walmart, for example, just reached 100,000 active sellers and continues to increase its market share by building automated small warehouses within its legacy stores, beefing up its advertising business, and announcing new pro-seller programs, just in time for the holidays. 

On August 30, America’s largest retailer hosted its first seller summit, unveiling marketplace expansion plans and an array of tools designed to streamline the selling experience for sellers on its platform. These include:

  • Extending the company’s marketplace presence to Chile, marking its first venture beyond the borders of North America. 
  • Adding more brand shops available on its website, offering sellers the opportunity to craft unique digital storefronts that showcase their standout products.
  • Waiving peak season storage fees for sellers who manage to store their holiday inventory in Walmart’s facilities before October 1st. 

Aside from revamping its fulfillment services, Walmart is also actively exploring metaverse opportunities that seamlessly bridge the gap between ecommerce and its physical stores.

To illustrate, customers now have the option to purchase identical items for their physical homes as they would for their virtual houses within the House Flip mobile game. In this game, players can engage in home renovations and virtual property sales. In addition, shoppers can acquire virtual clothing items inspired by Walmart’s fashion brand, Scoop, within Zepeto, a mobile virtual universe enabling players to craft and personalize their avatars. 

Sellers who see the benefit in these new initiatives would be smart enough to stock up more inventory within Walmart, which could then help the company to finally encroach upon terrain (logistics) once dominated by Amazon.

Increasing customer interest in Temu and Shein

Recent data from Consumer Edge (CE) shows a rising trend of shared customers between Amazon and these emerging Chinese online stores.

This growing interest coincides with Temu and Shein’s expansion in the US market, which began in 2022. The rapid growth can also be attributed to their “low prices, not fast shipping” offerings. The Wall Street Journal (WSJ) reports that inflation-fatigued American consumers are becoming more patient, willing to wait for their purchases if they offer significant savings. 

In fact, over the last three months, 5% of Amazon’s customer base ventured into Temu for a purchase, while 4% opted for Shein, according to CE. Interestingly, those who frequently shop on Amazon exhibited a greater inclination to explore these new entrants. This suggests that people with a penchant for online shopping are more likely to diversify their shopping experiences. In addition, more than 6% of consumers who engaged in over 20 transactions on Amazon in the past three months also chose to make purchases from Temu and Shein.

Shein’s recent efforts are aimed at fast-fashion customers, specifically Gen-Zs. The company just released new collections from its Designer Incubator program, which guides fashion designers through the end-to-end supply chain process, from product development to manufacturing to marketing to logistics.

The fast-fashion store also recently announced its partnership with Forever 21. Under the terms of the arrangement, Shein may eventually establish in-store boutiques within Forever 21 locations, while Forever 21’s clothing line could also become available for purchase on Shein’s online platform.

Meanwhile, Temu has reportedly muscled out Target and Shein in web traffic, but the company “has got a long way to go to catch up to Amazon,” as per Comscore, the eComm giant still holds the top stop by a wide margin, and might stay that way for a while.

Within Amazon’s leadership, discussions are ongoing about the possibility of enhancing the visibility and accessibility of bargain deals on the platform in response to the rapidly increasing customer interest in Temu and Shein.

TikTok braces for battle with Amazon and Walmart

The social media giant has officially entered the US eComm space in September of this year following the launch of its own marketplace platform, TikTok Shop

As part of its expansion strategy, the company introduces new site functionalities, including a dedicated shop section on the home screen, interactive live video shopping, affiliate programs tailored for content creators, and shoppable ads.

TikTok uses Shopify to offer eComm solutions to sellers and facilitates seamless integration with Feedonomics (listing management system) WooCommerce (eComm plugin for WordPress), Salesforce Commerce Cloud, BigCommerce, and Magento. 

When it comes to customer service, TikTok links up with Zendesk, Gorgias, and 1440. Additionally, for print-on-demand merchandise, it partners with Printful, Printify, and NovaTomato. And to gather reviews, TikTok collaborates with Yotpo. Lastly, TikTok ensures efficient shipping through WeeBee, Flowspace, and Easyship.

Based on internal documents reviewed by Bloomberg, the social commerce app is also reportedly strategizing to provide huge holiday season discounts that are set to kick off as early as October. The company hopes that these holiday deals “can attract consumers to its newly launched marketplace as it aims to compete with Amazon and Walmart.”

However, while TikTok may appear armed and ready for its eComm showdown with Amazon, its efforts to establish itself as a shopping hub are already facing difficulties that could hinder success.

Industry insiders told Fortune that the abundant number of inferior products on Tiktok Shop, coupled with the company’s stance on customer data handling, is causing potential partners (sellers, influencers, or marketers) to hesitate.

During Fortune’s initial exploration of the marketplace, the product assortment appears to be heavily leaning towards the lower price range, with the first seven items featured were made in China and priced below $20.

For marketers and influencers seeking to maintain a premium brand image and avoid associating with subpar products and counterfeits, this might serve as a deterrent. 

To address this issue, TikTok is “working on onboarding some really great (American) partners that they have shared. So I think we’ll continue to see [Shop] get better and better,” said Haley Galler, head of talent at Shine, an influencer management company.

TikTok’s “overly complex” onboarding process and inaccessible customer data are also turning off some brands.

In an interview with Fortune, Ann McFerran, CEO and founder of cosmetics company Glamnetic, said that TikTok refuses to give her shop access to customer data. 

“They’re going to start generating actual revenue and taking credit card information from all these users, [but] not sharing it with the actual brands,” McFerran said.

The absence of data access could pose major challenges for sellers looking to build relationships with their customers. Moreover, the collection of private information, such as credit card details and mailing addresses, by a China-owned company, might introduce additional complexities.

TikTok is already in the crosshairs of US lawmakers amid concerns that the China-owned app could potentially compromise the privacy of American users. However, the company has maintained that it does not share protected data of US users with the Chinese government.

Who should Amazon be most concerned about?

Walmart remains as the top eCommerce rival, with its fast-growing fulfillment network, expanding marketplace features, and booming ad business. The retailer is essentially taking a page out of Amazon’s playbook, but with seemingly more seller-friendly initiatives, i.e., waiving peak season storage fees.

TikTok is a noteworthy contender, especially due to its popularity among younger shoppers and live streaming capabilities. However, the marketplace is currently littered with cheap buys and knockoffs that brands may not want to associate themselves with. If customers wanted goods from China, they could simply opt to stick with Temu and Shein.

Overall, these emerging China-based shopping apps still have a lot of potential to play a major role in Americans looking for an easier way to buy goods at bargain prices. But whether these stores can consistently meet customer delivery expectations is still up for debate. 

It’s likely that 10 to 20 years down the road, we’ll reflect on one of these eComm players as  now a colossal company, despite falling short compared to Amazon in 2023. This prospect bodes well for both sellers and consumers.

Brace for Higher FBA Fees in 2024

Amazon has just dropped a bombshell announcement – the eCommerce giant is implementing its most significant FBA fee changes to date. Strap in, as we unravel the layers of this fee adjustment puzzle, dissecting how each update may impact your margins. 

2024 FBA Fee Changes at a Glance

In a corporate blog post dated December 5, 2023, Dharmesh Mehta, Vice President, Worldwide Selling Partner Services, said Amazon is implementing the following referral and FBA fee changes in 2024:

  • Commencing on March 1, 2024, an inventory placement fee will be imposed on each item shipped into FBA, ranging from $0.21 to $0.68 per unit for standard size items and $2.16 to $6.00 for oversize items.
  • Effective April 15, 2024, Amazon is reducing FBA fees for most items, notwithstanding the introduction of the new placement fees which will actually create a net increase overall.
  • Starting April 1, 2024, FBA sellers will be subject to low-inventory-level fees for standard size items that have less than 28 days of inventory. So, apart from incurring overage fees for excess inventory at Amazon, sellers will also have to pay a fee if their inventory stored at FBA falls below a certain threshold.
  • Effective January 15, 2024, Amazon is implementing a reduction in referral fees for apparel products with prices below $20.
  • Amazon seems to be replacing the “Oversize” size tiers by rebranding them “Large Bulky-size”.

Inbound Inventory Placement Fee

Applicable to both standard and large bulky-sized items, this fee covers the cost of transporting  your shipments from an initial receiving center to several fulfillment centers (FCs) across the country. Bringing inventory closer to urban centers allows Amazon to provide faster delivery speeds at a lower outbound transportation cost. 

While this change may benefit Amazon and customers, it could increase seller inbound fees significantly. Then again, it may be that in some instances, only needing to ship to one single location rather than multiple could make up for the fee in actual shipping cost savings.

When shipping inventory to a single location, expect to pay $0.21 to $0.68 per unit fee for standard size and $2.16 to $6.00 for large bulky products. The impact of this fee adjustment could be extremely rough on sellers who are already facing major profit erosion due to all of the FBA fee increases made earlier this year.

Note: Amazon is replacing Inventory Placement Service (IPS) with this new inbounding program on March 1, 2024, essentially subjecting most sellers to additional shipping costs instead of giving them the option to sign up for a paid service like IPS.

Standard Size Placement Fee Rates (starting March 1, 2024)

SizeWeightPremium FBA Inbound Placement Service Fee (send to a single location)Discounted FBA Inbound Placement Service (Send to multiple locations)
Small standardMax 15x12x0.75 inches16 oz or less$0.21-$0.30Receive up to 100% discount based on number of shipments and inbound locations.
Large standardMax 18x14x8 inches12 oz or less$0.23-$0.34
12+ oz to 1.5 lb$0.27-$0.41
1.5+ lb to 3 lb$0.32-$0.49
3+ lb to 20 lb$0.42-$0.68

Large Bulky Size Placement Fee Rates (starting March 1, 2024)

SizeWeightPremium FBA Inbound Placement Service Fee (send to a single location)Discounted FBA Inbound Placement Service (Send to multiple locations)
Large Bulky Size
Max 59x33x3 inches
5 lb or less$2.16 to $2.67Receive up to 100% discount based on number of shipments and inbound locations.
5+ lb to 12 lb$2.55 to $3.15
12+ lb to 28 lb$3.19 to $3.95
28+ lb to 42 lb$4.13 to $5.11
42+ to 50 lb$4.85 to $6.00

These charges apply when sending shipments to a single FC. Those who want to send their products to multiple inbound FCs themselves may opt for Amazon’s discounted inventory placement service for a reduced fee or no fee, depending on the number of shipments, current inventory levels at FBA, and target inbound locations.

Pro tip: When creating a shipping plan, compare the total cost of sending in 3 shipments (i.e., Texas, California, and Florida) versus the cost of 1 shipment to see which is more profitable for your business. Your account will then be charged a fee 45 days after receipt of your inventory by Amazon.

Alternatively, you may sign up for Amazon Warehousing and Distribution (AWD), the retailer’s low-cost upstream bulk storage solution, to completely avoid these inbound placement service fees. However, do so cautiously, as sellers have shared mixed reviews on this service, with some having quite a bit of trouble with lost inventory and difficulty transferring stock to non-Amazon locations.

If you’re mostly shipping oversized items, consider using Amazon Global Logistics to save on costs. This move makes one wonder whether the new inbounding program is just another tactic employed by Amazon to strong-arm sellers into putting all their eggs in one fulfillment network, or, conversely, to push sellers to take on the burden of distribution themselves.

Related: The Covert Amazon Program that could be Costing You Thousands

Lower FBA Fulfillment Fees

Shifting from a national fulfillment model to 8 interconnected regional fulfillment networks has a few benefits, one of which is lower outbound transit cost – savings that Amazon can pass on to sellers (which are unfortunately offset by the inventory placement fee introduction).

Effective April 15, 2024, Amazon will decrease FBA fees for standard-sized products by $0.20 per unit and for Large Bulky-sized products by $0.61 per unit on average.

For some sellers, these fee decreases barely make a dent in offsetting the impact of the newly introduced receiving fees. In that case, be sure to take advantage of any ongoing fulfillment fee discount promo or conduct an inventory profit audit to minimize profit loss and stay ahead of fees.

See the updated FBA Fulfillment Fee Rates here.

Low-Level Inventory Fee

In Mehta’s announcement on December 5th, he explained that the new fee for standard-sized items “applies if you carry consistently low levels of inventory relative to unit sales, as this inhibits our ability to distribute products across our network, degrading delivery speeds and increasing our shipping costs. Sellers can avoid this fee by maintaining more than four weeks of inventory relative to sales. These fees will apply starting April 1, 2024.”

Let’s make it very clear that this is a fulfillment fee related to total days of supply at FBA. It is not a storage fee. This means that you will only be charged when you sell the stock. This fee kicks in upon fulfillment of the units being penalized.

The introduction of Low-Level Inventory Fee seems directly linked to Amazon’s decision to restructure FBA. Instead of maintaining a nationwide fulfillment network, the company has transitioned to operating eight regional networks, each functioning independently to enhance delivery speed. 

However, Jassy’s shareholder letter regarding this shift overlooked addressing the repercussions for sellers utilizing FBA for inventory storage and fulfillment. Consequently, it remains uncertain whether sellers will need to divide inbound shipments more frequently. What is evident now is that they will bear the cost of decentralizing the network, with the specifics yet to be clarified.

“Maintaining sufficient inventory levels also enables us to place inventory closer to customers across our network, reducing costs to fulfill orders. In cases where you have low inventory levels, this drives transportation costs higher, and we will introduce fees to align with these underlying costs. Where your actions reduce our costs of fulfillment by maintaining healthy inventory levels, you will see lower fees for these items.”

Simply put, maintaining less than four weeks of inventory in FBA will result in higher costs for sellers—specifically, charges ranging between $0.32 – $1.11 per unit.

The implementation of the new low-inventory fee requires sellers to have increased visibility into their inventory so that they can quickly get rid of unprofitable products and keep their best sellers in stock. Some sellers might even be tempted to temporarily reduce advertising efforts or increase pricing to circumvent low-inventory fees in case of unforeseen surges in demand, potentially averting a low stock period or reducing the number of units sold and subject to this added fulfillment cost. The new low-inventory fee makes forecasting inventory demand with razor-sharp accuracy and efficient inventory management more important than ever.

Here’s a glimmer of positive development. To help you maintain sufficient inventory levels, Amazon will reduce the non-peak monthly storage fees for standard-size products by an average of $0.09 per cubic foot, from an average of $0.87 per cubic foot to $0.78 per cubic foot, from January-September. Monthly storage fees for non-standard-sizes will remain the same, however. This update will apply on April 1, 2024.

Additional Changes

Amazon is implementing further changes, which encompass:

  • A reduction in referral fees for apparel products
  • The introduction of a fulfillment fee discount for eligible items enrolled in the Ships in Product Packaging (SIPP) program
  • Expansion of “returns processing fees” to all categories for products with elevated return rates (while the existing returns processing fees for apparel and shoes will maintain their current average rates).
  • The implementation of new rates and benefits for Supply Chain by Amazon, an end-to-end solution to swiftly move your inventory from suppliers to customers globally.
  • Update to the fees for Amazon Global Logistics, Partnered Carrier Program, and Amazon Warehousing & Distribution.
  • Annual updates to Storage Utilization Surcharge, Removal, Disposal, Aged Inventory, Prep, and Inbound Defect fees.

In sum, Amazon routinely implements annual fee hikes, but the intricacy of the latest fee adjustments is unprecedented. Some sellers may have a hard time completely grasping the financial and operational repercussions of these fee hikes, along with the inevitable need for subsequent price adjustments, while others may opt to overlook these fee increases due to their complexity, leading to a gradual decline of profit margins.

Some of the mentioned fee updates have yet to be revealed. We will continue to inform sellers on the changes as they roll out and will update our Amazon Fee Stack white paper accordingly. There, we will be doing a deep dive into all of these fees and providing more insights into how each of them work and their potential impact on sellers. 

Related: Minimize the Impact of FBA Fee Increases on Your Margins, Restore Profitability in Your Business, Amazon FBA Calculator to Optimize FBA Size Tier Fees

UPDATED: Battle for Last-Mile Logistics Heats Up as Amazon Expands Same-Day Delivery Network

Battle for Last-Mile Logistics Heats Up as Amazon Expands Same-Day Delivery Network

UPDATE 11/24/2023: In a strategic move to fortify its last-mile delivery capabilities, Walmart is set to roll out 40 additional parcel delivery stations by the end of 2023, revolutionizing the online shopping experience for customers. 

In a blog post, Walmart US SVP of Transportation and Delivery, Jennifer McKeehan, notes that these stations are designed not only to allow customers to place online orders for a broader range of products with next-day delivery but also to streamline the order distribution process for employees within stores.

McKeehan emphasized the retailer’s commitment to expanding this capability to more locations in the coming year, aligning with Walmart’s overarching mission to serve customers with unparalleled speed, accuracy, and reliability. The introduction of these parcel delivery stations is poised to play a pivotal role in building density (deliver more parcels per route) within the last-mile delivery process, ultimately driving down costs associated with reaching American customers.

Efforts to enhance density are part of Walmart’s broader strategy to compete with industry giant Amazon, particularly in the realm of fulfillment operations.

Walmart CEO Doug McMillon highlighted significant progress during a recent Q3 earnings call, citing a 15% reduction in store-to-home delivery costs. McMillon attributed this success to ongoing initiatives focused on “densifying the last mile.”

Walmart’s Spark Driver network is a key player in achieving this density, facilitating more deliveries from nearby stores while also extending its services to other retailers through Walmart GoLocal.

Over the last 12 months, Walmart has raised the percentage of online orders fulfilled by stores by 800 basis points (1 basis point = 0.01%), while the GoLocal platform approaches a milestone of 12 million deliveries. Crucially, the retailer is managing to reduce last-mile costs without compromising on speed.

McMillon revealed the company’s commitment to trimming same-day delivery times for over 80% of its stores, with some locations achieving speeds as remarkable as 30 minutes – a testament to Walmart’s dedication to delivering an unparalleled combination of efficiency and ultrafast delivery speed in the fiercely competitive eCommerce landscape.

UPDATE 08/25/2023: Amazon has relaunched a shipping service that it temporarily suspended during the initial phases of the COVID-19 pandemic. This move intensifies the ongoing last-mile battle involving Amazon, legacy carriers UPS and FedEx, and even major retailers Walmart and Target that are venturing further into the realm of ultrafast delivery.

What is Amazon Shipping?

Amazon Shipping offers ground delivery services from pickup to delivery for FBM sellers. This means the service will be available to items sold on Amazon.com and other online sales channels.

According to Amazon, it’s “working closely with USPS” to deliver packages in 2 to 5 days within the contiguous US. As can be recalled, the company recently announced its ongoing efforts to integrate USPS Ground Advantage (GA) with Buy Shipping, a label service where sellers can conveniently buy shipping labels for various carriers and track shipments.

Purchasing USPS GA labels through Buy Shipping can potentially help sellers save money (with Amazon’s pre-negotiated rates) and cut down ground delivery times from 8 to less than 5 days.

The relaunch also came after Amazon hit its “fastest Prime delivery speeds ever” and subsequently announced its plans to expand the number of same-day delivery facilities over the next few years.

Through the revival of Amazon Shipping and same-day site expansion plans, the retailer positioned itself to seize greater control of the delivery window, and thus offer 1 to 2-day delivery for Prime and up to 5 days for non-Prime shoppers and sellers, rivaling UPS (which has 24% of the US shipping market) and FedEx (16%).

All of this may be part of a larger effort to attract more non-Amazon sellers to its growing fulfillment network while providing existing FBM sellers with a streamlined shipping solution for their shipments. And to an extent, this holistic approach also allows Amazon to reduce its dependence on UPS, which already placed shipping limits on the company last year.
Related: Amazon Wants to Take a Bigger Chunk Out of Seller Profits with 2 New Fees

UPDATE 08/01/2023: It looks like Amazon is succeeding in trying to make same-day delivery the new norm. 🏆

In 2019, the retailer started working on free one-day Prime day shipping. Four years later, it finally achieved its “fastest Prime delivery speeds ever.”

During the first half of 2023, Amazon has delivered over 1.8 billion items to its US Prime members within the same or the subsequent day. That’s nearly a fourfold increase compared to what the retailer achieved over the same time period in 2019, said Doug Herrington, CEO of Worldwide Amazon Stores.

Herrington says that part of this remarkable feat is down to the restructuring of Amazon’s fulfillment model: moving from a national fulfillment network to a regionalized network model. 

Approximately 76% of US orders came from their eight interconnected regional warehouses. Each of these regional warehouses has a vast selection of items to accommodate immediate delivery of customer orders in nearby areas while still being able to ship products to distant locations when necessary.

Aside from restructuring, Amazon has also streamlined its last-mile delivery process by taking same-day sites closer to bigger cities and recruiting local small businesses in rural areas as delivery partners. This way, certain products have even shorter distances to travel, allowing Amazon to offer ultrafast delivery while reducing transportation costs.

Per Herrington, “millions” of items are available for same-day delivery across 90 major US cities, with more set to follow.

To build on this initial success, Amazon plans to open more same-day sites in the next few years. 

According to Herrington, Amazon’s same-day facilities “are designed for speed with smaller footprints, streamlined conveyors, and picking directly to pack stations.”

And while these hybrid warehouses are smaller than your typical million-square-foot Amazon fulfillment centers (FCs), they are filled with products that customers regularly buy.

As a result, it only takes Amazon associates 11 minutes to pick, pack, and ship customers’ orders in same-day sites, which is “more than an hour faster than traditional fulfillment centers.”

Amazon doubling down on its same-day network expansion plans only means Prime orders will come faster (e.g., from several hours down to just two hours) to customers in the near future. If living close to drone delivery centers, it may even be possible to get certain items (under 5 lbs) delivered within 30 minutes

While this bodes well for both customers and sellers, top retailers like Target and Walmart boasting their own fulfillment network will be sensing escalating competition as their battle for last-mile dominance with Amazon rages on.

UPDATE 07/13/2023: A few weeks after Walmart introduced its new order fulfillment network, Amazon announced they’re seeking 2,500 small US businesses to join Amazon Hub Delivery. This new local delivery service appears to be another piece of the puzzle in the company’s last-mile network.

In February, the retailer opened several same-day delivery sites across major cities in the country. A couple of months later, CEO Andy Jassy confirmed Amazon has overhauled its logistics operations from a national fulfillment service model to a regionalized model to speed up deliveries and lower costs.

To improve delivery efficiency in their target regions, Amazon is currently recruiting small businesses such as dry cleaners, coffee shops, salons, flower shops, gas stations, fashion boutiques, grocery stores, and auto service centers, among others. These businesses have a profound knowledge of local roadways and neighborhoods, making them a great addition to Amazon’s existing network of third-party couriers and contractors.

Amazon aims to recruit 2,500 businesses in 23 states, specifically rural areas, by the end of 2023 and in a later phase, expand the deliveries to bigger cities like NYC, Seattle, Boston, and LA.

How Amazon Hub Delivery works

  • Delivery partners will receive Amazon packages each day.
  • Delivery partners will have the flexibility to make deliveries when they’re available. 
  • Finally, get paid for every package delivered.

Amazon is looking for partners who can deliver 20 to 50 packages every day. The exact compensation details have not been disclosed, but small business owners have the potential to earn an annual income of up to $27,000 through Amazon’s new local delivery service.

Based on a delivery partner’s projections, a company that manages to deliver an average of 50 packages per day could potentially earn around $2.50 for each package delivered. However, this amount may not be good enough for some businesses that take several hours to meet their delivery commitments. 

For instance, vehicles are likely to endure significant wear and tear from driving on rough roads for up to 5 hours per day, requiring tire replacements frequently. And as more nearby businesses participate in the program, the volume of daily packages may decrease, impacting a business’s earnings adversely. Interested delivery partners should take their availability, assigned route (traffic and road conditions), and operating costs into careful consideration before joining the program.

It may be a good fit for businesses that have gaps in their normal delivery schedule. In that case, making Amazon deliveries may be a good way to subsidize income and maximize employee productivity. 

It will be interesting to see how this program develops but it is a smart idea to leverage under-utilized, available resources much in the way Uber and Airbnb have done.

UPDATE 06/13/2023: Walmart may have figured out how to beat Amazon and Target in the last-mile eCommerce department – building automated compact warehouses within its physical stores. 

In April 2021, Walmart announced a new order fulfillment network called Market Fulfillment Center (MFC). It is a small warehouse “built within, or added to, a store” and equipped with an automated item retrieval system called Alphabot.

Robots retrieve the products from within the warehouse and then bring them to a sorting station manned by an associate. The associate then collects and prepares the sorted items for courier delivery or customer pickup.

Presently, Walmart customers expect free 2-day delivery when shopping online. The implementation of MFCs is set to revolutionize the company’s daily order fulfillment speed and capacity.

According to the retailer, Alphabot can retrieve items 10x faster than a person, which can make the whole fulfillment process span only a few minutes, commencing from the time the order is submitted to the point at which it becomes available for the customer or delivery driver to collect. 

Once deployed nationwide, MFCs, combined with a robust drone delivery system that’s currently available in 7 states and a growing driver program, could potentially put Walmart’s last-mile service on par with, if not better, than Amazon’s 1 to 2-day delivery promise. 

But that is still a few years down the line, as out of 3,561 Walmart supercenters in the US, only two have an MFC built within them so far. The company piloted the program in 2019 in Salem, New Hampshire and four years later, opened its first official MFC in its Bentonville supercenter store in Arkansas. 

This gives Amazon a lot of time to catch up or get ahead of Walmart’s MFCs, unless they continue to cut costs, which could delay such progress.

Overall, retail giants doubling down on their same-day expansion plans is good news for customers, as this could mean faster delivery times or more accessible pickup locations in the near future.

For sellers, this presents a better opportunity for them to explore Walmart as an additional sales and distribution channel, especially if the sellers’ goal is to reach grocery shoppers.

UPDATE 05/20/2023: In a bid to compete with Amazon, John Mulligan, Target Executive Vice President and COO, unveiled an innovative strategy to optimize their delivery operations.

With a focus on enhancing capacity and streamlining routes, Target is embarking on a significant expansion of larger delivery vehicles in locations where their sortation centers operate.

According to Mulligan, when it comes to routes that were previously covered by smaller vehicles, the utilization of SUVs and minivans allows for the delivery of more than twice the number of packages.

However, the real game-changer lies in Target’s “high-capacity vans,” which have the ability to cater to almost five times the number of packages (vs. sedans). The effectiveness of these larger vehicles has been put to the test by the company, which has been experimenting with high-capacity van routes at their Dallas and Minneapolis sortation centers.

“Over the past year, across all of our markets served by our sortation centers, we have shifted more routes to larger passenger vehicles and early results have been positive,” Mulligan told analysts.

These high-capacity vans accounted for 65% of Target’s last-mile deliveries in Q1 2023 compared to zero during the same quarter in 2022.

“This resulted in meaningful cost savings for our last mile delivery program overall,” Mulligan said.

Other Initiatives to Handle Greater Parcel Volume 

In 2022, Target delivered a staggering 26 million packages through their sortation centers. As they stride forward into this new year, their goals soar even higher as they set their sights on nearly doubling this monumental figure.

To make that happen, the retailer is working on a standardized and expedited approach to load its vans, which “enables package containerization and easy identification of the correct packages at delivery.”

By streamlining the loading process, Target not only simplifies the daily tasks of its drivers but also empowers them to move a greater number of packages in and out of the sortation centers without compromising safety.

As a result, this significantly enhances the company’s last-mile delivery capacity.

Expanding Next-Day Delivery Coverage with More Sortation Centers

In February, Target announced it’s constructing six additional sorting centers across strategic locations to expand its next-day delivery capabilities.

Currently, the company has nine sortation hubs in Texas, Chicago, Minnesota, and Pennsylvania. These hubs collect packages from local stores and prepare them for delivery to customers by Shipt drivers or third-party couriers. 

To optimize the delivery capabilities of its existing sortation centers, Target is adding extension facilities to its logistics network. It recently opened one in Smyrna, Georgia in an attempt to serve its other sortation center in Atlanta.

This way, eComm orders that end up outside of the Atlanta sortation hub can be moved to the Smyrna extension facility. Couriers can then pick up those packages in Smyrna and deliver them to neighborhoods in the area.

With these high-capacity vans and new sortation hubs, Target can now reach and provide new markets with a delivery service that could, it hopes, eventually begin to challenge Amazon.

UPDATE 04/14/2023: In a shareholder letter published April 13th, CEO Andy Jassy confirms Amazon has recently completed a shift from a national fulfillment service model to a regionalized model to lower costs and provide lightning-fast deliveries.

“Last year, we started rearchitecting our inventory placement strategy and leveraging our larger fulfillment center footprint to move from a national fulfillment network to a regionalized network model,” Jassy explained.

“We made significant internal changes (e.g. placement and logistics software, processes, physical operations) to create eight interconnected regions in smaller geographic areas. Each of these regions has broad, relevant selection to operate in a largely self-sufficient way, while still being able to ship nationally when necessary.”

As you may already know, under its previous national distribution model, Amazon would sometimes have to ship an ordered product from far-off locations if a local fulfillment center didn’t have it in stock. Not only did this increase costs for the company, but it also resulted in longer delivery times for customers. 

Now, with its regionalized fulfillment model in place (combined with automated warehouse systems), Amazon is all set to take its next-day and same-day delivery services to new heights. 

“Shorter travel distances mean lower cost to serve, less impact on the environment, and customers getting their orders faster,” Jassy said.

Presently, the retail giant is capable of handling 600,000 same-day deliveries in 90 metropolitan areas. The company also aims to bring its ultrafast delivery service to places beyond larger cities by investing in more rural areas, such as Omaha and Sioux Falls.

Amazon may yet again redefine last-mile expectations as it aims to expand its same-day delivery footprint from 45 to 150 facilities over the next few years. New sites have reportedly opened in Los Angeles, San Francisco, and Phoenix, which can prep and handle hundreds of thousands of popular items for immediate delivery.

The company also announced it will allocate $200 million to driver safety across its logistics network in 2023, showing its continued commitment to getting last-mile right.

With expanded last-mile capabilities across the US, more customers will have the option to get their orders delivered within hours instead of days – a direct shot at the express delivery services of retail rivals Target and Walmart and delivery firms UPS and FedEx. This could also mean improved delivery times during the holiday season.

Per Wall Street Journal, Kansas City-based customer Kristin Whitehair first saw the ultrafast delivery option in February when browsing through electric toothbrush heads, which she needed urgently. She placed an order in the morning and received it in the evening, an experience similar to in-store shopping where customers can pick, pay and bring an item home within the same day.

Customers may no longer need to look at other retailers for faster delivery. However, this also means the pressure is on Amazon to consistently meet ever-evolving customer expectations, especially once its drone delivery service, which could potentially cut down delivery times from several hours to just under 60 minutes, is deployed at scale.

Although last-mile service is considered as the most expensive part of the logistics process, Amazon said they are not increasing prices for this fast-shipping service delivery. Though rates will, they claim, remain the same as when first introduced a few years ago, the Same-Day service is not always free and can range from free to 2.99 per order for Prime members and up to 9.99 per order non-Prime.

The cost of providing services such as this may, in part, be offset by the company’s recent Prime membership fee increase. In 2022, Amazon raised the cost of an annual Prime subscription from $119 to $139, an increase large enough for some members to call it quits. Therefore, if they were to announce another fee hike in 2023, it might give members who have stuck it out a more solid reason to finally jump ship and turn to Walmart or Target, which Amazon is desperately trying to avoid after suffering a huge decline in eCommerce sales for the fourth time in the last five quarters.

Amazon has already implemented a series of cost-cutting measures, such as shutting down old logistics centers, subleasing unused warehouse and jet cargo space, and laying off 18,000 employees. The company also launched fulfillment-as-a-service programs such as Buy with Prime and Amazon Warehousing and Distribution (AWD) to boost growth and increased warehouse automation to reduce inefficiencies.

Trends that Drive the Need for Ultrafast Delivery

Amid all the cost-cutting efforts and a looming recession, why is Amazon still pouring money into its logistics and transportation network?

  • Preference for speed and convenience. Based on a McKinsey survey, 28% of respondents cited speed and price as two of the most important delivery features, while alternative delivery locations (parcel lockers or in-store pickup) and flexibility of delivery time come in second and third respectively. When people talk about speed and price, they mean free one to two-day shipping, which has generally become the norm. But that is slowly changing with the advent of same-day delivery, thanks to the pandemic forcing home-bound customers to shop for urgently-needed essentials online. Additionally, a 2021 Digital Commerce 360 report shows 68% of consumers consider fast shipping as a deciding factor when shopping online, while 36% have checked out of a store and selected same-day delivery as an option, indicating a growing demand for faster delivery.
  • Customers’ willingness to pay a premium for same-day, within-hours delivery service. As mentioned earlier, last-mile delivery is not cheap. 53% of overall transportation spend goes to last-mile, so understandably, eComm companies offer this service at a premium. Fortunately, 88% of consumers are willing to pay extra dollars for same-day delivery.
  • Same-day delivery could be a lucrative source of revenue. The US market for this delivery option is expected to triple in size by 2024. In 2019, same-day delivery market was worth $5.87 billion and is expected to grow to $15.6 billion by next year.
  • Increasing competition. Target recently announced it will invest $100 million to add more sortation facilities into its supply chain to speed up and reduce the cost of delivering online orders. Meanwhile, Shopify launched its own fulfillment-as-a-service program, Shop Promise, which offers next-day and two-day, taking on Amazon Buy with Prime. Lastly, Walmart revealed plans to expand its Private Fleet Development Program, which launched last year, to improve delivery capabilities for sellers.

With retail giants all vying for the top spot – as the go-to same-day delivery service provider – Amazon needs to consistently invest in its last-mile service to ensure truckers can deliver orders faster than Target, Shopify, and Walmart to have an edge on its rivals.

While building 150 same-day sites sounds like a good start, Amazon may need more to be able to fully deploy the program across the entire country. 

“They need volume to make it work,” said Marc Wulfraat, President of MWPVL, a supply chain consulting firm.

More volume also means higher labor and warehouse costs that could drive up Prime membership fees in the future.

Wulfraat predicts retailers will start teaming up with pickup and delivery companies such as DoorDash and Instacart to alleviate the cost of building out their own in-house last-mile network.

Register for Amazon Seller Wallet By November 30 to Unlock Cost Savings

Making or receiving payments in foreign currency often entails fees that can erode your profits. Luckily, there are various strategies to mitigate charges associated with cross-border foreign currency payments, one of which is by signing up for Amazon Seller Wallet (ASW). Receive reduced fees for the first year when you sign up by November 30th.

What is Amazon Seller Wallet?

Introduced in July 2022, Amazon Seller Wallet allows you to store and manage your US store earnings within a single online payment system, giving you control over how much and when to transfer your money to your bank accounts.

You can also conveniently use the funds in your wallet to pay vendors, suppliers, and contractors. Simply add them as recipients to be able to start sending USD payments from your wallet.

Note: Don’t confuse Amazon Seller Wallet with Amazon’s disbursement solution called Currency Converter for Sellers (ACCS)

ACCS automatically converts and deposits your international earnings into your domestic currency, often making it a go-to choice for sellers. 

Seller Wallet, on the other hand, enables you to keep your Amazon payouts in a virtual account and freely convert or transfer the money whenever necessary. Simply put, you get to decide when to initiate money transfers.

ASW Primary Features

  • Enrolling in Amazon Seller Wallet is free with no mandatory minimum amount.
  • No account maintenance fee required.
  • Free US domestic transfers and payments to vendors with a US bank account.
  • Amazon Seller Wallet uses the backend technology that sellers trust to ensuring the safety of their transactions and the security of their information.
  • For a fee, you can make international transfers to your own bank accounts in more than 20 currencies or send payments to USD-denominated bank accounts in Hong Kong. However, Amazon says this fee decreases as your sales grow. See transaction fees below:

ASW Cost Benefits

  • Quickly make international transfers from your wallet. You can now skip transferring your payouts from Amazon to your bank account before settling payments with your business partners. For global sellers, this translates to savings on currency conversion fees and prevents losses when utilizing USD proceeds for USD-based transactions.
  • Heightened control over your money. Without extra cost, conveniently monitor all your store proceeds, bank transfers, and vendor payments in a centralized location.
  • Special sign-up offer. Despite Seller Wallet’s ease of use, it’s important to note that Amazon imposes a fee on the converted amount. In addition to this cost, using ASW exposes you to the uncertainties of fluctuating exchange rates, potentially diminishing your profits. 

As mentioned, you can optimize your financial savings by enrolling in Seller Wallet before November 30, 2023, and unlock exclusive benefits with Amazon’s special sign-up offer. By doing so, you’ll gain access to reduced fees for cross-currency transfers and Hong Kong USD payments for up to a year.

Enjoy lowered fees (e.g., paying only 0.60% vs. 1.5%) for transfers and payments determined by your cross-currency net proceeds – the earnings derived from all of your Amazon stores operating with a currency distinct from your reporting country within the last 12 months.

How to Get Started

  • Check if you’re eligible to sign up for the program.
  • If yes, fill out the registration form and submit the necessary documents.
  • Add your bank accounts and recipients.

Click here to learn more about Seller Wallet.

Updated: Bid for a Higher Inventory Limit with FBA Capacity Manager

SoStocked Bid for a Higher Inventory Limit with FBA Capacity Manager

Update 11/17/2023: In a surprising move, Amazon has reportedly slashed the capacity limits of some sellers without prior notice, leading to potential financial implications and operational challenges.

One seller, who initially had a capacity limit of approximately 800 cubic feet in October, found himself grappling with a sudden reduction to just under 400 cubic feet in November.

The abrupt decrease in capacity caught the seller off guard, leaving him with excess stock that exceeded the new limit. As a consequence, the seller was warned of a hefty overage fee (more on that below) amounting to $1,900.

Upon repeated requests to support having the limit raised back up again, the seller has now seen the capacity increase but is still uncertain as to what will become of the overage fees he may have erroneously incurred during the period of reduced limits.

What’s particularly concerning is that Amazon made this adjustment without providing any advance notice, leaving the seller with little time to address the issue or adjust his inventory planning accordingly.

This is not an isolated incident, as another seller reportedly faced a similar fate. Her stock allowance was cut without warning.

It may be that, with Amazon’s new storage bidding system finally being stress tested now that the Q4 season is instigating a high volume of requests for storage. It may be that sellers are experiencing such anomalies due to the system not being able to properly allocate space within their software algorithms. This is just theoretical but these recent issues certainly point to possible bugs in the system.

If a seller’s limits are lower so that he has more inventory than allotted storage space, the problems that this creates are two-fold. First, he will not be allowed to send anymore inventory into Amazon until he is below the threshold and second, he will incur overage fees until he is under that limit.

Affected sellers will be required to pay these unexpected overage fees by the end of the month, adding financial strain during an already challenging time.

The sudden and drastic capacity limit reductions may also force the impacted sellers to reconsider their strategies and potentially pull some of their stock out of Amazon’s warehouses to avoid or minimize overage fees and or swap the space from lower velocity products to best sellers. This move, however, comes with its own set of challenges, including increased hefty removal fees and stockout risk, which consequently may lead to potential disruptions in deliveries and a negative impact on overall customer experience.

The lack of warning from Amazon, not to mention violation of their own policies, regarding these capacity limit adjustments has sparked frustration and concern among sellers who rely on the platform for their livelihoods. Many sellers depend on the eCommerce giant for fulfillment services, and such sudden changes can have far-reaching consequences on their businesses.

Amazon suddenly dropping capacity limits for some sellers isn’t unheard of, especially during Q4. In 2021, the e-Tailer replaced ASIN-level quantity limits with storage-type level restock limits. 

