Amazon Seller News

Amazon has introduced several new features aimed at improving seller operations and customer experience.

First, starting September 5th, Multi-Channel Fulfillment (MCF) orders will be delivered faster, allowing sellers to meet rising consumer demand for quick delivery across platforms. 

Additionally, cosmetics sellers must ensure their product listings comply with updated requirements by September 24th, helping maintain quality and regulatory standards.

Sellers can also take advantage of the new Pan-European FBA portal, streamlining management of cross-border fulfillment across Europe. The Voice of the Customer dashboard has been enhanced with Return Rate and Star Rating features, providing more detailed insights into customer satisfaction.

Lastly, Amazon Seller Wallet introduces lower cross-currency transfer fees, enabling sellers to save on international payments.

Staying updated on these changes is key to optimize your business and take full advantage of Amazon marketplace tools.

1. Amazon’s MCF Upgrade Cuts Delivery Times for Sellers

Amazon has announced faster delivery speeds for US MCF orders, providing a significant upgrade for sellers at no additional cost.

• Standard delivery now takes just three (3) business days, down from five (5).
• Expedited delivery has improved to two (2) business days instead of three (3).
• Amazon has discontinued priority delivery, with future orders charged at the expedited delivery rate.

This update allows you to offer faster shipping, which can improve customer satisfaction and drive more sales. With reduced delivery times, you can compete more effectively with platforms that prioritize quick shipping, such as Amazon Prime. Faster shipping can also result in fewer cart abandonments, as customers often choose retailers who can deliver quickly.

For example, studies show that 73.6% of online shoppers consider delivery to be the most crucial factor in their overall shopping experience. This highlights just how essential fast and reliable delivery is for influencing customer views of your brand.

With these new MCF delivery options, you have an opportunity to attract more customers who expect quick service, ultimately boosting your sales without additional shipping costs.

However, note that while this change benefits sellers in the US, sellers outside the US or those with complex fulfillment needs might still face challenges with inventory management and logistics. Nonetheless, for many US-based sellers, this update presents an opportunity to optimize operations and improve customer experiences.

Related: Inventory Management & Supply Chain Profitability

2. Amazon Issues Reminder for Updating Cosmetic Label Guidelines

Amazon has issued a crucial reminder for all sellers in the cosmetics category to update their product listings by September 24, 2024. This is to comply with both US Food and Drug Administration (FDA) regulations and Amazon’s internal policies. Failure to adhere to these guidelines may result in the deactivation of non-compliant listings.

Key Guidelines for Compliance

• Ingredient Disclosure: Your product listings must include a complete list of ingredients. This information can be provided through text or images on the listing page.
• Drug Facts: If your cosmetic product or any of its ingredients are classified as a drug, you must include the relevant drug facts on your listing.
• Essential Details: Ensure that each listing contains the product name, purpose, quantity, ingredients, and manufacturer information.

This update aims to enhance customer safety by ensuring that all cosmetic products listed on Amazon meet regulatory standards. Products affected include a wide range of items such as perfumes, lipsticks, nail polishes, temporary tattoos, makeup, shampoos, hair colors, toothpastes, and deodorants.

Action Steps

• Update Listings: Make sure your listings are updated with all required information. Note that changes might take up to two (2) to four (4) hours to be reflected in Amazon’s system.
• Appeal Process: If your listing is deactivated in error, you can appeal by going to the Account Health section, selecting the appeal button next to the deactivated listing, and providing the required details including a list of affected ASINs and confirmation of ingredient information.

Adhering to these guidelines will not only help you avoid potential disruptions to your listings but also contribute to maintaining high safety standards for consumers.

For more information and to ensure compliance, go to the Cosmetics and Skin and Hair Care page.

3. Amazon Unveils New Pan-European FBA Portal to Streamline European Sales

Amazon has launched a new Pan-European FBA portal designed to simplify the way sellers manage their European operations by centralizing multiple functions into one user-friendly interface.

Key Features of the New Portal

• Streamlined Enrollment: The portal offers resources to guide you through expanding your business into European markets smoothly. Whether you’re new to selling in the EU or looking to optimize your presence, these tools aim to make the process more straightforward and efficient.
• Centralized Management: Gone are the days of juggling multiple pages in Seller Central. The new portal consolidates settings for inventory placement, management, and detailed reporting, enabling you to manage your EU operations from a single location.
• Compliance Assistance: Navigating regulatory requirements can be complex. The portal provides guidance and resources to ensure you meet EU standards for tax and Extended Producer Responsibility, helping you avoid costly compliance issues.
• Educational Resources: To further support your expansion efforts, the portal includes educational content that equips you with the necessary knowledge to effectively launch and grow your business on European storefronts.

By integrating these features, Amazon aims to reduce the administrative burden on sellers and improve their ability to scale across European markets. This update not only simplifies operational tasks but also enhances your ability to comply with regional regulations, making it a valuable tool for any seller looking to expand their footprint in Europe.

Visit Pan-European FBA to start using the new portal.

4. Amazon Enhances Voice of the Customer Dashboard with New Features

Amazon has rolled out two (2) new features on the Voice of the Customer (VoC) dashboard designed to give sellers deeper insights and help boost customer satisfaction. These updates are aimed at providing a more comprehensive view of product performance and customer interactions.

New Features Overview

• Return Rate Metric: This new feature tracks the total number of units returned by customers over the past 12 months. This data helps sellers understand their return rate beyond just product defects, offering a clearer picture of how often customers are returning products. Access to this information enables sellers to make better decisions regarding their inventory and product listings, potentially improving product quality and reducing return rates.
• Star Rating Display: The Star Rating feature now shows the average rating of your ASINs as they appear on Amazon’s product detail pages. By having this data readily available on the VoC dashboard, sellers can quickly identify products that may need attention. This centralized information helps sellers monitor and address areas for improvement more efficiently.

Seller Feedback

While some sellers appreciate the added transparency, others express concerns about the growing number of metrics they need to manage.

One seller mentioned, “Whilst we all want to give our customers the best possible service, there are so many metrics to meet nowadays. This new feature adds another layer to monitor.”

Another seller questioned the necessity of these updates, saying, “We already have ratings and returns, so what’s the point in it? Amazon should focus on improving the feedback and review system.”

On the other hand, Amazon’s aim with these updates is to offer a more holistic understanding of customer interactions with products. By consolidating return data and star ratings, sellers can gain better insights into customer experiences and make informed decisions.

For more information on how to utilize these new features effectively, visit Voice of the Customer page.

5. Amazon Reduces Cross-Currency Transfer Fees with Seller Wallet

Amazon has updated its Seller Wallet tool to streamline fund transfers and cut costs related to currency conversion.

Key Updates

Efficient Fund Management

Amazon Seller Wallet allows you to manage your US sales proceeds more effectively by offering flexibility in when and how much you convert. This feature enables you to transfer funds directly to your local bank account without needing to convert money twice or wait for funds to settle.

Savings on Currency Conversion Fees

Sellers can save on fees when using USD proceeds for USD expenses. For instance, if you need to pay a supplier based in the US or Hong Kong, you can set up their bank account in Amazon Seller Wallet and make payments directly from your US store proceeds. The platform supports conversion from USD to over 20 currencies, offering competitive foreign exchange rates. 

By reducing the fees associated with cross-currency transfers, Amazon Seller Wallet helps sellers retain more of their revenue and allocate funds more efficiently. The ability to pay suppliers directly from your US store proceeds without extra conversion fees also simplifies financial management and reduces waiting times for funds to become available.

Go to the Amazon Seller Wallet page to take advantage of these benefits. If you’re considering registering, check out the Seller Wallet registration checklist.

The global ecommerce arena is rapidly evolving, with major players rolling out new initiatives, expanding their reach, and doubling down on growth strategies.

From Amazon’s ambitious export goals to Shein’s massive supply chain investment, these moves reflect the ongoing battle for supremacy in key markets. Here’s a look at the most recent updates and their potential impact on your ecomm business.

1. Amazon Eyes $5 Billion in Exports from India by 2024

Amazon’s focus on boosting Indian exports underlines India’s growing role in the global supply chain. The ecommerce giant expects exports from India-based sellers to surpass $5 billion by 2024, up from $3 billion in 2023. This surge is part of Amazon’s Global Selling program, which has empowered 150,000 small exporters to tap into international markets like the US and UK.

For sellers, this presents an opportunity to diversify into global markets, especially as Amazon continues to invest in tools to optimize reach and enhance product discovery.

Exporters, particularly those offering affordable, lightweight products like textiles and Ayurveda items (supplements), can benefit from reduced import taxes and lower logistics costs. As Amazon works to reach $20 billion in Indian exports by 2025, sellers must leverage the platform’s global presence to scale their businesses and increase profitability.

2. Amazon India Reduces Selling Fees Ahead of Festive Season

In a seller-friendly move, Amazon India has announced up to a 12% reduction in selling fees across various product categories just ahead of the festive season. The fee cuts, which went into effect on September 9th, provide sellers an edge by reducing operating costs, especially for products priced under ₹500 (around $5).

According to Amazon, suppose you’re offering printed T-shirts priced at ₹299 ($3.50), you will now benefit from a significantly lower referral fee of just 2%, down from the previous 13.5%, saving you ₹34 ($0.40) per unit.

This reduction in selling fees spans various product categories, including home furnishings (a 9% decrease), indoor lighting (an 8% decrease), and home essentials (an 8% decrease). Additionally, referral fees for low-cost items in categories such as apparel, kitchenware, wireless accessories, office supplies, sports equipment, footwear, luggage, pet products, jewelry, beauty, watches, and more will also see reductions.

Moreover, weight handling fees for fulfillment centers and Amazon programs like Seller Flex and Easy Ship have been adjusted based on your applicable STEP level.

This can be an opportunity for sellers to reinvest the savings into inventory expansion or marketing, particularly during the lucrative Diwali shopping season. The timing is critical, as sellers gear up for high demand during the festive season. By optimizing operations and capitalizing on the reduced fees, businesses can drive growth and customer acquisition.

Related: Amazon Holiday Success: Boosting Sales with External Traffic

3. Walmart Mexico’s New CEO Aims to Double Sales

Walmart Mexico’s (Walmex) new CEO, Ignacio Caride, has big plans to transform the company into more than just a retailer.

Caride’s goal is to blend the physical and digital shopping experiences seamlessly while expanding into areas like financial services and healthcare. He envisions doubling annual revenue to $93 billion in nine years, positioning Walmex to compete with Latin American ecommerce titans Amazon and Mercado Libre.

For sellers in Mexico, the push towards an integrated digital and physical ecosystem means more opportunities to tap into Walmart’s growing customer base. As the company invests in modernizing its technology infrastructure, sellers will have access to enhanced digital tools and services to streamline operations.

The ability to cross-sell financial products and services could also create new revenue streams, making Walmex a compelling partner for sellers looking to expand in the Mexican market.

Related: Maximize Your Online Sales: The Benefits of Choosing Walmart for Your Ecommerce Business, How to Sell on Amazon Mexico and Walmart Mexico

4. Mercado Libre: Dominating Latin America’s Ecommerce Market

Mercado Libre, often referred to as the “Amazon of Latin America,” continues its meteoric rise, reporting 42% annual growth and $5.1 billion in net revenue for Q2 2024. The company’s dominance is particularly strong in Brazil, Mexico, and Argentina, with plans to expand its US footprint via a fulfillment center in Texas.

Sellers looking to penetrate the Latin American (LatAm) market should take note of Mercado Libre’s expansive reach, especially as the company builds its cross-border capabilities. With millions of loyal customers and free shipping options to Mexican consumers, sellers can access a thriving customer base while leveraging Mercado Libre’s logistics network.

As the company plans further US expansion, American sellers may find new opportunities to reach LatAm buyers with ease.

5. Shein Invests $514 Million in New Supply Chain Hub

Shein’s $514 million investment in a new supply chain hub in Guangzhou, China, signals the fast-fashion giant’s commitment to scaling operations. The new hub will integrate warehousing, picking, shipping, and settlement services (resolution of legal disputes), allowing Shein to respond even more swiftly to consumer demand.

Shein’s continued growth is a double-edged sword for sellers in the fashion and fast-moving consumer goods space. As Shein strengthens its supply chain capabilities, sellers must focus on agility and speed to market. Competing with Shein will require optimizing operations, perhaps by partnering with fulfillment centers or leveraging platforms that offer rapid delivery services.

Related: Amazon’s Strategic Evolution: Challenging Alibaba in Global Sourcing

6. Shopify Expands Partnership with YouTube

In a move aimed at boosting social commerce, Shopify has expanded its partnership with YouTube, allowing eligible sellers in the US to join YouTube’s affiliate program. The partnership enables Shopify merchants to collaborate with content creators to promote their products via YouTube Shopping.

This presents a significant opportunity for sellers to tap into the growing influence of social commerce. By partnering with influencers and leveraging YouTube’s vast audience, sellers can increase brand visibility and drive sales. The integration with Google Merchant Center further allows merchants to track content performance and sales, providing valuable insights into which products resonate with consumers.

Related: Google Expands Suite of Live Shopping Tools, Shopify Introduces YouTube Shopping Integration to Compete in Live Commerce, Strategies for Successful Brand-Influencer Partnerships

Staying Competitive in a Rapidly Evolving Market

As ecommerce giants ramp up their strategies, sellers must adapt quickly to capitalize on emerging opportunities.

For Indian exporters, Amazon’s push for global expansion offers a lucrative pathway into new markets. Meanwhile, sellers in Mexico and Latin America can leverage Walmart’s evolving ecosystem and Mercado Libre’s dominant position to grow their businesses.

Shein’s supply chain investment highlights the importance of logistics optimization, while Shopify’s YouTube partnership points to the growing power of social commerce. By staying informed and agile, you can position yourself for success in an increasingly competitive global ecommerce arena.

Related: Major eComm Players Making Big Changes to Take on Amazon, Target Expands Online Marketplace with Shopify Integration

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

Amazon is launching game-changing updates that could transform your business.

From cutting-edge AI in checkout technology to expanded delivery options that could reshape how you fulfill orders, these changes are set to make a big impact.

Whether it’s the introduction of faster same-day delivery for Prime members in Canada, a pilot program for one-hour delivery in the UK, or the mandatory home collection for heavy item returns, Amazon is pushing boundaries to enhance the shopping experience. And for those looking to grow their business across Europe, the automatic enrollment of more ASINs into Pan-European FBA could be a game-changer.

With these updates, understanding how they could affect your business operations is crucial. So, keep reading to find out see how these updates could streamline your operations and give you a competitive edge.

Amazon Just Walk Out Technology Gets Smarter

Amazon’s Just Walk Out self-scan technology is about to receive a major AI upgrade, poised to revolutionize the way retailers handle customer transactions. This advanced AI model is designed to make the system more accurate, efficient, and less costly to implement, which is a potential game-changer for retailers considering this technology.

How the AI Upgrade Works

The new AI model improves the system’s ability to handle complex shopping scenarios, such as camera obstructions, varying lighting conditions, and the presence of other shoppers. These enhancements mean that Just Walk Out (JWO) can now accurately identify products, even in challenging situations, like when a customer grabs two identical items at once. This level of precision is crucial for maintaining customer trust and ensuring that transactions are processed smoothly.

Fewer Fixtures, Faster Sales

For retailers, the most significant advantage of this upgrade is the potential reduction in costs.

By requiring fewer hardware fixtures, the technology becomes more affordable, making it a more attractive option for a broader range of retailers. This is especially relevant in environments like stadiums, airports, and hospitals, where quick and efficient service is essential. Retailers in these sectors could see improved customer satisfaction and increased sales by minimizing wait times and streamlining the checkout process.

The Competitive Landscape

Despite these advancements, many convenience and grocery retailers have been hesitant to adopt JWO at scale due to high implementation costs and data privacy concerns.

Recently, Amazon has scaled back its use of JWO in the US, opting instead for Dash Cart, a smart shopping cart which features an integrated weighing scale, barcode scanner, visual AI camera, and geo-fencing capabilities. In contrast, Netto, in collaboration with Trigo, has launched the largest frictionless grocery store in Europe.

However, Amazon’s JWO AI upgrade could change this dynamic by lowering the entry barrier and offering a better return on investment. As the system processes more data and becomes even more accurate, it may become a more compelling option for retailers who have so far opted for cheaper alternatives.

Amazon’s focus is shifting from its own retail stores to third-party venues, where Just Walk Out is finding success. For example, stadiums like Seattle’s T-Mobile Park and airports operated by Hudson are already benefiting from the technology.

According to Jon Jenkins, VP, JWO technology, Amazon has plans to double the number of third-party stores equipped with Just Walk Out this year, thereby positioning JWO as a solution for venues that need fast, reliable service around the clock.

What’s Next

In addition to the AI upgrade, Amazon is also introducing an RFID-powered checkout system for stores where customers prefer a more traditional shopping experience, like clothing and merchandise shops. This expansion into new types of retail environments shows Amazon’s commitment to staying at the forefront of checkout technology.

As Just Walk Out technology advances, its enhanced accuracy and efficiency are poised to make it a more attractive solution for a broader spectrum of retailers. For retailers, keeping up with these innovations is crucial—embracing this technology could offer a significant competitive advantage in today’s rapidly digitizing market.

Related: Amazon Warehouse Automation Increases Concerns over Job Loss and Product Selection Inaccuracy, AI and Automation

Amazon’s Same-Day Delivery Push: Challenges and Opportunities for Sellers

Amazon has ramped up its focus on same-day deliveries, a move that aims to bolster its competitive advantage over Walmart.

In 2024, Amazon has already delivered over 5 billion items globally within a day, marking a more than 30% increase from the previous year. In the US, almost 60% of Prime orders in the top 60 metropolitan areas arrived within a day in Q1 of this year, a significant rise from about 50% in early 2023. Amazon offers over 300 million items with free Prime shipping, with tens of millions available for same-day or next-day delivery. This represents a dramatic increase in the number of products eligible for expedited shipping since Prime’s launch in 2005.

This impressive feat highlights Amazon’s commitment to making rapid delivery the new standard.

Outpacing Walmart and Target with Same-Day Speed

The push for same-day delivery also comes amid heightened competition. Rivals like Walmart and Target are enhancing their delivery capabilities, with Walmart offering deliveries as fast as 30 minutes and Target introducing a loyalty program for same-day delivery on orders over $35. 

Amazon’s investment in speedy shipping is a direct response to these competitive pressures, aiming to maintain its dominance in the market by meeting consumer expectations for faster delivery. The company’s reorganization of its logistics network into regional hubs has not only sped up deliveries but also reduced costs, achieving a drop in the cost per unit to serve.

How Amazon is Reinventing Fast Delivery

To stay ahead of consumer demands and outpace its rivals, Amazon is honing in on several strategic initiatives:

1. Centralized Same-Day Options

Amazon is consolidating all same-day delivery items into a dedicated “Same Day Store” page, making it easier for customers to find and purchase products that can be delivered within hours. Amazon’s strategy includes consolidating all same-day delivery items into a dedicated “Same Day Store” page, making it easier for customers to find and purchase products that can be delivered within hours.

2. Expanded Delivery Reach

The retailer plans to double the number of same-day delivery facilities in the US in the coming years. These facilities, averaging 100,000 square feet, focus on high-demand items in major metro areas.

As of this writing, Amazon Same-Day delivery is available in more than 120 US metro areas, such as Atlanta, Boston, and New York City, as well as smaller locales like Baton Rouge and Cedar Rapids, ensuring faster delivery to a broader range of customers. By consolidating the fulfillment process, Amazon reduces the number of stops a package makes, which cuts costs and improves efficiency.

3. Same-Day and Overnight Delivery in Canada

Aside from the US, the ecomm giant is also introducing enhanced Same-Day and new Overnight Delivery options for Prime members in Canada. This initiative, now available in the Greater Toronto Area, Southwestern Ontario, and Metro Vancouver, marks a significant step forward in the company’s ongoing quest to offer unparalleled convenience to its Prime members.

Prime members in the targeted regions can now enjoy Same-Day Delivery with a quick turnaround time of as little as seven hours. By selecting the new delivery window of 5PM to 10PM at checkout, customers can have their orders delivered by late evening the same day. 

Additionally, Amazon has introduced new overnight delivery options, allowing orders placed by midnight to arrive the following morning, with delivery windows from 4AM to 8AM or 7AM to 11AM. This new service aims to cater to urgent needs such as last-minute gifts or travel essentials. Items eligible for this service are marked as “Prime Overnight” in search results and on product detail pages.

4. Broadened Retail Partnerships

Amazon is teaming up with a growing roster of retailers, including Sur La Table, GNC, Fabletics, PacSun, and Office Depot, to diversify its product offerings.

These steps are designed to not only meet evolving consumer expectations but also to keep Amazon at the forefront of the online retail landscape.

Impact on Sellers

For sellers, this expansion has both positive and challenging implications. On one hand, increased visibility and faster delivery can drive higher sales volumes and enhance customer satisfaction. Amazon’s data indicates that consumers tend to spend more and shop more frequently when one-day shipping is available, as supported by RBC Capital Markets.

On the other hand, sellers may face increased pressure and operational costs to meet Amazon’s rapid delivery requirements. This could necessitate adjustments in inventory management and fulfillment processes to keep pace with Amazon’s heightened standards.

For instance, some sellers may need to invest in more advanced fulfillment capabilities or partner with local distribution centers to meet the demand for rapid delivery. Smaller sellers might particularly struggle with the logistical demands and costs associated with meeting the same-day delivery promise.