That change in Amazon’s storage policies resulted in immediate repercussions for some sellers, with a sudden and unanticipated reduction in storage capacity, reaching up to 40% overnight. Announced without prior warning, it left numerous sellers exceeding their newly adjusted limits.

Some sellers received notifications stating that shipments already in transit had been canceled, prompting them to liaise with their providers for return arrangements. A daring few chose to proceed with their shipments despite the cancellations, finding that Amazon accepted these deliveries, while others faced the unfortunate and costly outcome of rejected shipments.

This unexpected shift in storage dynamics has underscored the challenges and uncertainties sellers face on the Amazon platform.

As sellers navigate these challenges, calls for increased communication and fairness in Amazon’s policies are likely to grow louder. The incident spotlights the vulnerability of sellers in Amazon’s eCommerce system, emphasizing the need for the company to strike a balance between their own operational efficiency and the livelihoods of the sellers who contribute to their success.

What you can do

Firstly, if you have experienced unexpected storage charges, it is important to understand exactly what the charges are related to. You may assume charges are due to overages but they may be associated with peak storage fees or aged inventory surcharges. In order to properly understand what you are being charged for, navigate to the Payments Dashboard under Transaction View and search Service Fees for details on the expenses you’ve incurred.

To avoid the risk of reaching your capacity limits overnight and potentially facing stockouts on your best-selling items, it is advisable to review your Restock Inventory report before dispatching shipments. ☠️ Recommendations are adjusted to factor capacity limits which could provide insights into your inventory planning.

If you find yourself grappling with capacity restrictions and are seeking a resolution, one option is to enroll in the Amazon Warehousing & Distribution program, which offers the advantage of no restock limits and lower storage fees of $0.42/unit year round with no peak fee increases.
Alternatively, you can explore my comprehensive guide on minimizing the impact of Amazon fee hikes and enhancing capacity limits for a more detailed and strategic approach to overcoming these restrictions.

Update 11/01/2023: Sellers, be ready for a tighter Amazon capacity restriction in December – we have some helpful tips to help you prepare if you haven’t already!

Quick recap

In FBA storage management, when the need for additional space arises, the most direct and immediate course of action is to engage in a bidding process through Amazon’s FBA Capacity Manager. This capacity management system allows you to request extra storage by specifying the amount you’re willing to pay per cubic foot. Amazon then evaluates these requests and prioritizes them based on the reservation fees offered from highest to lowest.

How much should you bid?

Your bid should align with the how critical your additional storage are to your business (e.g., during Q4 when demand is higher than average) and, just as importantly, your confidence in offsetting the reservation fee with the performance credits earned from increased sales, as discussed below.

Additionally, Amazon expert and 8-figure seller, Jon Derkits, offers a tip that, due to timing, may not be as helpful in these later months of Q4 but should definitely be placed in your back pocket for future sales events like Prime Day. Derkits advises that rather than solely focusing on what you bid, it’s crucial to consider when you bid. You can place bids for additional capacity up to three months in advance, and Amazon reviews capacity requests every three to four days. Starting from the highest bid, Amazon works its way down the list to distribute available capacity.

All sellers granted additional capacity, irrespective of their initial bid, pay the lowest accepted bid. Illustrating an example in his newsletter, Derkits used 10 sellers competing for 1,000 cubic feet of FBA storage space. The top 5 bidders may win the allocation, but they will all pay the lowest accepted offer. 

When is the right time to bid?

As you may know, the demand for storage fluctuates during different times of the year. During Q4 for example, you may need a higher bid to secure additional capacity, and the lowest accepted bid will likely be elevated due to the urgency of other sellers’ storage needs.

This is why bidding early offers another compelling advantage: Amazon’s lowest reservation fee guarantee. This guarantee ensures that if other requests with lower reservation fees for the same period are approved later, your previously granted request will be adjusted to match the lower fee.

Suppose you secure storage in March at $3 per cubic foot based on an auction in January, but a subsequent auction offers the lowest acceptable price of $2.50 per cubic foot for March. In that case, you will only pay $2.50 for your additional March storage.

Therefore, while both are important, the timing of your bid can play a more significant role than the specific amount you bid when it comes to effectively using Amazon’s Capacity Manager for FBA storage management.

Alternatively, if you want to avoid tinkering with the bidding system and, instead, rig the FBA Capacity Limits system in your favor, Derkits suggests “taking aggressive actions in the 7-10 days leading up to  Amazon’s [capacity limits] calculation.”

Note: Amazon announces capacity limits for sellers on a monthly basis, typically during the week that begins on the third Monday of each month. So, if you want to boost your capacity limits for the holidays, now is the best time to do it.

Below are some pro tips for increasing your December capacity limits potentially without paying for extra storage.

  • Increase your MCF orders: One ethical option is to genuinely invest in marketing to create more demand and fulfill more MCF orders. This would reduce your need for additional space.
  • Run deals in these weeks leading up to the big show: Amazon considers the anticipated surge in demand and allocates additional capacity accordingly. Note that you have the flexibility to call off your deal campaigns up to 25 hours in advance to avoid incurring any deal fees. 
  • Exceed your ASIN’s estimated sales forecast: Amazon provides sales forecasts for certain ASINs in the Restock Inventory Dashboard. Amazon then uses your forecast data to calculate your capacity limits. Derkins recommends setting Amazon’s forecast as your “target that you need to exceed if you’re padding your stats.”

It is important to note here that you should be prepared for a worst case scenario if you aren’t able to earn the performance credits needed to cover your reservation fee. Additionally, you should factor overage fees into your planning if you are truly assessing worst case.

Overage fees would apply if you were stuck with a ton of inventory at the end of the month and Amazon reduces your capacity limits below that point. You will incur overage fees that accumulate daily until your inventory capacity falls within the limit. This should also be considered when placing your bids as it could have a big impact on your costs and profits.
Ultimately, the decision on how to boost your December capacity limits is in your hands. For more seller tips, explore our Attack of the Fee Stack white paper to gain comprehensive insights into Amazon’s storage bidding process, a detailed overview of the 2023 fees, their implications, and strategies to minimize or eliminate them, accompanied by explanations and illustrative examples.

Update 03/01/2023: 📢 FBA Capacity Manager is now live!

Amazon has replaced weekly restock limits with a single, monthly storage cap. Sellers who could use some extra space may go to Capacity Manager to place a bid. ⚠️ However, bidding for a higher inventory limit comes with risks that you should be aware of so you can avoid them. 
Lucky for you we’ve updated our “Attack of the Fee Stack” white paper to include an in-depth explanation and examples of Amazon’s storage bidding process, as well as a breakdown of the other 2023 fees and how they work, their impacts, and tips to reduce or eliminate them. 💪

Amazon might have just found another way to monetize its excess warehouse space – sell it to the highest bidder!

Dubbed FBA Capacity Manager, this new capacity management system allows sellers dealing with storage volume constraints and restock limits to bid for additional space.

We went from Amazon implementing inventory limits to ease warehouse congestion during the pandemic to auctioning off storage space to improve FBA revenue amid a looming recession. 🤔 Not only are sellers still getting saddled with capacity limits, they’re also now being pit against each other via storage wars.

This auction-based system is set to take effect March 1st, 2023.

The idea isn’t a new one. Amazon released something called the Storage Limit Manager (SLM) program in February 2022 to help sellers with IPI storage volume restraints. The program was structured in much the same way this FBA Capacity Manager is now laid out. 

Convincing Sellers to Adopt Capacity Manager

Amazon recently made a few inventory changes to be able to simplify capacity management for sellers, and at the same time, to increase early and rapid adoption of Capacity Manager.

Under the new system, Amazon will:

  • Replace weekly restock limits and quarterly storage volume limits with a single monthly capacity limit for each storage type, making capacity monitoring easier. This monthly limit will be set based on several factors, such as IPI score, sales performance, forecasts for your ASINs, shipment lead time, FBA capacity, and marketing plans (e.g., lightning deals). Updates are announced every third week of the month and can be viewed via the Capacity Monitor Dashboard inside Seller Central.
  • Provide you with estimated capacity limits for the next 2-3 months so you can plan in advance, giving you greater predictability and control over your inventory.
  • Provide capacity limits in volume (cubic feet) versus units to give a more accurate representation of your Amazon warehouse usage. This means that you will now have to monitor your capacity in cubic feet rather than units.
  • Let you request for a higher capacity limit. If you need extra storage for the next selling period, you can go to Capacity Manager to place a bid, aka reservation fee, for your desired capacity limit increase (up to 20% of your initial limit or 2,000 cubic feet, whichever is greater). While this will cost you money, you can offset some or 100% of your reservation fee with performance credits. You will earn $0.15 per dollar of sales generated using the additional inventory and use that to lower your fees.

Here’s how performance credit works according to Amazon:

Performance Credit Examples

Why Bidding for a Higher Capacity May Not be a Good Idea

Using Capacity Manager may not be for you if:

  • You already have a lot of unsold products sitting in FBA. Amazon will most likely grant capacity increases to sellers whose goal is to make more room for their top sellers than slow sellers, which makes sense because that’s how sellers will be able to generate more sales for Amazon. In fact, Dharmesh Mehta, Vice President, Amazon Worldwide Selling Partner Services, said it himself: “Our goal is to provide sellers with more control over how much space they can have while limiting unproductive use.” 
  • You have long lead times. Capacity limits may change monthly so it may not be wise to ship your additional inventory directly from China to Amazon as that process will take a few weeks, depending on your shipping method. By the time it arrives, the extra storage might no longer be available. Either use express air shipping or store buffer stock in a 3PL so that you can immediately transfer additional units from there to FBA whenever necessary.
  • You don’t have sufficient funds to bid for extra capacity. Amazon grants requests starting with the highest reservation fee. If you urgently need that additional storage space, you may need to allocate a substantial amount of money and place higher bids to increase your chances of getting approved from weeks to within a few days. Note that Amazon evaluates its FBA capacity every 3 to 4 days and approves pending requests when space is available.
  • You don’t have the capability to sell through your additional inventory ASAP. Not only will you end up paying the remaining balance of your reservation fee, you might also exceed your capacity limit for the following month with those unsold products and therefore, also pay overage fees.

Final Thoughts

If utilized productively, the additional storage may help you to increase sales, which in turn, may also improve your IPI score. Sales performance and IPI score are two of the most crucial metrics that Amazon uses to determine your inventory limits. If increased significantly, you may not need to bid again next month for additional capacity.

That’s the best-case scenario.

⚠️ The worst-case?

You could lose a lot of money to fees and receive a lower IPI score if you’re unable to use the additional storage efficiently. You may also be charged overage fees if your on-hand FBA inventory ends up exceeding your capacity limit for a specific period.

💡 Before using Capacity Manager, consider reviewing the difference between the cost to bid for a storage increase and the cost of shipping smaller orders more frequently. Splitting your FTL/LTL shipments into smaller orders may help you to avoid maxing out your inventory limit quickly so you won’t have to pay for more warehouse space at FBA.

Unless Amazon slashes your limits without prior warning or there’s a sudden surge in demand for your product, you might not need additional capacity regularly, especially during off-peak. So, don’t count out other fulfillment options just yet. 

To cover all your bases, set aside some extra inventory in your warehouse or third party fulfillment center to provide a buffer for your business in case of unforeseen challenges.

Related: Would You Pay for Extra Storage Space?

Shop Socially: Amazon and Meta Team Up for One-Click Social Commerce

In an unprecedented move, Meta teamed up with Amazon to introduce a new feature that allows Facebook and Instagram users to effortlessly fuse their accounts with Amazon, revolutionizing the online shopping experience within their favorite social apps. 

By linking Facebook and Instagram accounts directly to Amazon, the two tech giants have unlocked on-platform purchasing capabilities while enhancing ad targeting through shared data.

According to CNBC’s report on Thursday, November 9, the goal is to keep users engaged within their feeds, eliminating the hassle of switching between apps to shop.

Previously, ads on Facebook and Instagram led users to Amazon’s mobile site, where they’d check out product prices and reviews, then log into their Amazon account to complete the purchase.

Now, with a simple click on an Amazon ad within Facebook or Instagram, US customers are directed to a sleek, condensed Amazon product page, featuring a bold “Buy with Amazon” button. They will also be able to view real-time pricing, Prime eligibility, delivery estimates, and product details without leaving Facebook and IG, Amazon spokesperson Callie Jernigan confirmed in a statement to TechCrunch.

Meta Amazon Tie Up
Source: Marketplace Pulse

Overall, this streamlined approach means fewer friction points in the customer buying journey—a game-changer in the world of eCommerce.

What does this Team Up Mean for Sellers?

The partnership between Meta and Amazon capitalizes on their individual strengths.

Amazon’s intent-based model expands its reach, connecting sellers with potential customers who haven’t actively sought their products on the platform. Meanwhile, Meta’s discovery-based approach delivers targeted ads to users who aren’t actively searching for products to buy. This integration mirrors a successful partnership between Pinterest and Amazon, indicating promising potential for both Meta and Amazon. 

For sellers, this collaboration offers a unique chance to engage a motivated audience effectively. It promises a smooth online shopping journey, bridging the gap between awareness and action. 
Through Amazon’s powerful ad tools and Meta’s expansive user base, brands might experience improved conversion rates and greater returns on ad investment, setting the stage for success in a rapidly evolving digital market.

Related: AI in eCommerce: Trends Redefining Shopping Experiences, Shopify Sellers Can Soon Offer Amazon Buy with Prime to their Customers

4 Updates to Amazon Seller-Fulfilled Prime

In case you missed it, Amazon has recently reopened its Seller-Fulfilled Prime (SFP) program with “new standards in place” which the retail giant stated have been designed to provide sellers with an even better experience and enhanced opportunities, though some sellers do not agree.

What’s New?

1. SFP fee has been removed

As of October 1, the 2% fee for every item sold has been removed from the SFP program after receiving flak from sellers. Per Amazon, the fee was initially intended to cover program development and operational costs, but after consideration, the company has chosen not to implement it to maintain positive sentiment and encourage enrollment.

2. Enrollment is subject to certain requirements

To join the program, you need to pre-qualify for the SFP trial and successfully complete the 30-day trial period, meeting all requirements.

Pre-qualification criteria include:

Criteria to pass the SFP trial and become an enrolled seller:

3. Default SFP order handling time will be reduced to one day

Starting on October 31, 2023, Amazon updated the default handling time for SFP orders. This change will impact how quickly SFP participates are expected to handle and ship orders. Here are the primary details of this update:

  • Default Handling Time Change: The default handling time for SKUs that are typically handled in one day or less will be updated from two days to one day.
  • Improved Accuracy: This update is intended to align handling times more accurately with how quickly sellers usually ship orders. According to Amazon, more than 85% of SFP orders are currently shipped within one day.
  • Account Health Consideration: The new handling time will be based on your handling time history over the past three months “to protect your account health.” SKU-specific settings will also impact the handling time. As you may already know, handling time on Amazon impacts your account health by influencing key performance metrics, including the Late Shipment Rate and Valid Tracking Rate. Inaccurate handling times can also lead to negative customer feedback and reduced Buy Box eligibility. To maintain a healthy seller account, it’s crucial to align your handling time with your actual shipping capabilities and meet customer expectations for timely deliveries.
  • Action Required: If you have products that take longer than one day to handle, you should set a longer SKU-specific handling time in the Manage Inventory section to override the default one-day handling time.
  • Order Handling Capacity: To protect your business from sudden sales spikes, Amazon recommends setting an order handling capacity.

These changes aim to enhance the accuracy of handling times and provide shoppers with more attractive delivery promises while ensuring you can effectively manage your order processing. 

Click here to update your SFP handling time settings.

4. Amazon B2B: Business Hour Delivery Rate for SFP Orders

Amazon has introduced the “business hour delivery rate” metric for SFP orders sent to Amazon Business and Business Prime customers with commercial addresses. This metric calculates the percentage of Amazon Business shipments delivered on the first attempt during business hours within a 30-day period.

You can access this data on the Fulfillment Insights Dashboard, helping you optimize your delivery methods and improve customer satisfaction (e.g., minimize delivery attempts and package theft), though it doesn’t affect program eligibility.

What Sellers Are Saying

While some sellers welcome the newly reopened program and SFP fee removal, others aren’t particularly happy about the tedious program requirements and changes to the default SFP order handling time.

From what we were able to glean from the comments section of the SFP reopening announcement post, various sellers are:

  • Are having trouble enrolling in the SFP trial even though they meet the prequalification criteria.
  • Expressing concerns about the delivery speed requirements, specifically the need for same-day and next-day delivery.
  • Having issues with the program’s metrics not being calculated correctly on the dashboard.
  • Desiring more flexibility in terms of shipping times and cutoff times.
  • Raising questions about the fairness of the new rules and their impact on sellers.
  • Worried about handing their customer service and return processes over to Customer Service by Amazon, which means “Amazon has sole discretion over whether to charge the costs of any returns, refunds, or other adjustments and concessions related to Prime items to the seller’s account.” For instance, Amazon can decide to issue refunds to customers on your behalf, which can impact your profitability, especially if you believe a refund is unjustified.
  • Some sellers are frustrated with the changes and complexities of the SFP program, suggesting a simpler approach to displaying the Prime badge.

Additionally, the changes to the default handling time for SFP orders, reducing it from two days to one day, have also sparked disappointment and apprehension among sellers. They are worried about losing their control over shipping settings (unless they have a lot of time to manually override the default option for each SKU by going to Manage Inventory). They also risk incurring potential penalties for late shipments, especially in cases where unforeseen circumstances like weather delays or labor strikes may affect shipping times.

Some sellers are also concerned about the impact of the update on their ability to offer USPS Ground Advantage shipping, as the new one-day handling time may not align with USPS transit times. Overall, many sellers feel that Amazon’s decision is unnecessary and may lead to more challenges in managing their businesses effectively.

In summary, some sellers appreciate the SFP program’s return, but many others are dealing with uncertainties and complexities surrounding these changes, hoping for more straightforward solutions. For these changes to be announced during the busy Q4 shipping rush makes it all the more daunting for sellers who already face increased challenges during the holidays.

Updated: New Amazon Features, Updates and Requirements

Update 10/20/2023: Amazon has just updated their product listing attribute requirements and several sellers aren’t happy about it.

In an effort to enhance the quality of listings, Amazon’s making some changes to the Add Products and Add Products via Upload tools within Seller Central.

According to the retailer, the inclusion of product attributes can significantly improve the customer shopping experience by facilitating access to vital product information, ultimately aiding shoppers in making well-informed buying decisions.

As you continue to create or modify product listings in the upcoming weeks, you will observe that certain optional attributes will become mandatory, while some required attributes will transition to optional. Additionally, some attributes will be phased out.

Too Much Work

In the comments section of the news announcement, a handful of sellers expressed frustration at Amazon for making such changes a few weeks before the busiest time of year.

“Notice Amazon always pulls this B.S. right before Black Friday? It is effective November 13th! They do this on purpose so many of our listings are suppressed! They compete against us POINT BLANK,” one seller wrote.

Another seller said that the latest change seems unnecessary after updating the attributes in September. The seller is concerned that the new changes may not be universally applicable, potentially complicating the process of adding variations. Additionally, they anticipate technical issues, including glitches and product suppression, as a result of these changes.

Troublingly, one commenter has experienced negative effects of AI-driven attribute selection, leading to irrelevant attributes being assigned to their listings, such as specifying a handle material for a product without a handle. This has resulted in inaccurate product information, and despite seeking assistance from Amazon support, the issues remain unresolved. The seller advocates for more control over listings and the ability to mark certain attributes as not applicable.

According to Amazon, new listings and any modifications to existing ones will not be added into the catalog until all necessary attributes are supplied through the Add Products or Add Products via Upload tools. For current listings, any required attribute changes won’t take effect unless you actively choose to edit them.
To view the updated list of required attributes, go to Updated attributes within the Add Products and Add Products via Upload dashboard.

Amazon constantly announces new seller tools and product listing requirements. Here’s our latest roundup post to keep you updated. 💪

  1. Track your FBA Shipments from China with ShipTrack Carriers

This announcement is for sellers who use non-partnered carriers for their China-to-US shipments, but often encounter difficulty in accurately tracking their inventory, which could be due to poor data provided by their preferred carrier.

Without reliable data providing insights into the location of your inventory, it is hard to anticipate when it will arrive at an Amazon warehouse and get checked-in, turning marketing planning and stockout avoidance into very real challenges. 

To make cargo tracking from China to US easier, Amazon is now offering ShipTrack, a pickup and delivery service that offers access to a selection of company-vetted carriers and a track and trace system. Other product features include a dispatch system, proof of delivery, chain of custody, and last-mile delivery support.

Similar to the Amazon partnered carrier program, ShipTrack automatically generates the carrier and tracking information for you (and Amazon) in Seller Central. That means you may no longer be required to manually submit such information before shipping your goods from China to an Amazon fulfillment center in the US, allowing you to be more efficient in your inventory order process.

In addition, employing ShipTrack’s “reliable tracking information” greatly enhances Amazon’s ability to predict the arrival of your shipment at FBA, thereby refining the accuracy of estimated delivery dates. This elevated level of shipment tracking also empowers you to make smart restocking decisions to minimize overstock fees and mitigate losses due to stockouts.

While this development sounds like excellent news for sellers who source goods in China, it’s not well-received by some of those who make (and sell) their own original products in the US and who are often, the target of China-based counterfeiters.

“Hooray for supporting China shipments into the US. How about Amazon working harder to keep the fake sellers, bad actors off of Amazon permanently? This is where the focus needs to go stop these people from ruining honest sellers brands and accounts,” commented one seller on the news announcement page.

But alas, “the platform makes too many dollars to remove Chinese sellers or products,” another seller said in reply to the above comment.

In fact, by the end of Q4, ShipTrack will be accessible to even more sellers, specifically those who ship goods from China to Japan and Europe.

To learn more about the new cargo tracking service, go to Send to Amazon: ShipTrack.

Related: How to Ship to Amazon FBA and Speed Up Check-in Times, Amazon Hopes to Restore Consumer Confidence with $1.2B Anti-Counterfeit Initiative, FTC Proposes a New Rule to Rein In Fake Reviews

2. Orders Older than 2 Years to be Archived Starting in September

A new file management process has been implemented by Amazon wherein customer orders older than two years will be systematically archived every month.

This move is part of Amazon’s data security measures to protect customers and their personal data from bad actors.

According to Amazon, certain data fields will be removed from the archived orders, such as the buyers’ personal information – names, contact numbers, addresses, and accompanying gift messages. Meanwhile, less-sensitive information like the date of purchase, product name, ASIN, quantity, price, tax, shipping fee, and sales channel used will be retained.

⚠️ Moving forward, if you need personally identifiable customer details to meet accounting or taxation requirements, consider developing a system of regularly downloading order files as older orders are continually being archived.

Go to Archived Orders for more details.

3. New Product Listing Attributes Required for New Listings

Amazon is adding 206 attributes across 199 product categories!

Starting September 12, 2023, providing these new attributes will be required when creating new listings, or else the product will not be added to your product catalog. Amazon believes that adding relevant attributes to your products can help increase sales, as they “make it easier for customers to search for product information that improves their purchase decisions.”

For example, Amazon just added the following attributes for baby bottle products so that shoppers can quickly find and buy the one that suits their specific needs. They can now search baby bottles by age range, item weight, capacity, bottle type, bottle nipple type, color, or dishwasher safety feature and listings containing any relevant details will likely show up on the customers’ search results pages.

Product TypeAttribute Name
BABY_BOTTLEage_range_description
BABY_BOTTLEbottle_nipple_type
BABY_BOTTLEbottle_type
BABY_BOTTLEcapacity
BABY_BOTTLEcolor
BABY_BOTTLEis_dishwasher_safe
BABY_BOTTLEitem_weight

Although not required, updating a listing with new attributes may be ideal to enhance your product’s visibility and discoverability on Amazon. Make sure to follow the steps correctly, e.g., provide all the necessary product information, to avoid listing suppression, which can affect sales and also lead to products getting stranded at FBA, hurting your IPI Score.

For sellers with numerous product listings, this process could be complex and time-consuming, and thus prone to error.

One seller commenting on the news post said, “Stop this new required attributes madness! I just spent the last hour trying to fix Amazon’s required attribute errors for the product I always list. I have been selling on Amazon for years. Every new Amazon update is a mine field for us sellers new and old.”

Amazon recommends visiting Error code explanations to fix listing errors. As usual, sellers are left to fend for themselves when trying to make things work after an update.

A full list of attributes can be found via Amazon’s attributes spreadsheet (instant download).

Related: 3 New Seller Tools and Product Recall Reporting Page, Disable Amazon Returns Evaluation to Minimize Negative Customer Reviews

New Security Issues Leave Many Sellers Vulnerable to Cyberattacks

An urgent security alert issued by Rafelson Law Firm and SellerBasics.com on October 13th highlights a noticeable increase in unauthorized account access incidents.

Rafelson recently noticed a significant uptick in account hacking cases hitting his desk and decided to dig in. His team uncovered some new methods hackers are using on sellers who are inadvertently exposing themselves to risk. 

Based on the law firm’s investigative efforts, the primary tactics that hackers are currently utilizing include:

To take preventive measures as we approach the crucial holiday sales season, follow the below recommendations.

  • Review your Amazon account information. It’s imperative to ensure that your Amazon seller account’s email and phone number remain confidential, and they are not disclosed anywhere, particularly on your business page.
  • Change your password(s). If you feel your account might be at risk or compromised, update your passwords and keep the new ones in a secure location. You might also consider using an authenticator app for added security.
  • Take note of your Seller ID or Merchant ID. Keep a copy of your Merchant ID, aka Seller ID, a unique number that distinguishes your online store and the array of products you offer within the Amazon marketplace. That way, in the event of a hacking incident and you’re locked out of your account, Amazon can use your ID to help you regain access to your account.

What happens if you get hacked?

If your Amazon seller account has fallen victim to hacking, it’s crucial to recognize that the journey to recovery will be time-intensive.

In the event of Amazon identifying potentially fraudulent actions or suspecting unauthorized access to your account, they reserve the right to promptly suspend your account without prior notification. Even if a bad actor has stolen your earnings, it remains your responsibility to initiate the essential steps to fix the issue and file an appeal against Amazon’s account suspension.

At this point, your primary focus should shift away from recovering stolen online sales proceeds and instead concentrate on the pivotal task of regaining control over your business. Consider contacting a lawyer who can evaluate your case and provide expert guidance on the best course of action.

Related: Bad Actors Book Multiple Inbound Amazon Delivery Dates to Create Artificial Scarcity

The Covert Amazon Program That Could Be Costing You Thousands

Amazon is reportedly auto-enrolling some select sellers in its new inbound shipping solution, the FBA Multiple Destinations Program.

In his recent Amazon-focused newsletter, AUKO eCommerce Founder and Amazon expert, Jon Derkits, reveals that the program goes back as far as 2021. Amazon allegedly “opted sellers in to the program, sending easily overlooked emails like the one below to only the Primary User of an account.”

Sellers unwittingly enrolled in the program may suddenly find themselves paying higher shipping fees that they otherwise could have avoided, had Amazon not resorted to yet another sleight of hand move. 

For Derkits, FBA Multiple Destinations is “a program whereby, in exchange for a small break on fulfillment fees, Amazon is going to have you split your inbound FBA shipment into 3 smaller shipments.”

How is this different than Amazon’s standard practice of splitting shipment? The most notable (and costly) impact is to FTL (full truckload) shipment. Derkits noticed his FTL shipments were suddenly being split into multiple LTL (less than truckload) shipment, increasing shipping costs significantly.  

For Amazon, processing smaller shipments may result in lower cross-docking labor and transit costs. But for many sellers, prepping and transferring inventory this way may result in elevated shipping costs, logistical challenges, and a multitude of inconveniences.

Note: Unenrolling from FBA Multiple Destinations program should not be confused with Amazon’s Inventory Placement Service (IPS).

For a substantial fee, IPS involves a 2-step process that allows you to initially send your shipment to just one fulfillment center instead of directly sending it to multiple locations from your warehouse. Once your inventory arrives at the initial receiving center, Amazon will then split it up into several boxes and distribute those boxes across different fulfillment centers as they see fit.

A New Costly Nightmare?

One seller on the Seller Central Forum wrote, “We are preparing products all day long, box them and at the end, we are creating one single shipment going to 1 pretty close destination, and it is simple and easy…

With this new feature, which is going to be implemented all over the board, we are going to have to split at last minute all the inventory in 3, with random quantities, and we are going to pay much more for shipping everyday to 3 destinations. The discount per item is simply ridiculous, at $.05 per item.

For us, it’s a $20 discount per day, for at least $100 increase in shipping costs. Why every single move of Amazon is making things more difficult and more expensive?”

While Amazon may tout a minor savings of just $0.05 cents per small standard unit and $0.09 for large standard, the cumulative expenses incurred by these shipment splits tend to far outweigh any perceived benefits for most sellers.

Derkits himself revealed in his email that staying opted into the program would have cost him $14,401 in additional yearly inbound freight transportation charges.

However, not all sellers miss out on the benefit of FBA Multiple Destinations. In the comments section of this YouTube video, one seller reportedly gained considerable savings through the program.

“If you’re sending volume in my opinion it’s worth it. I sent in 400 units 3 location, usually this would have been $60-$70 this time around I paid $27,” 

Meanwhile, over at Reddit, one seller commented, “We use it, but all our stuff is small so we can ship 5k+ units on a pallet. The three warehouses are in the same region and average $100 per pallet. So at $0.05 Amazon is basically paying us to ship this way.”

That said, when it comes to whether or not the program will save you money long-term, it all boils down to the number of SKUs you have to ship and the distance between your location and Amazon’s designated receiving centers.

It depends on your workflow and circumstances but if it’s going to take you so much time and effort to manually prep and pack different SKUs for multiple shipments going to several fulfillment centers, opting out of FBA Multiple Destinations .

How to Opt Out

As easy as it is to find yourself inadvertently enrolled, unenrolling proves to be quite a challenge.

The program is difficult to find. In fact, if you attempt to search for it in the help center, it will not show up. The only success in locating it has been with a direct link to the program policy.

There is opt out feature within your Seller Central account. The only ways to opt out are by opening a case with Seller Central and then emailing [email protected].
“It took multiple Seller Support (SeSu) cases to get some ground truth, and then multiple emails to get un-enrolled,” Derkits shared. He advises against opening a live chat or phone case, instead opening a case via email. He then lays out the below instructions.

To sum up, FBA Multiple Destinations can be a profit killer for some sellers but a financial benefit to others. It all boils down to crunching the numbers for your business. 

But if you are finding that you suddenly have to split FTL into LTL or that the additional prep and shipping costs of multi-destination shipping is high, opting out may be the best option. Bottom line, now that you know about this “secret” program, you have the ability to make that decision for yourself.

You can read more from Derkits on
this edition of his recurring newsletter and can subscribe for future insights.

Related: Amazon Offers New Fulfillment Fee Discounts on Select ASINs

FTC Proposes a New Rule to Rein In Fake Reviews

Update 10/17/2023: An alliance of cross-industry leaders, including Amazon, is coming together to ensure the integrity of online reviews. 

Coalition for Trusted Reviews

Amazon is collaborating with Booking.com, Expedia Group, Glassdoor, Tripadvisor, and Trustpilot to introduce the first global Coalition for Trusted Reviews. Their goal is to:

  • Establish industry standards for detecting fake reviews
  • Promote best practices in managing online reviews
  • Facilitate the exchange of intelligence concerning deceptive activities by entities involved in the sale of fraudulent reviews
  • Safeguard consumer access to reliable information on their respective platforms

For quite some time, online marketplaces have grappled with the persistent issue of bogus reviews, despite their ongoing attempts to eliminate it.

A significant portion of this problem can be attributed to fake review brokers who, in pursuit of monetary gain, freebies, or various incentives, actively seek fabricated customer reviews via social media and encrypted messaging apps. These brokers engage in both promoting fake positive reviews to enhance business and seller sales and orchestrating negative reviews to detrimentally affect their competitors’ sales and performance.

Hence why, Becky Foley, VP of Trust & Safety at Tripadvisor, has emphasized a dedicated commitment to targeting individuals attempting to sell phony reviews to businesses seeking to artificially boost their star ratings and online reputations. This mission of eradicating such practices takes immediate focus for the coalition.

“These actors often operate outside of jurisdictions with a legal framework to shut down fraudulent activity, making robust cooperation even more important,” she said in a press statement.

The formation of the trusted reviews coalition stems from discussions that emerged during a conference on “Fake Reviews” arranged by Tripadvisor in San Francisco last year. The companies have confirmed their intention to convene once again, with plans to meet early in December at a follow-up conference hosted by Amazon, scheduled to take place in Brussels.

Minimizing Regulatory Risk

While the timing may have nothing to do with FTC’s recent fake reviews rule proposal, it is interesting to see how Amazon’s actions prior to and on the heels of government intervention seem to correlate.

The founding of the coalition could be seen as way of to minimize regulatory risk that the pending rule on fake reviews may cause if passed into law.

Regulatory risk pertains to the potential danger posed by the introduction of new laws, regulations, or amendments to existing ones, which could result in companies falling out of compliance with their obligations. This non-compliance may lead to financial burdens, decreased profitability, business loss, or other detrimental effects on their functions, reputation, or financial performance.

By keeping abreast of evolving legal frameworks, guidelines, and rules while actively monitoring regulatory activities, Amazon can take a proactive approach to assess how emerging changes might introduce new risks or require policy adjustments.

In response, the company can implement measures to minimize these risks, control expenses, and secure ongoing compliance.

On June 30, 2023, the Federal Trade Commission (FTC) published a new proposed “Rule on the Use of Consumer Reviews and Testimonials,” or Part 465, which aims to illegalize certain customer review practices and authorize courts to impose a civil penalty of up to $50,000 per violation.

Factors that Compelled the FTC to Take Action

The success of a product frequently hangs in the balance of online reviews, as retailers and search engines prominently display them. This is done to aid customers in making smart decisions, but recent studies suggest that some of these reviews might be deceptive and misleading.

In fact, unreliable reviews have become so prevalent that 85% of customers believe what they read online is sometimes or often fake or fraudulent

On Amazon.com alone, 42% of 720 million reviews analyzed by Fakespot were deemed fake in 2020. Many of the bogus reviews are the work of AI bots, strategically aimed at manipulating product ratings. Additionally, some third-party sellers have reportedly resorted to unethical practices, such as incentivizing positive reviews through cash payments or free or discounted products.

Even though using shady review tactics is against Amazon’s product review policy, it helps bad actors influence customers to buy their products over competitors, according to this 2022 study.

Conducted in the UK, 10,000 shoppers were presented with five identical products.

During the experiment, certain participants were exposed to fake reviews, inflated star ratings, or a combination of both. The insightful findings revealed that these unreliable testimonies had an impact on consumers’ wallets, causing them to spend an additional $0.12 for every dollar spent.

The study also found that individuals exposed to such deceptive information were six percentage points more likely to end up purchasing a flawed product.

Notably, the influence of star ratings was also brought to light. The paper disclosed that a mere one-star increase in a product’s rating led to a substantial surge in demand, driving it up by 38%.

Lastly, it was revealed that providing people with warnings and educational sources on the topic of review manipulation, though not thoroughly effective, could potentially curtail the adverse effects by 44%.

This study sheds light on the importance of transparent and genuine feedback in the decision-making process of consumers, as fake reviews undercut honest businesses, tarnish brands, erode trust between sellers, customers and platforms, and overall lead to bad shopping experiences – all of which can have emotional and economic repercussions.

As for the efforts marketplace platforms take in policing these reviews, the FTC itself received comments from three individuals dedicated to fighting fake reviews – the Transparency Company, Fake Review Watch, and Fakespot. All three commenters claimed that “the strategies that are currently being used by review platforms are insufficient.”

All this contributed to FTC’s move to take action, in an effort to finally capture a wider swath of malicious customer review practices in the US.

FTC’s Efforts to Address Rampant Fake Reviews

The newly added Part 465 has undergone an extensive development process, as is customary for any federal regulatory body.

In 2019, FTC pursued legal action against a merchant for disseminating deceptive information and engaging in the purchase of counterfeit reviews. Prior to that, the FTC had also addressed the issue of “influencer marketing,” where endorsers failed to disclose their financial ties to products they were promoting.

Now, the agency is poised to implement a comprehensive provision based on rules initially presented in November 2022.

Part 465 is the culmination of years-long research and extensive dialogue with various stakeholders, including businesses, consumers, and advertising trade organizations. 

Interestingly, despite Trustpilot not supporting the rulemaking and certain trade groups urging the FTC against rigorous enforcement on this thriving fake review business, the agency remains resolute in its pursuit.

Product Review Practices Prohibited Under the New Proposed Rule

FTC’s proposed rule would stop businesses or sellers from utilizing the following malicious review and endorsement methods.

  • Fake customer reviews, customer testimonials, or celebrity testimonials. Engaging in the fabrication, production, sale, purchase or solicitation of reviews by a reviewer who meets any of the following criteria is considered a violation.

    The reviewer does not exist. For instance, bad actors using automated buyer accounts or bots to boost positive reviews for their clients and downvote positive reviews for their rivals.

    The reviewer did not use or have any genuine experience with the product, service, or business being reviewed or endorsed. For example, using AI chatbots like ChatGPT to generate fake glowing reviews and then creating multiple dummy accounts to be able to spam a listing with those reviews.

    The reviewer significantly distorts their experience with the product, service, or business being reviewed. Additionally, the rule would also restrict people from acquiring reviews or spreading such testimonials if they were aware, or should have been aware, of their fraudulent or deceptive nature.
  • Honest negative review suppression. Making genuine negative reviews disappear or threatening individuals to prevent or delete their poor feedback is called review suppression. FTC has recently undertaken its first case targeting a company’s deceptive practice of withholding negative reviews, and it has now come to a $4.2 million settlement with Fashion Nova, LLC, a fast-fashion retailer based in California.

    Per FTC, Fashion Nova purportedly integrated a third-party review management system that enabled the company to post specific reviews automatically, while holding back others pending their approval. The fashion retailer allegedly employed this system between 2015 and 2019 to instantly publish favorable four and five-star reviews, while deliberately choosing not to display any of the numerous reviews that rated below four stars. This means Fashion Nova misrepresented the opinions of all customers who contributed feedback on its website.
  • Review hijacking. Businesses would be prohibited from using or repurposing an existing listing or product page (often with excellent reviews), then updating the product’s details with those of a considerably distinct product.

    For example, the Variation Relationship feature on Amazon organizes reviews from diverse product variations into a unified collection. Certain product offerings have multiple options, such as various shapes, sizes, colors, and more. However, Amazon only allows one consolidated set of reviews to cover all these distinct variations. 

    Imagine a selection of 4 different colors of Apple Watch Series 8, each available in aluminum finishes, along with an additional choice of 2 different wrist sizes. Despite these numerous options, customers will provide reviews for the watch as a whole, rather than separately for each variation. This ensures a comprehensive assessment of the product’s overall quality and performance, but certain sellers have found a way to exploit this particular feature.

    Their intention is to artificially inflate the number of reviews for their products. To achieve this, they resort to hijacking unrelated listings and incorporating them as product variations. As a result, the reviews from these stolen listings get merged with the genuine reviews of their own product, leading to a deceptive increase in the product’s overall rating. While these reviews might indeed be authentic and written by real individuals, they were originally intended for a completely different product altogether.
  • Biased reviews from insiders like employees. The forthcoming regulation aims to impose restrictions on corporate execs and managers, preventing them from authoring reviews or testimonials for the products or services offered by their own company, unless they explicitly disclose their affiliations. It also seeks to disallow businesses from promoting testimonials provided by internal personnel without transparently revealing any existing relationships.

    Additionally, the proposed rule will address specific instances where company officers or managers seek reviews from their employees or relatives, and whether the businesses were aware or should have been aware of such connections, to determine whether such solicitations are permissible.
  • Company-controlled review websites. An outright prohibition would be imposed on businesses like Yelp, TrustAdvisor, and Trustpilot aiming to establish or exercise control over websites claiming to offer unbiased viewpoints concerning a specific category of products or services, which coincidentally include their own offerings. 
  • Selling fake social media indicators. For example, businesses that sell or buy fake followers or views to gain prominence or “misrepresent their importance for a commercial purpose.”
  • Incentivized positive or negative reviews. This approach deceives shoppers looking for authentic feedback on a product or service and undercut honest sellers. Amazon itself updated its Community Guidelines to ban this malicious practice in 2016, while making an exception for its Vine program.

Companies Subject to the Proposed Rule on Fake Reviews

The new proposed rule would encompass all businesses, defined broadly as “an individual, partnership, corporation, or any other commercial entity that sells product or services.” 

However, internet service providers like Amazon, Google, Yelp, Tripadvisor, and social media sites where thousands of fake review brokers recruit reviewers may not be directly held accountable, the Washington Post reports.

That’s because Section 230 of the Communications Decency Act states:

“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

Therefore, these companies may opt to assert immunity under Section 230, making it difficult for the Commision to file complaints against them.

Per FTC, “Amazon did not state support for or opposition to the rulemaking.” The retailer already has existing policies and initiatives to combat fake reviews and counterfeiters on its site.

In 2021, Amazon invested over $900 million and employed a dedicated workforce of more than 12,000 individuals in safeguarding its customers and store from fraud and abuse. Notably, in 2022, Amazon proactively put an end to more than 200 million suspected fake reviews.

Amazon also reported the existence of over 16,000 social media groups involved in buying or trading misleading reviews. Consequently, social media sites such as Facebook, Twitter, and Instagram removed groups that had amassed over 11 million members. In response to this issue, Amazon took legal action and filed a lawsuit against more than 10,000 Facebook groups in 2022.

These efforts and FTC’s proposed rule may not be enough to completely wipe fake reviews off of Amazon and other platforms, but they do hold the potential to bring about some much-needed relief.

Related: A Purge Could Be Coming For Fake Reviews on Amazon, Amazon Highlights ‘Frequently Returned’ Products You Should Think Twice Before Buying, Amazon Hopes to Restore Consumer Confidence with $1.2B Anti-Counterfeit Initiative

How FTC’s Historic Monopoly Case vs. Amazon Might Impact Sellers

As recently announced, Amazon faces an upcoming legal showdown against the Federal Trade Commission (FTC) and 17 state attorneys general who sued the company on Tuesday over alleged abusive practices that harm competition, raise prices, and hinder innovation.

Making the Case

The agency takes action against anticompetitive practices as violations of Section 5 of the FTC Act, which prohibits use of “unfair methods of competition” and “unfair or deceptive acts” to acquire or maintain monopoly power.

Monopoly power is a single or a small group of companies’ ability to set higher prices due to little or no competition from other firms. While gaining a sizeable market share through superior product or service, business acumen, or innovation is not illegal in the US, power acquired or maintained by using unreasonable methods is considered a violation.

FTC’s suit against Amazon seeks to punish the eComm giant for wielding “its vast power, size, and control over multiple business units to implement an interrelated and exclusionary course of conduct” and “restore the lost promise of free and fair competition,” FTC Chairperson Lina Khan said in a statement.

By making it extremely difficult for rivals like Shopify and Walmart to compete, Amazon has presumably managed to:

  • Charge high seller fees, which then get passed on to shoppers. Per FTC, Amazon takes roughly $1 out of every $2 of sales from sellers who use its fulfillment network, many of whom are small businesses with razor-thin margins.
  • Strong-arm sellers to use FBA, which offers Prime benefits like fast and free delivery. Otherwise without Prime eligibility, sellers may “disappear from Amazon’s storefront,” or Buy Box, the FTC states. This also forces some sellers to pay more for ads, which further eats into their profits. And as a result, they’ve had to raise their prices to stay profitable.
  • Penalize sellers for offering lower prices on other sales channels like Walmart, eBay, or Shopify. Amazon may remove them from the Buy Box, suppress their offers, suspend the ship option, or worse, restrict their selling privileges. The company does so “to prevent rivals from gaining business by offering shoppers or sellers lower prices.”

Sellers told the Commission that because they rely so much on Amazon (after practically decimating competition), they effectively have no choice but to succumb to the company’s increasing demands.

Amazon’s Antitrust Violations

Below are some of the anticompetitive methods that Amazon allegedly uses to maintain market power illegally.

Multiple “Anti-Discounting” Tactics

The FTC finds that the tech giant employs a series of strategies aimed at stunting competing retailers’ growth through discounted pricing.

For example, Amazon uses advanced web crawlers that actively monitor and scour the internet for potential price drops that could pose a threat to the company’s dominant presence. When a web crawler spots that an item is cheaper on Walmart than a seller’s offer for the same item on Amazon.com, Amazon penalizes that seller.

To avoid punishment, many sellers hike their prices off Amazon, while others never tried to offer discounts in the first place or simply refused to start selling on other channels.

Within the platform, Amazon also uses the same tactic to make it hard for third-party sellers to set their own prices that would allow them compete better with the company’s first-party (1P) retail arm, which accounted for 40% of its total sales in Q2 of 2023.

“Ultimately, this conduct is meant to deter rivals from attempting to compete on price altogether – competition that could bring lower prices to tens of millions of American households.”

Project Nessie

Certain sections of the complaint concerning the retailer’s “anti-discounting” tactics contain extensive redactions, particularly the ones about a secret algorithm named “Project Nessie.”

The complaint alleges, “Amazon’s Project Nessie has already collected over [redacted] from American households.”

Although the exact function of Project Nessie remains elusive, Amazon previously stated in a 2018 blog post that Nessie is “a system used to monitor spikes or trends on Amazon.com.” as well as the name of one of its buildings.

TechCrunch speculates that Amazon could be using Project Nessie to manipulate prices and search results “based on the immense amount of sales data” it has access to. This data may provide insights into the price a customer is willing to pay, which for Amazon, “would be both highly profitable and fit the description of belying the customer-first narrative.” However, this could also price sellers with overvalued products out of the market.

Rigging Search Results

The FTC claims that Amazon manipulated search results to promote its in-house brands by showcasing them within the “expert recommendation” widget.

“Rather than competing to secure recommendations based on quality, Amazon intentionally warped its own algorithms to hide helpful, objective, expert reviews from its shoppers,” the agency explained. 

Amazon search and product pages have also become increasingly filled with ads, overshadowing what used to be a focus on providing pertinent organic search results. According to the agency, the prime real estate in search results now prominently features “Sponsored Brand” and “Sponsored Product” ads, “making relevant products harder to find and less likely to be clicked.”

Abusing the Featured Merchant Algorithm

This algorithm allows Amazon to select one offer to display in its highly coveted Buy Box or “Featured Offer.” Being the Featured Offer can lead to substantial sales, as a large number of purchases on the platform are made using the “Add to Cart” and “Buy Now” buttons in the Buy Box. 

The FTC asserts that Amazon purposely drives customers away from the sellers not featured in the Buy Box by displaying additional offers on the product detail page.

Suppose you’re using a desktop to view an offer from a seller who is not featured in the Buy Box. In that case, you must either click a link that takes you to the “All Offer Display,” or scroll down the page to view “Other Sellers on Amazon,” which conveniently includes a list of offers from sellers selected by Amazon.

Favoring Prime Sellers Over Non-Prime

The case also delves into a significant facet of Amazon’s operations, focusing on its expansive fulfillment network. It scrutinizes how the retailer’s product ranking algorithm exhibits a preference for items that qualify for Prime status, a designation contingent upon utilizing Amazon FBA.

What’s Not Included in the Lawsuit

The suit does not cover Amazon’s potential data exploitation tactics to find out what items it should sell under its own private label brand, allowing them to directly compete with (and undercut) sellers.

Additionally, there are accusations of Amazon engaging in predatory pricing strategies to weaken competitors, potentially leading to their acquisition, and assertions of the retailer wielding significant influence within labor markets to squash unionization activity.

Many of these assertions were documented in a comprehensive 450-page congressional report, co-authored by Lina Khan during her tenure as a House Judiciary Committee staffer before her FTC appointment.

Amazon Strikes Back at FTC

In a press statement dated September 27, David Zaplosky, Amazon’s Senior VP of Global Public Policy and General Counsel, refuted these charges.

Key points from Zaplosky’s response include:

Consumer pricing. Zaplosky argued that Amazon strives to match the low prices of other retailers, both online and offline, for its own products. Third-party sellers independently set their prices on the platform, but Amazon provides tools and education to help them maintain competitive pricing. Amazon does not promote non-competitive prices, but the FTC’s case suggests that this approach leads to higher prices, a view Amazon disputes.

Managed fulfillment and advertising. The FTC lawsuit contends that Amazon forces sellers to use FBA to qualify for Prime sales, which includes product storage, packaging, shipping, returns, and customer service. Zaplosky clarified that FBA is an optional, competitively priced service, and sellers are not compelled to use Amazon’s fulfillment or advertising services for Prime eligibility.

Retail competition. Amazon challenged what it termed as the FTC’s “gross mischaracterization” of the retail industry, emphasizing that over 80% of consumer product purchases occur in physical stores, highlighting the competitive landscape. Zaplosky stressed that consumers have numerous options for shopping, from brick-and-mortar stores to online and hybrid models, fostering price competition and choices for consumers.

Should Sellers Be Worried?

During Khan’s 2022 testimony to a Senate committee, she said that the FTC would not accept any concessions from Amazon to settle the lawsuit, suggesting a possible break up of the company. This means divesting major parts of its business, such as FBA and Amazon Ads, to address the government’s antitrust concerns.

However, Khan told NPR Tuesday that at this point, the complaint is not about breaking up Amazon, but rather the complaint is “focused on establishing liability.”

But if Amazon is liable, a court order seeking to stop the illegal tactics could include “structural relief,” a legal term referring to a potential breakup of the retail giant.

When it does happen, “there will be honest and fair competition in the marketplace and the public will benefit. The public will benefit through lower prices, higher quality, greater selection, more innovation. And both shoppers and sellers will have more opportunity, right?” Khan said.

Structural relief as legal remedy might be enough to put pressure on Amazon to make meaningful changes right now.

Multiple sellers interviewed by Modern Retail shared the sentiment that “one positive thing that could come out of the FTC lawsuit is if it persuades Amazon to make changes to its Buy Box.” 

For many sellers, achieving success on Amazon heavily relies on winning the Buy Box, which they find to be exceedingly challenging. Meanwhile, some sellers perceive certain aspects of the FTC lawsuit, such as attempts to portray Amazon as a monopoly or critiques of its fulfillment service, as exaggerated.

They hold hope that the FTC lawsuit might pave the way for constructive improvements, but there is also concern among them about potential excessive government intervention.
In a Facebook post, Paul Rafelson, seller advocacy lawyer and the most cited resource in the antitrust investigation, provided insights into how the case would likely unfold in the coming years, saying drastic changes are not likely to occur soon.

Such a landmark monopoly case is, as Rafelson puts it, “a Herculean task” and can take years to resolve. A further point highlighted is that the outcome of the lawsuit might also hinge on the 2024 Presidential election’s results. Since the president appoints the FTC chair, a shift in administration could usher in a new leadership at the FTC with a different perspective on the case. The possibility of an amicable resolution between the FTC and Amazon is also mentioned, as previously seen in the recent EU Commission deal

So, sellers should not be worried about losing Amazon as a sales channel, at least not while the case is still in its early stages. It may be best to continue advocating for their “right to a transparent and fair eCommerce platform” to “ensure the platforms play fair and that every seller plays by the same rules (no matter the country they operate from),” Rafelson wrote.

FTC’s latest lawsuit vs. Amazon is part of the ongoing scrutiny of major tech companies under the leadership of Lina Khan.

Amazon has faced increasing regulatory scrutiny, with antitrust concerns dating back to 2019, when the FTC began investigating the company. The agency’s actions are part of a broader conversation about the market power and practices of tech giants, echoing calls from politicians like US Senator Elizabeth Warren to address what she termed as the “monopolies” of companies like Amazon, Google, and Facebook.

Additionally, the FTC is reviewing Amazon’s acquisition of One Medical and its planned purchase of iRobot, highlighting ongoing regulatory attention on the company.

Related: FTC Proposes a New Rule to Rein in Fake Reviews, FTC Lawsuit Alleges Amazon of Tricking and Trapping Customers into Recurring Prime Subscriptions, Why Amazon Wants you to Lobby Congress, AMZ Faces Tougher Scrutiny Under EU’s Digital Services Act

Amazon and Flexport Vie for End-to-End Logistics Supremacy

On September 12, Amazon and Flexport unveiled new offerings designed to assist sellers in seamlessly connecting their global shipping needs with US warehousing and fulfillment services.

However, many sellers have a lingering doubt whether the two logistics giants can really bring together the various supply chain links needed to fulfill their factory-to-porch delivery promise. Hence the age-old question remains, should you put all your eggs in one basket?

With so much potential, the end-to-end (E2E) logistics space is rapidly evolving into an arms race between major players.

Tale of the Tape

Top Service FeaturesSupply Chain by AmazonFlexport Revolution
Factory PickupYesYes
Freight Management (ocean, air, and truckload)YesYes
Storage YesYes
Prep and HandlingYesYes
Integrated Replenishment Transfer from an upstream storage facility (e.g., Amazon Warehousing & Distribution or AWD) directly into FBA or 3PLYes (if auto-restocking is enabled, your inventory is considered “in stock” and buyable when received by AWD. AWD is exempted from capacity limits, allowing you to store as much inventory as you want and conveniently transfer units as needed)Yes (but shipping inventory from a non-AWD facility to FBA may subject you to capacity limits. On the upside, though, this actually prevents you from putting all your stock in Amazon. To minimize stockouts, set aside buffer stock at your supplier or 3PL and transfer units as needed)
Order FulfillmentYesYes
Parcel Delivery to CustomersYes (within 1 to 2 days)Yes (within 1 to 3 days)
Multichannel Distribution Across Physical Stores or Retail PartnersYes (currently in a pilot test, but will be rolled out more broadly later this year)Yes (send inventory directly into FBA, Walmart Fulfillment Services, and 15+ wholesale channels, including Costco, Target, and Nordstrom)
Supply chain financingNo (though Amazon Lending is an option for many sellers and could be utilized toward supply chain.)Yes via Flexport+, a $149/month membership that provides you with improved repayment terms (up to 120 days), faster shipping speeds, and advice from logistics experts. 
PricingTransportation, storage, and fulfillment costs depend on product weight and dimensions. Storage costs can also vary by season.Only pay for the services you use with predictable, all-inclusive pricing. No hidden fees.
Pricing structure for storage is at the pallet/carton level, removing hidden overages and costs.

These recently unveiled E2E supply chain solutions share a common goal and target audience. Both aim to:

  • Help sellers deal with various challenges within their global supply chains by making it easier for them to access tools, resources, and capabilities that were once only available to large companies.
  • Keep sellers’ 3PL warehouses, physical stores, or retail partners in stock so that they can consistently fulfill same-day or next-day deliveries through an efficient multichannel inventory distribution system.

Those closely following the logistics industry note that the launch timing and similarities of Supply Chain by Amazon and Flexport Revolution are far from accidental. This can be attributed to the influential role played by Dave Clark, who previously served as the CEO of Flexport and prior to that held a significant position within Amazon’s operations.

Conventional wisdom suggests that Amazon, owing to its substantial financial resources, expansive warehouse footprint, and dominant eComm presence, possesses the more appealing offers.

However, Flexport, as a freight forwarding company, is staking its claim on its extensive experience in facilitating China-to-US trade as a unique selling point. This could mean access to seasoned freight forwarders, affordable freight rates, better customs clearance support, and faster international shipping speeds, potentially creating a more seamless trans-Pacific trade experience overall.

Additionally, its recent acquisition of the eCommerce fulfillment service, Deliverr, presents them with a seasoned D2C distribution network to facilitate the last mile delivery component.

All things considered, it’s a tough choice between Amazon and Flexport, but this is the kind of rivalry that will benefit sellers in many ways. Both provide an AI-driven platform where you can shop for the best freight rates, create and track shipments, manage inventory transfers (global and domestic), and more from a single dashboard. 

It all probably boils down to who truly has the infrastructure to meet your unique logistics needs, including the ability to provide support during disruptive supply chain events. 

Related: Supply Chain by Amazon, 3PL Logistics Backup for Amazon, Lead Time in Inventory Management for Amazon Sellers, How to Ship to FBA (And Speed Up Check-In Times)

UPDATED: 60-Minute Amazon Drone Delivery is Now a Reality

60-Minute Amazon Drone Delivery is Now a Reality

UPDATE 09/21/2023: The Federal Aviation Administration (FAA) has finally allowed UPS and Zipline to fly commercial drones beyond the visual line of sight (BVLOS) of ground operators, a landmark decision that opens up many opportunities for operators, sellers, and consumers.

What is BVLOS?

BVLOS refers to drone operations conducted beyond the direct visual observation of a spotter manning a designated delivery route. Due to safety concerns involved in flying drones outside the visual range, the FAA has set an extensive process for attaining BVLOS approval, which for months has grounded Amazon’s lofty drone delivery ambitions in the US.

Companies looking to get approved for BVLOS drone delivery must submit detailed documentation of their flight operations, including data on their unmanned aerial vehicles. The aviation rulemaking committee then reviews the application and decides whether to grant approval.

Disruptive Potential of BVLOS in Last-Mile Delivery

With BVLOS approval, UPS and Zipline can now fly delivery drones over longer distances with less manpower.

UPS’s Matternet M2 Drone, for instance, can “carry payloads of up to 2 kilograms (4.4 pounds) over distances of up to 20 kilometers (12.4 miles) over urban and suburban environments.”

Meanwhile, Zipline’s Sparrow drone has been approved by the FAA to make BVLOS deliveries without spotters in Salt Lake City and Bentonville, Arkansas. The drone model is designed to unload packages using a parachute. 

“This exemption from the FAA represents a monumental shift for logistics and equitable access in the U.S. It builds the foundation for Zipline to scale to deliver food, medicine, consumer goods and other supplies to millions of Americans on-demand, and to do so in an environmentally conscious way,” said company COO, Liam O’Connor, in a prepared statement.

The FAA making widespread use of commercial drones a reality could make last-mile deliveries more efficient for everyone in the future.

For logistics companies and sellers, last-mile incurs the highest costs and consumes the most time. But drones offer the potential to automate delivery and improve wait times, thereby alleviating pressure on drivers to meet unrealistic quotas and mitigating the customer dissatisfaction associated with shipping delays.

For consumers, it could widen their options for ultrafast delivery outside of Amazon’s logistics network, potentially making deliveries cheaper.

In sum, with the aviation authority and drone operators pushing for advancement in BVLOS capabilities, drone delivery is poised to become a feasible and cost-efficient logistical solution to common supply chain issues across various sectors.
Related: Battle for Last-Mile Logistics Heats Up as Amazon Expands Same-Day Delivery Network

Prime Air, Amazon’s drone delivery service, has finally arrived in California and Texas. 🚀

According to Ars Technica, the online retail giant started flying 5-pound packages by drones to customers in Lockeford, CA and College Station, TX.

With this service, Amazon hopes to speed-up their last-mile deliveries from 1-2 days to less than an hour, especially at a time when they’re reportedly struggling to meet their 2-day delivery promise.

If successful, drone delivery may help Amazon change customer delivery expectations and potentially disrupt the retail industry (once again), aka the Amazon Effect. Why shop in-store when you can get your items delivered right to your doorstep in less than an hour?

In a statement to KTXL Fox 40, Amazon Air spokesperson, Natalie Banke, said that the company’s goal is to safely introduce its drones to the skies. Banke also mentioned expanding drone deliveries to more cities over time.

9 Years in the Making

Prime Air was first revealed by former Amazon CEO Jeff Bezos in a 60 Minutes interview in 2013. Part of the initial plan was to use Octocopters, drones with 8 motors and propellers, to transport lightweight packages to customers in just 30 minutes.

Bezos had estimated that Octocopters will be available to customers in 4 to 5 years, but several technical challenges extended that lead time to 9 years.

In August 2022, Amazon finally got the greenlight from the Federal Aviation Authority (FAA) to fly delivery drones with a maximum payload of 5 lbs each. The said weight represents 85% of the company’s last-mile shipments. 
Four months later, the eComm giant’s current model, MK27-2 drones, which are reportedly lighter and quieter than Octocopters, started doing deliveries in California and Texas to help measure buyers’ interest in getting their packages flown over and placed safely into their backyards.

Amazon-Air-MK27

“The drone will fly to the designated delivery location, descend to the customer’s backyard, and hover at a safe height,” Amazon said.

“It will then safely release the package and rise back up to altitude.”

When assessing the safety of drone operations, the FAA takes into the consideration user feedback and all types of potential hazards such as:

  • Drones crashing into homes or people
  • Propellers causing injuries to people such as cuts and stabs and hearing problems due to engine or prop noise
  • Hacking concerns. Drones could be used to hack into computer systems.
  • Privacy concerns. Drones can hover over a property or look down into people’s yards.

This is why Amazon continuously develops new tech and redesigns their drones to ensure people feel comfortable receiving packages by unmanned devices.

“While it’s impossible to eliminate all risks from flying, we’re taking a proven aerospace approach to design safety into our system,” Amazon said in a press release dated August 17, 2022.

“Any car you drive is tested—that’s how you know it’s safe. We’re developing our drones in the same way. Just as aircraft manufacturers test their new planes, or automakers test their new vehicles to failure before they go on sale, we test our drones in private and controlled facilities.”

In 2020, the company received a Part 135 Air Carrier Certificate from the FAA. This means Amazon has provided all the required evidence that supports the safety of their drone operations, and thus given permission to “operate as an airline and deliver small packages via drone.”
As of this writing, only Lockeford and College Station residents may sign up for Prime Air. Once signed up, Amazon will then confirm whether they can deliver by drone to the customer’s mailing address. Confirmed orders will also get an estimated delivery time and tracking number.

What’s Next for Prime Air

As Amazon puts it, the MK27-2 drone model is just the beginning. Expect the eComm giant to “constantly redefining, iterating, and experimenting to meaningfully transform the customer experience.”

Amazon also plans to launch its next generation of drones, the MK30, in 2024. Lighter and smaller than the MK27-2, MK30 will have:

  • Increased range
  • Improved temperature tolerance
  • More safety-critical features
  • New capability to fly in light rain

With these improved features, customers may feel even more encouraged to select drone delivery over traditional modes of shipping.

Given its potential, we may also see other retailers and legacy carriers offering drone delivery in the coming years.

In fact, corporate giants like Walmart, Alphabet, Domino’s Pizza, and DHL have already taken the first step.

Bulgarian planemaker, Dronamics, is also slated to become the world’s first “cargo drone airline” in 2023. Dubbed Black Swan, the unmanned aircraft is the size of a delivery van and large enough to carry a 770-pound payload and travel across a 1,550-mile range (e.g., Austin, TX to NYC), essentially covering middle-mile shipments. 

In sum, it’s an exciting time for the logistics industry as drones could be a safer and faster alternative to existing logistics systems that aren’t as efficient during a pandemic or supply chain crisis caused by labor issues, port congestion, or maritime/air disasters. It will be interesting to see what evolves in this space.

UPDATED: Amazon Wants to Take a Bigger Chunk Out of Seller Profits with 2 New Fees

UPDATE 09/21/2023: In a rare move, Amazon has dropped its plan to impose a 2% fee on sellers who use Seller Fulfilled Prime (SFP). 🤯

The company had initially scheduled to initiate this fee on October 1st, in addition to the existing 8% to 15% commission it levies on all sellers. 

According to documents referenced by Bloomberg, Amazon stated that it based its decision on feedback from SFP sellers, though both some sellers and media outlets finger the pending antitrust suit as a more likely motivator. 

In a statement to Forbes, an Amazon rep said that “after careful consideration we’ve made the decision not to implement this program fee to ensure seller sentiment related to the fee does not impact program participation.” 

The spokesperson further explained that the additional fee was intended to assist the company in offsetting infrastructure expenses. However, many sellers refused to believe that, telling Bloomberg that the new fee was “as an attempt to pressure them into using Amazon’s logistics services rather than fulfilling orders themselves,” potentially implicating the eComm giant in another anti-competitive practice.

Amazon’s logistics program has been the target of FTC’s increasing antitrust scrutiny, alleging that it is favoring its own products and sellers who use FBA/Prime and disincentivizing non-Prime sellers on its platform. The agency may file suit centered precisely on that allegation later this month, as reported by Reuters.
Related: FTC Alleges Amazon of Tricking and Trapping Customers into Recurring Prime Subscriptions, Amazon Faces Tougher Scrutiny Under EU’s Digital Acts

One week after announcing a Prime Day-like event in October, Amazon decided to spoil the fun by bringing back its seasonal surcharge and imposing an extra fee for those who use Seller Fulfilled Prime.

2023 Holiday Peak Fulfillment Fee for FBA and MCF Orders

From October 15, 2023 through January 14, 2024, a holiday peak fulfillment fee will apply to the following orders:

  • US FBA
  • Canada FBA
  • Multi-Channel Fulfillment
  • Remote Fulfillment with FBA

The seasonal surcharge rates remain the same from 2022 for US and Canada, per Amazon. But you will see that the holiday fee has the following significant increases in comparison to fulfillment fees during off-peak:

  • Small standard: $0.20 more per unit
  • Large standard up to 2 lbs: $0.30 more per unit
  • Large standard between 2 lbs and 20 lbs: $0.50 more per unit
  • Small oversize: $1 more per unit
  • Medium, large, and special oversize: $2.50 more per unit

Check out the updated rate card for US FBA, CA FBA, MCF, FBA Remote Fulfillment to see the fee changes in greater detail.

Some sellers in the comment section of the news post feel like there’s no end in sight to Amazon fee hikes. Meanwhile, others are more concerned about whether paying these extra fees will really get their inventory checked-in on time for the holidays or Amazon’s “just charging extra for the same abysmal service FCs have been providing of late.”

One seller in particular is surprised about the announcement, given that “most customers already shop at Temu for lower prices,” causing their profits to fall. However, “Amazon has not taken any actions other than charging sellers for more expensive rates.”

To minimize the impact of fees on your margins, be sure to read our white paper, Attack of the Fee Stack. This year, more eCommerce sellers and experts have been sharing practical profit-focused advice and solutions to improve margins in the face of these fee hikes.

2% Fee On Each Product Sold for Seller Fulfilled Prime

Amazon has introduced a new fee targeted at sellers who opt not to utilize its fulfillment solutions, aka Seller Fulfilled Prime (SFP). This program lets Amazon sellers sell their products with the Prime badge and offer 1 to 2 day shipping to Prime customers while fulfilling orders from their own storage facility or by teaming up with an approved third-party fulfillment service provider. 

The fee hike has caught many sellers off-guard and is perceived by many as a strong-arm tactic (to get them to switch to FBA), especially in light of the impending antitrust lawsuit by the FTC against the eCommerce giant, Bloomberg reports.

In the course of FTC’s investigation, the agency has directed its attention towards Amazon’s treatment of sellers operating on its platform. Of particular interest is Amazon’s practice of punishing sellers who are shipping products themselves by favoring Prime sellers over non-Prime.

Currently, there are expectations for the agency to unleash the said lawsuit which has become almost unavoidable following the recent “last rites” deliberation between Amazon and FTC representatives.

With the FTC intensifying its scrutiny, Amazon’s decision to introduce an additional fee for sellers sidestepping its FBA services and choosing to manage their own product shipments seems rather poorly timed.

Starting from October 1st, SFP sellers will be subject to a 2% fee on every item sold. This is on top of any other applicable charges like the 8% to 15% referral fee.

Ever since its inception in 2015, SFP has enabled sellers to dispatch their products autonomously at no extra cost. However, the recently introduced 2% fee might create a compelling reason to transition towards using Amazon’s own logistics services, as they might now be cheaper than SFP. 

In a notice sent to SFP sellers last week, Amazon offered a vague explanation why the additional fee was necessary.

“We’re updating our requirements for Seller Fulfilled Prime to ensure that it provides customers a great and consistent Prime experience.”

However, in communication with Bloomberg, the company stated that the levy would assist in funding the expenses associated with maintaining “a separate infrastructure and measuring its effectiveness.”

Discussing the matter without revealing their identity, an anonymous source informed Bloomberg that SFP sellers were given only a few weeks’ notice about the fee change.

This limited time frame posed challenges for the sellers to accommodate this additional cost, especially considering that they had already procured inventory for the upcoming holiday season, the source further elaborated.

Amazon taking third-party sellers by surprise with sudden policy changes and short adjustment period is nothing new. The online retailer simply has too much control over the marketplace, which is why the FTC stepping in could potentially bring about great changes in the way Amazon or the US eComm industry is regulated.

Recently, Amazon offered concessions to the UK Competition and Markets Authority (CMA) to stop an ongoing antitrust probe. However, FTC Chairperson Lina Khan opposes such legal remedies. This means if the agency wins its long-awaited lawsuit vs. Amazon, it could finally break up parts of the retail giant.

Roundup: Upcoming Amazon Changes and Features

Here’s the latest on Amazon’s suite of products and services, including upcoming changes to the FBA removals policy. 

1. Set competitive prices with new Similar Product dashboard

Amazon just launched a new dashboard that allows you to compare the prices of up to 5 similar products being sold on Amazon.com. Think of it as your very own pricing advisor, empowering you to make informed choices that have the potential to boost your sales and maintain your competitive edge. 

However, a few sellers question the motive behind the creation of the new dashboard saying it could just be another tool to covertly harvest product data, while others doubt that it’s as useful as Amazon purports it to be. 

In the comments section of the announcement page, one seller, listed as SELLC, advises people to “pay attention” to their “desired profits to be earned”, further hypothocizing that you likely won’t see Amazon’s offerings in the dashboard and inferring that Amazon desires slow down sales for sellers by promoting higher pricing, thus encouraging them to make up for it with Amazon ad spend. 

Another seller expressed their lack of confidence in the new dashboard, writing “bots are not good enough at identifying ‘similar according to humans’ without a lot of human intervention.”

Moreover, “by using this dashboard, you’ll be creating data for an AI, which Amazon will then use to (poorly) identify similar items. Then Amazon will (a) push customers to cheaper versions of your product, largely from overseas, thereby taking away your sales and further eroding the middle class and (b) require that you match pricing to poorly defined similar products in order to get surfaced on the platform.”

This new feature could be of value to providing insight into what Amazon’s AI considers similar, which may or may not provide insight into some of the other features utilizing a “similar products” method throughout the platform.

However, if the shared opinions of the sellers commenting on the announcement prove valid, this new feature could become a dwindling spiral of lost sales and profits. 

If your products don’t sell because they’re not priced competitively, you’ll find yourself buying ads from Amazon to boost search visibility. So, while you’re fixated on keeping your prices slightly higher to stay profitable and managing ad campaigns, Amazon’s own brands and those others with the lowest prices continue to sell around the clock more easily.

Some fairly strong views on this feature but sellers will have to decide for themselves whether they see the value or not.

You can try comparing prices from your Manage Inventory page inside Seller Central. Or, go to Similar Product Pricing to learn more.

2. New end-to-end supply chain management across all sales channels

Amazon seems poised to intensify its competition with freight forwarders by unveiling a “completely automated” end-to-end supply chain management service, connecting suppliers directly to sellers through to their customers.

Introduced during this year’s Accelerate, Supply Chain by Amazon features “advanced logistics, fulfillment and transportation capabilities to keep products in stock, ship faster and more reliably, and significantly lower costs.” 

The logistics giant claims a 25% cost reduction for cross-border shipping directed towards its Amazon Warehousing and Distribution (AWD) facilities. Now open to all sellers, AWD is a low-cost bulk storage solution that autonomously restocks your inventory to align with anticipated demand levels. You also have the option to distribute your inventory from AWD to multiple sales locations, including physical stores, with the help of Amazon partner carriers.

In addition, AWD is exempted from capacity limits and Amazon’s peak holiday surcharges. Storage savings are a benefit to AWD that shouldn’t be overlooked. During non-peak, AWD is 51% less expensive than standard FBA storage, and 82% cheaper than FBA holiday storage. Long-term bulk storage discounts will also be available to sellers later this year, potentially making AWD 80% cheaper than FBA.

All of this makes it sound like Supply Chain by Amazon is just the polished version of Amazon Global Logistics, because it is!

“Amazon Global Logistics is now part of Supply Chain by Amazon, a fully automated set of services that gets your products from manufacturers to customers around the world,” the company said.

However, expect that Amazon will most likely continue to subcontract a lot of the pickup and delivery services to forwarders and couriers and then take their profits, as they do with their Partnered Carrier Program. 

The introduction of Supply Chain marks another strategic move in Amazon’s ongoing efforts to bolster its presence in the logistics sector. This program comes on the heels of some huge developments, including a 10-year agreement with Hawaiian Airlines to operate 10 converted A330-300 freighters and Buy with Prime integration with Shopify and the more recent Amazon Multi-Channel Fulfillment (MCF) App for Shopify.

With this latest deal, Amazon is positioning itself to become one of the premiere fulfillment providers for non-Amazon eCommerce sellers which represents a huge potential toward putting their, in recent years, over-extended logistics and warehousing network to good use and, dare we say, the road to profitability.

Overall, it’s exciting to watch this space and to see what logistics could become over the next several years.

3. Update to FBA removals policy

Effective November 1, 2023, if you’ve selected “Dispose” as your removal option within the Automated Unfulfillable Settings, the scheduling of your removal orders will be determined by Amazon’s capacity considerations. This may include immediate action following the assessment of returns.

Additionally, if you haven’t selected a removal option by November 1st, the default selection will be set to immediate “Disposal.”

While this may help streamline your removal process, one seller is concerned about the possibility of losing the ability to thoroughly check product returns that have been marked as “unfulfillable” by Amazon. 

In busy and clogged fulfillment centers such as FBA, mistakes can happen. An Amazon associate could mistakenly tag your products as unsellable. Unless there’s solid proof that your product has been returned by the customer poorly or damaged by carrier, it’s always good practice to maintain some control over your returns so you could still refurbish or repair those in sellable condition.

Try to maintain a regular removal schedule, whether on a weekly or biweekly basis, by going to Automated Unfulfillable Settings, select your preferred return option, and provide a valid return address. This will grant you the flexibility to manually initiate removal orders for your (unsellable) returns at any point before your chosen automated removal date.

Related: Amazon Return, Refunds and Reimbursement Policy Updates

Amazon Tries to Increase Revenue from Existing Shoppers

Sellers may soon not be the only ones bearing the brunt of Amazon’s restructuring efforts to boost profits.

The retail giant is reportedly testing a higher free shipping minimum for some non-Prime customers and charging Prime members a fee for in-garage deliveries beyond the designated Amazon Delivery day. While this may help Amazon generate an additional source of income, they (and Amazon sellers) also risk losing customers to competitors that offer surprisingly low prices like Temu, TikTok Shop, and Shein.

Related: Amazon is Testing a New Way to Show Product Reviews 

Raising the Free Shipping Threshold

In a statement to CNBC, Amazon spokesperson Kristina Pressentin confirmed that the company is testing a new free shipping minimum for some non-Prime members in selected regions.

Non-Prime customers generally have to place an order with a minimum value of $25 to qualify for free shipping. But that changed for some shoppers on August 28, when Pressentin said Amazon has increased that threshold to $35, while “Prime members continue to enjoy free delivery on over 300 million items.”

The new change seems like an effort by Amazon to align its shipping minimums with that of Walmart, perhaps in hopes of attracting a larger customer base to its Prime service that offers free 1 to 2-day shipping and a host of membership benefits for an annual fee of $139 or a monthly fee of $15.

On the one hand, non-Prime customers may start comparing free shipping offers from different sales channels and decide to take their business somewhere more affordable.

On the other, this could be an opportunity for sellers to increase their sales by implementing value creation strategies that will make customers see the worth of buying add-ons or more expensive products to meet or exceed Amazon’s new free shipping minimum.

  • Product bundling. Grouping related products for a slightly lower price than buying individually.
  • Cross-selling. Encouraging customers to buy items that complement the product they wanted to purchase. For example, a customer adds a  $25 French Press Coffee Maker in their online shopping cart. With cross-selling, you could recommend them accessories like a milk frother, coffee mug, espresso brush, or reusable straw to ensure a higher single order value.
  • Upselling. Influence customers to buy pricier items or upgrades to increase their order value. Suppose a customer is eyeing that $25 French Press. In that case, you can highlight an upsell offer for a $50 coffee maker that has more advanced features.

Related: Tiered Discounts on Multi-Unit Orders

Free to Fee: In-Garage Delivery Service

Amazon Prime members currently enjoy free In-Garage Delivery, a service that ensures packages find a secure haven inside garages equipped with Amazon Key openers (accessible via an app), safeguarding them from theft and bad weather. However, this perk is about to change, contingent on the timing of package deliveries.

Starting from October 4th, Amazon is introducing a $1.99 fee for those choosing In-Garage Delivery outside of the designated Amazon Day delivery slots.

As highlighted by reports from The Verge, discontent among members is palpable as posts circulating on Twitter reveal their dissatisfaction with this impending price adjustment, saying “Amazon Key In-Garage Delivery is by far one of my favorite services, but they’re going to charge $1.99 PER DELIVERY unless you choose the Amazon Delivery day option.”

Other customers who commented on the The Verge’s post also share the same sentiment, with one wondering if the change is “bad for Amazon? This was a “safe” option for a lot of consumers and beats dealing with potential package theft when your packages are left outside. I’m not sure what Amazon really wins here outside of trying to force more people to choose their Amazon Day shipping.”

In reply to said comment, one poster wrote “Not completely bad. Just bad for those that want deliveries outside of their designated “Amazon Delivery Day of the week”. So, are you patient or needs things ASAP? ASAP will cost money, like it should IMHO.”

Some customers speculate that the extra time drivers take to access the codes to open garages is slowing down deliveries, which can cost Amazon money.

Delivery is expensive business, so it is no surprise Amazon is trying to get as much juice from the squeeze as possible. In a study conducted by the data validation firm, Loqate, it was found that within a sample of over 140,000 online orders, ecommerce companies experienced an 8% initial delivery failure rate. These mistakes, with an associated average cost of $17.20 per occurrence, collectively incurred a substantial expense of over $193,000 among the 300 companies included in the survey.

In addition to delivery cuts, Amazon has been aggressively reducing costs through job cuts and eliminating excess warehouse space. The company has also recently brought back its holiday peak fulfillment surcharge for FBA sellers and started charging an extra fee for those who participate in the Seller Fulfilled Prime program

All of this contributes to the effort Amazon has been making in recent years to pull up out of the post-Covid tailspin it found itself in. Time will only tell whether these changes will be good or bad news for the retailer. Unfortunately, unless you factor in the broad possibility of more financial stability for Amazon, we can’t see an angle on this that serves the customer or the seller.

UPDATED: Amazon Faces Tougher Scrutiny Under EU’s Digital Services Act (DSA)

UPDATE 09/06/2023: The European Union has intensified its efforts to curb the dominance of Amazon, Alphabet, Apple, Meta, Microsoft, and ByteDance in the region. This move involves the implementation of comprehensive regulations designed to provide consumers with greater choices and level the playing field for fair competition.