Related: Amazon’s New On-Time Delivery and Shipping Policy: A Mixed Bag for FBM Sellers

Overall, Amazon’s commitment to same-day delivery represents a major shift in its logistics strategy, aiming to offer even faster service to its customers. While this move can benefit sellers by increasing their potential sales and visibility, it also brings challenges in terms of meeting Amazon’s expedited delivery standards.

Amazon Requires Home Collection for Heavy and Bulky Product Returns

Starting August 30th, Amazon will require sellers to offer home collection for returns of heavy and bulky items. This update affects items that weigh 31.5 kg (about 70 lbs) or more, or those with a longest side exceeding 175 cm (about 69 inches). The change is aimed at improving the returns experience for customers purchasing such items from seller-fulfilled listings.

How It Works

• Home Collection Requirement: Provide a home collection service for returns of qualifying heavy and bulky items. This means arranging for a carrier to pick up the item directly from the customer’s location.
• Tracking and Communication: Authorize or deny return requests within 48 hours. Once authorized, they must notify the customer via Buyer-Seller Messages, provide the estimated collection time, and upload the prepaid return label and tracking ID.
• Collection Process: Arrange and ensure the collection is completed within three attempts based on the scheduled time provided to the customer.
• Alternative Options: Consider offering a partial refund or replacement part instead of arranging a home collection, provided the customer agrees. In such cases, you must update the return request with the new tracking ID and use the reason code “Return request cancelled.”

How this Might Impact Your Business

• Higher Operational Costs: For some sellers, especially those with fixed-location carrier contracts, arranging home collections can be complex and costly. The expense of ad hoc collections from remote addresses may exceed the original shipping costs, potentially impacting profitability. 
• Carrier Contracts: Review your carrier agreements to ensure that home collection services are included. Updating contracts or negotiating new terms may be necessary to comply with Amazon’s new requirement.
• Risk of Damage: A few sellers expressed apprehension about the risk of items being damaged during return transit. They are worried about taking on the financial risk for returns due to buyer remorse or accidental orders, particularly if the item is damaged upon return. Currently, customers are responsible for ensuring the safe return of items, but this policy shift places more risk on sellers.
• Customer Expectations: Some sellers question whether the new policy aligns with customer expectations. Historically, customers have not expected home collection services for bulky items, and this change might set a new precedent that could lead to increased return rates and further complications.
• Operational Challenges: The logistics of arranging collections can be cumbersome. Coordinating collection times that fit customer schedules, handling missed appointments, and managing multiple collection attempts can be challenging. Some sellers worry that this will lead to more disputes and A-to-Z Guarantee claims, where customers might exploit the policy to get free returns.
• Compliance: Adhere to strict timelines for authorizing returns and communicating with customers. Efficiently managing these requirements will be crucial to avoid unnecessary A-to-Z Guarantee claims and maintain a good order defect rate.

Amazon’s Response

Amazon acknowledges the concerns and has clarified that sellers can deduct the cost of return shipping, including home collection, from the refund if the return is the customer’s responsibility. However, issues such as damaged returns and the suitability of messages like “Return Request Cancelled” are still points of contention among sellers.

In sum, while the new home collection requirement may align with Amazon’s goal to enhance customer satisfaction for large-item purchasespresent, it presents logistical and financial challenges for sellers. You will need to adapt their processes and possibly renegotiate carrier terms to meet these new standards effectively.
Go to Manage Returns to learn more about this new requirement.

Related: Amazon’s Reimbursement Policy Updates: What Sellers Need to Know, Tips to Improve Customer Experience and Reduce Returns

Amazon Expands Pan-European FBA Enrollment

Amazon is simplifying the process for sellers to expand their business across Europe by making more ASINs eligible for automatic enrollment in Pan-European Fulfillment by Amazon (Pan-EU FBA).

Effective July 1, 2024, this update aims to streamline access to Amazon’s Pan-EU FBA network, which allows sellers to reach customers across multiple European countries using a single inventory pool.

What Changed

Previously, to qualify for Pan-EU FBA, sellers needed to have active product listings in four (4) Amazon European stores—Germany, France, Italy, and Spain—and maintain inventory placement in at least two (2) of these countries. This requirement posed challenges for many sellers, especially those with listings impacted by local language requirements, restricted products, or blocked accounts.

With the new update, sellers will be exempt from the requirement to have active listings in all 4 stores if their listings are inactive due to these issues. Instead, ASINs will be automatically enrolled in Pan-EU FBA as long as the seller maintains active listings and inventory in at least 2 of the specified countries.

What to Expect

• Increased Accessibility: The new policy lowers the barrier to entry for Pan-EU FBA, allowing more ASINs to benefit from Amazon’s European fulfillment network. This change will enable sellers to reach a broader European audience more easily, without the need to ensure active listings in every targeted country.
• Simplified Management: By automatically enrolling eligible ASINs, sellers can avoid the administrative burden of managing listings across multiple countries to qualify for Pan-EU FBA. This streamlining can save time and reduce complexity in managing inventory and sales across Europe.
• Grace Period for Reactivation: For ASINs that are exempt from listing requirements, Amazon will provide a grace period allowing sellers time to reactivate these listings. Initially, this grace period will be unlimited, giving sellers flexibility, though it will eventually be time-restricted. Sellers will receive notifications at least 30 days before any changes to the grace period duration.
• Local Fulfillment Fees: Enrolled ASINs will incur local Pan-EU FBA fulfillment fees based on the store where the product is listed and has inventory. Sellers will need to manage these fees according to the specific requirements of each European market.

Amazon’s move to automatically enroll more ASINs in Pan-European FBA represents a huge opportunity for sellers to enhance their reach across Europe with greater ease. While the updated policy reduces some of the previous requirements and complexities, sellers should remain attentive to changes in grace period durations and manage their ASINs and inventory placements strategically to fully leverage this expanded access.For further details on eligibility and grace periods, visit the Pan-European FBA ASIN enrollment page.

Related: 6 Expert Strategies for Expansion in Amazon Europe, Unlocking European Ecommerce: A Comprehensive Guide to Global Ecommerce for US Sellers, GPSR: What EU Sellers Need to Know and Implement Before December Deadline

New Tools for Tracking Voice of the Customer Performance and Feedback

Amazon has recently upgraded its Voice of the Customer dashboard, offering sellers new ways to track product performance and access feedback in multiple languages. These updates aim to provide more actionable insights for improving product quality and customer satisfaction.

New Features and How They Work

• Performance Benchmarks: The updated dashboard now includes metrics such as the Negative Customer Experience (NCX) review rate and NCX return rate. These indicators show how a seller’s product review and return rates compare to industry benchmarks. By monitoring these metrics, sellers can track performance trends over time and make data-driven decisions to enhance product quality.
• Frequent Returns Badge: A new badge has been introduced under the Action column, highlighting frequently returned items. This feature provides detailed feedback on why items are being returned, enabling sellers to address common issues and reduce return rates.
• Multilingual Feedback: Previously available only in English, customer feedback can now be read in multiple languages. This enhancement allows sellers to better understand and address concerns from a diverse customer base.

Seller Reactions and Implications

These updates are designed to improve transparency and support sellers, but the feedback from the seller community has been mixed. Some sellers appreciate the added functionality, noting that the ability to track performance benchmarks and view feedback in multiple languages can be valuable for refining their offerings.

However, there are concerns about the effectiveness of these tools. One seller expressed frustration with the Voice of the Customer system, suggesting that it often fails to address specific issues related to product quality or return reasons. They proposed a “Voice of Seller” feature, similar to eBay’s system, which would allow sellers to block problematic buyers and address abuse more effectively.

The seller argues that the current feedback system does not adequately consider the challenges faced by sellers, such as dealing with fake return reasons or abusive chargebacks. They advocate for a more balanced approach that includes better protection for sellers and a clearer process for resolving disputes.

Related: Mastering Ecommerce Marketplace Management: A Guide to Cross-Marketplace Control and Monitoring, Monitor Your Amazon Listings and Competitors 24/7

Artificial intelligence (AI) has become the centerpiece of a technological arms race, with major companies and nations scrambling to secure a dominant position in this rapidly advancing field. 

The global AI race isn’t just about innovation—it’s a struggle for geopolitical and economic power, driven by the fear of falling behind. As AI continues to evolve, its impact on industries like ecommerce and on companies like Amazon, especially in the wake of partnerships with firms like Anthropic, is expected to be profound.

In this article, we discuss the big moves tech titans and countries are making to control AI, what lies ahead, and what all this means for your business.

Major AI Companies: Pushing the Boundaries

The world’s leading tech giants—Microsoft, Alphabet, Amazon, and Meta—have collectively boosted their capital spending on AI infrastructure by 50% in 2024, with investments surpassing $100 billion in the first half of the year.

These companies are not merely expanding their cloud computing capabilities; they are laying the groundwork for the next generation of AI technologies.

Here’s a breakdown of their strategies and recent developments.

Amazon: AWS and Anthropic Collaboration

Amazon’s investments are not just about enhancing its ecommerce logistics but also about embedding AI deeply into its operations through its partnership with Anthropic.

Amazon’s $4 billion investment in Anthropic is a strategic move that not only strengthens its AI capabilities but also positions it as a key player in the development of large language models (LLMs). These models are expected to power everything from customer service chatbots to advanced analytics, further enhancing Amazon’s ecommerce dominance.
For instance, Anthropic’s focus on creating AI that understands and interacts in a more human-like manner could lead to virtual assistants that better understand customer emotions and context, making interactions more seamless and satisfying.

Related: How Rufus Could Change Amazon’s Shopping Landscape for Consumers and Sellers

However, this partnership has also attracted regulatory scrutiny, particularly from the UK’s Competition and Markets Authority (CMA), which has initiated a Phase 1 investigation into the deal. This highlights the growing tension between innovation and regulation in the AI space. More on that later.

Related: What Is Amazon Bedrock? The Good, the Bad, and the Profitable of the New Amazon AI Toolkit, Key Revelations in Jassy’s Shareholder Update and their Impact on Sellers

Google: Pioneering AI Research and Integration

Google has deeply integrated AI into its core products, significantly enhancing services like search, advertising, and cloud offerings. A key example is the AI-driven improvements in Google Search, where machine learning is used to deliver more relevant results, predict user queries, and even generate answers directly in search snippets.

Related: How Google’s New “Helpful Content” Algorithm Impacts the Future of Amazon Seller SEO

In addition to enhancing existing services, Google has also launched innovative AI-powered products. One notable example is Gemini (aka Bard), a competitor to OpenAI’s ChatGPT. 

Gemini leverages Google’s advanced natural language processing capabilities to offer conversational AI. For instance, enable more accurate and context-aware search results. This helps users find exactly what they’re looking for, even with vague or complex queries, improving the overall online browsing experience.

In search, Google’s AI advancements in NLP, particularly through models like BERT (Bidirectional Encoder Representations from Transformers), enable more accurate and context-aware search results. 