According to the Commission, a total of 22 core platform services operated by these six “gatekeepers” have been designated for regulation under the Digital Markets Act (DMA)

The DMA consists of a set of rules, or “dos and don’ts,” that aims to streamline users’ ability to:

  • Transition seamlessly between rival services – for example, making it possible for WhatsApp users to send messages to others without needing to be concerned about which messaging platform they are using.
  • Retain control over the use of their data for personalized advertising. Gatekeepers must ensure that performance data regarding ad campaigns and pricing information for ads are accessible to business users.
  • Exercise a choice in selecting their preferred search engine or web browser rather than being constrained by default settings. 

“The most impactful online companies will now have to play by our EU rules,” European Commissioner Thierry Breton said on X, previously known as Twitter.

“DMA means more choice for consumers. Fewer obstacles for smaller competitors. Opening the gates to the Internet.”

This also means Amazon could soon be prohibited from ranking their own in-house brands or services higher than their competitors in search results pages, as covered in the “don’ts” section of the DMA.

The retail giant already started providing European shoppers with more choices when it settled antitrust investigations by agreeing to giving sellers equal treatment on the platform’s Buy Box and adding another “buy box” with a different delivery option or price for the same product.

To enforce compliance, fines of up to 10% of the company’s global revenue loom overhead, and there’s even the potential for the tech giants to begin to divest specific segments of their operations in order to secure their foothold in the European market.

DMA is set to take full effect in six months, during which the six gatekeepers will be required to communicate their strategies for compliance with the digital act to the Commission.
Related: Amazon Faces Backlash for Alleged Abusive Practices, FTC Lawsuit Alleges Amazon of Tricking and Trapping Customers into Recurring Prime Subscriptions

A cohort of corporate giants, including Amazon, Apple, and an additional 17 industry leaders, have been identified and classified by the European Union (EU) as “very large” online platforms or search engines.

Consequently, these companies are subject to enhanced scrutiny and more stringent regulatory measures, accompanied by the possibility of substantial fines should they veer from the newly established Digital Services Act (DSA) within the region.

Obligations Under the DSA

In late 2020, the European Commission, the executive body of the EU, laid out a fresh set of services-related regulations aimed at intensifying oversight of tech behemoths.

These regulations, known as the Digital Services Act (DSA), have been in effect for approximately four months now, granting regulators the authority to actively monitor online content, curbing the spread of harmful comments, and establishing guidelines for the utilization of AI.

This significant step highlights EU’s commitment to fostering a safer online environment and ensuring responsible practices by big tech operating within its jurisdiction. These platforms are defined as entities that reach a significant number of users (more than 45 million active users) and that have a significant impact on the EU market.

The DSA intends to impose various obligations on these major platforms, such as:

More user empowerment and protection

DSA aims to empower users and protect their rights online. Users will have clearer information about recommended content and the ability to opt-out of profiling-based recommendation systems.

Platforms must diligently process reports of illegal content from users. Advertisements based on sensitive user data are prohibited, and platforms must label ads and disclose the promoters. Tech giants are also required to provide easily understandable summaries of their terms and conditions in the languages of the Member States where they operate.

Overall, the DSA prioritizes user empowerment, combating illegal content, protecting privacy, enhancing advertising transparency, and improving communication online.

Increased transparency

Platforms will be required to provide clear information about their terms and conditions, content moderation policies, and advertising practices. They may also need to undergo third-party audits to assess their compliance with the DSA’s requirements.

Strong protection of minors

Platforms will be required to undertake significant system redesigns to prioritize the privacy, security, and safety of minors. Specifically, platforms must implement measures that safeguard children from targeted advertising based on profiling techniques, ensuring their online experiences are free from such practices. 

To assess the potential risks to minors’ mental health and well-being, platforms will need to conduct special risk assessments. These assessments must be provided to the Commission within four months of designation and, at the latest, be made publicly available within a year. 

By doing so, platforms will contribute to a better understanding of the potential negative effects on mental health associated with their services.

Content moderation and removal

Platforms will be expected to implement effective measures to combat illegal content, hate speech, and disinformation. They will also be required to provide mechanisms for users to appeal content removal decisions.

The companies falling under the scope of the DSA regulations are given a grace period of four months to facilitate a smooth transition, enabling them to adapt the new antitrust policies and procedures within a reasonable timeframe.

Non-compliance with these provisions may result in significant consequences, including potential fines amounting to 6% of the company’s global turnover.

In more severe cases of persistent non-compliance, platforms could face temporary bans from operating within the EU. These stringent measures underscore the importance of adhering to the DSA guidelines and reinforce the commitment to ensuring a responsible and accountable digital environment.

Impact of EU’s Digital Acts on American Online Service Providers

In this report dated November 2022, economist Kati Suominen estimates that the EU’s DSA and Digital Markets Act (DMA) would cost leading US digital service providers like Amazon between $22B and $50B in additional compliance and operational costs. 🧐

As a result, this might force them to either pass the added costs to their customers or let go of crucial business opportunities in the region. 

Suominen also believes that “if US digital services increased their costs on American companies by just 5% due to EU regulation, US companies could incur over $97B in new costs, with $45B carried by SMEs.”

Sellers currently selling in or planning to expand to the EU should watch closely how Amazon will respond to its DSA obligations. More importantly, sellers should brace for any potential cost increases once Amazon starts implementing new compliance requirements related to these digital acts.

Related: EU Advised by NGOs to Refuse Amazon’s Flawed Proposal for Antitrust Settlement, Amazon Faces Backlash for Alleged Abusive Practices, Why Amazon Wants You to Lobby Congress

UPDATED: Shopify Looking to Integrate with Amazon Buy With Prime

Shopify Looking to Integrate with Amazon Buy With Prime

UPDATE 08/30/2023: 📣 It’s official! Shopify announced on Wednesday that Amazon will release Buy with Prime in the platform’s app ecosystem, marking a ceasefire between the two eCommerce giants.

For Prime customers, this collaboration holds the potential for a more dependable checkout and delivery experience across a wider array of retail brands outside of Amazon.

For some sellers, this announcement may come as a surprise after Shopify cautioned its merchants against attempting integration of Buy with Prime on their respective online stores, citing breaches of its terms of service and the emergence of security vulnerabilities.

The subtleties surrounding this app integration provide insights into concessions orchestrated by both companies.

Customers who log into their Amazon Prime accounts on a Shopify store equipped with the “Buy with Prime” feature can choose to utilize a payment mechanism linked to their Amazon wallets. Yes, Amazon Pay will be added as another payment option within Shopify.

However, instead of Amazon Pay, the payment processing will be handled by Shopify’s checkout system, allowing the company to:

  • Keep the entire or a portion of the revenue generated by processing Prime orders within Shopify Checkout. It’s unclear whether both parties entered into a revenue sharing contract, where the income made from Buy with Prime transaction fees on Shopify is split between the two companies.
  • Help Shopify sellers “maintain 100% control of their brand and their customer data in Shopify’s admin,” the company said in a statement. 👏 

The program rolled out on August 30, initially catering to selected sellers on Shopify’s platform. By the end of September, it will become accessible to all Shopify sellers interested in leveraging Amazon’s extensive fulfillment network, Amazon said.
With Shopify out of the way, Amazon now stands to capture more non-Amazon merchants via wider Buy with Prime adoption, while existing sellers face increasing competition and fulfillment fees.

On Shopify’s Q4 2022 earnings call, President Harley Finkelstein revealed the company is currently in talks with Amazon about adding Buy With Prime (BWP) in Shopify-powered stores. 🫣

“We think any company that’s going to make their infrastructure available to merchants to sell more a great thing,” Finkelstein said during the earnings call.

“We’re going to talk to the Amazon now to make that work, but it has to be done in a way that we think is important for merchants to have a relationship with their end consumer,” Finkelstein added.

That’s great news for merchants and aggregators interested in using both Shopify and BWP, but not for those who don’t want to give up their customer data to Amazon. 🤔

BWP is a Fulfillment-as-a-Service (FaaS) program that allows merchants to offer 1 to 2-day shipping, free delivery, and free returns on their own websites outside of Amazon.com.

However, checkout is done via Amazon Pay, which requires a customer to create or log in to their Prime account to be able to complete a transaction. This process could allow Amazon to take a peek into the customer’s name, address, and possibly even contact details (for shipping purposes) that they could then use to launch remarketing and retargeting campaigns to that customer.

In September 2022, Shopify itself issued a warning to merchants about the potential security issues they could face when installing BWP. Moreover, taking the checkout process outside of Shopify is currently a violation of the platform’s Terms of Service.

But given Shopify’s recent complete turnaround on the issue, the warning may primarily have beenn due to its plans to launch its own FaaS program, Shopify Fulfillment Network (SFN). The service was first introduced in 2019, but has reportedly made little progress since.

Turning to Amazon to Overcome Challenges Ahead

The broader rollout of SFN unfortunately happened at a time when the company’s Q4 2022 shares fell nearly 7% and revenue growth slowed amid escalating Amazon rivalry, indicating a rough time ahead.

That might explain why Shopify is looking for a partnership with Amazon instead of competition, a business strategy called “Co-Opetition.” 🤔

Welcoming its rival into the fold might help the company reduce competitive intensity levels while expanding its customer reach with Prime, which currently has over 200 million members worldwide.

Same goes for Amazon, a collaboration presents an opportunity to tap into the rival’s customer base while keeping them at an arm’s length, as well as maintain its lead over Walmart.

The risk, however, is potentially greater for Shopify as it stands to loosen their grip on their merchants’ customer data. Additionally, BWP could eat into its profits. The Canadian eComm giant mostly generates revenue from transaction fees. 

For that reason, analysts recommend not allowing Amazon to take over checkout. But it seems unlikely to happen given that Amazon Pay has always been conditional to BWP, unless both parties come up with a fair revenue sharing arrangement.

If no deal is taken, Shopify might have to find other companies that can take Amazon’s place in solving this challenge for them.

Shopify Tries to Stay in the Fight 

Recent moves suggest that Shopify is not backing down in its fight for market share. It has teamed up with Flexport to expand its fulfillment capabilities globally and compete with Amazon Global Logistics.

The company also released new tools and features that will help merchants sell across channels, boost conversion, and run their stores more efficiently.

Meanwhile, Amazon continues to beef up Buy with Prime by making it available to US merchants that use BigCommerce. The Texas-based shopping site builder launched an app that allows sellers to easily enable BWP features on their stores with no coding required.

In sum, while integrating with BWP could temporarily hurt Shopify, the company also stands to gain some wins, such as the ability to offer faster delivery without doubling its fulfillment network, i.e., cut costs.

It all probably just comes down to how the two eComm giants will split the revenue from BWP transactions on Shopify stores. It will be interesting to see how it all shakes out. 

Updates to Amazon Return, Refund, and Reimbursement Policy

Updates to Amazon Return and Refund Policy

Update 08/24/2023: Currently in invite-only beta, Amazon introduced a new feature that allows some select sellers to disable the evaluation of returns, giving them more control over the return process. This means sellers no longer have to rely on Amazon’s evaluation of a returned product’s condition, which is not always accurate. 

🚩 Imagine a customer receiving a damaged or counterfeit product because an Amazon associate did not carefully check the returned item. An upset customer may choose to leave a negative review that will not only dent your reputation and Amazon order defect rate but also profits – Amazon does not reimburse customer-damaged units.

👌 By disabling returns evaluation, Amazon will automatically mark returned products as “unfulfillable,” instead of putting them back to your available inventory to be sold again. You may then create a removal order so that Amazon can return the items to your warehouse. From there, inspect the returned products yourself and decide whether to resell or dispose of them.

Note: Think twice before opting to have Amazon automatically get rid of returned orders for you. Some sellers lack confidence in the retailer’s ability to properly dispose of unwanted or damaged goods, saying that these items will somehow find their way onto pallets and be auctioned off on an inventory liquidation site or sold at a flea market.

Preserving the integrity of your brand, especially higher-end products, is crucial. The thought of these damaged goods re-entering the market troubles artisan sellers that they would rather cover the removal fees, recover whatever is salvageable, and recycle what they can.

How to disable evaluation of returns?

  • Log in to your Seller Account > FBA Inventory Evaluation Settings > Click Disable
  • Choose Disable Returns for All ASINs or Disable Returns for Select ASINs
  • Click Update

Visit FBA Inventory Evaluation Settings or read the Terms and Conditions for Disabling Returns Evaluation for more details.
Related: Claim Reimbursement for Losses Caused by Amazon

Update 06/15/2023: In an email, Amazon announced they’re introducing a revised reimbursement policy for Multi-Channel Fulfillment (MCF) in the US.

Effective from July 15, 2023, the maximum reimbursement limit for eligible units lost or damaged during the fulfillment process will be set at $300 per item. This adjustment ensures that MCF’s reimbursement policy remains consistent with prevailing practices within the industry.

You may file your claim for reimbursement on eligible MCF orders no more than 90 days after the promised or estimated delivery date. You can monitor the status of your existing claims by going to your Amazon Fulfilled Inventory report or the Payments dashboard.

Amazon has not shared the formula for calculating a product’s reimbursement value, but per company policy, the goal is to provide a (cash) reimbursement amount that aligns with the estimated proceeds (minus MCF fees) you would receive from selling your item.

Note: In the event that Amazon stumbles upon your lost units one day, they may nullify the cash reimbursement by deducting it from your forthcoming deposit. They will also reinstate your lost units into your inventory, thereby granting you the opportunity to sell said items once again.

In cases where Amazon lacks sufficient data to calculate the estimated sale price using multiple price indicators, they will assign an approximate value based on the price of a similar product. Occasionally, an Amazon rep might also request additional information or documentation from you to assist them in determining the reimbursement value accurately.

If the value of your item exceeds the max reimbursement amount, Amazon recommends purchasing third-party insurance for additional coverage. But if Amazon frequently loses your inventory, it may be worth taking your fulfillment needs elsewhere, especially if you sell a lot of high-value items. For instance, you may want to consider fulfilling luxury goods through a different 3PL provider with better reimbursement coverage and only leave products below $300 up to Amazon MCF or FBA. 
Be sure to read this blog post to learn how to minimize lost or damaged inventory.

Update 12/15/2022: 😩 Another fee will take a bite out of your profits in 2023! Starting January 14, Amazon will no longer cover carrier shipping correction charges on seller-fulfilled returns with “incorrect return label information.”

Correction charges can be applied when:

  • The return address label is invalid – for example, text is illegible or part of the address is incorrect or missing. According to Amazon, the carrier will charge $18 per undeliverable package. 
  • The package weight or dimensions do not match the information you provided. You will be responsible for the difference in cost between the initial label you paid for and the label correction cost. Fortunately, you may also be credited for any overpayment made due to these factors.

This update has drawn the ire of many FBM sellers, arguing that they don’t have control over how customers return unwanted products. A customer may return a small item in a box 5x to 10x its size, for instance. 

Some sellers call on Amazon to instead push these correction charges on shoppers who use unnecessarily large boxes when shipping items back, as they rarely receive returns in the original packaging anyway.

But considering Amazon’s customer-centric policies, that’s very unlikely to happen. So the only paths forward sellers seem to have are to either, as per usual, suck it up and just cross fingers that the majority of customer returns come back without additional charges, or to switch to FBA. Otherwise, they’ll be paying the price as another line item to add to the profit and loss. 🤔
Go to Shipping Correction Charges for Seller-Fulfilled Returns to learn more.

Update 11/11/2022: 📢 Amazon just updated their Reimbursement Policy! Effective November 11, 2022, eligible unfillable units “will be reimbursed at a discounted rate to reflect the actual fair value of the item” rather than their regular retail price.

Unfillable items are returns from customers that can’t be sold as “New” on Amazon. If an unfillable item is lost or sent back in damaged condition, Amazon will reimburse you at a discount on the regular price. 😦

This could impact a lot of sellers that get a lot of returns in Q4. Profit is less in case a customer returns a heavily worn item (and thus unsellable) or Amazon loses them.

👉 Be sure to read on to learn more about the latest on Amazon’s Return and Refund Policy, as well as some pro tips for reducing unnecessary returns and abusive claims.

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.

Amazon is Testing A New Way to Show Product Reviews

Amazon is currently overhauling its product reviews system amid FTC’s pending rule on fake reviews.

In a recent blog post, top-100 Amazon seller and Zulay Kitchen Co-Founder Aaron Cordovez calls to attention the new review formats that Amazon is A/B testing to possibly find a better way to display key customer reviews stats like review count (number of reviews, e.g., 1,000) and overall product star rating (ranging from 1 to 5 stars) on its search engine results pages (SERP).

As Cordovez lays out, these are the major changes being seen by some customers on Amazon’s platform.

Test #1: Removing Review Count

Amazon Review Count Changes

Amazon has always featured product review count typically expressed in complete format (2,000; 20,000; 200,000) on search. However, in one of its A/B tests, review volume was hidden, which may not be a smart move.

A high review count is an essential metric that helps paint a picture of a product’s quality and size of customer base, thereby increasing the likelihood of shoppers to purchase.

A PowerReviews survey shows 80% of customers are less likely to purchase a given product if it has zero reviews. This impression most likely impacts new (though not necessarily inferior) products on the market, possibly giving Amazon a reason to hide review count to somehow level the playing field. 

Cordovez himself believes that “Amazon wants to test if there is a better way for new products to be discovered. This is a bullish sign for innovative products and more creative minds re-imagining the E-commerce space with better products.”

Removing review count may also help shift customers’ attention to “total units bought in past month,” which would be another way to create a positive first impression of your product.

Cordovez speculates that if a product with thousands of reviews from several years ago has gone stale, then letting customers rely on review count when making purchase decisions may not be a good idea.

“Number of units purchased last month gives much stronger social proof. It is taking away stale products from Amazon’s catalog,” Cordovez explained.

In terms of its impact on combating fake reviews on Amazon, there’s an upside and downside to hiding review count. On the upside, customers will be less likely to make purchase decisions based on this metric that can be easily inflated with fake reviews and review hijacking, essentially weakening the influence of these black hat tactics on consumer behavior.

On the contrary, Amazon could use this approach to make it difficult for ASIN alert tools and perhaps even antitrust watchdogs to track changes in review count during a particular period. 

As previously reported, we noticed in April that on some of Amazon’s own Basics line products, hundreds of thousands of reviews were removed overnight. It remains unclear whether the reviews purge included authentic low-star reviews or false positive reviews or was in any way motivated by a desire to avoid possible pending violations and penalties in the face of the potential FTC rule change on reviews.

Test #2: Changing the Review Count Format

Perhaps seeing how removing review volume altogether may negatively impact long-term sellers’ conversion rates, Amazon seems to be considering another alternative:

  • Changing the unabridged review count format to % of 4 or 5-star customer reviews
  • Replacing 5 review stars rating format with a single star icon while an inconspicuous drop-down menu button is provided to enable full view of a product’s customer star ratings.
Review Count 4 Star Percentage Format

The initial version displayed products with a percentage of 4+-star customer reviews, but as currently seen on Amazon search results pages, the reviews system now shows products with a percentage of 5-star reviews instead, irrespective of product type, total units bought in past month, and overall star rating. See example below.

Amazon Review Count 5 Star Percentage Format

On the one hand, this new format gives more weight to positive customer reviews, which could potentially help you generate more clicks.

On the other, less discerning customers or those that don’t have time to read online reviews and just rely on initial information presented may be misled to think they’re buying a high-quality product with that 5-star review percentage. They may overlook the actual lower star reviews and simply focus on the 5-star %. If the new format makes some customers less likely to spend time reading online reviews, it also increases their chances of falling victim to products with fake positive reviews or falsely inflated overall star ratings. 

In contrast, other customers may think that a product that has a high 5-star review % may be too good to be true, forcing them to seek out negative reviews.

Additionally, Amazon has also replaced the legacy 5 review stars format with a single star icon. At first glance, it appears you’re looking at one-star products, which some customers may find off putting.

To fully view a product’s customer star ratings (and facilitate smarter buying decisions), customers will have to hover their cursor over the small drop-down menu button next to the single star icon. 

New Product Star Ratings Art Format

Test #3: Hiding Product Star Ratings

Product Review Rating number is hidden but the star visual presentation is retained to still provide some form of social proof.

Hidden Review Star Ratings

Amazon may be testing how the star rating format (full or half stars icon) versus rating numbers (2.5, 3.7, or 4.8 out of 5) influence product preference.
This paper suggests that when looking at star ratings with a half star representing a decimal point, “consumers perceptually fill in the missing fragment by extending the yellow retained area to cover the grey cutout area.”

Star Rating Format

Interestingly, the “perceptual fill-in of the missing part of the rating unit will upwardly extend the decimal to the nearest integer [whole number, e.g., 4.0] and result in a visual rounding-up of the rating. Consequently, the non-rectangular (star) rating format will make the focal product seem more favorable.”

Test #4: Changing the Review Counter to Estimated Number of Thousands (27.2K instead of 27,220)

New Review Counter Format

The review system appears largely unchanged, except for the review counter, which now displays estimates with a “K” plus indicator which means thousand(s) instead of the exact review number. One seller in this discussion board believes this downplays the significance of presenting the review count in full. 

This change may again have something to do with how certain visual presentations influence customer buying decisions or simply optimizing the review stats section for improved user experience.

Sellers Weigh in on the Issue

In the comment section of Cordovez’s Facebook post regarding the matter, one seller summarizes this whole A/B testing best, “the new test version gives all the advantage to new sellers, and removes all advantages of being a long term, relevant player in your niche.” 

Another seller who has products that have more than 3,000 reviews also expressed concerns about increasing competition. Someone with three 5-star reviews (which, therefore, may appear as 100% 5-star review score on search) could have a better chance of selling or landing on prominent sections of search results pages than seasoned sellers with 88% 5-star review percentage, for example.

In this Reddit post, most sellers expressed dislike toward the new formats, with some saying “conversions will drop” and they “will only benefit products with fake reviews more than others.”

One seller offers a cautiously optimistic view on the anticipated reviews shakeup, saying it is “good for new brands, but limits older brands. But if your product is good, it doesn’t matter.”

When all is said and done, according to Cordovez, Amazon could re-adopt the traditional reviews system, or perhaps just modify the review count to reflect the number of thousands. Alternatively, the company might completely revamp the system, concealing either the review count or the overall product star rating. Many sellers are sure to be well-engaged in observing how all of this unfolds.

Amazon Delays Delivery Date Based Reserve Policy for Some UK Sellers After Backlash

In response to strong criticism from UK sellers who feared potential business closures, Amazon has decided to implement its revised payment schedule gradually, the Guardian reported.

Last week, the eCommerce titan announced that it would no longer provide instant credit to UK and EU sellers upon the completion of an online sale. This is to help Amazon ensure that sellers will have enough funds to cover the cost of customer returns or claims.

Under the new arrangement, however, sellers will encounter a delay of one week between the product being delivered and the receipt of their funds, also known as Delivery Date Based Reserve. 

Suppose you ship an item on August 17, and the delivery date is August 20, then the sale proceeds will be available for disbursement starting August 27. Previously, sellers faced a waiting period of around three days for the money to become available in their accounts, but because of the new reserve policy, many may have to endure a 7-day (or longer) wait after delivery before gaining access to the funds.

This rule change has triggered concerns about the viability of many Amazon businesses. For small sellers, for instance, having to wait 7 days to receive their money could lead to difficulty in paying employees and loans.

In an email sent out to affected sellers four months ago, Amazon itself acknowledged that implementing the Delivery Date Based Reserve policy may result in “a one-time cash flow disruption.”

However, according to BBC, some sellers said that “this email was not clear, or in many cases, went to their junk mail folder,” leaving them totally unprepared when the new policy finally took effect on August 3.

Consequently, some UK sellers turned to their Members of Parliament (MPs) for help. A UK government minister has reportedly started demanding Amazon for answers.

Following growing pressure from both sellers and the UK government, Amazon told The Guardian it was postponing the policy change for some sellers until January 31, 2024. The retail giant specifically said it was “extending the transition date for a small number of sellers who have contacted us and need support.

However, one seller believes that this move only delays the inevitable and that their business could still go under, thanks to the 7-day cash flow disruption.

That said, preparation is key to minimizing the rule’s impact on your cash flow. Ensure you have sufficient funds to cover any disruption to your earnings. You may also want to consider short-term financing options, if needed, though, as always, be well-informed of the terms of any funding you accept.

It would also be wise to keep an eye on your customer orders and their actual delivery dates. Depending on carrier and shipment options (standard or expedited), it might take your carrier up to 5 days to get items delivered.

In that case, if it is under your control, calculate the difference between the cost of using same-day or next-day delivery service providers and the potential impact of cash flow disruption on your business. It might be worth paying extra for faster delivery speeds than delaying inventory orders for Christmas because you couldn’t access your funds on time, for example.

It could also be worth taking a bit more action than that as, currently, Amazon is “listening to sellers’ concerns and is in contact with those who have experienced a one-time cashflow disruption,” as reported by The Guardian.


Consider reaching out to Amazon or contacting your MP to express your concerns. A large number of complaints could force the retailer to take similar action as Etsy did. The online crafts marketplace recently had to revise a policy that held back up to 75% of some UK sellers’ earnings for 45 days to appease those that initiated a boycott against the platform. Presently, Etsy expects that the standard withheld amount will now be around 30%.

Related: Amazon Faces Backlash for Alleged Abusive Practices

Amazon Working to Bring USPS Ground Advantage to its Buy Shipping Service

In a recent announcement, Amazon revealed its ongoing efforts to incorporate USPS Ground Advantage (GA) into Buy Shipping, a service that allows FBM sellers to purchase and print shipping labels for orders they receive from shoppers on Amazon. This service helps sellers save time and effort by integrating the label purchasing process directly into the Amazon platform.

We’ll take a deeper dive into USPS’s newest shipping solution and see how it might benefit your Amazon business, plus a few tips to help you deal with unexpected hiccups during this transition period.

What is Ground Advantage?

Launched on USPS on July 9, GA is a new service offering that rolls First Class Package Service (for letters and parcels under 1 lb), Parcel Select Ground (for packages weighing between 1-70 lbs), and Parcel Select Cubic (priced based on parcel dimensions) into one.

That means you will now be able to ship items that weigh up to 70 lbs through a single USPS ground delivery service.

Previously, USPS business customers such as Amazon FBM sellers who buy and print shipping labels with an online postage service provider had to use different service options for different types of shipments and sizes. For example, First Class for letters and lightweight parcels and Parcel Select or Priority Mail for medium and large items, causing seller confusion and indecision.

Aside from offering a streamlined shipping option, USPS also sweetens the pot by adding these benefits:

  • Up to $100 insurance
  • No fuel or residential surcharges
  • Available for shipping hazardous materials (HAZMAT)
  • Package forwarding and return-to-sender endorsements are included for all USPS Ground Advantage shipments

Pricing by Weight and Zone

Ground Advantage’s fee structure features tiers based on package weight and postal zones or distance.

For packages weighing less than a pound (previously known as First Class Package), rates will be determined at 4-oz increments (4 oz, 8 oz, 12 oz, and 15.999 oz). Rounding up to the nearest tier also applies. For example, if your parcel weighs 3.5 oz, then you’ll pay the 4 oz price. 

For packages weighing over a pound, rates will be calculated in 1-lb increments, extending up to 70 lbs (aka Parcel Select Ground). There will also be dimension-based cubic rates for weights over 1 lb, previously known as Parcel Select Cubic.

2 to 5-Day Delivery Promise

USPS is also making use of its “improved service standards and modernized operational structure” to increase delivery speeds across 50 US states. GA promises 2 to 5-day delivery within the continental US, which is as fast as First Class and faster than the previous standard of up to 8 days for Parcel Select.

Price-to-Win Strategy

To provide you with greater savings, GA rates will be lower compared to its previous offerings, with the legacy carrier looking to the new ground delivery service as a way to boost profits after posting a $2.5 billion net loss and lower parcel volume in Q2 2023.

In a statement dated May 10th, USPS said that the “published prices for GA will decrease 1.4% relative to current Parcel Select Ground and First Class Package Service pricing. USPS Ground Advantage Retail prices will decrease by 3.2% and USPS Ground Advantage Commercial published prices will decrease 0.7%.”
Presented below are the changes in commercial pricing for Ground Advantage in contrast to First Class Mail Package, Parcel Select Ground, and Priority Mail services.

Ground AdvantageFirst Class Mail PackageParcel Select GroundPriority Mail
Delivery speed (days)2 to 51 to 5 2 to 8 1 to 3
Tracking IncludedIncludedIncludedIncluded
Insurance$100; you can buy additional insurance coverage up to $5,000$0; No for letters (unless you buy certain other add-on services)$0; but you can buy external insurance options$100; you can buy additional insurance coverage up to $5,000
Package pickupIncludedIncludedNot includedIncluded
Commercial Pricing as of July 9, 2023 (4 oz)$3.59 to $4.13 (from Zone 1 to Zone 9)Large envelope: From $1.551(4 oz) to $3.711 (13 oz) N/AFlat Rate Envelope: From $8.05
USPS Mailing Box (Flat Rate): From $8.55 
Your Own Box By Weight/Zone: From $8.55 to $45.07
Commercial Pricing (15 oz, Zone 1 to Zone 9)$5.85 to $6.78N/A – Max weight is 13 ozFrom $2.84 to $5.06 depending on destination entry$7.64 to $18.03
Commercial Pricing (3 lbs, Zone 1 to Zone 9)$7.17 to $11.43N/A$3.91 to $6.17 depending on destination entry$8.43 to $37.43
Commercial Pricing (10 lbs, Zone 1 to Zone 9)$9.38 to $18.73N/AFrom $4.70 to $9.02 depending on destination entry$10.82 to $91.62
Pricing (up to 0.20 cubic, Zone 1 to Zone 9) $6.32 to $8.03N/A$7.07 to $10.12Large envelopes and Parcels: $8.23 to $27.59
Pricing (up to 0.50 cubic, Zone 1 to Zone 9) $7.52 to $13.15N/A$7.36 to $13.66$8.74 to $56.29
Pricing (1 cubic, Zone 1 to Zone 9) $9.45 to $18.82N/A$9.30 to $17.68N/A

First Class (1C) and Parcel Select (PS) may be cheaper than Priority Mail (PM), but they come with certain disadvantages. 

While 1C’s delivery speed is faster than PS, it offers limited shipping weight options, requiring you to shift to other services that have a higher max weight limit. You could opt to use Parcel Select for heavier packages over Priority Mail to cut costs, but you’d have to sacrifice delivery speed. Plus, PS doesn’t come with built-in USPS insurance.

By merging 1C and PS into Ground Advantage, however, USPS presents a competitive shipping alternative in contrast to Priority Mail. You could see savings of as little as $1 to as much as $43 per package, specifically in larger cubic shipments. This could be huge given how FBA fees have substantially increased in the last two years, mainly due to dimensional weight pricing and surcharges.

Not only does GA come with $100 insurance and decent delivery promise (albeit depending on destination and time of year it could be slower than 1C and PM), it also employs a pricing structure that adjusts according to weight, zone, and dimensions. That means you could get affordable rates for shipping compact packages over shorter distances. 
Conversely, rates may go up for longer or larger, lightweight items like pillows and tiki torches, as they take up more space. Being charged by dimensional weight (plus any applicable non-standard size fees) rather than your product’s actual weight can lead to higher shipping costs that can cut into your profits, unless you implement a price hike or resize your packaging to get to a lower size tier.

Related: Master Carton Calculator to Optimize Packaging and Reduce Shipping Costs

Another workaround is to buy USPS labels through Amazon, Shopify, ShipStation, or Pirate Ship to potentially save on fees. These online shipping label providers offer negotiated rates that are typically lower than the published rates.

Amazon, for instance, recently announced it’s now offering the lowest commercial USPS rates available, with an average of 35% off USPS Ground retail rates

Pirate Ship boasts even bigger savings. Its USPS Commercial Pricing offers discounts “up to 89% off what you’d pay at the Post Office.” 

Check out the full USPS price list here.

A Few Caveats

While some sellers may like the fact that they can now ship heavier packages without having to go the Priority Mail route, which is more expensive, others may not be happy about:

  • Slower delivery times. The 2 to 5-day delivery speed may be too slow for time-sensitive parcels or when trying to get your goods delivered on time during peak season. So, be sure to factor these variable into your process. Alternatively, you may also use Priority Mail for urgent shipments.
  • Transitioning issues. On June 30, USPS experienced some technical issues in preparing its system for the shift from First Class and Parcel Select to the new Ground Advantage shipping service.

    “Our IT teams are currently investigating the issues and plan to resolve these issues on July 2, 2023. Display issues on other eVS reports related to USPS Ground Advantage instead of First-Class Package Service, will be resolved as a part of the July 9, 2023 Release.”

    A few days after GA went live on eBay, however, several merchants reportedly run into some problems. For example, the USPS scanners failed to recognize the QR codes for the new shipping service, the listing form on the seller side displayed inaccurate pricing, and the vague wording of eBay’s announcement left many sellers confused about the steps they need to take to update their listings with the previous USPS services to Ground Advantage.

    It would be very concerning if these technical issues continue through Q3 because that’s when most sellers start to prepare for BFCM and the holiday sales period. Sellers want to make sure that there are no delays when shipping a large volume of packages during the busiest time of year. Exercise prudence by meticulously reviewing all facets concerning USPS shipping and billing, particularly as soon as Amazon launches GA, to preempt any potential issues during crunch time. 

Related: 3PL Logistics Backup Plan for Amazon Sellers

Many Amazon sellers are also not happy about the fact that it’s taking Amazon so long to enable Ground Advantage on its Buy Shipping platform, as this means they’re still stuck with the slower Parcel Select service and paying the additional insurance. Worse, a couple of sellers reported that their First Class parcels were refused by their local postal office locations, one stating that “USPS in my region is refusing to accept any First Class packages. They are rejecting all package with a First Class label printed from Amazon.”

Unfortunately, no official launch date has been released yet by Amazon. But according to USPS, it will still accept all First Class and Parcel Select services without penalty until September 30, 2023, allowing for an easier transition.

While Amazon is still playing catch up (perhaps working through some implementation issues), consider buying GA shipping labels from other service providers to be able to enjoy the mentioned benefits. If you’d like to stay with Buy Shipping, continue using the outgoing legacy services for your orders in the meantime. Just make sure to inform Amazon of any postal offices that refuse to accept parcels with First Class or Parcel Select labels to resolve the issue immediately.

All things considered, Ground Advantage seems to be a welcome improvement over First Class Mail with the max shipping weight limit expanded from 13 oz to 1 lb (plus insurance), Parcel Select with the faster delivery speeds and built-in $100 insurance coverage, and, with significantly lower rates, over Priority Mail as well.

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

Amazon Feature Updates: 3 New Seller Tools and Product Recall Reporting Page

Over the last two weeks, Amazon has made a series of announcements introducing new features and dashboards for Amazon sellers. Let’s recap.

  1. View Insights on Your FBA Returns (UK)

    Introducing a fresh addition to UK Seller Central is a dedicated page that shares comprehensive insights into your FBA customer returns. Find out the reason behind the return, customer feedback, grading disposition, and return status updates, so you can take action on returns that may be eligible for reimbursement.

    Amazon has established clear guidelines concerning customer returns and associated refund processes. Should a return fail to align with these guidelines, sellers may request a refund reversal for the amount that Amazon debited from their account.

    For instance, you may have a return request with “Customer refunded” status, but the customer never sent the item back. Or, Amazon reps themselves mistakenly accepted a return with missing parts or approved a return and refund request past the 30-day return period.

    In that case, file a reimbursement claim with Amazon 60 days (and no later than 18 months) from when the customer refund occurred.
    Visit FBA Returns to learn more.
  1. Brand Tailored Promotions to Customize Promo Codes

    Just in time for the second Prime Day in October, Amazon introduces a new marketing tool that lets you to create and send discount codes to various types of customers.

    Called Brand Tailored Promotions, you can use this free tool to entice potential new customers, brand followers, repeat shoppers, big spenders, and cart abandoners (those who have added some of your products in their cart but haven’t bought in the last 90 days) with discounts ranging from 10% to 50%. Offering discounts will not only help you to expand your customer base but also encourage recurring transactions and boost customer retention.

Here’s how to get started:

  • Go to the Advertising tab in Seller Central and click on Brand Tailored Promotions.
  • In the drop-down menu, choose the brand and audience type you want to create the special offer for. The discount will be applied to all ASINs within the selected brand and each eligible shopper can only redeem the discount on a single purchase.
  • Fill out the Promotional Details section with your preferred promo name, discount percentage, budget, and promo start and end dates.

Note that unlike Amazon Tailored Audiences, Brand Tailored Promotions do not allow email messaging your existing customers. Instead, the tool showcases your promotional discount to your target audience type(s) on your product listing, search result pages, and Amazon’s dedicated promotional shopping pages. 

Visit Brand Tailored Promotions to learn more.

  1. Free 20,000 Transparency Codes for One Year

    Every new product enrolled in Amazon’s Transparency program by December 31, 2023, entitles brands to receive free 20,000 Transparency codes for a duration of one year.

    Distinctive for each product, a Transparency code is an alphanumeric, non-sequential barcode. When affixed to your product’s packaging, it means that the product is authentic, thereby protecting customers against counterfeit or inaccurate product variations, such as differences in compatibility, color, materials, language, and regulatory compliance. 

    Before enrolling in the program, be aware that applying a Transparency code to each qualified unit requires a bit of work.

    One seller commented that they have to “scan each transparency code” and “upload it to each and every order”, and thus, “should get reimbursed for the hassle, time and extra training we have to give to all employess to do this.”

    Given this, the benefits of Transparency are generally found with businesses prone to counterfeiting or unauthorized sellers.

    If the Transparency program fails to meet your expectations, you may reach out to Brand Registry Support to unenroll products. However, withdrawing participation from the program may be challenging, and sometimes unsuccessful, according to some sellers. 

    To make an informed decision, learn more about this special offer by contacting Amazon or checking out this presentation.

Related: Amazon Hopes to Restore Consumer Confidence with $1.2B Anti-Counterfeit Initiative

  1. Recalls and Product Safety Alerts Page

    On July 26, Amazon launched a new page that provides customers with details about recalls and product safety alerts related to their orders.

    This means Amazon customers will no longer need to go hunting for information about recalled products on various news outlets or relevant government websites such as recalls.gov, National Highway Traffic Safety Administration (NHTSA), US Food and Drug Administration (FDA), and the US Department of Agriculture (USDA). They can simply go to “Your Recalls and Product Safety Alerts” page within their accounts. Furthermore, any recall or product safety announcement will also be dispatched to customers via email.

    Amazon is also making efforts to provide accessibility to this new system for third-party sellers as well. Sellers in the US will have the option to participate in Amazon’s Recalls Logistics Service (RLS).

    By opting in, sellers can effectively communicate with their customers who have purchased items that are subject to recalls. Meanwhile, Amazon will take on the responsibility of handling refund issuance on behalf of sellers and overseeing the intricacies of return logistics.

    However, a limitation of this system lies in its focus on US sellers and its reliance on an opt-in model. A considerable portion of Amazon’s marketplace sellers operate from overseas locations, often within regions that lack the same rigorous safety standards found in the US. 

    This discrepancy has led to instances where hazardous products from third-party sellers have found their way into the hands of American consumers.

    A CBS News investigation in 2019 highlighted examples like unsafe children’s toys entering the market through Amazon. The retailer has since removed said products from its eCommerce site. A Product Safety Team has also been put in place to keep an eye on the products sold on Amazon.com and investigate product safety concerns.

    The team normally takes their information from public recall alert websites, manufacturers, and sellers. And when they learn of a recall, they may:
  • Remove the product from Amazon.com and hold any available stock in FBA.
  • Reach out to sellers and manufacturers for more details about the recalled product or its potential safety hazards.
  • Add a warning label to the product detail page.
  • Inform relevant government agencies of any product safety complaints or incidents.
  • Contact customers that purchased recalled or potentially hazardous products to tell them the next steps to take, such as refund, return, or repair.

In this way, Amazon hopes to make its platform a safer, more trustworthy retailer for consumers, assuring that they will not get their hands on items that don’t meet the standards set by the Consumer Product Safety Commission (CPSC).

UPDATED: UPS Workers Ready to Repeat 1997 Mass Walkout Over Pay, Work Conditions

UPS Workers Ready to Repeat 1997 Mass Walkout Over Pay, Work Conditions

UPDATE 07/25/2023: 💪UPS and Teamsters have just set a higher labor standard for the logistics industry after reaching an agreement.

Described as “historic” and “overwhelmingly lucrative” by the union, the five-year tentative contract includes pay raises for all 340,000 workers, additional full-time positions, and several workplace safety improvements.

Each UPS union worker is set to enjoy a $2.75 per hour salary hike during the present year, followed by a series of gradual wage increases totalling $7.50/hour over the subsequent five years. These increases will push UPS’s average top rate for its unionized full-time drivers to $49 per hour, making them the highest paid delivery drivers in the US.

Part-time employees, comprising half of the workforce, will see their starting wage rise to $21 per hour, marking a significant improvement from the current starting hourly rate of $16.20, albeit lower than the $25 an hour advocated by a group of part-timers. But through general wage increments, plus longevity bonuses of up to $1.50 per hour, part-timers may still be able to reach their desired hourly rate over the next five years.

Another significant win was claimed by UPS and Teamsters with:

  • The establishment of 7,500 new full-time positions, which will provide part-timers with more opportunities to transition to full-time jobs.
  • The addition of Martin Luther King Day as a paid holiday and putting an end to forced overtime on off days.
  • Removal of the two-tier wage system. All second-class drivers, or 22.4s drivers (see article below), would be reclassified to Regular Package Car Drivers and promoted based on seniority.
  • Enhanced working conditions for UPS drivers. Starting from January 1, 2024, UPS will be installing air-conditioning units in all of its new delivery vehicles. Moreover, to guarantee optimal ventilation within the cargo compartments, UPS will also install two fans and air induction vents in all of its vehicles.

According to Teamsters, over 60 total changes and improvements were made to the National Master Agreement.

“UPS has put $30 billion in new money on the table as a direct result of these negotiations. We’ve changed the game, battling it out day and night to make sure our members won an agreement that pays strong wages, rewards their labor, and doesn’t require a single concession. This contract sets a new standard in the labor movement and raises the bar for all workers,” said union President Sean O’Brien.

On July 31, representatives of the UPS Teamsters locals will meet to review and recommend the tentative offer. The endorsed agreement will then be put to a vote by the union members from August 3 to 22.

UPDATE 07/19/2023: A UPS protest on August 1 remains possible, as no agreement has yet been reached between the carrier and Teamsters. 

On July 5, contract talks collapsed, with both parties accusing each other of walking out of the bargaining table.

Teamsters reportedly refused to take UPS’s “unacceptable offer,” while the logistics giant denied it ended the negotiations.

According to the union, “UPS refused to give the Teamsters a last, best, and final offer, telling the union the company had nothing more to give,” adding it has “repeatedly made clear that UPS members will not work beyond the expiration of the current contract.”

Two weeks after talks broke down, UPS announced it will re-engage in negotiations with Teamsters, presenting an improved offer. The primary objective behind this move is to prevent the looming threat of a potentially detrimental strike scheduled for August 1st.

“We are prepared to increase our industry-leading pay and benefits, but need to work quickly to finalize a fair deal that provides certainty for our customers, our employees and businesses across the country,” UPS said in a statement.

UPS accounts for nearly a quarter of all parcel shipments within the US. That makes the company second only to USPS with 32% and ahead of Amazon with 23%, according to global shipping and mailing firm Pitney Bowes

This means any widespread disruption to its operations may not only delay UPS deliveries in the country but also overwhelm other carriers left to pick up the slack.

A huge financial loss may also result. A new report from the Anderson Economic Group shows that a 10-day strike at UPS could cost the US economy over $7 billion, with customers and small businesses themselves losing roughly $4 billion.

If that happens, it would be the costliest work disruption in a century, and the largest protest (over 340,000 workers) against an employer in the country’s history, the economic group found.

But amid disagreements and roadblocks, many transportation analysts remain optimistic that a deal will be struck between UPS and Teamsters well before the deadline. The underlying reason for this positive outlook is the interdependence that exists between both sides.

“Both sides are going to suffer if there is a strike and there is no revenue flowing to the company and no wages to the workers. They’re both going to lose in the end, because some shippers will shift to other carriers and not come back. And there will be other challenges to disappointing your customers that rely on you,” Paul Bingham, Director of Transportation Consulting at S&P Global Market Intelligence, told Transport Topics.

Amazon Taking Measures Ahead of the Potential UPS Strike

In a statement to USA Today, Amazon rep Steve Kelly said the company has been working to streamline its logistics network.

Amazon has recently installed same-day sites in major cities and is actively recruiting local businesses in rural areas as delivery partners for improved Prime delivery speeds. This could help minimize the impact of the looming strike on their logistics operations.

However, there could be some delays for sellers and customers in areas that heavily depend on UPS, experts warn.

“Amazon’s delivery service providers, the Amazon vans, those are more for denser urban areas where you have a lot more package density,” supply chain expert Jason Miller explained.

“So your Amazon shoppers in rural areas, and just in general areas that have less customer density, they’re the ones that are most likely to be affected.”

Amazon sellers that handle their own fulfillment and delivery “could also take more time since there’s a good chance that they could be using UPS.”

In that case, consider discussing your other options with your 3PL. For instance, you may want to implement backup carriers to stay flexible during supply chain disruptions.

🪧 In August 1997, around 185,000 UPS employees staged a 16-day long protest over pay and job security, causing a nationwide service disruption that cost America’s largest courier $780 million in losses.

The aftermath of the strike also left a lasting concern among customers that it could occur again, a warning that may soon proved prophetic if UPS fails to reach a deal with its unionized workers by July 31, 2023.

Teamsters Prepare for Contract Talks with UPS

The existing five-year contract between UPS and Teamsters, a labor union representing 350,000 UPS workers, is set to expire by the end of July. Negotiations over the new work terms and conditions will start in April.

Currently, the union’s UPS National Screening Committee is reviewing thousands of proposals for contract terms they should include in the Master Agreement.

Key issues that Teamsters aim to address include:

  • Pay gap between regular drivers and second-tier delivery drivers, known as 22.4 drivers after contract Article 22.4. In 2017, UPS rolled out Saturday Delivery to keep up with Amazon, FedEx, USPS, and gig workers that make weekend deliveries. To offer this service, the company hired second-class drivers whose rate ranges between $20.50/hour and $30.64/hour, whereas regular drivers’ can reach up to $40/hour. That’s a huge pay gap issue that Teamsters General President Sean O’Brien and some senior drivers aim to close by removing 22.4 employee classification or UPS’s two-tier wage system and expanding the number of full-time offers.
  • Part-time salary increase. O’Brien will push for a $20 starting rate (from $15.50) for part-timers (drivers and warehouse workers) and urge UPS to reward those who have been holding a long-term part-time position. Part-timers should also be given an opportunity to convert to full time.
  • Excessive overtime. A report from More Perfect Union reveals UPS forcing some of its drivers to take 12-hour shifts and constant overtime on the weekend, thereby ruining several marriages and families.

    In an interview with Insider, O’Brien said that the union is “open to finding a solution to the seven-day week delivery.”

    For instance, FedEx has been offering weekend deliveries for a couple of years, but has recently reduced Sundays in an effort to cut costs amid slowing eCommerce demand. 

    UPS may follow suit but that could also mean laying off numerous employees or hiring more seasonal workers.

    The stakes are higher at UPS, however, as the job cuts could impact 350,000 unionized workers responsible for handling and shipping the courier’s 21.1 million US daily package volume, which Teamsters could use as leverage. A mass walkout might force UPS to stop its operations until an agreement is reached.
  • Personal Vehicle Drivers (PVDs) or subcontractors. PVDs are temporary drivers hired to help full-timers deliver items while using their own vehicles. 

    Based on the existing contract, UPS can outsource jobs to seasonal drivers as long as the company gives priority to union workers. That means independent contractors may not be entitled to some benefits or incentives.

    Teamsters aim to eliminate “outsourcing” to ensure every UPS worker is “classified, treated, and paid as an actual employee, protected by a Teamster contract,” a spokesperson told Insider.

Related: California Truckers Protest AB5

  • Surveillance cameras. UPS has reportedly installed front-facing and driver-facing cameras inside their trucks that act as motion detectors to alert drivers when they don’t fasten their seatbelts or they’re using mobile devices while driving.

    However, for O’Brien, the inward-facing cameras are an “invasion of privacy,” and therefore, must be removed.

    “That’s just another tool to increase productivity and hold our members hostage,” he added.
  • Heat protection. 24-year-old UPS trucker, Esteban Chavez, Jr., died from heatstroke after finishing his last delivery in July 2022. This incident has prompted union members to demand UPS to put in place better heat-related safety initiatives like getting a fan installed in their vans or not giving them 12- to 15-hour routes during the hotter months.

If no agreement is reached on time, hundreds of thousands of UPS workers may hit the pavement in August to demand higher pay and better working conditions. 

In a statement to CNN in 2022, O’Brien said that the union will make use of its $350 million protest fund to get every advantage they need to win the contracts they want. The contract negotiations will also serve as an example for other workforces that have yet to unionize.

“Striking is a last resort, but if a company is not negotiating in good faith, we’re going to get what our members deserve.”

In other words, if Teamsters end up launching a protest this summer, it’s UPS’s fault. And given the fact that UPS handles more than 6% of the country’s gross domestic product (the only company to do so), the strike could create a massive void that the other courier service providers may not be able to fill, putting thousands of small businesses in a vulnerable position.

Consumers will most likely also have to endure delivery delays. 😫

UPS CEO Addresses Labor Issues

During the company’s Q4 2022 earnings call, UPS CEO Carol Tome assured analysts that a “win-win-win” agreement would be reached by July 31st.

“I would submit that a win, win, win is very achievable because we are not far apart on the issues. And let me make this real for you by giving you a few examples. First, both Teamsters and UPS agree that a healthy and growing UPS is good, good for Teamsters, good for our people, and good for our customers. In fact, we’ve added more than 70,000 Teamster jobs since 2018. So, we’re aligned that a growing and healthy UPS is good. To be growing and healthy, we need to be competitive and make sure that our offerings meet the needs of our customers.”

Tome also thinks that resolving these labor issues will only require “just a few tweaks” to the company’s existing contract with Teamsters. 🤔

These tweaks might include:

  • Implementing “new technology and hydration measures” to keep drivers and warehouse staff safe in sweltering heat.
  • Drivers, specifically 22.4 drivers, may opt not to work 6 days a week to reduce pressure on the workforce with weekend operations.

The company remains vague about raising pay rates, though. Moreover, Teamsters’s O’Brien also refused to disclose what the bottom line is for launching a strike.

The 1997 protest was won by getting UPS to agree to:

  • Increase pensions by up to 50%
  • Give hourly rate increases: $3.10 for full-time workers and $4.10 for part-timers over the next five years, the biggest salary increases at the time
  • Offer full-time positions to the company’s 110,000 part-timers

If union members go on strike this year, UPS reportedly has contingencies in place to reduce the event’s impact on its network.

According to sources interviewed by Freight Waves, UPS has requested its managers “not to schedule any paid time off during July and August in case parcels are required to be moved,” indicating the company’s desire to stay operational if Teamsters push through with its plans to walkout en-masse.

Other Things You Can Do

💪 Consider the following actionable tips when building your own contingencies in preparation for the potential Teamsters protest in August.

  • Discuss logistics strategies with your 3PL partner so you can stay flexible during disruptive protests.
  • If not working with a 3PL, consider splitting your shipments between UPS and other carriers like FedEx.
  • If using FBA, book delivery appointments ahead of time.
  • Make sure you have enough inventory stored in Amazon, 3PL, and/or supplier’s warehouse to avoid stocking out due to inbound delivery delays caused by the mass walkout.

Related: Amazon UK Workers to Launch Historic Strike in Early 2023, How to Ship to Amazon FBA (And Speed Up Check-In Times), Amazon Inventory Risks + 5 Tips to Mitigate Them, Bad Actors Book Multiple Inbound Amazon Delivery Dates to Create Scarcity

Amazon Offers New Fulfillment Fee Discounts on Select ASINs

📣 ICYMI: Amazon quietly introduced a new discount program Sufficient Inventory Level Promotion. This limited-time offer grants eligible sellers reductions on forthcoming fulfillment fees. 

To unlock these cost-saving benefits, you must have ASINs that meet Amazon’s eligibility requirements for the program and send in the suggested unit quantities for those products during specific time frames.

Are your products eligible?

Enrollment in this promotion is limited to specific ASINs only, determined by several factors including forecasted demand. 

Unit Demand Forecast is Amazon’s FBA restock tool for high-velocity products.

The graph above shows two main prediction levels: optimistic forecast model and mean prediction level, which Amazon describes as:

If the forecast shows you’re likely to stockout during the next quarter for example, you may receive a new recommended minimum that you should send in by a given ship date. Not only will this help you to stay in stock, but also qualify for a discount.

Amazon may want to incentivize efficient sellers because keeping a good amount of inventory at FBA allows the company to bring products closer to customers and therefore, fulfill orders faster. 

Note: If you’re using a third-party inventory forecasting platform or Economic Order Quantity model, you may notice your own forecasts may differ from Amazon’s depending on the restock recommendation settings used.

For example, SoStocked helps you generate a more accurate inventory forecast by allowing you to include in many variables not factored into most basic forecasts, such as adjusted daily velocity (accounting for stockout days to avoid under-ordering), sales spikes, lead times, future marketing plans, and more. This is a feature that Amazon’s tool currently doesn’t have so its forecasts may be inaccurate when compared to a more sophisticated inventory management software.

That means you may end up ordering too much or too little inventory and as a result, incurring additional fees, possibly canceling out the benefits of the promo offer.
Read this blog post to learn more about Amazon’s restock algorithm.

To see which ASINs are eligible for the promotional fee discount, you have a couple of options. 

  • Go to the “Fee Discount (New)” column on the Restock Inventory page or utilize the Send to Amazon workflow.
  • Download the Restock Inventory Report or use the Fee discount filter on the Restock Inventory page, which provides a list of ASINs that qualify, along with the corresponding fee discounts and ideal minimum units.

Discount Period Dates

Qualify for the fee discounts by shipping the recommended minimums to FBA during these three “goal periods.”

  • May 15 to June 14 (Past)
  • June 15 to July 14 (Current)
  • July 15 to August 14 (Upcoming)

Credit Period 

After each goal period concludes, expect a processing time of two to four weeks for Amazon to verify whether you have met the requirements and the subsequent application of discounts as reductions in your future fulfillment fees.

According to Amazon, discounts will be applied to all of your eligible ASINs, not just to the ASINs that met the minimum-units requirement.

Let’s say one of your eligible ASINs earned a $40 discount for meeting the replenishment goal in May-June. Instead of applying the discount on that single ASIN, Amazon may apply a one-time $40 fulfillment fee discount across all your ASINs. 

However, it is unclear where the discounts (pick and pack, referral, etc.) will be applied specifically. The policy just states:

“Your goal status, total units received, and discount earned will show on the Restock Inventory page and Restock Inventory report within two to four weeks after each goal period.”

What happens if you don’t meet the minimum threshold?

If you sent in some units but didn’t meet the minimum threshold, no partial or prorated discount will be given to you – for example, splitting a single shipment into smaller batches to try to earn a partial discount each time you ship one batch in.

Moreover, surpassing the recommended minimum for the specific goal period will not result in higher discounts.

Fortunately, you can try to increase your chances of earning fee discounts by:

Related: How to Automate Amazon Inventory Forecasting, 4 Ways to Improve Your IPI Score, Pros and Cons of Amazon Inventory Placement Service, How to Avoid Delays in Purchasing Inventory, 11 Benefits of Amazon Inventory Trackers

Sellers Cry Foul Following Amazon’s Decision to End FBA Small and Light

Amazon just found more pennies to squeeze out of sellers! 💰

On June 29, 2023, the etailer announced they will be replacing US FBA Small and Light (SnL) with a new program that will, in some ways, be similar to the current SnL program and in other ways much different. 

The first strange thing to note about this change is this, back in January, the SnL price cap for eligible products increased from $10 to $12. Now, 7 months later Amazon will be sunsetting SnL and shifting to this new program called Low-Price FBA, effective from August 29, 2023.

This change, however, sets the price threshold back to $10. That means although the new rates may still offer financial advantages to qualified items, they, for the most part, do not match the substantial benefits that the new 2023 SnL provided.

Per Amazon, general estimates suggest that:

The above messaging is a bit of Amazon sleight-of-hand. They lead with the benefit to sellers not currently enrolled and boast an average $0.77 savings on these products. However, these products should already have been getting this savings anyway but if they were not enrolled, they missed out.

And while it is true that Low-Price qualified products will save significantly over standard rates, a majority of those currently enrolled in the SnL program will actually see their fees increase and by an average $0.30 per unit by Amazon’s estimation, a significant impact to the under $10 product segment with already razor thin margins. 

Others in the $10 – $11.99 range will be fully priced out of their current discounted rate starting August 29th.

Check out the table below to see the price changes in detail (SnL vs Low-Price FBA vs Standard FBA) and their potential impact on your margins.

Size TierShipping WeightSnL Rates (as of January 17, 2023)Low-Price FBA Rates excluding apparel (Starting August 29, 2023)Standard FBA Fulfillment Rates (2023)
Small standard4 oz or less$2.47$2.45$3.22
4+ to 8 oz$2.54$2.63$3.40
8+ to 12 oz$2.61$2.81$3.58
12+ to 16 oz$3.15$3.00$3.77
Large standard4 oz or less$2.66$3.09$3.86
4+ to 8 oz$2.77$3.31$4.08
8+ to 12 oz$2.94$3.47$4.24
12+ to 16 oz$3.77$3.98$4.75
16+ oz to 1.5 lb$4.42$4.63$5.40
2+ to 2.5 lb$5.19$5.33$6.10
2.5+ to 3 lb$5.40$5.62$6.39
3+ to 20 lb$6.40 + $0.16/half-lb above first 3 lb$7.17 + $0.16/half-lb above first 3 lb
Small oversize70 lb or less$8.96 + $0.42/lb above first lb$9.73 + $0.42/lb above first lb
Medium oversize150 lb or less$18.28 + $0.42/lb above first lb$19.05 + $0.42/lb above first lb
Large oversize150 lb or less$89.21 + $0.83/lb above first 90 lb$89.98 + $0.83/lb above first 90 lb
Special oversizeOver 150 lb$157.72 + $0.83/lb above first 90 lb$158.49 + $0.83/lb above first 90 lb

While it appears that Low-Price FBA is indeed cheaper than standard FBA, it generally still has higher rates than Small and Light. 🤔

Suppose you have an SnL product that weighs 1.5 lbs and retails for $11.99. Under SnL, shipping would only cost you $4.42 per unit, but once Low-Price takes effect, your per unit FBA fee would move to standard rates, jumping to $5.40. That’s a $0.98/item increase – enough to potentially make products under $11.99 unprofitable.

The other strange thing is that, while, with SnL, eligibility capped at 3 lbs or less, Amazon has eliminated the weight and size restrictions from the Low-Price FBA program which allows both Large Standard products over 3 lbs as well as oversize products.

The joke here is that those heavier products have to be priced at under $10. So, while the product types newly included in this program can technically qualify, the fees almost certainly guarantee that the product, after Amazon fees, will be losing money. 

For a bit of solace in the face of this change, what makes up for the higher fees, according to the retailer, is the faster fulfillment speed which “customers love.”

SnL may have the lowest fees, but the program also provides slower shipping times than standard FBA. And given how the last-mile battle among eComm giants has been heating up lately, Amazon getting rid of SnL to offer customers faster delivery speeds across all product types and sizes might be one way to maintain edge – to say nothing about increasing their bottom line. 

For some sellers, the trade-off may be worth it, but for those who make just enough money or are struggling to stay afloat amid rising inflation, losing SnL may result in a substantial change to their business economics. 
As previously mentioned, Low-Price FBA only applies to products under $10. Without SnL, ineligible sellers might be forced to:

  • Absorb the fee increase and consequently, operate with thinner margins
  • Resize product packaging to achieve a lower size tier and to be able to ship as many units per carton/pallet as possible, thereby reducing shipping and storage costs
  • Implement a price hike
  • Reduce their prices to meet the new Low-Price threshold
  • Stop selling small and light products that don’t meet the new price limit
  • Ditch Amazon for a more affordable sales channel

What’s worse is that SnL sellers only have a little over a month left to prepare for this (unwelcome) change. Those who have inventory that’s scheduled to arrive after August may have to adjust their strategy now to account for the potential fee increases. 

What Sellers Are Saying

Amazon’s decision to decrease the cap from $12 to $10 was understandably met with dissatisfaction among sellers, who expressed their discontent.

A comment by one seller emphasized the importance of reevaluating the products falling within the $10-$12 price range. 

Another seller said that this change is “another example of Amazon taking a bite out of 3rd party sellers profit. If anything the price should have increased from $11.99 to 12.99, not gone backwards. Many customers do not care about delivery times like they used to obsess over it.” 

One suggests “If Amazon brought it up to $20, I would lower my prices to under $20 and I think the volume increase would be a triple win – Amazon, customers and our business.”

In summary, this news may catch sellers with products enrolled in SnL off-guard, as Low-Price FBA could have a significant adverse effect on a substantial number of customers, causing negative repercussions for everyone involved, including Amazon itself. Most items under $12 will likely see a retail price increase of up to $5 due to this change, further reinforcing the association of Amazon with higher prices.

As what many sellers suggest, it would be best for Amazon to reconsider and either maintain the $12 threshold or, better yet, raise it to a more favorable price point. Otherwise, the upcoming SnL replacement and the noticeable increase in prices may drive many Amazon customers towards competing eComm platforms and social commerce sites.

Related: 2023 Amazon FBA Increases, Pallet Calculator to Optimize Load Capacity, Master Carton Calculator to Reduce Costs

Aggregator Shakeups and Shifts in Strategy

Online sales growth is slowing after a huge spike during the pandemic, driving Amazon aggregators, or aggs, to implement various strategies to combat funding slowdown and declining revenue.

Strategy Shifts

In 2021, investors injected more than $12 billion into a new generation of startups that set their sights on acquiring Amazon marketplace sellers. However, beginning the first half of 2022, the flow of funding has considerably diminished, and the once-vibrant landscape of dealmaking has come to a near standstill.

“The private market almost shut down,” said Riccardo Bruni, Co-Founder of UK-based aggregator Heroes, in a statement to the Financial Times.

“For a certain period of time access to capital became impossible.”

The slowdown can be attributed to cooling demand amid inflationary pressures and recession fears – a confluence of events that has overall sparked caution among investors, leading to a more reserved approach.

Compounding the issue are the escalating FBA fee hikes implemented by Amazon, surging over 30% since 2020. This has significantly impacted the profitability of both sellers and aggregators. 

As a result, several aggregators find themselves compelled to make the following measures to foster margin improvements.

Layoffs 

Boosted Commerce, a California-based company, made the decision to downsize its workforce by 20% earlier this year. Similarly, Thrasio, a leading aggregator, had to lay off an undisclosed number of employees in 2022.

Thrasio’s new CEO, Greg Greeley, revealed in an interview with Forbes magazine that the company had mistakenly assumed that the demand for eCommerce would remain at pandemic-era levels. As a result, Greeley emphasized the need for Thrasio to readjust its expectations, ensuring that excessive inventory is not held and that acquisition prices are not set too high.

Other aggs with layoffs last year include the Benitago Group and SellerX.

Putting Acquisitions on Pause

As brick-and-mortar stores reopened, eCommerce demand slowed, making small sellers less appealing to potential buyers. Consequently, the estimated valuations of these smaller sellers plummeted, leading some aggregators to halt their acquisition efforts.

According to industry insiders who spoke to the Financial Times, the number of major aggregators actively pursuing new sellers has dwindled to less than ten. In the past, these aggregators were even willing to incur significant debts, often accompanied by steep interest rates of around 18%, all for the sake of finalizing acquisitions.

These acquisitions, in some cases, were completed at multiples as high as 7x the sellers’ adjusted valuation or earnings before interest, taxation, depreciation, and amortization (EBITDA). However, by Q1 of 2022, these brands were not performing as well as aggs had expected, primarily because for the first time in history, in-store shopping grew faster than eCommerce. That means aggregators have paid inflated prices for a large portion of those brands

With sales and funding shrinking dramatically in 2022, aggs have come to realize that relying solely on acquisitions for growth is not always a sustainable approach. As a result, some companies are opting to launch their own brands instead of acquiring existing ones.

For instance, Amazon aggregator Upexi is cautious on acquisitions spending 90% of its time building the business organically and 10% of its time on Mergers & Acquisitions (M&A).

Strategically Buy Up Quality Brands at Lower Prices

The long-term value of established aggregators may decline if the products they offer are considered common commodities. In a highly competitive market, only those who offer unique products are likely to survive.

So, while some aggs had to stop dealmaking completely, others have shifted their focus from doing rapid acquisitions to selectively “buying great assets at 20%-30% lower prices.”

Thrasio, for example, has expressed its growing involvement in emerging sectors that pose greater challenges for market entry. 

In an interview with Modern Retail, Thrasio President Danny Boockvar said that the company is actively expanding its portfolio by acquiring brands that they identify as a growth category, such as cleaning. These particular categories present higher barriers to entry (gated or regulated) due to the complexities associated with manufacturing products involving various chemical components.

Olsam, a European aggregator, disclosed to Modern Retail its strategic expansion into uncharted territories of patents and intellectual property, moving beyond conventional performance indicators such as seller ratings and product reviews.

Smaller aggs such as Heroes, Cap Hill Brands, and Gravitiq have also taken steps to streamline their operations and concentrate on a narrower range of categories.

Foundry Brands, in particular, exemplifies this trend by prioritizing quality over quantity as part of its aggregation strategy. Since its establishment in 2021, the company has strategically acquired fewer than 10 brands in total, emphasizing a selective approach.

Simultaneously, the prevailing economic conditions have presented an opportunity for aggregators to acquire high-quality brands at more affordable prices compared to the previous years.

Consolidate through M&A with other Aggregators

Facilitating strategic alliances and synergies is one way to create growth in times of austerity. From buying up online sellers, aggregators pivot to purchasing each other.

  • Acquisitions. To navigate the challenges, aggs have started acquiring one another, often expanding their reach globally. In a recent acquisition, Berlin-based SellerX purchased Elevate Brands, headquartered in Austin. By taking over Elevate Brands, SellerX will now oversee 80 Amazon marketplace brands, generating an impressive annual sales figure of $426 million. This also gives the heavily Euro-focused agg a better foothold into the US Amazon marketplace.

    Other noteworthy acquisitions took place in 2022 when Olsam acquired Flywheel Commerce and Marketfleet, and in April 2023 when Razor Group snapped up Stryze.
  • Mergers. Two smaller US aggregators, Suma and D1 Brands, recently merged to form a consolidated entity known as The Ambr Group. This unified business now manages a portfolio of over 30 enterprises, amassing a substantial annual revenue exceeding $100 million.

Less accomplished aggregators looking for cash in these tough economic times, however, could face the pressure of liquidation. 

According to Marketplace Pulse, there are 93 active aggregators across the world, 5 of which – namely Thrasio, Berlin Brands Group, Perch, Heyday, and SellerX – raised over $7 billion in 2021.

What’s Next for Amazon Aggregators?

Aggregators interviewed by Modern Retail believe that it’s not all bad news. There’s still a lot of growth opportunities in 2023, whether that means finding growth through M&A with other aggs, exploring beyond Amazon, or applying a more selective aggregation approach.

As Forum Brands CEO Brenton Howland puts it, “For sellers who are out there and want to know what the future state of the Amazon ecosystem is, as it relates to acquisitions, its continued health and activity. It may not be quite at the rate at the level that we saw in 2021. In 2023, we’ll see a healthy return to normalcy for business models that from a fundamentals perspective are outstanding and will continue to be that way.” 

Related: Amazon Aggregators: Comments and Concerns, Amazon Braces for Slowing eComm Growth in 2023

UPDATED: Amazon Taps into $100B Retail Media Market, Invests in New & Cutting-Edge Ad Platforms

Update 06/30/2023: Amazon just rolled out two new advertising features and revealed plans to add an ad-supported tier for Prime Video to boost its booming retail media business!

  • Add videos to sellers’ listings. EU Announcement. If you’ve been an Amazon seller for three months or more, you now have the opportunity to enhance your product pages by incorporating video content, such as product demos, installation guides, and setup tutorials. The addition of videos can significantly amplify your sales and reduce returns. Visit Amazon’s video upload page to get started.
  • 3D product pages with Hexa. Amazon has collaborated with Hexa, a Tel-Aviv based 3D visualization platform, to enhance its product pages with 3D images. Leveraging the power of AI, Hexa’s innovative tech transforms the conventional 2D product images provided by merchants into lifelike 3D models. These 3D images can be seamlessly integrated into websites, social media platforms, and augmented reality (AR) applications.

    Notably, these models offer an interactive experience as users can effortlessly maneuver and explore the product from various angles using their cursor. Hexa further assists its users by offering comprehensive services such as storage, management, distribution, and analysis for the 3D models they create.
  • Ad-supported tier to Prime video. According to Axios, Amazon is considering launching an ad-supported tier for its video service to boost revenue and attract more subscribers through less expensive subscription plans. The launch date, however, remains unclear.

    The move comes as more ad dollars shift from traditional TV to streaming platforms. Video streaming rivals Netflix, Disney+, and HBO have recently introduced their own ad-supported tiers. In its favor, while some rivals have only recently established their ad products, Amazon already has an established advertising team and other ad-supported video products, such as Freevee. This should play a significant role in guiding and enhancing the tech giant’s efforts in this area.

Amazon’s ad business is growing rapidly, with Q1 2023 ad revenue reaching $9.5 billion, a significant surge compared to the previous year. The company is also expected to capture 40% of new search ad dollars in 2023, per Insider Intelligence. It is possible that these figures may skyrocket even further once the new features roll out more widely and ads were to be introduced on Prime Video.

Not too long ago, retail media, aka marketplace advertising, caught the attention of advertisers as a rising digital channel, yet only a few big retailers like Amazon, Walmart, and Target dared to explore its potential.

Back in 2012, Amazon’s ad revenue amounted to just $609 million, and during that period, retail media was merely synonymous with advertising on Amazon itself.

Retail media networks like Amazon leverage their first-party customer data to serve customers relevant ads across search, display, or product pages. These ads can come in many forms, such as exclusive offers, coupons, and sponsored ads that appear during a shopper’s active browsing session on Amazon or other ad channels like Google Search and Facebook.

Related: Amazon Attribution Update Makes for a more Effective Sales Tool

Fast forward to 2022, retail media has experienced a phenomenal surge, primarily driven by the eCommerce boom. Advertisers allocated more than $40 billion toward retail media initiatives, with Amazon capturing an impressive 37% share of the total investment. Meanwhile, retail rivals Walmart and Target collectively accounted for a 36% share.

In a statement to Marketing Dive, Todd Krizelman, MediaRadar CEO, chalked it up to Amazon having such a “tight grip on the digital space that they really sit in a category of their own.”

“Other players are growing quickly, but it will be difficult for legacy brick and mortar retailers to beat Amazon on its own terrain.” 

Overall, these major players dominated the retail media landscape, commanding 73% of total ad investment in 2022. And over the next few years, the $40B market could potentially more than double.

Future is Bright for Retail Media

Touted as the “new frontier” of advertising, retail media is the world’s third-largest digital channel behind social ads (2nd) and paid search (1st).

Consulting firm McKinsey & Co estimates that the expansion of retail advertising networks in the US has the potential to surge up to $100 billion in ad spending by 2026. Moreover, these advertising investments prove to be immensely lucrative, yielding operating profit margins ranging from 50% to 70%.

Media investment company, WPP & GroupM, also predicts that retail media will increase by 60% by 2027.

Such projections highlight the tremendous growth and profitability that retail media is poised to achieve in the coming years, with Amazon leading the way. 

Leaning on the $100B retail media sector may catapult Amazon into the second spot of the overall US digital ad market, just behind Meta. 

Peaking at the Right Time

Insights from Insider Intelligence suggest that while Google and Facebook continue to see growth in their advertising businesses, their pace is comparatively slower than other areas of the US online ad market.
In the midst of this landscape, Amazon has been steadily gaining market share.

Per Insider Intelligence, Amazon accounted for 11.8% of US digital ad spending in 2022. This figure is projected to increase to 12.9% in 2023 and further to 14% in 2024. 

By 2025, the total online ad market share gap between Amazon and Meta will be down to just 3.2% points. This goes to show that Amazon’s ad business has become one of its key strengths. And sellers are well-positioned to take advantage of this growth area with Amazon’s advertising tools.

Amazon’s Working to Expand its Ad Business to Accelerate Growth

With momentum on its side, the retail giant wasted no time in beefing up its advertising division. The company recently:

  • Launched Amazon Anywhere, a groundbreaking program which allows customers to seamlessly browse and purchase tangible products from Amazon in virtual environments, such as video games, augmented reality (AR) experiences, and third-party mobile applications. With Amazon Anywhere, the boundaries between virtual and physical shopping blend, creating a truly immersive and convenient retail experience.
  • Assembled a team to build an AI-powered tool that will generate images and videos for advertisers.
  • Overhauled the Amazon Demand-Side Platform (DSP) to introduce more advanced machine learning and predictive algorithms to “enhance bidding and pacing decisions” and help advertisers reach “previously unaddressable audiences.” With these upgrades, users reportedly saw a 12.6% increase in click-through rate, 24.7% reduction in cost per impression, and 34.1% increase in return on ad spend.
  • Hired Kelly MacLean, a seasoned monetization product engineer at Meta, as VP of Amazon’s DSP business. According to Business Insider, she will play an important role in demonstrating DSP’s new offerings to agencies and non-Amazon advertisers. 

For sellers, these advancements could provide a new and better way to diversify their ad investments, optimize ads for performance, or reach untapped markets and thus, drive sales. For customers, improved search relevancy enhances the shopping experience by allowing sellers to offer them a more targeted product selection in real-time.

With this in mind, consider adopting a retail media strategy and seamlessly integrate it into your comprehensive marketing plans, if you haven’t done so already. This approach allows you to maximize the potential of Amazon’s available resources and leverage emerging opportunities in response to evolving customer behavior.

Related: Walmart Launches New Ways to Find and Buy Products, Amazon Will Pay Users $2/Month to Track Their Data, Amazon Now Allowing Email Marketing Campaigns to Repeat Customers, How to Optimize Amazon Attribution

FTC Lawsuit Alleges Amazon of Tricking and Trapping Customers into Recurring Prime Subscriptions

Right on the heels of Amazon’s 2023 Prime Day announcement, the Federal Trade Commission (FTC) has filed a complaint accusing the tech giant of duping customers into signing up for Prime and “knowingly” making it hard for them to opt-out.

What are the details of the complaint?

According to FTC, for years Amazon has employed what is being described as “manipulative, coercive, or deceptive tactics” in an effort to steer customers towards signing up for Prime, even if the customers may have harbored reservations at enrolling. Subsequently, these subscriptions were set to auto-renew, resulting in a monthly charge of $14.99 or an annual fee of $139.

Prime holds a major role within the tech giant’s retail empire, as its members tend to exhibit heightened shopping activity and expenditure. As of 2020, Amazon had a total paying Prime members of 200 million.

However, the current FTC lawsuit claims that a portion of these subscribers may have been acquired through deceptive means.

What are Dark Patterns?

Coined by British User Experience (UX) designer Harry Brignull, dark patterns are “deceptive user interfaces” designed to get people into performing an action that they didn’t mean to. Common types of dark patterns include:

  • Disguised ads – The individual, under the false impression, assumes they are interacting with an interface element or genuine content, unaware that it is, in fact, a cleverly disguised ad. For example, popular software download site Softpedia features a conspicuous download button that bears a striking resemblance to the genuine download button for the desired software. Consequently, users inadvertently fall prey to this deceptive design, mistakenly clicking on the ad thinking that they are initiating the actual software download.

    Another example of this type of dark UX may be observed in Amazon’s search results. The Washington Post reveals that unbeknownst to many Amazon users, the initial search results they encounter when looking for a product are primarily comprised of advertisements rather than organic listings. This exposes Amazon’s questionable tactics, as the company compromises the trust placed in its search results in order to generate additional revenue.
  • Bait and switch – When deceptive data or false information is presented, it revolves around the user’s interests and triggers their curiosity. Once the user expresses interest and proceeds by clicking, the information or data undergoes a complete transformation or shift. Bait and switch tactics are commonly employed by businesses to attract more clicks.

    Such a strategy enables site owners to generate additional revenue from ad impressions, while advertisers enjoy the advantages of enhanced click-through rates, potentially leading to increased sales.
  • Hidden subscription – The covert scheme of hidden subscriptions works by utilizing sneakiness and misdirection. Users are led to believe they are making a one-time purchase, unaware of a concealed legal provision that commits them to an ongoing subscription. After signing up, the service operates discreetly, refraining from sending any emails or notifications to remind users about the recurring payments. This lack of communication ensures that payments go on for an extended duration. Additionally, this tactic is commonly coupled with the hard-to-cancel deceptive pattern.
  • Hard-to-cancel subscriptions – Signing up is easy but canceling is difficult. More on that later.
  • Buried terms or hidden costs – Companies entice consumers by advertising only a fraction of the product’s total price while conveniently omitting any mention of mandatory fees until the later stages of the buying process. In a notable case involving LendingClub, the FTC accused the online lender of utilizing prominent visuals (design elements like art, text, and color that grab attention) to deceptively assure loan applicants that they would receive a specific loan amount and encounter “no hidden fees.” However, the mention of mandatory fees was cleverly tucked away behind tooltip buttons and inserted amidst more conspicuous text.
  • Tricks to obtain user data – These deceptive tactics often disguise themselves as granting users the power to make decisions regarding their privacy preferences or data sharing. However, their true intention is to deliberately guide users towards the choice that surrenders the greatest amount of personal information. According to FTC, smart TV manufacturer VIZIO was accused of facilitating default settings that enabled the company to gather and distribute consumers’ viewing habits to third parties. Only a small number of consumers received a brief notice regarding this practice.

Trick and Trap Tactics Allegedly Used by Amazon

FTC’s case involving Amazon focuses on the company’s hidden subscription and difficult-to-cancel tactics. By employing these devious mechanisms, Amazon has presumably violated the FTC Act and the Restore Online Shoppers’ Confidence Act.

FTC says throughout Amazon’s online checkout process, customers encountered multiple instances where they were presented with the chance to become Amazon Prime subscribers at a monthly cost of $14.99.

Often, it proved challenging for customers to find the option of buying items on Amazon without subscribing to Prime. Additionally, in certain situations, the button provided to finalize the transaction did not explicitly indicate that by choosing that option, customers were also agreeing to enroll in Prime for a recurring subscription.