Google’s leadership in AI research is further solidified by its subsidiary, DeepMind, one of the world’s leading AI research labs. DeepMind has achieved major breakthroughs, including the creation of AlphaFold, an AI system that solved the protein folding problem, a challenge that had perplexed scientists for decades and which opens the door to advancements in medical therapies and biology. This achievement underscores Google’s role in pushing the boundaries of what AI can achieve.

Microsoft: AI-First Strategy and Partnerships

Microsoft has made significant strides in AI through strategic investments and partnerships. One example is its multi-billion-dollar investment in OpenAI, which has led to the integration of OpenAI’s GPT models into Microsoft’s core products, such as Azure, Office 365, and Bing.

For instance, ChatGPT helps Bing understand and respond to more complex, natural language queries. This allows users to ask questions in a conversational manner and receive more relevant and nuanced answers or recommendations, moving beyond simple keyword-based searches.

This partnership has strengthened Microsoft’s position in the AI landscape, allowing it to offer cutting-edge technology across its product suite.

This deep integration of AI has made Google’s services smarter and more intuitive, enhancing the user experience across its platforms.

Related: 5 Easy Ways Amazon Sellers Can Use ChatGPT to Increase Profits (According to ChatGPT)

In cloud computing, Microsoft Azure has emerged as a leading platform for AI services. Azure provides the necessary tools and infrastructure for businesses to build and deploy AI models, making it a go-to solution for enterprises worldwide. 

For instance, Azure AI offers tools for analyzing customer data and gaining insights into buying behavior. Azure Cognitive Services and Azure Machine Learning enable ecommerce businesses to develop personalized experiences, optimize marketing strategies, and improve customer engagement.

In sum, these AI services enhance various business functions, from improving customer service to optimizing logistics, demonstrating Azure’s critical role in modern AI applications.

Microsoft is also embedding AI into everyday productivity tools with innovations like Copilot for Microsoft 365. This AI-powered assistant helps users with tasks such as writing emails, analyzing data in Excel, and creating presentations, significantly transforming how people work. 

By integrating AI into these tools, Microsoft is making advanced technology accessible to a broader audience, increasing productivity and efficiency.

Meta: Building the Metaverse with AI

Meta, formerly known as Facebook, is leveraging AI to build the metaverse—a digital universe where people can interact in immersive virtual spaces. AI is integral to this vision, enabling the creation of realistic avatars, designing engaging environments, and facilitating seamless interactions within this new digital realm.

For instance, in the metaverse, brands can create fully immersive virtual stores where customers can browse, interact with products, and even try them on in a 3D space. AI can personalize these stores based on user preferences, making each visit unique and tailored to individual tastes. 

AI can also introduce gamified elements into the shopping experience, such as virtual treasure hunts, contests, or reward systems. These interactive experiences make shopping more engaging and fun, encouraging users to spend more time in the metaverse.

Overall, this technology is key to making the metaverse a dynamic and interactive space, pushing the boundaries of how we experience and connect in digital worlds.

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

Chinese AI Tech Companies: Ambition and Government Backing

The Chinese government has declared its goal to become the global leader in AI by 2030. Chinese tech giants like Baidu, Alibaba, JD.com, Tencent, and Huawei are at the forefront of this push, with massive investments in AI research and development.

Alibaba, for example, has heavily invested in AI to personalize the shopping experience on its platforms, such as Tmall and Taobao. Their AI algorithms analyze vast amounts of data to offer personalized product recommendations, pricing strategies, and targeted marketing campaigns. This has contributed to their dominance in the Chinese ecommerce market, with Tmall accounting for about 63% of online retail sales in China as of 2022.

JD.com, meanwhile, uses AI to optimize its supply chain operations. Their AI-driven systems predict demand, manage inventory, and streamline logistics, ensuring faster delivery times and reducing costs. JD.com’s AI warehouse, which is fully automated, can handle over 200,000 orders a day.

Tencent has embedded AI into its WeChat platform, enabling users to shop directly through the app using AI-powered product recommendations and payment processing. With over 1.2 billion monthly active users, WeChat’s AI-driven ecommerce capabilities significantly influence consumer behavior in China.

These moves by Chinese AI tech companies are reshaping the ecommerce landscape, not just in China but globally. Their innovations in personalization, delivery, and consumer behavior analysis are setting new standards for the industry, making them formidable competitors on the global stage.

Related: How Temu Might Compete with Amazon in the US Market, Amazon’s Strategic Evolution: Challenging Alibaba in Global Sourcing

The Rise of AI Nationalism

Countries worldwide are not just spectators in this AI race; they are active participants, driven by what some are calling “AI nationalism,” which refers to the practice of nations prioritizing the development, control, and deployment of AI technologies to achieve strategic, economic, and political advantages.

Nations like the United States, China, France, India, United Arab Emirates, and Saudi Arabia are investing heavily in AI, crafting policies to ensure that they remain competitive. The US, for instance, has leveraged its control over critical AI chips, designed primarily by Nvidia, to maintain its lead, even as it restricts exports to rivals like China. This has created a fragmented AI landscape, where access to technology and its applications can vary significantly depending on geographic and political boundaries.

China, despite facing significant challenges, is catching up rapidly. Chinese firms have begun unveiling AI technologies that rival those from American companies, such as video generators and chatbots that are already available to consumers.

China’s approach, which includes the open-sourcing of AI technologies, contrasts sharply with the more guarded strategies of Western companies. This open-source model allows for faster innovation and widespread adoption, potentially giving China an edge in the global AI race.

The Future of AI: Implications for Ecommerce

The advancements in AI are poised to revolutionize the ecommerce industry. Companies like Amazon, which are deeply integrated into the AI development ecosystem, stand to benefit enormously.

AI-driven innovations can enhance everything from inventory management and supply chain logistics to personalized customer experiences. For instance, by leveraging Anthropic’s LLMs, Amazon could significantly improve the accuracy and efficiency of its recommendation algorithms, leading to higher conversion rates and customer satisfaction.

However, these technological advancements come with their own set of challenges. As AI becomes more integrated into ecommerce, issues such as data privacy, algorithmic bias, and the potential for AI-driven monopolies are likely to attract increased regulatory attention.

CMA’s investigation into Amazon’s partnership with Anthropic is just one example of how regulatory bodies are starting to scrutinize AI deals more closely to prevent anti-competitive practices.

Related: Amazon Faces Backlash for Alleged Abusive Practices, FTC Launches Probe into Surveillance Pricing Practices

Antitrust Scrutiny: Shaping the Future of AI

The rapid pace of AI development has not gone unnoticed by regulators. As tech giants pour billions into AI, concerns about monopolistic practices and the concentration of power are growing.

In the US, the Federal Trade Commission (FTC) has already sent orders to major tech companies, including Amazon, Google, and Microsoft, demanding transparency about their AI investments and partnerships. 

Meanwhile, California (CA) has recently proposed an AI bill, SB 1047 Safe and Secure Innovation for Frontier Artificial Intelligence Models Act.

Sponsored by CA State Senator Scott Wiener, the bill aims to regulate large AI models (defined as those costing at least $100 million to train) during training by enforcing safety protocols to prevent their misuse in causing significant harm, such as mass casualties or major cyberattacks. While this could enhance user safety, it may also increase compliance costs for developers like Anthropic, potentially slowing innovation and limiting the availability of cutting-edge AI technologies.

In Europe, AI titans are subject to the EU AI Act. It is a comprehensive regulatory framework that seeks to govern the use and development of AI across the European Union by categorizing AI systems based on their potential risk to users. It aims to ensure that AI technologies are safe, transparent, and respect fundamental rights, impacting users by offering greater protection against harmful AI applications while promoting innovation within a clear legal framework.

These actions signal a broader trend towards stricter oversight of AI, which could shape the future of the industry. On the one hand, increasing antitrust scrutiny could lead to more stringent regulations, potentially slowing down the pace of innovation.

On the other, it could also lead to a more balanced AI ecosystem, where competition and consumer interests are better protected. For tech giants like Amazon, this means navigating a complex regulatory landscape while continuing to innovate and expand their AI capabilities.

Related: Amazon Faces Tougher Scrutiny Under EU’s Digital Services Act, Amazon in the Crosshairs: Unveiling Recent Legal Turmoil

Navigating the AI Frontier

The AI race is not just a technological competition. It is a battle for global supremacy, with far-reaching implications for industries like ecommerce. As major AI companies continue to push the boundaries, their moves will shape the future of technology, economics, and even geopolitics.

For Amazon and its peers, the challenge will be to harness the power of AI while navigating the growing regulatory landscape. The next few years will be critical in determining who will lead in this new era of AI-powered commerce and how the global AI landscape will evolve.

Related: AI & Automation, AI in eCommerce: Trends Redefining Shopping Experiences, GenAI Showdown: How Amazon and Walmart Are Raising the Stakes

Amazon is reportedly making aggressive moves to dominate the sourcing market, aiming to overtake Alibaba as the go-to platform for international sourcing. This strategic shift is significant for American and European sellers, as it seeks to introduce more Chinese goods into the US market, potentially impacting pricing and competition. This also serves as a wake-up call, highlighting the need to adapt to these changes or risk being left behind.

Amazon’s Strategy to Dominate Global Sourcing

1. Expansion in China through Seller Events and Support

In a LinkedIn post, Amy Wees, CEO of Amazing at Home eCommerce Consulting, reveals that Amazon is stepping up its game by hosting an exclusive Supplier Day event to match attendees with suppliers in its network.

This initiative is similar to Alibaba’s successful supplier days event CoCreate, signaling Amazon’s intent to become a major player in the sourcing market. Wees’ insights reveal that Amazon is no longer content with its existing supply chain model and is now focusing on becoming an end-to-end solutions provider for global e-commerce.

Aside from helping international sellers find suppliers in China, Amazon has also been actively hosting events for Chinese businesses, particularly in key cities like Shenzhen, Wuhan, and Zhengzhou. These events are designed to educate and recruit local sellers, helping them navigate the complexities of international ecommerce, essentially taking on Temu and Shein’s seller network.

Amazon is also leveraging its expansive logistics network and other resources to assist Chinese sellers in exporting their products worldwide, thereby enhancing the variety and affordability of products available on its platform.

Amazon’s new supply chain strategy highlights the retail giant’s plans to offer a full suite of services, including sourcing, shipping, and financing. On the one hand, this move positions Amazon as a one-stop-shop for both US and Chinese sellers while directly challenging Alibaba’s dominance in the global sourcing arena. On the other, the only piece of the sellers’ business they aren’t looking to “own” is their overhead.

2. Direct Shipping Initiatives

Amazon plans to launch a discount page selling directly from Chinese factories, with some products potentially distributed within the US for faster delivery. This initiative could reduce costs and delivery times, making Amazon more competitive against platforms like Temu and Shein.

3. Technological and Logistical Integration

According to Nikkei Asia, Amazon’s official WeChat account is actively used to recruit sellers through live seminars, offering a seamless way for sellers to integrate into Amazon’s ecosystem.