Source: pudding.cool

To strategically dissuade members from leaving, especially after raising membership fees from $119 to $139 annually, Amazon has implemented a laborious opt-out process called the “Iliad Flow.” This process draws parallels to Homer’s epic poem about the decade-long Trojan War. In other words, if customers wanted to unsubscribe from Prime, it will take them ages to effectively do so.

In a blog post published September 2022, market analyst Dr. Pierre-Nicolas Schwab shares how Amazon used two dark pattern mechanisms to discourage members from terminating their Prime subscriptions.

  1. Make it difficult to find Prime in the menu.
  2. Put in place multiple confirmation prompts.

Allegedly, Amazon deliberately obscured the cancellation process, making it challenging for customers to locate. Upon discovering the cancellation flow, they were then directed to a series of pages enticing them with various offers, such as discounted subscription rates, the option to disable auto-renewal, or the choice to retain the service. It was only after navigating through these pages that members could ultimately proceed with canceling the service.

Based on internal Amazon documents reviewed by Insider in early 2022, it is believed that the company possessed knowledge of customers being involuntarily enrolled and encountered difficulties when attempting to opt out of Prime. And yet, the execs reportedly neglected to tackle these concerns until they were notified of FTC’s investigation.

Worse, FTC’s lawsuit also alleges that Amazon made deliberate efforts to delay the Commission’s investigation on several occasions.

Amazon’s Response

In an email to The Verge, Amazon spokesperson Heather Layman told the media outlet that the claims put forth by the Commission were entirely unfounded both in terms of factual accuracy and legal basis.

“The truth is that customers love Prime, and by design we make it clear and simple for customers to both sign up for or cancel their Prime membership,” Layman explained. 🤔

It is worth noting that the Commision recently proposed a new provision requiring sellers to make unsubscribing as easy as signing up. So, it looks like the FTC wanted to make an example of Amazon by filing suit.

“The proposed rule would require that companies make it as easy to cancel a subscription as it is to sign up for one. The proposal would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties.” said FTC Chairperson Lina Khan.

If proven guilty, Amazon may find themselves paying up to $50,120 in civil penalties per violation of an FTC rule. Considering how quickly these penalties can add up, now’s the best time for the tech giant to review their business practices to ensure FTC compliance.

Related: A Purge Could Be Coming for Fake Reviews on Amazon, Amazon Faces Tougher Scrutiny Under EU’s Digital Services Act, S.2992: Why Amazon Wants You to Lobby Congress

Clash of the Titans: Walmart and Amazon Battle for Dominance Intensifies

Clash of the Titans: Walmart and Amazon Battle for Dominance Intensifies

Update 06/21/2023: Following in on Amazon’s footsteps, Walmart just launched an inventory distribution program called Inventory Transfer Services (ITS). 

“Our new solution allows for the seamless and efficient transfer of inventory to Walmart fulfillment centers, optimizing supply chain logistics and enabling faster delivery to customers,” said Jaré Buckley-Cox, VP of Walmart Fulfillment Services, in a LinkedIn post.

According to Buckley-Cox, ITS aims to enhance the availability of sellers’ inventory across Walmart fulfillment centers, cut down on inbound shipping costs by consolidating goods at a central hub, and provide faster shipping options.

The launch comes after the retailer announced they’re building small warehouses within their existing supercenters and four next-gen fulfillment centers (FCs) over the next few years. These high-tech FCs will be equipped with “a powerful combination of people, robotics, and machine learning,” allowing Walmart to take their 12-step fulfillment process down to just five.

With improved fulfillment speed and capacity, these next-gen FCs “could provide 75% of the US population with next- or two-day shipping on millions of items, including Marketplace items shipped by Walmart Fulfillment Services.”

When combined with traditional Walmart FCs and store locations, the retailer can reach 95% of US shoppers with 1 to 2-day shipping and 80% of the population with same-day shipping.

By contrast, Amazon has FCs within one hour of 77% of the US population. And given how both of these retail giants have many products with similar prices, customers will likely prefer the one with the fastest delivery.

No wonder Walmart is making huge strides in setting their stores and FCs up to fulfill online orders. Not only will these upgrades allow them to keep up with increasing demand for same-day shipping but also potentially to outdeliver Amazon.

🆚 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:

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:

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. 💪

4 Major Changes Coming to Amazon

Stay in the know! Amazon has recently announced the following changes that sellers should prepare for.

1.INFORM Consumers Act: Amazon Threatens Non-Compliant Sellers with Account Deactivation

What is the INFORM Consumers Act and why should you care?

In the Consolidated Appropriations Act of 2023, an extensive bill governing federal government expenditures for the upcoming year, an important addition called the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act, also known as the INFORM Consumers Act, was included.

On December 29, 2022, this Act was officially enacted into law. Its primary objective is to eradicate organized retail crime syndicates from online marketplaces through the authentication of seller identities. The Act additionally seeks to establish the responsibility of eComm platforms in preventing the sale of fake goods.

In accordance with the INFORM Consumers Act, online marketplaces like Amazon are now obligated to collect, verify, and divulge specific identification details relating to “high-volume third-party sellers.”

These sellers are classified as individuals who have completed more than 200 transactions and generated revenues exceeding $5,000 within a span of 12 months. If you’re eligible, you will be required to provide Amazon with your:

  • Personal Information (name and phone number)
  • Government ID
  • Tax ID
  • Business Address
  • Bank Information

Severe consequences await those who fail to adhere to this legislation. The Act empowers the FTC to impose hefty fines of $46,517 per violation, applied to each instance where an online marketplace neglects to gather, verify, or disclose the necessary information. Moreover, state attorneys general are granted the authority to initiate legal proceedings against non-compliant online marketplaces if their respective state suffers adverse consequences.

In order to adhere to the INFORM Consumers Act, online marketplaces must establish and implement policies, procedures, and controls by June 27, 2023.

With the deadline fast approaching, Amazon is intensifying their efforts, much to the dismay of sellers, to provide the required information within a short period of time.

The company has sent out an email blast to sellers who are at risk of account deactivation because they have some missing information. To ensure compliance ASAP, sellers are advised to click on and execute the action items enumerated in the email.

Things can get complicated if your information is fraudulent, outdated, or simply does match with Seller Central’s records. If outdated, promptly update your details in Seller Central.

It is unclear whether Amazon will let sellers who rely on a blend of personal information or personal bank accounts for their business operations to continue without encountering potential issues down the line. Be sure to check your Account Health Dashboard for verification status updates or contact an Amazon representative to learn more.

After June 27, sellers who neglect to comply might encounter a temporary suspension of their payments and potentially face account deactivation. 

Related: A Purge Could be Coming for Fake Reviews on Amazon, Amazon Faces Tougher Scrutiny Under EU’s Digital Services Act, What is S.2992?

2. Amazon Replaces Inventory Overview Page with FBA Dashboard

In a Seller Info email, Amazon revealed that the trusty Inventory Overview Page, aka Planning Page, will bid farewell on June 5, 2023, making room for the brand new FBA Dashboard.

FBA Dashboard

Embracing innovation, the FBA Dashboard takes the foundation laid by Inventory Overview and enhances it further. It presents a comprehensive and “unified view of your FBA business,” encompassing vital data such as the Inventory Performance Index score, inventory age, shipment information, and expert inventory management recommendations.

Head over to FBA Dashboard for more details.

3. Marketplace Web Service Migrating to Selling Partner-API 

UK/EU Announcement: Sellers who have utilized Amazon’s legacy Marketplace Web Service (MWS) API program to develop tools to interact with the marketplace are required to switch over to Selling Partner (SP) API by August 31st in order to avoid any disruptions to their business automation.

Previously, through MWS, sellers were able to build apps for their own or others’ seller accounts. These applications facilitated various tasks such as searching for products to sell, retrieving orders for fulfillment, confirming shipments, and generating reports.

However, starting from August 31st, 2023, sellers must transition from MWS to SP-API. Alternatively, they can opt to replace their current application with a 3rd party app that supports sections that will soon be discontinued, namely Merchant Fulfillment, Orders, and Reports API sections.

In addition, effective April 1, 2024, Amazon will shutdown all other remaining MWS API sections

In their recent announcement, Amazon emphasized the benefits of using SP-API, which includes a more streamlined and consolidated authorization process, more granular data access controls, and the ability to access information for both seller and vendor accounts.

To assist sellers in this transition, Amazon recommended reading this migration guide or exploring the Selling Partner Appstore, where they can find reputable 3rd party apps that have been vetted and deemed of high quality, serving as suitable replacements for the company’s existing MWS integrations.

Sellers who have never developed their own applications using Amazon APIs to exchange data between their systems and Amazon’s systems need not be concerned about these changes.

4. Heavy and Bulky Items No Longer Eligible for Amazon Vine

This announcement is for Amazon Vine users in the UK.

Effective immediately, the option to create new Amazon Vine enrollments for heavy and bulky items will be unavailable in an effort to enhance FBA’s fulfillment process. However, if you have already enrolled such an item, it will remain eligible for reviews until the end of your enrollment period.

Amazon considers products weighing more than 30 kg (66 lbs) or 1.5m in length as heavy and bulky. This might be yet another cost-cutting move given that these oversized items take up more space and usually have special handling or delivery requirements (e.g., using larger trucks). Therefore, they cost a lot to ship, which not only eats into Amazon’s profits but also sellers’.

Amazon Delivery Drones Off to a Rocky Start

AMAZON DELIVERY DRONES OFF TO A ROCKY START

Update 05/18/2023: Since launching in December 2022, Amazon Prime Air has just completed 100 deliveries in Lockeford, CA and College Station, TX. This figure only represents 1% of the company’s target delivery goal of 10,000 by the end of 2023. 

The once-promising projection now teeters on the brink of uncertainty. In Lockeford, a small town housing roughly 4,000 residents, reports from Prime Air staff reveal that Amazon’s drones are currently catering to a mere two households, both located within a mile’s distance from the company’s local delivery hub.

Considering College Station, a significantly larger town with 120,000 residents, one might assume greater prospects for Amazon’s drone operations. However, the company has yet to seize the potential of this market as well.

In a statement to CNBC, Amazon spokesperson Av Zammit cited FAA flight restrictions as the reason why the program is still experiencing slow progress in the two service areas.

As we’ve previously reported, Amazon has been diligently working to enhance its drone technology in order to satisfy the stringent requirements set by the FAA and gain greater operational flexibility. However, despite its efforts, the company has been unable to persuade the FAA to remove the substantial restrictions imposed on its drone operations.

Per FAA’s 2023 revised Exemption No. 18601B, Amazon can conduct drone deliveries in sparsely populated towns like Lockeford and College Station, but the drones are not allowed to fly over roadways, schools, or people without case-by-case permission, essentially limiting Amazon’s drone operations.
With a lot of regulatory hurdles to overcome, Prime Air’s wider rollout in the US might take longer than expected. But as they say, slow progress is better than no progress at all. Zammit told The Verge that the company will continue to cooperate with the FAA to ensure they meet all restrictions to be able to expand drone deliveries to more areas over time.

Federal Aviation Administration (FAA) restrictions and massive job cuts have reportedly stalled widespread use of Prime Air, Amazon’s drone delivery service, in Lockeford, California and College Station, Texas. 

As a result, Amazon completed less than 10 deliveries in its first 30 days. That is a far cry from the company’s aim to deliver 500 million packages annually by drones by the end of the decade and the number of deliveries truck drivers do each day, which are about 170 to 350 packages per shift.

Does this mean Prime Air is a failure? Will we ever see a wider rollout of the program in the near future?

It all depends on the FAA’s operating restrictions for Amazon and how they are going to comply.

FAA Flight Restrictions Impacting Prime Air’s Ability to Operate

In August 2020, the FAA issued an approval certificate to Amazon which allowed the company to utilize drones in a commercial setting. However, the aviation authority also included several conditions and limitations (see below) that the tech giant reportedly tried to downplay, which turned out to be a costly move.

Amazon argued that its latest drone model, MK27-2, is safer and more autonomous than its predecessors. It is also equipped with an enhanced perception system that can detect obstacles or people below it during delivery or landing.

That means it doesn’t need as many personnel, including visual observers (people who assist remote pilots in completing delivery drone flight operations). While Amazon’s drones can fly autonomously, it doesn’t mean they can cross public areas or no-fly zones without FAA’s permission, a rule that the company presumably violated.

One of FAA’s existing regulatory barriers for autonomous delivery drones include not allowing unmanned aircraft (UA) to fly over “non-participants” unless otherwise approved by the Administrator. In Prime Air’s case, “non-participants” would be people who are not part of the drone flight operations.

So, when Amazon’s drones tried to fly over people or public roads without case-by-case permission, the FAA intervened for the safety of the residents and temporarily blocked Amazon from continuing its drone operations, The Information reported.

The suspension has significantly reduced the number of drone deliveries in California and Texas. As of mid-January 2023, Prime Air made as few as three deliveries in Lockeford, CA, and five in College Station, TX.

In an email to Gizmodo, Amazon rep Av Zammit confirmed that they’re “making a limited number of deliveries” in the two towns. Despite FAA restrictions, the tech giant still plans to continue to expand over time. 

“Just last week we received the FAA’s approval to start delivering to more customers in these locations.”

However, FAA restrictions are just one of the many obstacles that Prime Air needs to overcome in its early stages. Public outcry and labor issues may further delay its national rollout.

Amazon Drone Safety Issues

In the US, drone malfunction (resulting in crashes) is the top concern for most people.

Insider recently reported that town residents expressed safety concerns after finding out Amazon’s delivery drones would be flying over their yards, and rightly so given the program’s erratic record with the FAA.

Amina Alikhan, a College Station resident, worried about the possibility of a 90-pound drone “falling from the sky onto our home, onto our car, onto our children.” 

MK27-2s weigh roughly 80 lbs when empty, and can carry a maximum payload of 5 lbs. By contrast, Amazon’s drones are 10 to 40 lbs heavier than Alphabet’s Wing and Walmart’s Flytrex and Zipline.

During one of Amazon’s test flights in Oregon, one drone crashed into a field, causing a 25-acre bushfire

Disastrous consequences such as this one is why the FAA has more stringent rules for heavier drones than it does for small Unmanned Aerial (UA) drones weighing less than 55 lbs. 

In 2019, the FAA modified Part 107 to allow “routine operations of small unmanned aircraft over people, moving vehicles, and at night under certain conditions” potentially without a waiver depending on the level of risk small UA present to people.

That said, Amazon may need to roll out a more lightweight drone, implement advanced autonomous systems, and invest in skilled pilots and observers to change the public’s perception of drones as killing devices to vehicles that benefit shoppers with same-day delivery of products.

Widespread Layoffs Immobilizing the Drone Flight Safety Division

Another factor that could delay Prime Air’s wider rollout this year is the impact of mass layoffs on its drone safety team.

According to CNBC, around half of the drone delivery department – that includes designers, maintenance staff, systems engineers, flight testers and flight operations specialists – have been laid off.

The employees said that the layoffs, along with increased pressure to meet delivery goals, “have created new concerns about the potential dangers Prime Air poses” and made them question the company’s commitment to safety, Insider reports.

“I think it says what their priorities are,” one current employee told Insider.

If the company prioritized drone safety “as much as they like to tell the media, that team wouldn’t have gotten laid off.”

Amazon spokesperson Maria Boschetti quickly squashed claims of widespread drone job cuts telling Insider in an email that they are “misinformed or inaccurate,” although she did not specify how many employees from the safety teams had been let go.

Boschetti reiterated that safety is the company’s top priority, and “implying that we no longer have a robust safety team in place is completely inaccurate.”

Prime Air got off to a rocky start, but the good news is it still has “a dedicated safety officer in each location, plus dozens of other employees who are responsible for safety as part of their job.”

The teams are also currently working on a new drone model, MK30, which is lighter, smaller, and quieter than MK27-2s, indicating their continued commitment to meeting FAA’s rigorous standards.

Related: 60-Minute Amazon Drone Delivery Now a Reality, Amazon Warehouse Automation Increases Concerns Over Job Loss and Product Selection Inaccuracy, Amazon Tweaks Logistics Strategy to Streamline Operations

Shein Moves Into the US Market, But May Struggle to Recruit 3P Sellers

After testing the waters in Brazil, Chinese fast-fashion giant and the world’s most downloaded shopping app, Shein, now appears to be finally moving into the US market and is adding new sales categories, such as Home and Beauty, to further compete with similar eComm retailers. 

Marketplace Pulse CEO, Juozas Kaziukėnas, recently came across multiple job openings posted by Shein on LinkedIn for positions in California. One of the newly posted positions is for a Senior Business Developer for the company’s US marketplace, whose primary responsibility will be to identify and pursue new business opportunities.

In addition, Shein is also seeking to fill the role of AML Compliance Officer – Global Operations Center, USA to “lead, oversee and ensure effective execution” of compliance and anti-money laundering initiatives in the Americas. Other available positions include a Supplier Management specialist and an Inventory Clerk.

This move comes after Shein revealed its plans to build 3 large distribution centers in the US to keep up with soaring demand and to shorten shipping times by 3 to 4 days. The retailer directly ships orders from China to over 150 countries and the standard shipping time for US customers usually takes 1 to 2 weeks, which has left many feeling frustrated.

By contrast, Amazon only takes about 1 to 4 days to get orders delivered across the mainland US, all made possible by its vast fulfillment network, including pickup locations at Kohl’s, Whole Foods, and Amazon Fresh.

According to Shein, they have been using both air and ocean freight for global shipping, but they are now exploring ways to identify more products that can be moved cost-effectively by sea. They’re also looking to source goods from locations closer to customers.

Last month, the etailer said it will invest almost $150 million in Brazil to build out its own network of manufacturers in the region. The money will be used to “provide tools and training for factories to upgrade their traditional production models” and “enable local producers to better manage orders, reduce waste at the source and lower excess inventory.”

Meanwhile, over the US, Shein is making strides to enhance its first distribution hub’s capacity by 50%. The company is also gearing up to launch a second center in California in 2023, with plans to introduce a third one in the Northeast with a yet-to-be-revealed timeline, the Journal reports.

Aside from significantly cutting shipping times, Shein also hopes to attract more local third-party sellers with its US expansion, which other Chinese eComm marketplaces like Alibaba and  TikTok have reportedly struggled with.

Shein needs American sellers to introduce more variety to its mostly Chinese-based product selection. However, retail experts interviewed by Modern Retail believe that the company might also suffer the same fate as its Chinese contemporaries.

According to Ryan Craver, Founder of Commerce Canal, Shein’s pricing strategy “works well” for Chinese merchants that have the same fast-fashion mindset.

“But it’s very difficult for US sellers and operators because the price point is so critically low,” which not only reduces the perceived value of a product, but also forces local brands to drop their prices in order to win the price war versus Chinese merchants.

Therefore, selling on Shein might feel like a race to the bottom for US sellers, especially those in the mid and upper-range markets.

Shein might have an answer to that, though. In 2021, the retailer launched a premium clothing brand called MOTF. Prices range from $5 to over $100 depending on the type of product and material.

The Journal reports that Shein aims to sell more high-end products with greater profit margins, but they may struggle to attract customers with a week-long lead time, hence why the company is doubling down on its fulfillment expansion plans.

So, perhaps until Shein has successfully gained a deeper foothold in the country with multiple distribution centers and a more favorable pricing strategy, only then will US sellers find the marketplace a viable contender to Amazon and other sales channels.

Related: Should You Be Selling on These New Sales Channels?, TikTok Gears Up for US Market Entry

A Purge Could Be Coming for Fake Reviews on Amazon

🚨 Amazon has quietly removed hundreds of thousands of customer reviews from some of its own Amazon Basics listings, indicating a new round of reviews purges may be soon at hand.
In April, a few Amazon Basics products saw a huge decrease in review count following Amazon’s heightened efforts to combat fake review brokers and counterfeiters on its platform.

As shown above, the review count for Amazon’s Pack of 50 Slim, Velvet, Non-Slip Hangers went down by 75% on average and around 98% for the Pack of 30 variant.

Given the company’s ongoing war on fake reviews, it is likely that most, if not all, of the reviews that have been taken down came from fraudulent sources.

However, it is unclear whether or not the listings had bogus positive reviews and if they did, were they also included in the removal process? 🤔

If the purge did include misleading positive reviews, it somehow implicates Amazon in the very fake review schemes they’ve been trying to eradicate for years (2016, 2018, 2020, 2021, 2022, 2023).

Now, that doesn’t necessarily mean Amazon is the culprit behind the dubious positive reviews. For instance, a nefarious seller may have hijacked the Pack of 30 Hanger listing to attach a completely different product to it, allowing the two items to share the same reviews. To bolster product visibility and trick more customers into buying, the hijacker could have also added more glowing feedback to the hijacked listing. 

An alternative, though unproven, theory is that Amazon themselves may have gamed the system to artificially inflate their product’s overall rating and drum up sales with false positive reviews. An analysis by the eComm consulting firm, Pattern, shows that improving one’s review rating by just one star can lead to a sales boost of up to 26%.

Even if Amazon’s hands are clean as far as positive reviews, that doesn’t discount the possibility of removing some authentic low-star reviews which would achieve the same results. 

This abusive behavior likely wouldn’t surprise sellers who have already seen how the retail giant can allegedly break its own rules to stay ahead.

How do bad actors abuse Amazon’s review system?

There are several ways that bad actors can cheat Amazon’s review system. These include:

  • Astroturfing. Bad actors or bots can create fake accounts or pay others to create fake accounts to leave positive reviews for their products. While this can increase a product’s rating and sales, this can also mislead customers into purchasing a product that may not meet their expectations.
  • Review stacking. Some sellers will add reviews from other (often dead or abandoned) products to their own listings to increase their review count. This may also help boost the listing’s total star rating from 3.4 to 4 stars, for instance. 
  • Review manipulation. This involves offering incentives or discounts to customers in exchange for leaving positive reviews. This can lead to biased or fake reviews.
  • Product swapping. Some sellers will send customers a different product than what was advertised, and then ask for a positive review in exchange for a refund. This can lead to deceptive top reviews for a product that is not the one being advertised.

What could be the reason behind Amazon’s review purge?

Amazon possibly deleting false positive reviews may be an attempt to remove traces of anti-competitive behavior that could potentially not bode lightly for its own antitrust probes and the financial penalties for its sellers.

Just last month, the Federal Trade Commission (FTC) levied a $600,000 fine against supplements maker, The Bountiful Company, for review hijacking on Amazon.com. 

Aside from potentially trying to get antitrust watchdogs off its back, Amazon is also well within its rights to remove fake negative reviews from its own and others’ listings. For instance, competitors can buy an Amazon Basics product and then fraudulently leave a bad review or report the product as defective or counterfeit. This can hurt Amazon’s reputation and sales, even if the product is legitimate.

The Fight Doesn’t End Here

Whatever the reason behind the purge, Amazon cleaning up its own backyard is still a step in the right direction. But with more than 2 billion listings to monitor, the fight is far from over.

In fact, our data just further proves that Amazon’s fake review problem continues to run rampant in the marketplace despite their years-long effort to eliminate it. This ruins not only Amazon’s own credibility but also third-party sellers’ selling on the platform, which ultimately impacts sales.

With a lot at stake, it’s crucial to take an active role in keeping bad actors from hijacking or sinking your product rating with fake negative reviews. Be sure to follow Amazon’s Product Review Policy and report any potential review violation.

It’s also best to check your competitors’ listings for fake positive reviews every once in a while. Some reviews are clearly written for other products entirely, such as a posture corrector with reviews on books and dog leashes.

Also, pay attention to the text (a few reviews may have similar wording or photos) and the number of good reviews that happened within a few days of each other. 

For example, if a listing received more than 6 verified or unverified reviews in a day, that could mean fraudsters made a push for those to occur on a certain timeline. As a result, Amazon may indefinitely block the listing from receiving additional reviews, but you can’t always rely on that happening, so keep an eye out. 👀

Related: Amazon Highlights ‘Frequently Returned’ Products You Should Think Twice Before Buying

25% Growth Rate: Euro B2B Opportunities Expand on Amazon

Amazon B2B continues to grow, with no signs of slowing down. 🚀

As the pandemic accelerated the shift towards online shopping, Amazon experienced a surge in office supply sales in Europe.

The tech giant is now looking to capitalize on this trend by expanding its Amazon Business to more countries.

In an interview with Reuters, Amazon Business VP Alexandre Gagnon stated that the division recorded a 25% compound annual growth rate in Europe during the two-year pandemic.

The business initially launched in Germany in 2016, then expanded to the UK, France, Spain, and Italy. However, Amazon refused to reveal which countries it would expand to.

Gagnon also mentioned that Amazon is investing in logistics to simplify the process for EU companies to procure bulk office, IT and healthcare equipment, and school supplies. By doing so, Amazon aims to secure contracts to procure these items for their clients.

Putting More Focus on Profitable Businesses

According to Reuters, Amazon’s B2B has higher margins than its B2C arm since it is cheaper to make bulk deliveries than individual small parcels.

“Because businesses buy in larger quantities, the fulfillment economics are more advantageous,” Gagnon said.

As we’ve reported, Amazon is currently facing slowing consumer demand and rising costs. In fact, the B2B expansion plan comes as Amazon announced it will be closing all 68 Amazon Books locations, pop-up chains, and 4-star stores in the UK and US. Workforce reduction impacting 27,000 employees globally is also underway in an effort to lower operating costs.

Therefore, Amazon may be trying to focus more on B2B to stimulate growth.

The 2022 European Retail eCommerce Consumer Forecast found that the total value of goods sold online in Europe is expected to reach $1.8 trillion by 2025, a consistent increase in online sales for B2B businesses operating in the region.

European Retail eCommerce Consumer Forecast
Source: US International Trade Administration

The report explains that the surge in B2B online consumption in the EU can be attributed to the heightened market demand for a wide range of products and services, such as spare machine parts, business and digital services, as well as packaged and bulk products. 

If you’re planning on joining Amazon Business, now’s the time to do it while demand is projected to increase at 11.9% through 2025

To grow your catalog with high-demand, no-competition B2B products, use Amazon’s ASINs Recommendations tool. It provides a list of items that many companies are looking for, but are presently unavailable on Amazon.

The tool also offers tailored suggestions based on the product category of your store so that you can incorporate new items that align with your brand or introduce new variations of existing products.
It’s important to note, however, that since ASINs Recommendations is primarily designed for B2B applications, not all categories may be included. You may also need to overcome certain restrictions imposed by Amazon before selling, including brand approval for gated products and compliance requirements.

Related: Walmart Launches B2B eComm Site to Rival Amazon and Shopify, Amazon Continues to Dominate B2B While Shopify Plays Catch-Up

UPDATED: Amazon Hopes to Restore Consumer Confidence with $1.2B Anti-Counterfeit Initiative

SoStocked - Amazon Hopes to Restore Consumer Confidence with $1.2B Anti-Counterfeit Initiative

Update 04/21/2023: 📢 In an effort to tackle organized crime on its platform, Amazon has rolled out its Anti-Counterfeiting Exchange (ACX) program. The initiative aims to assist brands in identifying and tracking counterfeit goods sold on Amazon.com.

Online marketplaces, including Amazon, have long struggled to keep counterfeiters at bay and prevent fake products from infiltrating their supply chain.

ACX is modeled after data exchange initiatives used by credit card companies to detect fraudsters and their methods. Under this program, participating stores can:

  • Report bad actors to Amazon anonymously
  • Use the ACX database to find stores or individuals that have been identified by other stores as counterfeiters

The strength of ACX lies in the ability of participating stores to share account information about detected counterfeiters.

Once the information is shared, all other stores involved in the program can be made aware of the counterfeiter and take action to stop them from selling on the platform. However, each participant retains autonomy to make independent decisions regarding the use of the information shared through ACX.

Since the program’s initial rollout in 2021, hundreds of matching accounts, in which the same counterfeiter attempted to create selling accounts on Amazon and at least one other store, have already been identified. 
In addition to ACX, Amazon is collaborating with the US Customs and Border Protection on a new program that will help identify and target low-value cargo that may contain counterfeit products or breach other regulations.

Amazon recently released its latest Brand Protection Report, which outlines its efforts to curb the sale of counterfeit goods to consumers worldwide.

The report highlights specific actions taken by the eCommerce titan to prevent the listing of knock-offs for sale. However, there are still lingering doubts about whether Amazon is truly committed to eradicating counterfeits and bad actors that it has historically neglected which caused big brands like Nike and Birkenstock to leave the platform a few years ago.

Billion-Dollar Anti-Counterfeiting Initiative in 2022

To prevent a potential mass exodus of sellers (and consumers) over growing piracy on Amazon, the tech giant had increased its efforts to protect brands by investing in cutting-edge technology and skilled personnel.

In 2021, Amazon invested $900 million into anti-counterfeiting efforts that saw the disposal of 3 million fake products, 170 counterfeiters sued in US courts, and 600 individuals sued or referred for investigation in several countries.

In 2022, the company poured $300 million more into its anti-counterfeiting program, showing its continued commitment to fighting fraudulent activities on the platform.

With an investment exceeding $1.2 billion, Amazon has employed more than 15,000 professionals dedicated to safeguarding customers, brands, selling partners, and the store from counterfeits, abuse, and fraud.

This crusade against bad actors has led to:

  • The seizure of more than 6 million counterfeit products that were being offered for sale on Amazon, doubling the number of the previous year.
  • A 1.7 million decrease in the number of bad actor attempts to create new seller accounts, from 2.5 million attempts in 2021 down to just 800,000 in 2022.
  • Significantly fewer notices of infringement submitted by brands, which could be, in part, attributed to Amazon’s efforts to address sellers that have purportedly issued fake takedown requests on competitors.
  • Over 1,300 criminals sued or referred for investigation in the US, UK, EU, and China.

At a time when the fight against counterfeiters has shifted largely to online and social media platforms, Amazon’s reported wins are quite significant. TikTok, in particular, has become a growing source of counterfeit products.

According to the US Chamber of Commerce, the global counterfeit trade is estimated to be worth over $500 billion annually. Some estimates also show that up to 10% of branded goods, especially luxury products, sold in the market may be fake. It is also believed that 80% of consumers have unknowingly handled falsified goods.

Since its inception in 2020, Amazon’s Counterfeit Crimes Unit (CCU) has been working directly with authorities to identify and seize dupes found in Amazon and factories where they’re being manufactured. 

For instance, CCU partnered with several Public Security Bureaus in China to carry out factory raids that led to the confiscation of more than 240,000 fake products. The report also mentioned additional joint efforts with law enforcement in Germany and London.

While these programs are a step in the right direction, for many victims of counterfeiting and abusive practices on the platform, the damage has been done and Amazon may be a little too late in trying to win their trust back. 

For years, brand owners have struggled with counterfeit products and have tried various methods to address the issue.

  • Chanel and Christian Louboutin sued Amazon and counterfeiters over knock-offs being sold on the retail site. In contrast, Cartier opted to collaborate with the tech giant in its effort to bring counterfeiters to justice.
  • Birkenstock and Nike cut ties with Amazon over the same unresolved counterfeiting issue.
  • Small businesses opting to enroll in Amazon Brand Registry for brand protection. Others also hire third-party service providers to help them comb through product listings and identify unauthorized sellers.

Yet despite these efforts from both Amazon and sellers, counterfeits still run rampant on the platform. Why? 

In an interview with Fast Company, Robert Handfield, a North Carolina State University professor who has conducted research on Amazon’s counterfeiting problem, says:

“Amazon does not do audits of distributors that claim to be selling original products. It has relied on companies and consumers to report counterfeit products to shut down the [unauthorized] seller. But then it’ll just pop up somewhere else.” 

Amazon’s behemoth size may have contributed to its poor ability to police itself, which then gave rise to its huge counterfeiting problem today.

Despite having a safety team in place, for example, lots of fakes or banned items did still slip through, as reported by Wall Street Journal in 2019. Similarly, in late 2021, Senate investigations also show that Amazon has not been quick to help small businesses take down fake listings.

So perhaps, until Amazon becomes more effective in verifying new sellers, checking the authenticity of goods that come and go, and defending sellers’ Intellectual Property (IP) rights, expect a large volume of counterfeiting activities to continue. Here’s to hoping that their investments in recent years will continue to show improvements in this arena.

Increased regulatory pressure from antitrust authorities will also be crucial in keeping Amazon themselves from creating knockoffs of successful products. Riding that distinction between counterfeit and knockoff may be legal, but is it ethical?

As reported, the tech giant opposes a lot of antitrust bills seeking to end self-preferencing in digital markets such as S.2992, sparking doubts as to whether Amazon is really serious about its road to zero counterfeit program and whether knockoffs are included in protections that should be awarded to brands on Amazon. 

That said, brand protection could, additionally, be a move by Amazon to slow down counterfeiting activity on the site to minimize Senate scrutiny, and that completely cleaning up the marketplace is a lofty, and possibly, insincere target.

The good news is that, whatever the motives behind the action, improvements are being made. However, we can’t expect change overnight or full eradication.

Counterfeiters are not going to go away anytime soon. It would be wise to maintain a proactive approach to protecting your brand, whether it’s by registering your IP, enrolling in Brand Registry, or working with service providers to identify unauthorized retailers and fake reviews.

Marketplace sellers will continue to play whack-o-mole. There just may be fewer moles to whack. Let’s hope the trend continues. 

Amazon Announces Further Cuts Amid Economic Uncertainty

As Amazon CEO Andy Jassy warns of an ‘uncertainty that exists in the near future,’ existing employees face reduced pay and job loss. The expected job cuts in particular will impact a number of roles across the company’s AMZ Web Services (AWS), Twitch streaming, human resources, online book store, and advertising businesses.

Fresh Round of Layoffs

Amazon has recently concluded the second stage of its yearly budgeting procedure, known internally as “OP2.”

In a memo dated March 20th, Jassy announced the company’s plans to let go 9,000 more employees in the coming months after cutting 18,000 jobs in January.

“The overriding tenet of our annual planning this year was to be leaner while doing so in a way that enables us to still invest robustly in the key long-term customer experiences that we believe can meaningfully improve customers’ lives and Amazon as a whole,” Jassy said.

Amazon’s workforce is being downsized as the company adjusts its hiring practices following a surge in employment during the pandemic. Its global headcount exceeded 1.6 million by the end of 2021, up from 798,000 in the fourth quarter of 2019.

As part of an extensive review of expenses, Jassy is implementing measures to address the economic downturn and slowing growth in the core retail business. Hiring in the corporate workforce has been frozen, certain experimental projects have been terminated, and warehouse expansion has been slowed down.

Despite these changes, Jassy remains optimistic about Amazon’s key business segments, including retail and AWS, as well as new divisions that continue to receive investment.

Reduced Employee Stock Awards

Aside from job cuts, Amazon announced it will also reduce employee Restricted Stock Units (RSU) awards by “a small amount” in 2025.

According to an initial report by Business Insider, Amazon is considering making changes to its employee pay structure, with plans to reevaluate compensation in Q1 of the following year to account for potential stock fluctuations.

The company is said to be exploring options for a more balanced compensation model, taking into consideration the current economic uncertainty and its compensation budget, as stated by an Amazon spokesperson.

Attempting to Make a Remarkable Recovery in 2023

After experiencing a sharp decline of nearly 50% in 2022, Amazon’s shares have made an outstanding recovery, surging 19% this year – thanks primarily to the 27,000 job cuts that helped to stimulate business performance.

By eliminating inefficiencies, for instance, the quality of work may improve and more cash will be available to the company, which could then result in increased profits and higher payouts for shareholders.

“While some may view these job cuts as a sign of a gloomier macro outlook, especially as it relates to cloud computing and digital advertising, we believe investors will appreciate Amazon’s heightened focus on cost savings and free cash flow,” Arun Sundaram, senior equity analyst at CFRA, said in a note to his clients.

Shares may be up 19%, but the company’s Q4 2022 financial results missed analysts’ expectations by a significant margin, with earnings falling well short. Additionally, the growth in AWS was slower than anticipated, resulting in a subdued forecast for the current quarter.

If revenue continues to decelerate through the end of Q2, we may still see Amazon announce additional cuts in the coming months to achieve a healthier level of profitability.

Amazon will release its latest quarterly earnings report on April 27, 2023 at 2:30pm PT with its virtual Q1 2023 Earnings Call.

Related: Amazon Warehouse Automation Increases Concerns Over Job Loss and Product Selection Accuracy, Amazon Delivery Drones Off to a Rocky Start

Amazon Attempts to Close Loopholes with New Shipping Policy

Amazon Attempts to Close Loopholes with New Shipping Policy

📢 Amazon has announced yet another change to their shipping policy, which could be perceived as an attempt to address and eliminate any potential loopholes.

As of March 31, 2023, shipping discounts will only be applied to compliant inbound FBA units in the Multi Destinations program. It may be news to you that this program even exists! Sellers enrolled in this program will save $0.05 per unit on fulfillment fees for Small Standard products and $0.09 for Large Standard. No small savings for sellers feeling the squeeze of recent 2023 fee increases.

While this program is invitation only to FBA sellers, accounts are auto-enrolled so sellers may be participating in this program without realizing it.

This policy change seems to specifically resolve issues around sellers who try to cheat the system and at the same time see discounts applied to their units – a double whammy. 

For instance, some sellers create and cancel their shipments, but still send them in anyway knowing that FBA associates may still accept them. This dirty tactic essentially allows the bad actors to get around their capacity limits.

There are also others who, after approving a multi-destination shipping plan, will try to send the shipment along a different route (most likely to a single warehouse or somewhere closest) to reduce cost. That’s probably because despite getting discounts on their inbound units, they may still end up paying higher shipping fees if they’re shipping inventory to multiple warehouses across long distances.

⚠️ With the updated shipping policy, non-compliant sellers enrolled in the Multi Destination Shipping Program will not only be ineligible to receive discounts on the violating units, their shipments may also get rejected, or worse, they may lose their ability to ship more units. 

Amazon requires sellers found in violation of its Shipment Policy to send a plan of action stating that future shipping plans will be compliant.

If you need to update any information or remove an item from your approved shipping plan, be sure to follow these steps and act in accordance to Amazon’s change shipment policy to do it properly.
In addition, read “Amazon Closing Shipping Loopholes May Wreak Chaos for Some Sellers” to learn more about the retail giant’s inbound shipping policies.

Related: Pros and Cons of Amazon Inventory Placement Service

Updated: Are You Prepared for the Updated Amazon Returns and Refunds Policy?

Amazon Returns and Refunds Policy Update

Update 04/06/2023: Amazon now offers sellers who use FBA Donations access to donation certificates.

Generated by Amazon yearly, this special document can be accessed conveniently on the Donations page within Seller Central. It includes details regarding the quantity and description of the inventory you generously donated through the program over the last 12 months. This means you can use the certificate to identify charitable contributions that are potentially tax deductible, which could help lower your taxes. 

Be sure to seek advice from your trusted accountant to learn more about the specific tax incentives you might be eligible for. You’d be surprised to find out how sometimes it may be more beneficial to simply donate your unsold inventory rather than destroying or liquidating it. 

For example, depending on your unsold inventory’s fair market value on the day it was donated, the tax deductible amount may be greater than its net recovery value if liquidated through FBA. Amazon’s Liquidations program currently pays up to 10% of your product’s average selling price and this results in additional revenue, which means you pay more in taxes. If you do the math, you might find that the tax deductions you get back from your donation might mean more money in your pocket in the long run that liquidation would bring you.
If you have donated goods through FBA Donations in 2022, you may now claim your donation certificate in Seller Central. If you want to learn more about the program, visit this FAQ page.