Amazon has also established new offices in China to provide a suite of services, from logistics to brand development, ensuring that even small and medium-sized sellers can successfully export their products.

What Does this Mean for US Sellers

Opportunities

• Access to Affordable Products: Sellers might benefit from lower-cost goods, allowing them to diversify their product range without significantly increasing costs.
• Enhanced Supply Chain Efficiency: With Amazon handling more aspects of sourcing and logistics, sellers can focus on other areas of their business, potentially improving overall efficiency.

Challenges

• Increased Competition: The influx of affordable Chinese goods could make it harder for American and European sellers to compete on price, particularly for commodity products.
• Market Saturation: As more Chinese products enter the US market, there is a risk of oversaturation, which could lead to reduced visibility and sales for existing products.
• Quality Control: Maintaining product quality standards might become a challenge with the increased volume of goods sourced from various Chinese manufacturers.
• Dependency on Amazon: Greater reliance on Amazon’s services could increase sellers’ dependency on the platform, limiting their control over their supply chains.

Related: How FBA Sellers Can Compete Against China’s Amazon Dominance

Adapting to the Shift

• Diversify Product Offerings: Consider expanding your product lines to include unique or niche items that are less likely to face direct competition from low-cost Chinese goods.
• Enhance Product Quality: Focus on superior quality and customer service to differentiate products from cheaper alternatives.
• Leverage Branding: Strong branding can help create a loyal customer base that values the brand over price alone.
• Optimize Costs:Evaluate the entire supply chain to identify areas where costs can be reduced without compromising quality or service.

Related: Where to Source Products to Sell: Top Countries Beyond China

Overall, Amazon’s aggressive expansion into global sourcing and its efforts to integrate more Chinese sellers into its platform signify a major shift in the ecommerce world. While this move improves Amazon’s competitive edge against Chinese rivals like Temu and Shein, it also presents new challenges and opportunities for global sellers. Staying informed and adapting your strategies can help you navigate these changes and continue to succeed in a rapidly evolving market.

Related: How Temu Might Compete with Amazon in the US Market, Is TikTok’s In-App Shop a Threat to Amazon Sellers – Or a New Opportunity?, Amazon vs. Shein vs. Temu: Exploring Multichannel Selling for Sellers

Two key updates to Amazon’s Product Listing Guidelines have just rolled out. It may go without saying that compliance with these new guidelines is crucial to maintaining visibility on the platform. So, let’s break down the details of these changes..

Amazon’s Updated Bullet Point Requirements

Amazon is updating its bullet point requirements starting August 15, 2024. These changes aim to simplify and enhance product detail pages, making it easier for customers to compare products and make informed purchase decisions.

However, the reception among sellers has been mixed, with some expressing concerns about the impact on their listings.

Key Changes to Bullet Point Requirements

• Restriction on Special Characters and Phrases: Amazon is tightening its rules on the use of special characters, emojis, and certain phrases such as refund-related guarantees in bullet points. This is intended to create a more standardized and professional presentation across listings.
• Guidance for High-Quality Bullet Points: Amazon is encouraging sellers to write clear, concise bullet points that highlight the key features and benefits of their products. The goal is to help customers quickly compare products and make informed decisions.
• AI-Generated Content: Amazon plans to use generative AI to assist in creating compliant, high-quality bullet points. If AI-generated improvements are made to a listing, Amazon will share these with sellers for review before publication.

The standardized approach to bullet points could help customers easily understand product features, potentially leading to better purchase decisions. And for sellers who struggle with writing optimized bullet points, AI-generated content could provide valuable assistance in creating Amazon-compliant listings.

Related: How to Create Powerful AI Amazon Product Listings, What Are The Pros And Cons Of Using AI To Optimize Your Amazon Listings?

Seller Concerns and Potential Drawbacks

Despite the potential benefits, many sellers are wary of these changes:

• Loss of Control: Sellers have expressed frustration over Amazon’s increasing control over their listings. One seller shared an experience where Amazon’s AI mistakenly replaced a product image with an unrelated item, leading to significant difficulties in getting it corrected. This raises concerns about the accuracy and reliability of AI-generated content.
• Skepticism Towards AI: Sellers have voiced strong opposition to the use of AI in managing their listings. Many fear that AI will incorrectly modify their listings, leading to inaccuracies that could harm their brand reputation. One seller shared an experience where Amazon’s AI changed a product image incorrectly, resulting in a frustrating process to get it corrected. Concerns about AI “hallucinating” or misinterpreting data from other sources are widespread.
• Challenges with Subjective Terms: Some sellers pointed out inconsistencies in Amazon’s guidelines, especially regarding subjective terms like “softness” or “durability,” which may not be meaningful to customers. They argue that these terms could lead to confusion rather than clarity.
• Inconsistencies in Guidelines: Questions have been posed about the unclear nature of Amazon’s guidelines, particularly regarding the prohibition of certain phrases while allowing others that may not be as informative or relevant. This has led to confusion about what is considered compliant.

Amazon’s updated bullet point requirements are a double-edged sword for sellers. On one hand, the changes could lead to more streamlined and effective product listings, enhancing the customer experience and potentially boosting sales.

On the other hand, the reliance on AI and stricter guidelines might result in a loss of control for sellers, who are rightfully concerned about the accuracy and relevance of AI-generated content. It also may result in revenue losses due to reduction in the effectiveness of the marketing. As these changes take effect, sellers will need to stay vigilant and proactive in managing their listings to ensure they remain accurate and aligned with their brand.

Related: What Is Amazon Bedrock? The Good, the Bad, and the Profitable of the New Amazon AI Toolkit, GenAI Showdown: How Amazon and Walmart Are Raising the Stakes

Amazon’s New Image Selection Policy

Amazon is expanding its image selection policy for product detail pages – initially introduced for hardlines (durable, non-perishable product categories like sports equipment or cookware) – to now include softlines (like clothing and textiles) and consumables. This change aims to elevate customer experience by providing a more comprehensive view of products, thereby helping shoppers make informed buying decisions.

However, as with any significant update, the implications for sellers are complex, with both potential benefits and concerns.

Key Updates to the Image Selection Policy

1. Expansion to Softlines and Consumables

Amazon’s new policy, which initially applied to hardlines, will now encompass softlines and consumables (such as beauty products and supplements). The photos for the product detail pages of these product types may come from multiple contributors but only those that meet Amazon’s product image requirements will be selected.

For instance, if the required images for a consumable product’s detail page are missing (could be due to non-compliance), for listings with multiple sellers, Amazon may source images from other sellers or Amazon themselves.

You can upload extra images to your listings at any time to truly stand out. Just make sure they meet Amazon’s guidelines to maximize the chances of your product photos appearing on the detail page. Images may take up to 72 hours to show up on Amazon after being uploaded.

Note: When you create a product detail page on Amazon, it becomes a permanent part of Amazon’s catalog, even if your inventory runs out. Also, by adding your copyrighted image to a product detail page, you’re giving Amazon and its partners the right to use that image indefinitely, anywhere in the world, without any payment to you.

Other sellers can list their products on the same page you created, using the image you uploaded. However, Amazon requires that the products they list must be exactly the same as the one described on that detail page. If you find that another seller is listing a product that doesn’t exactly match yours, you should report this directly to Amazon.If someone has added your copyrighted image to Amazon’s catalog without your permission, you can file a report with Amazon to address the issue. You may also contact Selling Partner Support to report incorrect or inaccurate images.

2. Prioritization of Brand Owner Images

In response to seller feedback, Amazon will now prioritize images provided by brand owners. Third-party seller images will only be used if the required images from the brand owner are missing. This adjustment is intended to ensure that the most accurate and representative images are displayed on product detail pages.

3. Standardized Image Requirements

Amazon requires at least three images per product detail page: one on a white background, one showing the product in an environment, and one providing product information such as dimensions or nutritional facts. These images will be automatically selected and displayed in the media block’s first available slots.

4. Process for Correcting Incorrect Images

Sellers can contact Selling Partner Support or go to Image Issues to remove incorrect or inaccurate images. Amazon has outlined the process for adding images and resolving potential image issues, emphasizing that accurate and up-to-date images are crucial for maintaining listing quality.

Related: Combatting Amazon Account Suspensions: How to Stay Compliant with Evolving Policies

Potential Benefits for Sellers

• Enhanced Customer Experience: As previously mentioned, when you upload a product photo to Amazon, it may not show up right away. In some cases, Amazon gets pictures from different sources, and they choose the ones they think look the best and follow their guidelines. This means that the product image you sent might be different from the one that shows up because Amazon wants to make sure customers have the best experience. This could be beneficial in categories where visual information significantly influences purchasing decisions, such as clothing or consumables. By choosing the best images for a hardlines product detail page, for example, customers can get a more comprehensive understanding of the product, potentially leading to higher conversion rates
• Brand Image Control: The prioritization of brand owner images is a positive step for brands concerned about maintaining the integrity of their product presentations. This ensures that the most accurate images, reflecting the brand’s intended messaging, are displayed prominently.
• Consistency and Clarity: The requirement for standardized images, including environmental and informational shots, helps create a consistent and professional appearance across product detail pages. This can improve the overall shopping experience, leading to increased trust in the platform.

Issues Facing Sellers

While the policy offers potential advantages, sellers have voiced concerns regarding its implementation and overall effectiveness.

• Reliability of Support: Sellers have voiced skepticism about the effectiveness of Amazon’s Seller Support in addressing image-related issues. Past experiences have left some sellers frustrated, as they often find it difficult to get incorrect images corrected promptly. One seller noted, “The way I read this is, ‘If you have a problem, we will direct you to an Amazon employee who cannot solve the problem but will… pretend that he has solved the problem.”
• Updating Outdated Images: Some sellers worry that outdated images on product detail pages, particularly those updated by major brands like P&G, may not be replaced quickly enough. This can lead to customer dissatisfaction when the product packaging they receive does not match the images shown on Amazon.
• Hijacking and Unauthorized Changes: Sellers are also concerned about unauthorized sellers changing images, sometimes replacing the main image with something inaccurate or misleading. This has been a recurring issue, with sellers struggling to regain control over their listings. One seller recounted, “We had someone totally change one of our main images to something that was not even an option to buy… We had to fight tooth and nail with Amazon to get it changed back.”