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 salesincrease customer retentionbuild 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

Updated: Amazon UK Workers to Launch Historic Strike in Early 2023

Amazon UK Workers to Launch Historic Strike in Early 2023

Update 03/31/2023: Unionized Amazon workers in Coventry, England continue to fight for better pay with 6 more protest dates, bringing the total days at the UK site to 14:

  • April 16th to 18th
  • April 21st to 23rd

Union representative, GMB, also reveals it has started ballots for industrial action at five different fulfillment centers in the Midlands.

  • Mansfield in Nottinghamshire 
  • Coalville in Leicestershire 
  • Kegworth in Leicestershire 
  • Rugeley in Staffordshire 
  • Rugby in Warwickshire 

Members are asked to vote whether to go on strike over Amazon’s meager 50 pence pay increase. 

As previously reported, the labor group is pushing for a  £10.5 to £15/hour pay hike to ensure workers have a living wage amid rising prices.
Amazon has so far refused to give in to the union’s demand, but the additional 6 protest dates, ballots at five FCs, and over £2 million revenue loss from these multi-day strikes may force the company to “get serious and talk pay with GMB now,” said GMB Senior Organizer, Amanda Gearing.

Update 02/17/2023: 🚨 More than 350 unionized workers at an Amazon warehouse in Coventry have announced they will go on strike for seven more days.

  • February 28th
  • March 2nd
  • March 13th to 17th

Represented by GMB Union, the workers are fighting for a pay increase from £10.50 to £15 per hour to help them keep up with the rising cost of living.

The protest continues as Amazon refused to have any negotiations with GMB, arguing that they had already raised worker pay by 29% and benefits since 2018.

An Amazon rep said the unionized workers represented less than 1% of the company’s workforce in the UK, a tiny fraction that is less likely to cause any significant service disruption.

Normal operations will also continue at Coventry and across the UK, the Amazon rep added.

Update 01/04/2023: 📢 Amazon associates in a Coventry warehouse are set to strike on January 25, the GMB union revealed on Wednesday. The union also said that further dates will be announced “in the coming weeks.”

Read on to learn how to prepare your business for potential delays in delivery across Central England.

🇬🇧 A first in Amazon UK, hundreds of workers at a facility in Coventry, England have voted to strike over the eComm giant’s 50 pence an hour pay offer, the General, Municipal, Boilermakers, and Allied Trade (GMB) union said on December 16th.

The mass walkout is expected to happen in January 2023. 🪧

“Amazon workers in Coventry have made history – they will be the first ever in the UK to take part in a formal strike,” GMB Senior Organiser Amanda Gearing said in a statement.

“They should be applauded for their grit and determination – fighting for what’s right in the face of an appallingly hostile environment. The fact that they are being forced to go on strike to win a decent rate of pay from one of the world’s most valuable companies should be a badge of shame for Amazon,” Gearing added.

When asked to comment on the issue, an Amazon spokesperson said that the company:

“We appreciate the great work our teams do throughout the year, and we’re proud to offer competitive pay which starts at a minimum of between £10.50 and £11.45 per hour, depending on location. This represents a 29% increase in the minimum hourly wage paid to Amazon employees since 2018.”

⚠️ However, inflation in the UK is at an all-time high as food and energy prices soar. This means inflation is eating into pay increases, forcing workers to demand more money.

The planned industrial action is the latest in a series of union protests happening in the UK since Q2. In August, 115,000 Royal Mail workers went on a strike in a dispute over pay, disrupting deliveries and collections across the country.

Just last month, some warehouse workers joined the “Make Amazon Pay” campaign, a coordinated protest led by an international assembly of trade unions who demand higher pay, better working conditions, and lower carbon footprint.

Major rail and transport strikes in December have also brought UK’s transport services to a standstill, causing reduced foot traffic in retail stores. 

Make Contingency Plans to Mitigate Delays

Seeing that these labor actions will likely hit supply chain and logistics sectors, it would be best to create contingency plans to reduce shipping delays that they may cause and to avoid stockouts.

For instance, recent strikes at Felixstowe, UK’s largest container port, reportedly threatened to put $4.7 billion in trade on hold. Many shippers had diverted their goods from Felixstowe to other ports to make sure they hit the store shelves in time for the holidays. As a result, the unrest had not caused “any real significant impact” on supply chains, according to Paul Davey, Head of Corporate Affairs at Hutchison Ports (UK).

While there is no current port strike danger in UK, there is in the US, so it’s still important to be prepared.

Since May 2022, negotiations have been ongoing between The International Longshore & Warehouse Union (a group that represents over 22,000 West Coast port workers) and Pacific Maritime Association (port terminals and ocean carriers). If unsuccessful, serious disruptions to port operations in the West Coast may occur, prompting some shippers to reroute their US-bound containers from the west to the east.

So, if you’re shipping goods to the US, your best move would be to work with your 3PLs and freight forwarders to figure out alternative arrangements that can be made for any container that may get stuck at sea due to industrial action.

A good logistics company should be able to provide you with excellent supply chain visibility to see where all your inventory is located and keep you informed on any potential disruption danger, so you can quickly respond to any supply chain blockages. From that vantage point, decide whether to reroute some shipments through other ports or to use alternative transport (e.g., send buffer stock from your supplier or other warehouses into Amazon by air or express shipping).

Until these UK labor groups get the pay that they deserve, expect to see more protests in 2023. Luckily, you can reduce the impact of disruptions by making contingency plans with your logistics partners.

Related: How to Ship to Amazon FBA (And Speed Up Check-In Times), Amazon Inventory Risks + 5 Tips to Mitigate Them, Bad Actors Book Multiple Inbound Amazon Delivery Dates to Create Scarcity

Amazon Highlights ‘Frequently Returned’ Products You Should Think Twice Before Buying

SoStocked - Amazon Highlights 'Frequently Returned' Products You Should Think Twice Before Buying

Amazon has released a new badge that highlights frequently returned items in its marketplace. 

It appears right below the bullet point section of the product detail page and encourages potential buyers to read more about the featured item before purchasing. This feature has not been rolled out across the platform and seems to be in beta as some items that other publications previously reported to be showing this badge, no longer are.

The badge also doesn’t explicitly tell why a particular listing has been flagged, so that’s for customers to find out.


Checking out reviews, for instance, may provide valuable insights into the product’s quality, thereby allowing people to make a more informed buying decision. Likely, this could help minimize customer dissatisfaction, unnecessary returns, and waste.

Frequently Returned Item Badge
Amazon | The Verge

As useful as it sounds, some sellers in the comment section of The Verge’s post don’t see how the new badge will help solve other pressing problems, such as fake reviews, return scams, and listing thefts (hijackers).

Perhaps, the biggest disaster in this new development: this new badge may also pave the way for a whole new problem for sellers. ⚠️ Similar to fake reviews, this feature may lead to a wave of fake returns campaigns led by black hat sellers attempting to flag products with frequent returns badges.

If Amazon really wanted to help customers make smarter decisions, their search algorithm should account for listings with frequent returns and move them down the rankings to make them less easily searchable.

Measures should also continue to be developed by Amazon to better safeguard against fake reviews, hijackings, and return scams.

Instead, honest customers are burdened with more responsibility, requiring them to painstakingly sift through hundreds of reviews on and off Amazon just to avoid disappointing themselves with bad orders because they couldn’t tell genuine and fake ratings or listings apart. 

For sellers, they may have to update their product pages with more accurate information. They may also have to trademark their original products and regularly check their listings for signs of hijacking to avoid counterfeit issues that could then lead to frequent returns.

If selling premium items, it would be wise to establish new or improve existing oversight mechanisms like offering signature confirmation to minimize return scams. 

If using Fulfilled by Merchant (FBM), investing in high-quality packaging materials and boxing up orders properly would be crucial to ensure they arrive in good condition.
Even with the “frequently returned item” feature, protecting your brand and keeping your customers happy will still require a lot of work. It’s a band-aid solution that may stop the bleeding, but it won’t solve some of these underlying problems.

But, to get to the heart of why this is likely happening, with less returns, Amazon will be able to cut return costs by helping customers to avoid purchasing sub par products.

Related: Amazon Braces for Slowing eCommerce Growth in 2023

In an email to The Information, Amazon spokesperson Betsy Harden said they’re applying the same methodology they use to calculate return rates to identify which listings to flag and whether they’re sold by a third-party seller or an Amazon brand.

Makes you wonder, then, whether this returns badge will be dedicated to third-party sellers only or if sold by Amazon products will take the same heat.

The badge is currently seen on some select products sold in the US, but expect a broader rollout in the coming months.

Related: Claim Reimbursement for Losses Caused by Amazon CSBA Reps, Amazon Overhauls its A-to-Z Guarantee Policies to Streamline Damages Claims, Updates to AMZ Return and Refund Policy

Amazon Braces for Slowing eComm Growth in 2023

AMZ BRACES FOR SLOW ECOMM GROWTH IN 2023

Update 03/10/2023: 🪓 Cost cutting remains high on Amazon’s priority list after suffering a $2.7 billion net loss in 2022. Growth in certain areas such as the company’s cloud computing business is also expected to continue to decline in 2023, according to Amazon Chief Financial Officer Brian Olsavsky.

To curtail expenses as profit weakens, Amazon is:

In addition, Amazon also reportedly continues to close warehouses this year.

According to MWPVL, Amazon has so far shut down a total of 99 logistics sites in 30 US states, up 29 from last year’s report. 
Many of these facilities were old buildings that cost a fortune to maintain and were located outside of bigger cities, per CNBC. With Amazon expanding its same-day delivery network, the site closures may be an attempt to reallocate resources to those new same-day sites while reducing outbound transportation costs.

🚨 As US consumers spend less on products due to inflation, Amazon is left to deal with lots of unused warehouse space, which contributed to the company’s $3.8 billion profit loss in Q1 and another $2 billion in Q2 2022.

New data from MWPVL International suggests that it may take the online retail giant three (3) years to recover from overbuilding its fulfillment network during the pandemic. However, Amazon rep, Lisa Levandowski, reportedly called MWPVL’s estimations “pure fiction.”

Amazon CEO Andy Jassy himself did mention – albeit did not exactly say how long – in his Q1 2022 earnings call that “improving productivity and cost efficiencies” throughout the logistics side of things “may take some time” as the company tries to “work through ongoing inflationary and supply chain pressures.”

As a highlight to the concern, within the first 72 hours of the new year, Tech Crunch reported that Amazon had secured an $8B loan to help weather some of the uncertainty.

In 2022, the eComm giant has taken a few steps geared towards financial recovery amid a slowing online growth and a looming recession, including raising their FBA fees for 2023.

Recent moves that Amazon has been making to improve profitability include:

Subleasing or shutting down several old warehouses across the US.

After nearly doubling its fulfillment network during the pandemic, Amazon had to majorly pullback last year to lower operational costs and capital expenditures. As of September 2022, the company has shut down or subleased more than 20 logistics centers and postponed or canceled the openings of 50 more sites. And in doing so, Amazon saved approximately $4 billion in 2022, according to MWPVL Founder & President, Marc Wulfraat.

Increasing warehouse automation with robots to improve productivity and efficiency.

Amazon has recently deployed multiple robotic arm systems, Robin, Cardinal and Sparrow, in some of its facilities to streamline its fulfillment process – a sign that the company could also be ramping up warehouse automation to reduce its workforce amid increasing unionization activity, which could drive up annual operating expenses by hundreds of millions of dollars.

Rolling out Prime Air, Amazon’s drone delivery service

Rolling out Prime Air, Amazon’s drone delivery service, which could be “faster, cheaper, and greener” than traditional shipping modes, i.e., manned, gasoline vehicles versus unmanned, fully electric cargo aircrafts. Moreover, according to UVL Robotics, drones can efficiently take hundreds of quick trips per day (within a 6-mile radius) and transfer packages from days to hours. Amazon’s drone service in particular is expected to cut down last-mile shipping times from 2 days to under an hour. With increased delivery efficiency, it could potentially reduce Amazon’s outbound transportation expense, and perhaps that would also translate to lower fulfillment fees in the future. 🤞🏼

Introducing Buy with Prime (BWP) to non-Amazon sellers to possibly increase fulfillment revenue.

What better way to fill up unused warehouse space than to offer it to hundreds of thousands of non-Amazon merchants? Instead of building out their own logistics infrastructure in an attempt to offer free 1- to 2-day shipping and returns, DTC businesses can now pay to use Amazon’s fulfillment without having to sell on the platform directly.

Market intel firm, PipeCandy, estimates that there are around 120,000 Direct-to-Consumer (DTC) brands in the US. The growing DTC market represents an important growth area for Amazon, which if they’re able to capture, could help them to stay ahead of Shopify, Walmart, and other rivals.

Presently, 17% of 21,000 US DTC merchants that PipeCandy have surveyed are using Amazon Pay (which is conditional to BWP) as a payment channel alternative. Majority of these stores are in the $5-$50 million gross merchandise volume range, which only represents 8% of the overall B2C goods aggregate sold in the US. 

Therefore, it’s still too early to say whether or not BWP is going to make a significant dent in Shopify’s checkout processing revenue, which is still currently the preferred checkout provider of DTC stores. 

Rising MCF fees is another factor that could stop merchants from using BWP, which makes increased warehouse and logistics efficiency through automation all the more important for Amazon to remain competitive.

Related: Storage Limit Manager: Would You Pay for Extra Storage Space?, Amazon Enters the 3PL Space with Amazon Warehousing & Distribution

Selling excess cargo jet space

Selling excess cargo jet space is yet another attempt by Amazon to offset the cost of overexpansion they have accumulated throughout the pandemic. In a Bloomberg post, Amazon is reportedly looking to hire execs with experience in selling excess air freighter space.

This year, global demand for air cargo is expected to fall by 25% or $150 billion, so Amazon might be looking to increase profits during this softening period by offering their surplus cargo space to third-party shippers. Amazon might venture into importing perishable and seasonal goods into the US on return flights, according to the sources familiar with the matter. For example, shippers could use Amazon’s cargo space to transport flowers from South America for Valentine’s Day and seafood from Canada and New Zealand to the US.

All of these profit recovery and growth initiatives point to Amazon adjusting from accelerated pandemic-era expansion to declining online sales. But whether or not these efforts could lead to a slowing down of fee increases in the coming months is still up for debate, given the fact that current inflation numbers remain above 8%, with no signs of letting up.

Therefore, it’s possible Amazon might still introduce new fees this year to account for any significant increase in prices. And unless the tech giant speeds up the wider rollout of their robots and drones, among other cost-efficient logistics systems, FBA fees will likely remain high, or become even higher, in the coming years.

Boost Sales with These New Amazon Seller Tools

SoStocked - Boost Sales with These New Amazon Seller Tools

With FBA getting more expensive, finding new ways to increase sales is even more crucial to your success on Amazon. 

💰 That’s why we have put together this list of new Amazon tools and features that you can use to generate more revenue for your business.

Case Pack Recommendations

Use this tool to identify which products to bundle as case packs or add offers on your existing case packs.

A case pack contains multiple single units of the same product for individual sale, allowing you to quickly move your inventory. It also simplifies bulk purchases and offers customers savings with case discounts and consolidated delivery.

This packing configuration is ideal for high-volume sellers. Amazon offers two types of recommendations based on your product catalog and sales:

  • Create new case packs. This section features items you currently sell as single units and are not yet listed in Amazon as case packs by you or other sellers. Amazon looks at the number of multi-unit orders of your single products to see if there is demand for any of these items to be sold as a case pack. If a product is eligible, you will then be provided with a suggested size for a case pack based on the number of units that customers have frequently bought from you.

    When adding a new case pack, Amazon recommends creating a consolidated listing that shows both your product as a single unit and as a case pack. This makes it easier for customers to compare and buy goods in different quantities and packing configurations.
  • Add offers on existing case packs. This section shows case packs that are already listed in Amazon by other brand-registered sellers. Products in case packs are ranked based on sales in the last 12 months. Amazon provides a suggested price for each case pack on this list. If you wish to match Amazon’s suggested price for an existing case pack, you may add an offer on that listing by clicking the “Add an Offer” button and entering your price and quantity details into the Offer Page.

To get started, go to Case Pack Recommendations.

Transparency Badge

Product authenticity is important to customers. When people find out they purchased a fake product from a brand, most would not trust and buy from that brand again according to DigitMarc.

In a marketplace flooded with knockoffs, demonstrating product authenticity through Transparency Badge are be critical to protecting your business from fake sellers, especially if you have a trademark on your product or selling items highly susceptible to counterfeiting like electronic gadgets.

You must be registered with Amazon Brand Registry and enrolled in Transparency to be able to receive a badge for your eligible products.

Participating FBA products are given a unique “Transparency” code that cannot be duplicated by counterfeiters. However, that means you will have to take extra steps to carry out this process. Before sending your inventory into FBA, you will have to apply the individual Transparency labels to every unit yourself or hire someone else to do it. 

A listing with a Transparency Badge indicates that the featured product has been verified authentic by Amazon and customers themselves. 

Customers who have purchased the product can use an app to scan the code to verify its authenticity. This offers another benefit to the Transparency program: the ability to shareproduct information, videos and promotions that your customers can view upon scanning the code.

If customers face any authenticity issues with a product, they can reach out to Amazon’s Transparency team to file a counterfeit complaint.

Visit the Transparency page to get started.

New Seller Incentives

This program entices new brands to sell on Amazon or existing brands to expand to other country sites by offering them:

  • 5% new brand bonus on their first £800,000 in branded sales
  • £160 off fulfilment fees using Amazon Global Logistics for out-of-country sellers
  • 120 days free storage plus 180 days free removals  for 100 units with FBA
  • £40 credit for Sponsored Products CPC ads
  • £160 in Vine credits for free access to trusted reviewers 

According to Amazon, you can enjoy more than £40,000 in potential benefits, which you can use to promote your products and scale your business. However, these benefits are only valid for 90 days, reduced from one full year, so you’ll have to act quickly.

Go to New Seller Incentives to check your eligibility.

Related: Attack of the Fee Stack White Paper, Prepare for these 6 Major Changes to 2023 Amazon UK and EU FBA Fees, 4 New Amazon Seller Tools to Accelerate Business Growth

Amazon Fees Changes for UK & EU Multi-Channel Fulfillment Orders

Amazon Fees Changes for UK & EU Multi-Channel Fulfillment Orders

Amazon’s price hike spree continues, thanks to rising operating costs! 😫

Starting April 7, 2023, Amazon will introduce major fee updates to multi-channel fulfillment (MCF) orders.

Depending on shipping destination (local or cross border), delivery option (standard or expedited) and size tier, you may see a slight decrease or significant increase in your MCF fees. In some cases, you may see no fee change at all.

For instance, if you review the policy you’ll see that Amazon dropped the rate for shipping an envelop package within the UK by an average of £0.04, while some fees remain unchanged. Other parcel size tiers experience an increase.

⚠️ However, things can get substantially expensive for you if fulfilling cross-border shipments due to a massive fee hike that will take effect on April 7th.

Take standard shipping for example. From smallest to largest, the expected fee increase ranges between £0.77 (80g small envelope) and £7.32 (31.5kg large oversize) per single unit order.

Standard Shipping: Cross-Border Shipments (1 Unit Per Order)

Size TierFees Before April 7, 2023Fees On and After April 7, 2023
Small envelope to 80g£4.96£5.73
Standard envelope to 210g£5.12£5.91
Large envelope to 960g£5.51£6.34
Standard parcel to 1.4kg£8.37£10.43
Standard parcel to 6.9kg£13.07£17.32
Standard parcel to 11.9kg£15.41£21.24
Small oversize to 1.26kg£12.17£14.68
Standard oversize to 2.7kg£14.93£18.40
Standard oversize to 29.76kg£21.09£26.65
Large oversize to 31.5kg£30.95£38.27 

Moreover, fulfilling expedited cross-border shipments this year will leave you with even slimmer profit margins.

On average, Amazon has raised the MCF fees for envelopes to a little over £1, standard parcels between £1 to £5, and standard oversize £6 to £9, and roughly £10 for large oversize.

Expedited Shipping: Cross-Border Shipments (1 Unit Per Order)

Size TierFees Before April 7, 2023Fees On and After April 7, 2023
Small envelope to 80g£6.06£7.42
Standard envelope to 210g£6.22£7.71
Large envelope to 960g£6.61£8.11
Standard parcel to 1.4kg£9.47£10.73
Standard parcel to 6.9kg£13.77£17.37
Standard parcel to 11.9kg£15.47£21.29
Small oversize to 1.26kg£15.48£21.29
Standard oversize to 2.7kg£18.23£25.00
Standard oversize to 29.76kg£24.40£33.26
Large oversize to 31.5kg£34.26£44.59 

Note: These fees already include the 4.3% fuel and inflation surcharge.

Reduce MCF Fees with Multi-Unit Discounts

Given how steep the fee increases are, be sure to take advantage of Amazon’s multi-unit discounts to get lower fulfillment rates. 

Check out the table of fees below to see the difference between local shipping fees for one-unit and multi-unit orders.

With multi-unit discounts, you could save up to 40% on fees! Try to increase your multi-unit sales by:

  • Offering coupons for minimum purchase amounts. For example, get 15% off with a min purchase of 3 items or buy 2 get the third one at 25% off.
  • Creating add-ons to your products, e.g., if selling women’s swimwear, provide customers with an option to add sun hats, flip-flops, aqua shoes, and more.

It is not clear to us at this time whether a virtual bundle will be counted as a multi-unit order but, given what is known about how Amazon counts SKUs in those orders, this seems likely. If that is the case, promoting virtual bundles could be a good way to capitalize on these reduced shipping rates. Testing this theory by reviewing the shipping charges tied to these orders would be smart.

Related: Master Carton Calculator to Optimize Packaging and Reduce Shipping Costs

Aside from multi-unit discounts, Amazon also made significant improvements on the following areas to help you grow your business.

  • If you’re selling on the UK marketplace, you may now opt to ship your MCF orders in blank packaging at no extra cost. This is helpful when you are sending items from other sales channels such as your own website, and don’t want Amazon’s logo featured on your deliveries.
  • Providing you with ISO-certified IT security systems so you can safely and securely conduct business on Amazon. This means Amazon’s systems meet a global standard approved by the International Organization for Standardization.
  • Maintaining their 98% on-time delivery rate to consistently meet Amazon customer delivery expectations.

Go to 2023 UK MCF Fee Updates for more information.

Related: Attack of the Fee Stack White Paper, Prepare for these 6 Major Changes to 2023 Amazon UK and EU FBA Fees, How to Increase Profit Margins for Amazon Sellers

Foreign Amazon Sellers Are Closing the Competitive Gap with ChatGPT

SoStocked - Foreign Amazon Sellers Are Closing the Competitive Gap with ChatGPT

For cross-border sellers, overcoming language barriers can be a challenge. Inaccurate translations, for example, may prevent them from being able to clearly get their messaging across or can create consumer distrust, leading to lost opportunities that impact conversion and sales.

However, with the recent arrival of modern communication technologies like chatbots and other AI tools, that could all be changing. One such AI application, which has been making the headlines recently, is ChatGPT or Chat Generative Pre-Trained Transformer. 🤖

What is ChatGPT?

ChatGPT is an AI-driven chatbot that uses Natural Language Processing (NLP) to recognize patterns in datasets harvested from the internet and use that information to generate meaningful human-like responses. And because it has the ability to comprehend human language, it can also provide users with coherent and grammatically correct content.

It has reportedly aided people in various tasks, such as composing poems, writing blog posts, crafting love letters, and even something as bizarre as coming up with instructions for removing a peanut butter sandwich from a VCR, King James Bible style.

How ChatGPT Can Influence Competition on Amazon

Amazon sellers are using ChatGPT to create titles, bullet points, and product descriptions for their listings. Foreign language sellers expanding into the US market in particular may find this tool useful for improving the quality and efficiency of their content marketing efforts. 

With fewer barriers to entry, however, it is going to make competition much more intense on Amazon. Cross-border sellers will start publishing better listing copy, and customers will not be able to distinguish as easily that they are not from the US.

For example, some buyers can easily tell when a seller is ESL (English as a Second Language). But ChatGPT changes all of that. Chinese sellers, for instance, are going to fare much better against competition with this strategy.

They can simply go to ChatGPT and type in a set of instructions (in English or their native language) for the tool to generate a description or sales copy for a particular product. It could be something as simple as “Please write 5 bullet points for an Amazon listing selling an air purifier.”

Here’s what ChatGPT came up with:

As you can see, the generated response is decent enough to describe what the product does. It offers a good start, but it doesn’t really make you stand out with those generic details.

To reel in customers, it may be necessary to tweak the prompt in a way that will allow the tool to write a more detailed product description. Consider plugging in relevant keywords or technical specifications, for example. Even then, you may still need to add a touch of artistic flair to your copy. 

This may sound like a lot of work, but ChatGPT is only supposed to make getting started with writing English copy easier, not to replace human creativity.

It’s also crucial to do some fact-checking to avoid disappointing buyers with misleading or inaccurate descriptions. Unfortunately, AI tools like ChatGPT can’t detect malicious intent or accurately distinguish falsehoods from facts so they don’t always provide truthful answers.

This is where US sellers can have some advantage as they are more familiar with the nuances of the English language and know the local market better.

Subtleties like colloquialisms and tones of voice unique to local customers typically get lost in translation. Therefore, foreign sellers may not be completely aware of them or at least know how to properly incorporate them into the text. If you’re a local seller, leverage those cultural insights to create a more compelling copy.

Related: FBA Sellers Can Use ChatGPT to Write Amazon Listings – But It Might Be Unethical, According to ChatGPT

Final Thoughts

ChatGPT could be useful at overcoming language barriers in cross-border selling. Foreign sellers can utilize it to quickly source ideas, get started with writing copy, or proofread and improve their existing Amazon listings to effectively communicate with US consumers.

However, the AI tool also has a few drawbacks. It may not accurately depict your product’s unique selling points, unless you spend a lot of time tinkering with the AI so that it can meet your specific requirements. Those who don’t bother modifying the generated responses even a little are less likely to stand out and thrive in a saturated market.

Suppose all air purifier brands start using the same prompt to generate bullet points for Amazon, they may end up having the same copy for those listings. After all, ChatGPT uses existing words and phrases from the internet to generate responses to user input.

So, there is a likelihood of having a competitor publish a listing quite similar to yours. The message is clear: you may have well-written product titles, bullet points, and descriptions, but don’t rest on your laurels. 

With its ability to write and proofread English copy like a human, ChatGPT is rapidly leveling the playing field for foreign sellers. You need to step up your Amazon game right now to stay ahead of the curve.

Take advantage of Amazon’s Listing Quality Dashboard to find areas in your listings that need improvement. Keep your copy relevant and discoverable with updated keywords and genuine customer reviews. Adding a little pizzazz (e.g., humor or visually compelling images) to the whole thing can do wonders, too! 😉

Related: 5 Easy Ways Amazon Sellers Can Use ChatGPT to Increase Profits, Marketing on Amazon

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

Amazon Shopify Completes Deliverr Acquisition

Update 02/10/2023: Shopify continues to battle Amazon for dominance as it expands its logistics and fulfillment network. 🚀

The Canadian eComm company recently:

  • Teamed up with Flexport to offer end-to-end import solutions to sellers, from requesting shipping estimates (for ocean and domestic freight) to booking shipments to tracking inventory orders (from supplier to fulfillment center). Smaller sellers can also use the company’s growing fulfillment network to import “as little as one pallet or 30 units of inventory,” according to Shopify Logistics CEO Aaron Brown.
  • Rolled out Shop Promise badge that allows sellers to communicate custom expected delivery dates to customers. Sellers can use the badge to feature the standard next-day and two-day delivery options or their own shipping dates as long as they deliver in five calendar days or less. 
  • Launched Shopify Magic, a new tool equipped with AI to help sellers generate product descriptions.

These latest moves are also likely done in response to Amazon announcing a nationwide roll out of Buy with Prime in January, which means increased competition for businesses that use Shopify.

Introducing these new logistics features will help Shopify merchants directly compete with Buy with Prime sellers.
“If we can level the playing field and give any merchant in the world before they’ve had their first sale all the benefits of a large retailer, we think that’s just giving pure magic to merchants,” Brown told Wall Street Journal.

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.

Amazon Warehouse Automation Increases Concerns over Job Loss and Product Selection Inaccuracy

Amazon Warehouse Automation Increases Concerns over Job Loss and Product Selection Inaccuracy

Update 02/03/2023: Amazon is looking at ways to get rid of barcodes!

This might sound like science fiction, but according to Amazon, the Robotics team has developed a new camera system that can identify and match items against the ones listed in the inventory system without scanning barcodes. And it apparently does its job with 99% accuracy! 😲

In a Science blog post, the eComm giant explains that robotic arms are not good at locating and scanning barcodes, especially those that are attached to oddly-shaped items or hard-to-reach areas. Such challenges typically result in mispicks (customers receiving the wrong item) or shipping delays.

To increase warehouse efficiency, Amazon aims to automate identification of items in its fulfillment centers using Multimodal Identification (MMID). This process uses two or more “modalities of information” like text, sizes and shapes instead of barcodes. 

For example, when a camera monitors an item moving along the conveyor, it takes the item’s dimensions and appearance to see if they match the reference images stored in Amazon’s database. Once identified correctly, a robotic arm will then pick it up to be put in the correct bin to continue with the next step.

Initially, the match rates ranged between 75% and 80%. The system faced challenges when it couldn’t distinguish the difference between two different colors of Echo Dot – blue or gray.

But after extensive experiments, the system can now put confidence scores to its ratings and flag potential mismatches. Currently, the match rates are at 99%, thanks in part to “Amazon’s inventory systems that know where each product is at each step of the fulfillment process,” thereby reducing the need for barcodes.

According to AI researchers, “the algorithm does not need to match an item against Amazon’s entire catalog of hundreds of millions of products — currently an impossible task. Each item comes from a particular tote, and each tote contains a few dozen products. So, the algorithm only has to match an item against the contents of a single tote.”

Fortunately, this process happens in the early stages of the fulfillment process so any mismatch or mispick can be easily corrected by “recycling the incorrect item back into the system to its correct location” without causing any disruption, says Robotics AI specialist, Doug Morrison.

🤖 Over the past few months, Amazon has been introducing a series of innovative robotic systems to streamline its fulfillment process and make work safer (and faster) for employees.

During the first half of 2022, the tech giant rolled out two stationary robotic arm systems, Robin and Cardinal, to automate roughly half of its fulfillment process, such as grabbing a boxed-up item from the conveyor and scanning the label so that it can be sorted and transported (via mobile robots) to the correct loading dock. 

The other half? Retrieving products from shelves and putting them in boxes, a repetitive task typically performed by pickers, which now Amazon aims to automate with the launch of its newest robotic system, Sparrow. 🤔

Potential Impact of Sparrow on Workers

Introduced on November 10th, Sparrow is reportedly capable of recognizing and handling 65% of all pre-packaged goods sold on Amazon.com. That’s around 230 million out of 353 million products that the entire marketplace is supposedly carrying.

If the current iteration of Sparrow can already handle that much inventory, it’s only a matter of time before it can finally do the work of more than one million workers that Amazon employs to pick, stow, and pack 5 billion packages it delivers annually.

💯 Therefore, Amazon workers are right to be worried about:

Job Loss

The eComm giant describes Sparrow as a major technological advancement to support its workers.

However, employees fear that while it could help them meet their productivity quotas, it could also oust them from their job, especially at a time when Amazon is facing multiple issues in its warehouses.

  • Excess capacity amid slowing ecommerce growth. After nearly doubling its warehouse footprint in the last two years, Amazon is scaling back its logistics operations by delaying, shutting down, or subleasing more than 60 logistics centers to cut costs.
  • Increasing unionization activity. In a report posted by Yahoo in April 2022, Morgan Stanley analyst Brian Nowak speculated that Amazon might double down on its automation program in response to unionization activity. The analysis came after Amazon workers at a logistics facility in Staten Island voted to unionize, which could drive up labor costs (as opposed to robots that can’t demand higher wages or stage protests). The Wall Street analyst estimated that for every 1% of Amazon’s workforce that’s unionized, the company’s annual operating expenses would climb by $150 million.

“If unionization efforts did begin to spread rapidly, it may cause Amazon to increase the pace at which it invests and integrates robotics and labor alternatives into its warehousing efforts,” Nowak said.

  • Dwindling pool of workers. Vox’s tech news arm, Recode, reported in June that Amazon is facing a looming labor crisis. Leaked internal documents from mid-2021 show the company could run out of workers in two years if it doesn’t do “a series of sweeping changes” in its “hiring practices, productivity quotas, attendance policies and unequal enforcement of rules,” some of the biggest factors that contribute to Amazon’s high turnover.

    According to The Guardian, the eComm giant was losing 150% of its workers annually before the pandemic. By comparison, the retail sector’s annual average turnover in 2021 was 64.6% and in transportation, warehousing and utility, the turnover was only 49%. Amazon is reportedly looking at increasing wages and warehouse automation to delay the impending labor shortage by a few years.

    Or, the company could continue business as usual and rely more on robotics to fulfill orders instead of hiring more employees, ultimately wiping out a significant number of their workforce.

“You can’t compete with the robots. They want you to compete with the robots. They want all the employees to compete with them. But who can win against a robot?” a former Amazon warehouse worker, Mohamed Mire Mohamed, told Business Insider.

In a patent filed by the retail giant in 2020, Amazon said that Sparrow’s suction-grip “hand” is designed to replace workers who “pick items from inventory, place items in totes, remove items from totes, place items into bins, remove items from bins, and place items into boxes for shipping.”

But Amazon has denied speculations that its new robotic arm will replace human workers, saying that it’s designed to work alongside its fulfillment line, not against them. 🤔

“Working with our employees, Sparrow will take on repetitive tasks, enabling our employees to focus their time and energy on other things, while also advancing safety. At the same time, Sparrow will help us drive efficiency by automating a critical part of our fulfillment process so we can continue to deliver for customers,” an Amazon spokesperson said in a press release.

Higher Productivity Quotas

A robot identifying and selecting 65% of Amazon inventory for packing is without doubt extremely efficient. However, this could also lead to managers raising performance quotas significantly, requiring employees to do repetitive tasks over long shifts.

For instance, pickers at one warehouse said they had seen their quota grow from 100 to 400 items per hour, increasing their risk for burnout and injury. 

While robots can’t get sick like their human counterparts, that doesn’t mean they don’t have flaws.

Impact of Production Inaccuracy on Sellers

Sparrow may help speed up Amazon’s pick and pack process, but issues around production accuracy (e.g., mispicks) should also be addressed, as they could impact sellers and customers in terms of receiving the right order on time. 

For example, Amazon’s existing robotic arm system is built with scanners to be able to read labels on products and sort them by ZIP code. If it fails to scan your product correctly, however, it could be placed into a cart where it doesn’t belong, and potentially get lost.

Or, if your product is buried under a pile of objects of varying sizes and shapes, the robot may also fail to detect and pick it up.

⚠️ Amazon themselves are not oblivious to these problems, even admitting to the fact that robots will make mistakes in production as seen during their experiments with Robin. 

In this Amazon Science blog post, Bhavana Chandrashekhar, a software development manager at Amazon Robotics & AI, reveals “sometimes, the differences between one package and another are hard to see, even for humans. You might have a white envelope on another white envelope, and both are crinkled so you can’t tell where one begins and the other ends,”

To increase Robin’s success rate, Chandrashekhar’s team “gathered thousands of images, drew lines around features like boxes, yellow, brown and white mailers, and labels, and added descriptions.” This way, when Robin picks up and scans an object, it can quickly compare what it sees with thousands of sample data to find the closest match and stow it away in the right bin.

They also took note of errors, added them back to the training deck, and retrained Robin to improve its accuracy.

The robotics team developed and equipped the robot with a quality assurance system to oversee how it handles packages.

Charles Swan, a senior manager of software development at Amazon Robotics & AI, explains that if Robin detects a problem like dropping a package or placing two parcels (instead of one) onto a sortation robot, it will try to fix it on its own or call for human support if it cannot.

“If Robin finds and corrects a mistake, it might lose some time. However, if that error wasn’t addressed at all, we might lose a day or two getting that product to the customer.”

With Sparrow expected to handle the early stages of the fulfillment process, it’s not hard to imagine Amazon using a more refined training model to perfect its newest robotic arm system before deploying it at scale. One misstep could quickly trigger some sort of domino effect in its fulfillment process.

For instance, to minimize mishandling issues, Amazon is planning to equip its robotic arms with more advanced perception features like the ability to detect deformable products (plastic bottles in mailers) to avoid crushing them with so much pressure from the suction cups and getting them delivered to customers in damaged condition.

Amazon is currently testing Sparrow in a warehouse in Texas. 

The company expects a broader rollout in 2023. And when that happens, its fulfillment centers are going to become a lot less labor intensive. Conversely, it could also reduce the need for warehouse workers.

All of the above are the best-laid plans of Amazon and its robotics team. But as for the true test, that comes out in the wild when Amazon releases Sparrow more broadly into warehouses across the country. 

And while humans can also make mistakes, 65% accuracy in identification is not nearly as close as what human workers might be able to achieve, at least at this stage. This is to say nothing of any potential damage by robot arms the products may sustain on their way to your customers’ doorstep. 

However, this could solve a lot of problems for Amazon and for sellers in terms of faster delivery and, thus, greater sell-through for Amazon. Amazon warehouses working more efficiently could mean another moratorium on restock limits as warehouse space is utilized more efficiently. 


Sellers should follow along as this develops and brace themselves for when it launches more broadly. Even as confident as Amazon sounds and as hopeful as they may be, the jury is out on whether this will improve things or become another challenge for sellers to overcome. 

The Latest Update to Amazon’s Automate Pricing Features

The Latest Update to Amazon’s Automate Pricing Features

Update 01/24/2023: Amazon has added a new Automate Pricing feature that will help you to match or beat prices from competitors outside of Amazon.com. 💪

Here’s how the new feature works:

  • Enroll your product in Competitive Featured rule or Competitive Lowest Price rule on the Automated Pricing page.
  • Set your off-Amazon pricing rules (higher or lower than competing sellers)
  • Once set, Automate Pricing may automatically increase or decrease your price when offers from competitors outside of Amazon change.

At best, the automatic price increase may help you make money at higher prices. At worst, however, your competitors may purposely lower or keep their offers low to attract more customers, and at the same time, drive your prices to the bottom.

To protect your margins, consider tracking and updating your offers manually or setting your rules modestly.
Go to Automate Pricing or continue reading to learn more about this tool.

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.
Automate Pricing In Bulk

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.

Walmart Launches B2B eCommerce Site to Rival Amazon and Shopify

Walmart Launches B2B eCommerce Site

Amazon, Walmart, and Shopify are taking their rivalry to a new arena: the fast-growing Business-to-Business (B2B) eCommerce industry. 

The Rise of B2B eCommerce

As US consumer spending weakens, B2B is growing at a rapid pace, prompting eComm companies to put more focus on B2B.

According to DigitalCommerce360, US B2B online sales grew from $1.39 trillion in 2020 to $1.63 trillion in 2021. B2B eComm is also estimated to reach a compound annual growth rate of 20.49% from 2022 through 2028, representing a huge growth opportunity for eComm players to tap into. Capturing this untapped market may provide some revenue boost that could help them offset Business-to-Consumer (B2C) sales slowdown.

Buyers going digital during the pandemic is one of the contributing factors to the rapid growth of online B2B.

In response to COVID-19 lockdowns in 2020, many businesses moved their B2B transactions from offline to online, and never looked back. Approximately 80% of B2B executives now prefer online self-service or remote human interactions over in-person sales primarily due to safety concerns, ease of scheduling, and savings on travel expenses, McKinsey reports. 

Among US B2B eComm companies, Amazon appears to be the most dominant player, having operated its own B2B arm, Amazon Business, since 2015 versus top competitors that have only been in the market for several months – Shopify since June 2022 and Walmart since January 2023.

Sales-wise, Amazon Business represented 1.4% of all B2B sales on eComm sites in the US in 2021. Moreover, by 2025, the company’s market share is estimated to grow by 2.4%. For context, Insider Intelligence forecasts B2B sales on eComm platforms to reach $2.3 trillion within the next two years. 

In an attempt to carve out a good proportion of this trillion-dollar market size for themselves, Walmart recently launched their own B2B eCommerce site. 🚀

Walmart Business for Small and Medium-Sized Enterprises (SMEs)

Announced on January 20, 2023, Walmart Business is an online procurement hub for SMEs and non-profit organizations looking to:

  • Simplify B2B purchases. Walmart removes the complexities of procurement by offering SMEs a curated list of over 100,000 products. They can easily shop for office supplies, furniture, bathroom items, food and beverage, electronics, or classroom and faculty needs all in one place. Buyers can then group their purchases by category to streamline their restocking process. Depending on a company’s organizational needs, one may select categories including administrative support (printing, stationary, or mailing items) or information technology (hardware or software).
  • Lower costs. Reduce travel expenses by eliminating face-to-face interactions with suppliers and opting for digital self-service orders or remote human engagement instead.
  • Leverage Walmart’s fulfillment network. Receive orders fast with the retail chain’s scheduling system, convenient store pickup locations, and 2-day delivery program.
  • Track and share spending information with multiple users. Add up to 5 users to a single account and track spending trends by sharing purchase history across members. Qualified buyers can also register in Walmart Tax-Exemption Program to enable automatic removal of eligible taxes during checkout.

SMEs can also upgrade to a Walmart Business+ account for $98 per year to enjoy the following additional benefits:

  • No minimum order required to qualify for free shipping
  • Free pickup and delivery from Walmart stores with a $35 minimum order
  • 2% rewards on orders $250 and above
  • 5% savings on eligible products set to subscription

Why Go After SMEs?

Like B2B eCommerce, the US small business market is a growth area with 33.2 million SMEs. This accounts for 99.9% of all American businesses, and is expected to grow by 36,000 by 2025.

Of the 33.2 million, 27 million do not hire any staff, while 5.4 million have under 20 team members and only 650,000 have fewer than 500 employees, according to Oberlo.

Therefore, tailoring Walmart Business to the needs of SMEs may help the retail giant win more sales while keeping existing customers from switching over to Amazon or Shopify, ultimately allowing them to grab a big piece of the B2B pie.

For sellers trying to lessen their reliance on Amazon, this could be an opportunity to branch out into Walmart. 🤔

It’s too early to say whether or not Walmart Business will make a dent in Amazon’s B2B sales, but it will surely bring new challenges to Amazon. 💪 Expect the eComm giant to try to forestall Walmart’s attempt to encroach on its market with new B2B tools and features in the near future.

Related: Walmart and Amazon Battle for Dominance Intensifies, Shopify Acquires Deliverr and Takes Aim at Amazon’s Buy with Prime, Amazon Makes Play Toward Offering Prime for Non-Amazon Orders

Prepare for These 6 Major Changes to 2023 Amazon UK & EU FBA Fees

Prepare for These 6 Major Changes to 2023 Amazon UK & EU FBA Fees

Like US sellers, UK and European marketplaces will welcome the new year with updated Aamzon FBA fees, the eComm giant announced on January 19th.

Amazon cited the current macroeconomic factors affecting the company’s operations as the primary reason for the upcoming changes. These include significant updates to the cost of fulfillment, storage, and return and disposal services starting March 1st, 2023.

The tech giant also announced it will introduce new fee promotions and reductions this year and improved benefits for products in the FBA New Selection Program, in what may be an attempt to keep sellers from opting out of FBA due to fee increases.

Read on to learn how these updates will impact your business in 2023 and what you can do to get ahead of mounting Amazon fees.

6 Major FBA Fee Updates for 2023

FBA Fulfillment Fee Changes

This year’s FBA fulfillment fee changes include:

  • Applying dimensional (DIM) weight calculations to all standard and oversize products. Previously, DIM weight pricing was only applied to oversize units. But that will change on March 1st, when Amazon starts using the greater of the unit weight and dimensional weight as the billable weight for standard parcels (and oversize items), which could potentially increase your per unit shipping cost. Amazon subtly slips into the announcement that DIM will also be applied to customer returns processing fees.

DIM Weight Sample calculation

Item unit weightItem dimension (cm)
Item DIM weight Greater of unit weight or DIM weightSize and weight tier before March 1, 2023Size and weight tier on and after March 1, 2023
900g35 x 25 x 12(35 x 25 x 12)/5,000 = 2.1 kgDIM weight is 2.1 kgStandard parcel ≤ 900gStandard parcel ≤ 3.90 kg

Assuming you’re shipping within the UK, here’s how much it would cost you to fulfill a standard parcel across the country from March 1st:

Standard Parcel2023 Fulfillment Rates
Standard parcel ≤ 150g£2.81
Standard parcel ≤ 400g£2.92
Standard parcel ≤ 900g£3.15
Standard parcel ≤ 1.40 kg£3.36
Standard parcel ≤ 1.90 kg£3.68
Standard parcel ≤ 2.90 kg£5.38
Standard parcel ≤ 3.90 kg£5.68

Based on DIM weight pricing, you may find yourself falling into a much higher weight tier than what your actual unit weight suggests and receive a massive per unit fulfillment fee increase for your large but lightweight products!

Pro tip: Parcels can get bulky due to excess air inside the packaging or using an excessive amount of bubble wrap or foam fillers. To reduce shipping fees, try to keep your products compact by implementing packaging optimization practices like using lightweight or condensed packaging materials or removing excess air or water from your primary packaging. Additionally, use our Master Carton Calculator to determine your optimal carton and pallet load capacity per shipment for additional savings to offset Amazon’s fees.

  • Making Fuel & Inflation Surcharge permanent. Amazon introduced this surcharge in 2022 to temporarily account for rising price levels during that period. However, “as economic conditions have progressed, these cost increases appear to be more permanent,” requiring the retail giant to adjust this year’s FBA fees to include these additional costs permanently. These fee changes are reflected in the rates published here.

    In general, this year’s fees are significantly higher with at least £0.17 per unit increases in many cases for the UK and €0.11 for EU.
  • Introducing new weight tiers in FBA fulfilment rates for Special Oversize items. Starting March 1st, Amazon will add 30 kg and 50 kg weight tiers to Special Oversize category to “better align fees” with its current fulfillment costs.

FBA Monthly Storage Fee Updates

Expect to pay:

  • Higher monthly storage fees for all Standard-Size units. Effective March 1, 2023, monthly storage fees for your standard-size inventory will increase by around £0.04-£0.10 per cubic foot depending on product category and storage month. Fees for storing dangerous goods and oversize products in FBA will remain unchanged.
  • Storage utilisation surcharge starting May 1st, if you meet the criteria. This additional fee (stacked on top of your monthly storage fee) will be based on the ratio of your average daily inventory volume (in cubic ft) and average daily shipped volume (cubic ft) over the trailing 13 weeks. 

    Rates will vary depending on your utilisation ratio, season, and product size tier level.

Quick sample

(Daily inventory volume over trailing 13 weeks / Daily shipped volume over trailing 13 weeks) / (7 days in a week) = Storage Utilisation Ratio (in weeks)

Or for example:

30,000 cubic feet / 140 cubic feet) / 7 = 30.61 weeks

Base monthly storage fee (off-peak standard size rate): £0.78 per cubic foot
Storage utilisation surcharge: £0.50 per cubic foot
Total storage fees: £0.78 per cubic foot + £0.50 per cubic foot = £1.28 per cubic foot

To reduce your utilisation ratio, consider deleting unused shipping plans, eliminating excess inventory, fixing stranded inventory, and improving your Amazon reserved inventory levels. Doing these things may also help increase your FBA capacity limits as storage utilisation is tied to your IPI score, which is one of the metrics that Amazon uses to calculate your inventory limits.

In addition, Amazon will charge a single storage utilisation fee for inventory kept in an Amazon fulfillment center in Spain, France, Italy, and Germany and a separate surcharge for your UK inventory. This means that your catalog sell-through will be analyzed separately for these marketplaces. If you sell both in Spain and UK, for instance, you could be charged two different storage utilisation fees.

  • Higher aged inventory surcharges. Effective May 15, 2023, all product categories will be subject to the following aged inventory fees. 

Aged inventory fees replace the fee structure that was previously referred to as long-term storage fees and significantly shortens the amount of time inventory can be held before these surcharges kick in.

As you can see from the above chart, items aged between 331 and 365 days will increase from £0.90 to £1.11/cubic foot per month.

Amazon will also add new tiers to begin the aged inventory surcharge for products that remain unsold between 271 and 300 days, excluding Clothing, Shoes, Bags, Luggage, Jewelry and Watches. At the 9th month, you could be charged an additional £1.11/cubic foot on top of your standard monthly storage fee.

Related: Amazon Automatic Aging Inventory Removal Starts April 15, Attack of the Fee Stack: How Sellers Can Maximize Profitability Despite Amazon’s 2023 FBA Fee Increases

FBA Return and Disposal Fee Changes

Return and disposal order fees will get more expensive for sellers starting March 1, 2023, while liquidation order fees will remain the same. Either way, this means carrying overstock inventory and getting rid of it will result in additional costs that could shrink your margins, so make sure to follow the best inventory management practices to avoid ending up with a lot of unsold products.

FBA Small and Light Changes

Amazon’s making some good changes to its FBA Small and Light (SnL) program in Europe this year.

Beginning March 1st, sellers will see an increase in price eligibility threshold of SnL items in:

  • UK (from £9 to £10)
  • France (from €11 to €12)
  • Germany (from €10 to €11)

Amazon will also introduce new size and weight tiers (460g in standard enveloped and 960g max weight limit for L and XL envelopes) to make SnL more affordable than its standard FBA fulfillment service, potentially making it a good alternative for those products that qualify.

However, be aware that the company will also start applying DIM weight pricing to SnL items effective March 1st. Additionally, you must be enrolled in the Small and Light program or the discounted rates will not apply even if you meet the weight and price thresholds.

Selling Fee Reductions and Promotions

Various fee decreases and promotions may help offset the cost increases that will be dropping throughout Q1 2023. These include:

  • Offering a 17.5% discount on EU fulfillment network fees (from EU to the UK and vice versa) starting from April 1, 2023. Click here to view the applicable promo fees.
  • Reducing the referral fee, from 15.3% to 7.14%, for products that fall under Clothing and Accessories. Eligibility requirements apply.
  • Extending the referral fee promo in Amazon Poland from March 31, 2023 to March 1, 2024.

FBA New Selection Program Changes

To help you save a little bit of money, Amazon will implement the following updates for standard-size products eligible for FBA New Selection Program:

  • Increased free storage, removal, and rebate benefits on up to 100 units per parent ASIN (clothing and shoes not included).
  • Extending free storage and rebate offer from 90 days to up to 120 days per parent ASIN (clothing and shoes not included).
  • Increasing rebates from 5% to up to 10%.

These changes are set to take effect in March 2023.

How to Prepare

With a little over 5 weeks to prepare, it would be best to start taking action now.

Fortunately, most of the upcoming additional FBA fees can be offset or avoided altogether (e.g., storage-related surcharges) with good inventory management.

Good inventory management practices include:

  • Finding out whether or not FBA is still a feasible fulfillment method for your business. Consider running some profit calculations now so that you can make the necessary adjustments to your inventory plans and fulfillment strategy ASAP.
  • Making accurate inventory forecasts to avoid over-ordering and under-ordering.
  • Keeping a firm eye on your inventory levels to know when and how much inventory to reorder.
  • Adopting inventory-minded marketing to ensure coordinated execution of your inventory and marketing plans.
  • Moving excess inventory through flash sales or by bundling them with your best sellers to avoid incurring storage utilization and aged inventory surcharges.
  • Ensuring timely delivery of your inventory by negotiating a better lead time with your supplier, freight forwarder, and/or 3PL so that you won’t miss out on your target sales events and therefore, sell through your inventory quickly.
  • Calculating your optimal carton and pallet load capacity to reduce shipping, storage, and handling costs.

These are just some of the best inventory management practices that you can implement in your business to protect your margins.

👌 For a more in-depth guide, download our Attack of the Fee Stack White Paper or join our upcoming live Q&A webinar, where industry experts and white paper authors Vanessa Hung and our very own Chelsea Cohen will answer questions about Amazon’s relentless fee hikes and how to ease their pressure on your profits.

Related: Amazon Hikes US FBA Fees Again, Protecting Your Profitability Webinar, How to Increase Profits for Amazon Sellers

Amazon Automatic Aging Inventory Removal Starts April 15

Amazon Automatic Removal of Aging Inventory Starts April 15 2022

Update 01/13/2023: 📢 ICYMI, Amazon recently announced they will implement aged inventory fee increases starting April 15, 2023, which coincidentally is also the company’s aged inventory removal start date.

Aged Inventory Fees April 2023

The longer your FBA stock remains unsold, the more expensive it’s going to get for you. New rates start at $0.50/cubic foot for inventory stored between 181-210 days to as high as $6.90/cubic foot for units aged 365 days or more.

To help you save on surcharges, Amazon has enabled automatic removal of your aged inventory. Depending on your product’s condition, you may opt to have it sent back to your return address for a fee, liquidated through FBA liquidations, or disposed of. More on that below.

Removal fees are increasing again this year in a big way on top of utilizing dimensional weight to calculate shipping weight, so the costs could really start stacking up if you’re not careful. 

🚨 If you want to disable automatic aged inventory removals, do so now and be sure to get your FBA inventory checked for any:

  • Extremely slow-moving items – for example, underperforming products that are less likely to get sold within 3 to 6 months. To boost sales, consider launching flash sales or bundling them with your top sellers.
  • Excess inventory that has been in Amazon warehouses for 6 months or more.
  • Obsolete, damaged, or expired goods, i.e., unfulfillable products.

Get rid of aging or unsellable items by April 15 to avoid tying up your capital in holding costs like aged and long-term storage fees.

Read on to learn more about automatic aged inventory removals and how to recover profits from your unsold inventory.

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.

Amazon Tweaks Logistics Strategy to Streamline Operations

Amazon Tweaks Logistics Strategy to Streamline Operations

Update 01/10/2023: Amazon site closures continue! On Tuesday, the tech giant announced it is shutting down three (3) warehouses in the UK, putting 1,200 workers at risk.

All affected employees will be given the opportunity to move to a different facility.

However, Steve Garelick of the GMB union argues that workers can’t be expected to suddenly relocate to other fulfillment centers that could be several miles away.

The facilities facing closure are located at Gourock, Hemel Hempstead, and Doncaster. The move came after Amazon’s thorough evaluation of its fulfillment network.

Warehouse evaluations are done “to make sure it [fulfillment network] fits our business needs and to improve the experience of our employees and customers,” an Amazon rep told CNBC.

“As part of that effort, we may close older sites, enhance existing facilities, or open new sites,” 

The tech giant plans to open two new UK facilities over the next three years, one in Peddimore and another in Stockton-on-Tees, creating 2,500 jobs.

Out with the old, in with the new! 🎉

Amazon is reportedly shutting down some of its older warehouses and retiring a few Boeing 767s in its air fleet as part of a larger effort to lower costs while improving each stage of the company’s fulfillment process.

As previously reported, Amazon nearly doubled its fulfillment network to meet the heightened customer demand during the pandemic. The company spent 30% of its $60-billion capital investment on distribution and 25% on transportation, accounting for more than half of its total capital investments.

However, by early 2022, eCommerce demand began to decline as consumers cut back on online spending and returned to in-store shopping. This has resulted in excess capacity that contributed to Amazon’s $3.8B profit loss in Q1 and another $2B in Q2.

Amazon CEO Andy Jassy remains confident about the future of the retail giant’s logistics arm stating:

“Today, as we’re no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network,” 

“This may take some time, particularly as we work through ongoing inflationary and supply chain pressures, but we see encouraging progress on a number of customer experience dimensions, including delivery speed performance as we’re now approaching levels not seen since the months immediately preceding the pandemic in early 2020,” Jassy added.

Amazon Attempts to Rightsize its Fulfillment Empire

To reduce operational costs and capital expenditures, Amazon is trimming down its warehouse footprint across the US. 

A report from MWPL International shows that, as of September 2022, Amazon has closed over 20 logistics centers and canceled or postponed the openings of 50 more sites. Most of these sites were delivery stations, where associates sorted orders by ZIP code and then dispatched them to customers via couriers.

Sites that are shutting down are either being subleased or having their operations consolidated into a nearby facility to lower outbound transportation expense. 

Facility closures might have also led to fewer third-party delivery partners this year. In 2021, Amazon added 670 delivery service partners in the US, but now it plans on curbing the network’s growth by 33%, just adding 451 partners in 2022.

With fewer recruits, however, the company will be able to focus on improving the quality of service that their partners provide, which could mean faster delivery times.

Aside from Amazon’s shrinking warehouse network, the growth of its air cargo fleet has also slowed in recent months.

Research from DePaul University shows that Amazon Air’s total flight activity only increased by 3.8% from August 2021 to March 2022, 10.5% lower than the daily flights recorded during the previous six months. This move makes sense from a financial and operational perspective, given that there are now fewer facilities to supply inventory to and fewer packages to move through its delivery network as demand declines.

“The natural business reaction to that is to pause, because your margin for error in an environment of complexity and increasing costs shrinks, and the cost of a mistake rises,”Jason Tolliver of Cushman & Wakefield said.

However, more streamlined operations don’t always result in greater customer satisfaction, especially for people who have come to expect same-day or two-day delivery.

For example, consolidating last-mile delivery stations into other facilities (usually located in the middle of highly populated sites) to cut costs might lead to longer delivery times for customers on the outskirts of metropolitan areas.

And because there are fewer delivery stations, it could even lead to more orders not delivered directly to customers’ homes, forcing them to step out of their house to pick up their parcel from a designated drop-off point. This defeats Amazon’s speedy port-to-porch delivery promise, which made the company almost as good as UPS and FedEx.

With Amazon scaling back its warehouse footprint and air deliveries this year, are we more likely to order from other sites that offer instant deliveries even if that means paying for shipping? Or, are we more likely to have to wait longer than 1 to 2 days? 🤔

It appears that Amazon is not only trying to rein in logistics spending, but also control customers’ same-day shipping expectations in an attempt to keep costs low. 

Customers within metropolitan areas will still likely receive their orders within hours, but those outside of city centers might have to wait longer than a day or two. But this could all be temporary, as Amazon is still trying to return to “a healthy level of profitability” after inflation and supply chain challenges took a huge chunk out of its Q1-Q2 2022 earnings.

Amazon Has Bigger Plans for 2023 

Although it seems that Amazon remains on track with its rightsizing plans, Wall Street Journal recently reported that the eComm giant is looking to add three new mega-warehouses in the US.

These include:

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

In a press statement, an Amazon rep said, “While we’re closing some of our older sites, we’re also enhancing some of our facilities and we continue to open new sites as well.” MWPVL estimates that Amazon will open 250 more distribution centers in 2022.

Aside from building these mega warehouses, Amazon has also acquired Cloostermans, a Belgian machinery and robotics manufacturer, to automate aspects of its fulfillment operations, such as moving heavy pallets and packaging products for delivery.

And just last month, Amazon hired Hawaiian Airlines to fly 10 Airbus A330 cargo planes for its air network in 2023. The converted freighters will replace the older Boeing 767s.

“These A330-300s will not only be the first of their kind in our fleet, they’ll also be the newest, largest aircraft for Amazon Air, allowing us to deliver more customer packages with each flight,” Director of Amazon Global Air Fleet Philippe Karam said in an Airbus press release.

The widebody jets are slightly larger than Boeing 767s and have a high volumetric payload capability that makes them ideal for carrying large amounts of packages in express delivery networks. 

For improved overnight operations across the US, Amazon launched a new air hub facility at the Cincinnati/Northern Kentucky International Airport. The facility can handle 44 flights daily, a 71% increase from March, according to researchers at DePaul University. It also operates similar to UPS, FedEX, and DHL with its synchronized scheduling and fast aircraft-to-aircraft transfers to ensure same-day deliveries in Kentucky, Indiana, and Ohio.

A few weeks back, we have reported that Amazon’s doubling down on its logistics expansion plans to possibly provide support for its new low-cost logistics service called Amazon Warehousing and Distribution (AWD) and its Buy with Prime program.

In 2023, AWD won’t just serve Amazon fulfillment centers, but it’s also expected to replenish inventory to non-Amazon locations, including to fulfill brick-and-mortar stores. 

So, once these new mega warehouses and freighters are fully operational, both Amazon and non-Amazon sellers can expect a significant improvement to transit times.

DePaul University researchers estimate that sellers who ship via Amazon Air from Cincinnati and have the goods ready for shipment by noon could have those packages delivered by next day to 25 largest US metropolitan regions. And they could also have the packages delivered by sometime the next day to approximately 95% of the mainland’s population. 

Clearly, with these expansion plans for 2023, Amazon’s not only looking to please shoppers with a better delivery promise, but also to make Prime a more attractive logistics option for sellers, a crucial move amid increasing competition.

Amazon Makes Play Toward Offering Prime for Non-Amazon Orders

Amazon To Offer Prime for Non Amazon Orders

Update 01/10/2023: Took Amazon a while, but the eComm giant is finally extending Buy with Prime (BWP) to all US direct-to-consumer (DTC) merchants on January 31, 2023. The service was previously available to some select sellers only.

With BWP, retailers not selling on Amazon.com can now offer Amazon checkout and fulfillment services on their own site, essentially allowing Prime users to shop anywhere online using their saved Amazon Pay checkout details and at the same time, receive free 1 to 2-day shipping and returns. 

To help drive traffic, build consumer trust, and boost sales, the company also released a few marketing solutions back in September 2022, and recently, Reviews from Amazon, which lets BWP users show reviews from their AMZ listings on their own sites.

Amazon’s new fulfillment revenue stream has been reportedly shown to increase conversion by 25% on average.

“We’ve been working closely with merchants since the launch of Buy with Prime and have been thrilled to hear the results it’s helped drive for them so far,” said Peter Larsen, VP of BWP.

The retail giant did not disclose how many sellers have joined BWP so far or estimates on how many will be willing to adopt it. But if we had to guess, the program may make more sense for sellers without fulfillment capabilities or small brands with less than $5M gross merchandise volume, which is about 16% of US DTC merchants, according to PipeCandy.

However, issues around the company’s rising fulfillment fees, data grabbing history (more on this below), or Shopify warning merchants against BWP may be viewed as the dealbreaker.
As of this writing, BigCommerce is the first eComm service provider to roll out a self-service integration into Buy with Prime.

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.

Shipping FBA Inventory from China to UK with SEND: What Could Possibly Go Wrong?

Shipping FBA Inventory from China to UK

After leaving the European Union (EU) in 2020, UK’s largest import market is China. The country imported £63.6 billion Chinese goods in 2021, which represented 13.3% of all foreign products shipped in to the UK.

According to the British Chamber of Commerce, the exit allowed the country to “independently control its trade,” changing the way in which it interacts with trading partners.

One such change is introducing the UK Global Tariff (UKGT) system, which enables the country to set its own tariff rates for imports with any international trading partners like China. As a result of this change, “over 3,500 products have seen tariffs canceled, reduced, or simplified – enhancing market access and thus encouraging further growth in the UK-China trade.”

However, UK’s departure from the EU also added some complexities around its import law and regulations that could make market entry difficult for some sellers. For instance, dealing with UK customs alone can be a long, arduous process that the government itself suggests hiring customs brokers or freight forwarders to help speed things up.

This is where Amazon’s new logistics service called SEND comes in handy. 🤔

Announced on January 9th, SEND is an Amazon Partnered Carrier Program (APCP) that makes it easier for sellers sourcing in China to ship their FBA inventory from China to the UK.

It’s a shipping solution that allows you to get your inventory: 

  • Picked-up by a partner carrier at a factory in China
  • Cleared through customs and then shipped across Asia to a port in the UK
  • Transported from the port to FBA centers in Great Britain

SEND essentially removes the middleman (3PLs, customs agents, or freight forwarders) from your supply chain, which may help lower shipping fees and cut down transit times. 

You may also be eligible for the following fee reductions until April 12, 2023:

  • Approximately 20% reduction on APCP fees for domestic shipments sent to UK FCs (from a UK shipping address to a UK fulfillment center).
  • Up to 50% discount on APCP fees for domestic packages and palletized shipments shipped to Amazon facilities in France, Germany, Spain, and Italy.

Program Features

Aside from Amazon-facilitated cargo shipping, SEND also offers:

  • Seller Central Integration
  • FC locking enabling, which means your inventory will only go to a single FBA facility.
  • Customs clearance
  • Carrier rates negotiated by Amazon
  • Shipment tracking

Downsides of Using SEND

While SEND sounds like a cheaper and quicker way to get your goods to the UK, it has a few disadvantages that should be taken into consideration when making a decision.

  • Letting Amazon take over your supply chain may not be a good idea. What happens when things suddenly go south, and you don’t have a contingency plan? Shipping delays are almost always a guarantee, especially during peak season. That’s why it would be wise to set aside some extra stock in your backup 3PL or supplier’s warehouse for emergencies, instead of just putting your entire inventory in one basket, especially when that basket is Amazon.

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

  • Can’t use your preferred carriers. When using APCP, you will be limited to carriers available within Amazon’s shipping network. You might have to spend extra time vetting those carriers you haven’t worked with before or pay a bit more to hire established carriers.
  • Amazon may use your supplier information to their advantage. If you’re a top seller, chances are, Amazon’s already keeping a close eye on you. Similar to how they allegedly use seller data to develop competing products, they may use SEND to take a peek into your supplier information and undercut you by working with your supplier to create copycats.
  • Amazon may just deliver your cargo from China to UK without checking it. Although not exactly a downside, as inspection is the seller’s responsibility, it’s still something that should be considered to prevent check-in delays at FBA. Amazon may also refuse to accept damaged or defective units. So, before handing your shipments over to Amazon, consider requesting detailed photos of your products and packaging labels from your supplier. Check if the goods meet your quality requirements or are packed correctly to minimize damage during transport. You may also hire a 3rd-party inspection company in China to do these things for you so that your supplier will be less likely to try and cut corners to save money.

In closing, hopefully this post has addressed the advantages and disadvantages of SEND or using APCP in general.

If you still want to give SEND a go, log in to Seller Central > FBA Inventory Dashboard > Select Product(s) > Send/Replenish Inventory to Amazon > Confirm Shipping > Amazon Partnered Carrier.

Or, click here to learn more about the program.

Sellers Feel the Squeeze After Amazon Announces US MCF Fee Hike

Sellers Feel the Squeeze After Amazon Announces US MCF Fee Hike

Amazon decided to be the Grinch who spoiled the holidays for US sellers after announcing major fee changes to its Multi-Channel Fulfillment (MCF) program. 🫣

Sneaking Fee Increases Just Before Christmas

On December 20th, the eComm giant said they will update their US MCF fees to reflect the recent improvements they have made to offer sellers:

  • Faster shipping times (from 7 days to 5 days)
  • Advanced shipment tracking capabilities and IT security systems
  • Free MCF integrator apps for Big Commerce, Adobe Magento, and Wix

⚠️ The updates will take effect on January 19, 2023.

It seems to us that these improvements most impact customer experience rather than seller benefit. While sellers may feel the effects of faster shipping times, it probably won’t be nearly as much as they’ll feel the strain on their profit margins. 

On the Forums page, one seller commented that these adjustments would increase the cost of MCF by a whopping 37% for them. Currently, a 5 oz large standard item costs $5.35 to ship, but in 2023, the fee would climb to $7.35 per unit, making MCF an expensive fulfillment method for many sellers. 🤦‍♀️

Here’s a quick look at how Amazon’s fee adjustments will increase MCF costs for Standard 3-5 Business Days Shipping in 2023:

Size TierCurrent Rate Card (As of August 16, 2022)New Rate Card for January 19, 2023 and after
Small standard 2 oz or less$4.75$7.15
Small standard 2+ to 6 oz$5.35$7.15
Small standard 6+ to 12 oz$6.20$7.80
Small standard 12+ to 16 oz$7.45$8.25
Large standard 2 oz or less$4.75$7.35
Large standard 6 oz or less$5.35$7.35
Large standard 6+ to 12 oz$6.20$8.20
Large standard 12+ to 16 oz$7.45$8.50
Large standard 1+ to 2 lbs$7.65$9.50
Large standard 2+ to 20 lbs$7.65 + $0.46/lb above first 2 lb$9.50 + $0.62/lb above first 2 lb
Small oversize 2+ to 30 lbs$12.50 + $0.46/lb above first 2 lb$16.00 + $0.62/lb above first 2 lb
Small oversize Over 30 lb$24.70 + $0.46/lb above first 30 lb$32.88 + $0.62/lb above first 30 lb
Medium oversize$20.20 + $0.51/lb above first 2 lb$25.25 + $0.62/lb above first 2 lb
Large oversize$103.39 + $1.05/lb above first 90 lb$118.80 + $1.16/lb above first 90 lb
Special oversize$171.99 + $1.10/lb above first 90 lb$189.19 + $1.21/lb above first 90 lb

As you can see, Amazon has also made a few adjustments to its weight tiers. Both “2 oz or less” and “2+ to 6 oz” tiers now fall under a single new category: 6 oz or less. 🤔

So, any small standard item weighing less than 6 oz, for instance, will now cost you $7.15/unit to ship via MCF, a $1.80 to $2.40 per unit increase from the current rates.

If you’re using MCF for small and low-cost products (under $20), you might have to rethink your fulfillment strategy to stay profitable next year. You could raise your prices to account for this fee change, switch to FBA Small and Light to take advantage of reduced fulfillment costs, or incentivize shoppers to buy multiple units in one order so you can qualify for MCF shipping discounts.

Related: Amazon Announces Unbranded Packaging for MCF Orders

Tiered Discounts on Multi-Unit Orders 

If the cost of shipping a single item is too steep for you, consider giving out discount coupons or bundling items to encourage customers to increase their units per order – for example, get 10% off with a minimum purchase of 3 items.

According to Amazon, when your MCF order has multiple units, you’ll receive up to 50% discount on your fees. 

Suppose you’re shipping a 4-unit small standard 6 oz or less order. In that case, you’re going to be charged $3.72, which is 50% less than what you’d be paying for per 1 unit order. 

Here’s how discounts will be applied to standard shipping multi-unit orders.

Go to Amazon Supply Chain to view the latest US MCF rates for expedited and priority shipping.

These price hikes are obviously squeezing every penny out of sellers. And if they continue to increase with little room for adjustment (amid soaring gas prices and inflationary pressures), Amazon might just become too expensive not only for sellers but also for customers, forcing them back to shopping in-store or to look for alternative online marketplaces.

If you have any feedback on these updates, send an email at
[email protected].

You can also visit Multi-Channel Fulfillment for more details.

Related: Amazon Hikes FBA Fees Again: What This Means for Your Business

Walmart Launches New Ways to Find and Buy Products

WALMART INTROS NEW WAYS TO FIND & BUY PRODUCTS

🙌 Amazon may be the undisputed eCommerce leader, but Walmart is catching up by introducing two new ways to find and shop products online.

TrendGetter

Announced on December 8, TrendGetter is a platform equipped with image recognition technology that lets you:

  • Upload or take a picture of an item you want to buy.
    Often, shoppers browse through their TikTok or Instagram feed and find trending products that don’t have shoppable links or come with a hefty price tag. Luckily, they can now go to TrendGetter to add photos of their must-haves and then let the platform’s visual AI tech offer an exact match or similar items at affordable prices on Walmart.com.
  • Select and buy products in seconds.
    Once a product is found, buying is as quick as a few button clicks.

While Walmart just released this unique way of shopping online, the technology has been around  for some time. In 2020, Amazon launched StyleSnap, where customers can upload a picture of the product they’re looking for in order to find and buy it in just a few clicks instead of scouring Google search for information. 

Then in 2022, Amazon Fashion and Snap took things a step further by offering an AR-powered shopping experience on Snapchat through AR lenses that allow people to virtually try on sunglasses.

Given how ahead Amazon is in transforming eComm with artificial intelligence, it’s not surprising to find Walmart launching AI-powered features to change the way customers shop on their website in an attempt to level the playing field.

“We know our customers are searching for what they love at can’t-miss prices. Now, whenever you find a product you love, you can easily search for a similar item at Walmart’s everyday low prices and purchase as soon as inspiration strikes,” Walmart said in a statement.

Text to Shop

Walmart has also recently added a text-to-shop functionality to their eComm site and app so that customers can “shop as easily as texting.”

New users with an Apple or Android device can sign up for an account to get started. Existing eComm shoppers can simply log in to their Walmart account and follow the instructions to get their phone set up with Text to Shop.

Once you’re all set, you can start adding items to your cart with a text or voice text. The AI shopping assistant will then give you the most relevant search results so you can find the best match(es) easily.

Text To Shop was also designed to remember your previous buys so you can quickly update your cart with your favorite products with a text message. This allows for faster and smarter reorders, helping you save time.

“Between balancing your busy schedule, performing at work, managing your household, preparing meals — and ensuring you’ve got everything you need, when you need it — you’ve got a lot going on,” Walmart’s VP of Conversational Commerce, Dominique Essig, said in a statement.

“At Walmart, we know that keeping track of your household shopping list is often a mental task you manage as you go about your day. That’s why Walmart is excited to offer our customers a new and convenient way to shop — by simply texting us.” 

Enhanced Version of Alexa

Walmart’s Text to Shop is similar to Amazon’s Alexa in that both AI assistants let you create shopping lists, but the similarities end there.

Walmart took a step further by making Text to Shop capable of remembering and offering items you’ll want to buy next based on your shopping history, and allowing you to set a time for home delivery or store pickup rather than just creating a list.

When grocery shopping with Alexa, for instance, it just helps you make a list, but it doesn’t know the brand names you usually purchase. Unless you specifically said “add Quaker Instant Oatmeal to the list,” it’d just add oatmeal.

Text to Shop, however, will already know what you usually buy, including serving size (e.g., 40 oz oatmeal bag), and suggest Quaker when you text for oatmeal.

And if you’re looking for something you haven’t purchased before, simply text Walmart the product name or information (in as little as one word) and the app will provide you with a few options to select from. 

Overall, these advanced AI features may help narrow the gap between Walmart and Amazon. Customers who lead a very busy life may find Walmart the most convenient way to shop online – either by adding a photo of the product they’re looking for to TrendGetter or sending Walmart a text message via Text to Shop.

Related: Walmart and Amazon Battle for Dominance Intensifies, Should You Be Selling on These New Channels?

4 New Amazon Seller Tools to Accelerate Business Growth

4 New Amazon Seller Tools to Accelerate Business Growth

In case you missed it, Amazon recently introduced multiple seller tools designed to aid you in growing your business quickly. 🚀

FBA Small and Light Recommendations

Amazon’s Growth Opportunities program continues to expand with indications of eligibility for Small and Light (SNL), an FBA program that offers fulfillment discounts on eligible compact and low-cost products. Based on current eligibility requirements, items weighing up to 3 lbs and priced under $12 may be qualified for the program.

With FBA Small and Light Recommendations, you can now:

  • Discover and review products that are eligible for enrollment in SNL so you don’t miss out on potential savings. For instance, if you’re selling a 4 oz product that’s qualified for SNL, you will only pay $2.47 fulfillment fee per unit, $0.75 less than Amazon’s rate for non-SNL items weighing 4 oz or less.
  • Use sales metrics to figure out which SNL products will deliver the best return on investment possible.
  • View Amazon’s recommendations for your business in the Explore Selling Programs page.

This could be a quick win for sellers giving them an easy way to identify products that are eligible for SNL. Qualifying for the program could also give them more room to adjust their prices, especially after Amazon recently announced they will be raising FBA fulfillment fees again next year.

To get started, go to Product Recommendations > Top 50 Opportunities > Enroll in FBA Small and Light.

Account Health Assurance

Launched on November 16th, Account Health Assurance (AHA) helps sellers who maintain a high Account Health Rating (AHR) avoid automatic account deactivation when they encounter an issue. This new benefit basically allows them to keep their selling privileges while working on getting any issues resolved with Amazon.

Sellers who maintain an AHR of 250 for at least 6 months (except seasonal businesses) are automatically enrolled in the program. Suppose your account is at risk of deactivation due to policy violations, an Amazon rep will reach out by phone or email and provide you with recommendations for addressing the problem within 72 hours.

While AHA can be a helpful account deactivation risk alert tool, meeting or exceeding the 250 AHR threshold to be eligible may be quite steep for budding micro businesses that nevertheless have a good track record.

According to some sellers on the Forums page, one would need around 14 orders each day without any violations for 6 months to reach the 250 AHR cap, essentially putting smaller sellers at a disadvantage. So, either they have to significantly increase their daily order volume to hit (and maintain) the target or Amazon has to update its metrics to account for these micro brands.

As of this writing, the AHR formula only tracks order volume and violation count and type. For example:

  • 200 is base AHR score with no infractions
  • Assuming no infractions, to increase your score, you would have to fulfill 50 orders to gain 1 point. Simply put, 1 point for every 50 orders in 6 months.
  • 204 AHR = 200 orders in 6 months
  • 250 AHR = 2,500 orders in 6 months
  • 1,000 = 40,000 or more orders in 6 months

In sum, AHA seems like a great tool for those who at least have 250 AHR, although its limitations may exclude some micro sellers who don’t want to go big or those that otherwise may have qualified if the AHR formula also takes the type of product (large appliances, luxury goods, among other niche items that are less likely to get sold 14x a day but enough to turn a profit) into account.

Related: How Does Amazon’s Account Health Assurance Work – And Is There A Catch?

Group Buyer-Seller Messages into Cases (UK Sellers)

Keep your interactions with the same buyer organized!

Group buyer-seller messages into cases instead of forming an ongoing thread.

For instance, once a buyer’s issue or question is solved, you can mark the “case” as resolved so that when that same buyer communicates with you again in the future, the interaction will start as a new case.

This new feature also allows you to sort messages by order and topic, making it easier for you to address concerns, which is essential in keeping shoppers satisfied with your customer service.

You can opt-in to this new feature by clicking the Messages Inbox banner.

Related: Amazon Now Allowing Email Marketing Campaigns to Repeat Buyers

Express Payout

Announced at Amazon Accelerate 2022, Express Payout is a new payment service that lets you receive deposits within one day (even on Sundays) rather than waiting 3 to 5 days on Automated Clearing House (ACH) transfers.

This is a huge deal for small and medium-size sellers that need to access their funds quickly to be able to buy additional inventory or fulfill any financial obligations owed to suppliers, aka inventory payments.

Who is Eligible for Express Payout?

US sellers must have the following to be eligible for the payment service:

  • An in-network US bank account
  • A primary address in one of the 50 states. Those in US territories are not eligible.
  • Transactions of $1 million or below at the time of payment initiation

Service Fees

Express Payment is available to US sellers for free until September 2023. After the promo ends, Amazon will charge a $0.50 flat fee per transaction. 

Visit the FAQ page for more details.

Bonus: Make last-minute changes to your product descriptions and brand story features to boost product visibility and sales this Q4 with A+ Content Practices Best Guide.