Protecting Your Brand on Amazon

To protect your brand against copycats on Amazon, there are several steps you can take to safeguard your products and intellectual property:

1. Enroll in Amazon Brand Registry: One of the most effective ways to protect your brand is by enrolling in Amazon’s Brand Registry. This program provides you with tools to protect your brand and gives you greater control over your product listings. With Brand Registry, you can:
   • Control Product Listings: Ensure that the information on your product detail pages is accurate, preventing unauthorized changes.
   • Proactive Brand Protection: Amazon uses machine learning and automated protections that continuously scan its site for potential infringements, helping to remove inaccurate or infringing content quickly.
   • Report Violations Easily: The program gives you access to tools that make it easier to report violations, such as counterfeit products or unauthorized sellers listing their items under your brand.
2. Use Trademark Protection: Register your brand’s trademark. This is often a prerequisite for enrolling in the Brand Registry. A registered trademark can help you take legal action against those who use your brand name or logo without permission.
3. Monitor Your Listings: Regularly check your product listings to ensure that there are no unauthorized sellers or inaccurate product information. Use Amazon’s tools, such as Brand Registry’s search features, or AMZ Alert by Carbon6 to monitor your listings.
4. Leverage Enhanced Brand Content: Utilize features like A+ Content and Amazon Stores, which are available to Brand Registered sellers, to showcase your brand’s unique value proposition. This can make it more difficult for copycats to replicate your brand’s identity.
5. Protect Your Intellectual Property: Beyond trademarks, ensure you have copyright protections in place for your product images, descriptions, and branding materials. If someone uses your copyrighted content without permission, you can report it to Amazon.
6. File Infringement Reports: If you discover a copycat using your brand name or product images, you can file a complaint through Amazon’s reporting tools. Brand Registry makes it easier to submit and track these reports.

Taking these steps can significantly strengthen your brand’s defenses against copycats and unauthorized sellers, ensuring that your products and brand reputation are well-protected on the platform.

In sum, Amazon’s update to how product detail page images are selected is a mixed bag for sellers. While the policy aims to improve the customer experience by offering more comprehensive and accurate product representations, it also presents challenges in terms of support and maintaining control over listings.

Related: From Clicks to Conversions: The Ultimate Guide to Amazon Creative Listing Optimization

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.

The Federal Trade Commission (FTC) has initiated an investigation into eight companies over concerns about the use of surveillance pricing, a practice that could significantly affect consumer costs and market fairness. This investigation is targeting eight firms:

• Mastercard
• Revionics
• Bloomreach
• JPMorgan Chase
• Task Software
• Pros
• Accenture
• McKinsey & Co

All of these companies have been identified as employing advanced technologies like AI to customize prices for individual consumers based on personal data.

Surveillance Pricing vs. Dynamic Pricing

Surveillance pricing differs from dynamic pricing, a strategy commonly used by companies like Amazon, ride-sharing services, and airlines.

While dynamic pricing adjusts costs based on broader market factors such as demand fluctuations, surveillance pricing delves deeper into individual consumer data, including precise location, shopping habits, and even browsing history.

This practice can lead to individualized pricing, potentially putting certain consumers at a disadvantage by charging them more based on their specific data profiles.

The FTC’s Concerns and Goals

The FTC’s probe, leveraging its 6(b) authority, seeks to understand the extent and impact of surveillance pricing practices. The agency has issued orders to the involved companies, requesting detailed information on several key areas:

• Types of Products and Services: The nature of the surveillance pricing technologies, including their development, implementation, and intended use.
• Data Collection and Inputs: Methods and sources of data collection, including whether the data is collected by third parties.
• Customer and Sales Information: Details on the customers using these technologies and the purposes for which they employ them.
• Impacts on Consumers and Prices: The potential effects on consumers, particularly regarding the prices they pay due to these practices.

Impact on Businesses and Consumers

This investigation raises significant questions about transparency and fairness in pricing strategies.

If the FTC determines that surveillance pricing unfairly exploits consumer data, it could lead to stricter regulations and oversight, impacting how businesses, especially those in retail and online markets, operate.

According to CNBC, Mastercard and Bloomreach have already expressed their intention to cooperate, while some argue that such data-driven approaches can ultimately benefit consumers by optimizing prices.

Implications for Amazon and Sellers

While the current probe focuses on surveillance pricing, it also echoes issues around dynamic pricing, a practice Amazon extensively uses.

Back in March, the Commission raised significant concerns about the use of algorithms in setting prices, emphasizing that such practices could potentially violate federal antitrust laws. 

This warning, reinforced by a recent FTC blog post, Price fixing by algorithm is still price fixing, and a joint Statement of Interest filed with the US Department of Justice (DOJ) in a related legal case, highlights the scrutiny algorithms face when they influence market pricing. The focus on algorithms, as seen in cases like Duffy v. Yardi Systems, Inc. and In re RealPage, Inc., centers around allegations of price fixing—where competitors allegedly use shared algorithms to set or influence prices, thereby undermining competitive market dynamics.

In May, US Senator Sherrod Brown also launched his own inquiry into the use of dynamic pricing algorithms by Amazon and Walmart, highlighting concerns over potential price gouging and unfair pricing practices.

Senator Brown’s letter to Amazon CEO Andy Jassy outlines specific questions that, depending on the responses, could lead to further regulatory actions:

• Fair Price Determination: How Amazon defines and ensures fair pricing.
• Data Use: Detailed information on the data used in pricing algorithms, including customer data.
• Price Change Triggers: The factors that trigger price changes.
• Non-Discrimination Measures: Steps taken to prevent discrimination based on protected classes.
• Consumer Communication: How Amazon communicates price changes to consumers and helps them plan for purchases.

If the FTC or the Senate decides to scrutinize dynamic pricing practices further, Amazon could face new regulatory challenges, especially if their pricing strategies are found to lack transparency or fairness.

For instance, the eComm giant could be exposed to lawsuits similar to those in the Duffy v. Yardi Systems, Inc. case, where pricing algorithms led to allegations of price fixing.

This could prompt a reevaluation of how pricing algorithms are deployed, potentially affecting both consumer trust and competitive dynamics on Amazon.

The FTC’s investigation underscores a growing concern about the ethical and practical implications of using personal data in eCommerce. As AI continues to evolve, the balance between innovation and consumer protection remains a critical focus for regulators and businesses alike.

Related: Amazon Faces Backlash for Alleged Abusive Practices, How FTC’s Historic Monopoly Case vs. Amazon Might Impact Sellers, FTC Lawsuit Alleges Amazon of Tricking and Trapping Customers into Recurring Prime Subscriptions, Amazon Faces Tougher Scrutiny Under EU’s Digital Services Act (DSA), Amazon Key In-Garage Delivery: Unauthorized Entry

The latest from Amazon promises to enhance the shopping and selling experience on the platform. Among the most significant updates is the nationwide roll out of Amazon’s AI-powered shopping assistant, Rufus, now available to all American customers through the mobile app. This AI-powered tool is set to revolutionize how consumers interact with eCommerce, offering personalized shopping assistance and recommendations.

For sellers, Amazon has released new features in Veeqo, its multi-channel fulfillment software, designed to streamline order fulfillment and reduce costs. In addition, the retail giant’s new “Send it Again” feature simplifies the process of replenishing FBA inventory by allowing sellers to replicate previous shipments with a single click. This upgrade reduces the time and effort needed to manage inventory, making it easier to keep popular items in stock.

Another critical update is the introduction of an ASIN Exclusion feature in Brand Tailored Promotions, allowing sellers to exclude specific products from catalog-wide promotions. 

Lastly, Amazon is preparing for the upcoming Extended Producer Responsibility (EPR) regulations in Germany, affecting products containing single-use plastics. Sellers will need to register their brands by January 1, 2025, to comply with these new environmental standards.

Read on for more detailed insights into these updates and how they could impact your business.

1. How Rufus Could Change Amazon’s Shopping Landscape for Consumers and Sellers

With the launch of Amazon’s AI-powered assistant, Rufus, the way customers interact with the platform is set to undergo significant changes. This also means the way sellers conduct business will undoubtedly change as well.

Rufus offers a personalized shopping experience by providing product recommendations, comparisons, and insights drawn from Amazon’s extensive product catalog, customer reviews, and additional web data. This tool aims to guide users in making better purchasing decisions, whether they’re hunting for household items or niche products like dinosaur toys.

Simplifying the Customer Shopping Experience

For consumers, Rufus promises to simplify and enhance the shopping experience on Amazon. By answering questions and providing tailored suggestions, Rufus helps users navigate the vast array of products more efficiently. This AI assistant is particularly useful for those who want quick, informed recommendations without sifting through endless options.

However, the system isn’t without its challenges. According to Engadget, Rufus sometimes provides a seemingly random assortment of well-reviewed products, which might not always align with the user’s specific needs.

There’s also concern about the accuracy of the information provided, as it primarily pulls from product descriptions, which can vary in reliability. This limitation highlights the need for users to verify the information provided – and for brand owners to ensure accurate listing content.

Impact on Sellers

For sellers, Rufus could be a double-edged sword.

On one hand, it offers an opportunity for high-quality products to gain visibility based on merit rather than advertising spend. This could level the playing field on Amazon, prioritizing products that genuinely fulfill customer needs.

However, if Rufus’s recommendations are swayed by ad dollars, it could reinforce existing market dynamics where visibility is linked to advertising budgets. This might disadvantage smaller sellers or those with limited advertising resources, potentially making it harder for them to compete.

Related: Tim Jordan’s Absolute Best Method for Running External Traffic That is Affordable & Powerful

Overall, Rufus could change the dynamics of product visibility on Amazon, impacting marketing strategies for sellers.

Vanessa Hung, Co-Founder at Seller Assist by Carbon 6, recommends providing as many details as possible and ranking for specific, long-tail keywords when creating listings in the era of AI.

“Ranking and indexing for long tail keywords with much context about the occasion, feature, function, audience, location, event, and activity. Pretty much all the functions COSMO was built for. Broad generic search terms are (I think) going to be things of the past or at least be less impactful than context-rich keywords,” Hung added.

For now, it appears to focus on user needs and preferences, which could favor high-quality products with positive reviews. This focus encourages sellers to maintain high standards and customer satisfaction to benefit from organic visibility through Rufus.

Related: How to Get Positive Customer Reviews to Boost Your Amazon Rank, How to Rank Organically on Amazon

Looking Forward

As Rufus evolves, it will be crucial for both consumers and sellers to monitor its development closely. Customers may find value in a more personalized shopping experience, while sellers will need to adapt to the changing landscape of product visibility and competition on Amazon. Rufus’s success and its impact on eCommerce will largely depend on how Amazon navigates the balance between innovation and fair competition, especially with its FTC lawsuit pending.

2. New Veeqo Features: Enhancing Efficiency and Reducing Costs for Sellers

Amazon has recently rolled out new features for its Veeqo platform, designed to significantly enhance order fulfillment and lower costs for sellers. Veeqo, Amazon’s free multi-channel fulfillment software, is already a valuable tool for managing orders across various platforms. These latest updates aim to streamline processes and boost efficiency.

Here’s a closer look at how the new features will benefit sellers:

Identify and Merge Orders from the Same Customer

One of the standout features is the ability to automatically identify and merge orders from the same customer. This functionality is particularly useful for sellers who tend to get multiple orders from a single customer within the same shipping time frame. By consolidating these orders into one shipment, sellers can:

• Save Time: The automation reduces the manual effort needed to review and combine orders.
• Cut Shipping Costs: Combining shipments can lower the overall shipping expenses, as fewer packages mean less cost per shipment.
• Enhance Customer Experience: Customers benefit from fewer packages and a streamlined delivery process.

Sort Orders by SKU, Customer, or Bin Location

The new sorting capabilities in Veeqo allow sellers to organize their orders based on SKU, customer, or bin location. This feature offers several advantages:

• Streamlined Operations: Sorting orders by SKU or bin location helps in efficiently managing inventory and picking processes, reducing time spent locating items.
• Improved Accuracy: Sorting by customer ensures that all items for a single customer are picked and packed together, minimizing errors and improving order accuracy.
• Efficient Document Handling: The ability to sort and print documents in the chosen order aligns with the sorting preferences, further enhancing operational efficiency.

Efficient Order Routing

The advanced order routing feature enhances the fulfillment process by selecting the warehouse closest to the delivery address. This helps sellers:

• Speed Up Delivery: By routing orders to the nearest warehouse, products can be delivered faster, improving customer satisfaction.
• Reduce Shipping Costs: Shipping from a nearby location often reduces transportation costs, contributing to overall savings.
• Ensure Inventory Availability: The system checks stock levels in the selected warehouse before allocating inventory, preventing delays due to stock shortages.

Seller Feedback: Mixed Reactions

Despite the promising features, seller feedback has been mixed. Some sellers have reported significant issues with Veeqo’s performance:

Order Merging Concerns

While the feature aims to reduce costs, there are concerns about A-Z buyer protection when orders are merged. If a merged order has varying ship-by dates, protections may not fully apply, potentially leading to disputes or customer dissatisfaction.

Ensure that you only merge orders that share the same shipping address. Veeqo provides a UI pop-up to remind users of this risk, but it’s crucial for sellers to be aware and manage these orders carefully.

Technical Glitches

Other sellers have experienced technical problems, such as inventory discrepancies and connection issues that led to out-of-stock items being incorrectly listed as available. These problems can result in increased troubleshooting time, canceled orders and dissatisfied customers.

In summary, while Veeqo’s new features offer promising benefits like cost savings, operational efficiency, and faster delivery, they also come with potential risks and technical challenges. Weigh these factors carefully and monitor your systems closely to ensure that the benefits outweigh the drawbacks.Go to Veeqo for more details.

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

3. ‘Send It Again’ Feature Replicates Previous FBA Shipments With One Click

Amazon has introduced a new feature called “Send It Again” for FBA shipments to streamline the process of replenishing inventory. This enhancement aims to simplify how you manage and replicate your FBA shipments, but how does it measure up in practice?

Here’s an overview of the feature, its benefits, and potential drawbacks.

Overview of the “Send It Again” Feature

The “Send It Again” feature allows you to replicate SKUs and quantities from previous FBA shipments with a single click. This is a significant improvement over the traditional method, which required you to either manually select SKUs or use a bulk upload process for replenishment.

The steps to use this feature are straightforward:

1. Navigate to the Inventory tab and select FBA Inventory.
2. Go to the Shipments drop-down menu > Manage Shipments.
3. Under the Next steps column, choose Send it again.

This feature simplifies the replenishment process, allowing for faster restocking of inventory that has already been sent to FBA.

Benefits of the “Send It Again” Feature

Efficiency Boost

• Time-Saving: Replicating previous shipments with a single click eliminates the need for repetitive SKU selection and data entry, significantly speeding up the replenishment process.
• Reduced Manual Work: You no longer need to manually input SKUs or use bulk uploads, reducing the chance of errors and saving valuable time.

Consistency

• Uniform Shipments: By replicating previous shipments, you can maintain consistent quantities and SKUs, ensuring that your inventory levels remain stable and that they meet demand without overstocking.

Flexibility

• Easy Adjustments: Although the feature simplifies replication, you still have the option to manually add or remove SKUs and adjust quantities before finalizing the shipment. This flexibility allows for modifications based on current inventory needs or market conditions.

Potential Drawbacks

Limited Customization

• Feature Constraints: While the new feature simplifies Amazon’s FBA restocking process, it may not accommodate complex inventory scenarios where significant adjustments are needed. Sellers with highly variable inventory needs might find the feature less useful if their replenishment requirements deviate significantly from past shipments. Regularly review and adjust your inventory strategies to avoid stocking products that are no longer in high demand.

Potential for Mistakes

• Replication Risks: If past shipments contained errors or if there were issues with the inventory levels, replicating those shipments could perpetuate the same mistakes. Ensure that previous shipments were accurate before using the feature.

Amazon’s “Send It Again” feature represents a significant improvement in managing FBA inventory, offering increased efficiency, consistency, and flexibility. It’s especially useful for sellers who have stable and predictable inventory needs.

However, you should be mindful of the potential drawbacks, such as the limitations of the feature for more complex inventory scenarios. By understanding both the benefits and limitations, you can leverage this feature effectively to optimize their inventory management processes.

Go to Create shipments with Send to Amazon to get started.

4. Exclude Products From Catalog-Wide Brand Tailored Promotions

Amazon has launched a new ASIN Exclusion feature within its Brand Tailored Promotions to give you greater control over your promotional strategies.

This feature allows you to exclude up to 100 parent ASINs from a catalog-wide promotion, refining your marketing efforts and improving targeting precision.

What is the ASIN Exclusion Feature?

The ASIN Exclusion feature enables sellers to manage their promotions with more specificity by excluding certain ASINs from being part of a catalog-wide promotion. This tool is particularly useful for brands looking to optimize their promotional strategies and avoid including specific products that might not align with their current sales objectives.

How It Works

To use the ASIN Exclusion feature:

1. Select Your Brand and Audience: Begin by choosing the brand you want to promote and the target audience for your campaign.
2. Product Selection: During the product selection phase, you have two options:
   • Add All Products: This will include your entire brand catalog in the promotion.
   • Exclude Specific Products: Choose this option to exclude up to 100 ASINs from the promotion. You can exclude parent ASINs, which will also exclude all related child ASINs, or exclude individual child ASINs.
3. Complete Promotion Details: After setting exclusions, enter any additional promotion details and submit the promotion.

How this Might Benefit Sellers

Enhanced Control Over Promotions

• Targeted Campaigns: By excluding specific ASINs, you can tailor your promotions to feature only the products you want to highlight, potentially increasing the effectiveness of your campaigns.
• Avoiding Unsuitable Products: This feature allows you to avoid promoting products that are out of stock, have lower margins, or do not align with current marketing goals.

Improved Inventory Management

• Stock Allocation: Excluding certain ASINs can help manage inventory better by ensuring that only available or prioritized products are promoted, reducing the risk of stockouts and unsatisfied customers.

Customizing Customer Experience

• Focused Promotions: Sellers can create more relevant and engaging promotions for their target audience by excluding products that may not appeal to them or are not currently a focus for the brand.

Limitations and Considerations

No Retroactive Changes

• Current Promotions: ASINs cannot be excluded from promotions that are already “running” or “scheduled.” This means that once a promotion is active, exclusions cannot be applied retroactively, which means sellers must carefully plan campaigns.

Exclusion Limits

• 100 ASIN Cap: The feature allows for the exclusion of up to 100 parent ASINs. While this is a significant number, larger catalogs may find this limit restrictive if they need to exclude more items.

Implementation Complexity

• Management Overhead: While the feature provides more control, it also adds a layer of complexity to promotional management. Sellers will need to carefully select which ASINs to exclude and ensure that their promotional strategy aligns with their overall business goals.

Amazon’s ASIN Exclusion feature in Brand Tailored Promotions offers you greater flexibility and control over your promotional campaigns. By allowing the exclusion of up to 100 ASINs, it enables more precise targeting and inventory management.

However, you need to be aware of its limitations, such as the inability to exclude ASINs from ongoing promotions and the cap on the number of exclusions. Overall, this feature can enhance promotional strategies and improve customer targeting, provided it is used thoughtfully and strategically.

5. Register Brands For EPR Single-Use Plastics In Germany

Starting January 1, 2025, Germany will implement the Extended Producer Responsibility (EPR) regulation for Single-Use Plastics, affecting how products containing single-use plastics are handled. (See “What are Single-Use Plastic products” or Self-check on SUP product for more guidance)

This regulation is designed to encourage sustainable waste management and reduce plastic pollution. To continue selling these products on Amazon.de, sellers must comply with the EPR requirements.

Here’s a step-by-step guide to help you navigate the registration process and ensure your compliance.

Step-by-Step Registration Process

Step 1: Obtain Registration Numbers

Before anything else, check if you are considered a producer of single use plastic products in Germany here.

For Producers Established in Germany

• Register Your Brands: Sign up for the Single-Use Plastics Fund platform (DIVID) provided by the German Environment Agency. Register all your brands under each applicable single-use plastic category to obtain your registration numbers.
• For Drop-Shipping or Reselling: If you are not the original producer but instead drop-ship or resell single-use plastic products, you need to obtain the registration numbers from your upstream suppliers.

For Producers Not Established in Germany

• Create an Account: Register on DIVID to create an account. You will also need to appoint an authorized representative in Germany who will handle the single-use plastic requirements on your behalf.
• Register Your Brands: Starting August 1, 2024, you can begin registering your brands on DIVID.

Step 2: Submit Registration Numbers

• Compliance Portal Submission: Once the Compliance Portal is available (expected in Q3-Q4 2024), submit your obtained registration numbers through this portal. Amazon will notify you when the portal goes live, so keep an eye out for this update to ensure timely submission.

Step 3: Annual Reporting and Payment

• Annual Reporting: Beginning in 2025, you must report the types and quantities of single-use plastic products sold in Germany to DIVID annually.
• Eco-Fees: Pay the eco-fees (levy rates) associated with your single-use plastic products. This is crucial for maintaining compliance with the EPR regulations.

Additional Recommendations

• Early Registration: Start the registration process on DIVID as soon as possible to ensure you have your registration numbers ready when the Compliance Portal becomes available. Early registration helps avoid last-minute issues and ensures you can prove compliance to Amazon without delays.
• Stay Informed: Regularly check for updates from DIVID and Amazon regarding any changes or additional requirements related to the EPR regulation.
• Monitor Compliance: Continuously monitor your compliance status to avoid having your listings deactivated. Ensuring that you meet all EPR requirements will help maintain your selling privileges on Amazon.de.

By taking these steps now, you’ll be well-prepared for the upcoming regulations and can avoid disruptions to your listings on Amazon.de. For more information on EPR requirements, visit the EPR requirements: Single-use plastics in Germany page.

In today’s digital age, convenience often comes at a price. For some Amazon customers, that price might be their privacy and security.

Amazon Key is an in-garage delivery service that partners with garage door opener apps MyQ, Aladdin Connect, and Overhead Door to deliver packages directly inside the garages of Amazon customers.

A simple four step process is laid out on the Amazon Key page to illustrate the simplicity and security of the service.

Participating garage door opener apps grant Amazon Key access. These partnerships are what makes this service possible. 

This delivery practice could mean a significant reduction in porch piracy, but raises significant privacy concerns and highlights the need for customers to be vigilant about their digital and physical security.

The Uninvited Intrusion

Where this moves from convenience to violation is in some customers experiencing this service being enabled without their permission. 

One Austin-based Amazon customer we spoke to shared a troubling experience that highlights the gravity of the issue.

When checking on her Amazon orders, she noticed a message indicating her package was going to be delivered into her garage.

“We never opted into this service on Amazon or in the MyQ app,” she explained. 

The couple witnessed their garage door being opened and talked with the delivery driver who was in an Amazon uniform and drove an Amazon Prime truck. The driver relayed that his Amazon delivery app instructs him as to how each package is to be delivered and provides him the ability to open customers’ garage doors.

While Amazon Key is supposed to be an opt-in service, this accounting indicates this may not always be the case.

Not The First Occurance

This story is not an isolated incident. Many users on Reddit have reported similar unauthorized entries by Amazon delivery drivers, all facilitated through the MyQ app. 

According to a 2019 press release from Chamberlain Group, the app’s parent company, the integration is supposed to be activated only when customers link their Amazon and MyQ accounts via the Amazon Key app. 

However, many customers assert that they never went through this linking process or authorized such access. The result is an alarming breach of privacy, with Amazon deliveries occurring inside private garages without explicit consent. 

Privacy and Security at Stake

The potential implications of this unauthorized access are profound. Beyond the immediate concern of unwanted intrusions, there are broader security risks towards both customers and drivers.

These risks include:

• Theft or vandalism of property inside the garage or home.
• Accidental damage to homeowner’s property.
• Complex liability issues in case of accidents or injuries occurring during the delivery process. For example, an Amazon delivery driver could be injured by a pet or tripping hazard inside the garage, leading to liability issues for the homeowner.
• Unexpected garage access could trigger home security systems, leading to false alarms and potential fines from local authorities for repeated false alarms.
• Amazon drivers might unintentionally gain access to personal or sensitive information stored in the garage, such as documents, tools, or equipment.
• Personal safety risks to the inhabitants, especially if they are unaware of the delivery or misinterpret the entry as a break-in attempt. For example, this instance where the driver accidentally left a garage door open.

There have been instances where individuals felt violated and unsafe knowing that someone could enter their property without their knowledge or permission. 

On a Reddit thread discussing Amazon delivering in garage without authorization, poster WestRoyal5079 wrote, “I have never authorised Amazon Key. I know this for fact because every time I opened the MyQ app I would get notification on the top of the app to create Amazon Key, but I never did because I didn’t want any of those delivery guy coming to my house. I feel so violated. I know that I can turn off the key but what are the chances that they turn it back on if they need to? They will probably say I did it accidentally again.”

Another poster commented, “This also happened to me as well on 12/3. I came home one evening & found the packages delivered inside my garage. I wasn’t even aware that this garage delivery option was available. I did not authorized this & it’s an invasion of privacy. I also have MyQ garage opener which I installed 6 months ago. This was the 1st time this happened. I’ve been on the phone with multiple Amazon reps including the Supervisor of Logistics for answers. It’s been 2 weeks & I have not heard back from Amazon.

If the Amazon driver can change the delivery option & has access to my garage, that’s scary! I’m still waiting for answers from Amazon.”

Indeed, the breach of trust is significant, and the lack of clear communication and consent from Amazon and MyQ is troubling.

Loss of Control Over Personal Data

If Amazon can access your garage without permission, it also raises questions about the control and security of other smart home devices and systems, specifically about how personal data is being used and shared with third-party apps.

Moreover, this situation brings to mind previous privacy lapses by Amazon such as issues with its Ring and Alexa products, which have led to substantial fines and settlements.

How Did This Happen?

For many, the problem began with MyQ’s app interface, which offers several opportunities to enable in-garage delivery, sometimes leading users to unknowingly activate the service.

In other cases, it appears that Amazon and MyQ automatically enabled the feature without proper user consent, as suggested by numerous Reddit posters. This automatic opt-in mechanism lacks transparency and undermines consumer trust.

In a post, Claude_Henry_Smoot reported that “MyQ has turned on Amazon Key (without my permission) and I cannot find a way to turn it off.”

He said that he never set this up because he doesn’t need it and doesn’t want delivery people in his garage.

“It was fine until last week when I noticed someone putting my garage door up. I ran out … it was Amazon. I never activated it. I looked in the MyQ app and it now indicates I am ‘all setup’ in the Amazon Key section and seems to provide no way to turn it off. I didn’t want to be all setup.”

The Broader Implications

The broader issue at play is the delicate balance between convenience and security. While in-garage delivery can be seen as a solution to package theft and missed deliveries, it should never come at the expense of user autonomy and consent. Consumers should have full control over who has access to their property and under what circumstances.

Furthermore, this situation highlights the need for stricter regulations and standards regarding smart home technologies and services. Companies must be held accountable for ensuring that their products and services are secure and that user permissions are clear, transparent, and respected.

Potential FTC Violations 

If unauthorized in-garage deliveries continue to surface, Amazon and MyQ could potentially be exposing themselves to a class action lawsuit for violation of several Federal Trade Commission (FTC) regulations. Some relevant areas include:

Unfair and Deceptive Practices

The FTC Act prohibits “unfair or deceptive acts or practices in or affecting commerce” (Section 5). Unauthorized access to customers’ garages could be deemed an unfair practice, especially if Amazon did not provide clear, conspicuous, and truthful information about the service or failed to obtain explicit consent.

Related: Amazon Faces Backlash for Alleged Abusive Practices, FTC Lawsuit Alleges Amazon of Tricking and Trapping Customers into Recurring Prime Subscriptions

Data Privacy Violations

The FTC has taken action against companies that fail to protect consumers’ personal data or mislead them about privacy and security practices. If Amazon did not adequately inform customers about the garage delivery feature or circumvented security settings, this could be seen as a failure to protect customer data and privacy.

Consent and Notification Issues

The FTC requires companies to obtain explicit consent from consumers for services that affect their privacy. If Amazon activated in-garage delivery without obtaining clear, affirmative consent from customers, it could be in violation of FTC guidelines on consent and notification.

Protecting Your Privacy

For those concerned about their privacy and security, there are several steps you can take to protect yourself:

• Check Your App Settings: Verify that Amazon Key In-Garage Delivery is turned off in your Amazon account. 
  On the Amazon website: 
  • Navigate to Your Account.
  • Scroll down to Ordering and Shopping Preferences.
  • Amazon Key settings. 
  • Select In-Garage Deliver is OFF.

• Continue to Monitor: Regularly review the settings in your garage door opener and Amazon apps to ensure that in-garage delivery is disabled unless you explicitly want it enabled.
• Enable Security Features: Use any available security features, such as multi-factor authentication, to add an extra layer of protection to your smart home devices.
• Stay Informed: Keep up to date with any changes or updates to the terms and conditions of your smart home devices and delivery services.
• Communicate Concerns: If you experience unauthorized access, report it to the companies (Chamberlain Group and Amazon) involved and demand action.  Concerns can also be addressed with the FTC. Sharing your experience can help raise awareness and prompt necessary changes.
• Consider Alternatives: If you are uncomfortable with the potential for unauthorized access, consider using alternative delivery options or even reverting to non-smart systems for critical home access points.

While the convenience of in-garage delivery is appealing, it should never compromise your privacy and security.

Tech companies like Amazon and MyQ must prioritize user consent and transparency, ensuring that their services enhance convenience without infringing on personal property and privacy. Consumers, in turn, must remain vigilant and proactive in safeguarding their homes against unauthorized intrusions.

Related: Amazon in the Crosshairs: Unveiling Recent Legal Turmoil, New Security Issues Leave Many Sellers Vulnerable to Cyberattacks, Amazon Faces Tougher Scrutiny Under EU’s Digital Services Act (DSA)

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

This week’s Amazon feature roundup brings a wealth of updates for sellers aiming to stay competitive and informed.

Amazon is poised to challenge popular discount giants Temu and Shein with a new discount section, promising to attract budget-conscious shoppers and potentially boost traffic to the platform.

The launch of new Shipment Tracking and Inventory Visibility APIs for Amazon Warehousing and Distribution (AWD) will offer enhanced logistical control, ensuring smoother operations and fewer surprises. Amazon is also expanding the range of products eligible for AWD to include shoes, providing footwear sellers with more flexibility and storage options. 

The updated FBA Enrollment Opportunities tool is set to help sellers find lower FBA rates, optimizing costs and maximizing profitability.

As regulatory landscapes evolve, Amazon sellers must stay ahead with the upcoming EU Batteries Regulation requirements for Extended Producer Responsibility (EPR). 

Lastly, Amazon’s significant reduction of plastic air pillows in North American packaging underscores the retailer’s commitment to sustainability—an initiative that could resonate with eco-conscious consumers and enhance brand image.

Dive into this article to explore these developments in detail and discover how they can impact and benefit your Amazon business.

1. Amazon Challenges Temu and Shein

Amazon is planning to launch a new discount storefront aimed at competing with popular low-cost eCommerce platforms, Temu and Shein. This new section will feature unbranded apparel and household goods, primarily priced under $20, shipped directly from warehouses in China.

By doing so, Amazon aims to offer products at significantly reduced prices, appealing to bargain shoppers.

How the New Discount Page Works

The discount storefront will feature a variety of unbranded items, such as facial massaging tools, arm weights, and phone cases, all shipped from China to the US within nine to eleven days.

Unlike the traditional FBA model, this new approach allows Chinese sellers to ship products directly to customers, potentially reducing overhead costs. This method also enables sellers to test new items through small-batch production, similar to Shein’s on-demand manufacturing model.

Related: How Temu Might Compete with Amazon in the US Market

Impact on Competing Sellers in the US

Amazon’s plan to introduce a discount storefront featuring Chinese goods at bargain prices is causing significant concern among American sellers, who fear it will further erode their market share and profit margins, according to Modern Retail.

Meanwhile, on Sellers Ask Sellers, many sellers have expressed their apprehensions and frustrations, highlighting the potential negative impacts of this move.

Erosion of Market Share

The introduction of a dedicated discount section on Amazon’s platform is expected to attract price-sensitive customers who are currently gravitating towards Temu and Shein. 

In an interview with Modern Retail, Lori Barzvi, who sells washable pee pads for dogs under the Pupiboo brand, noted that “Amazon customers are already price-sensitive, and a dedicated discount section could further erode our market share.”

This sentiment is echoed by other sellers who worry that the established trust and reliability of Amazon will eliminate the hesitation some consumers have about purchasing from lesser-known platforms, accelerating the shift towards ultra-cheap purchases from China.

Increased Competitive Pressure

The new storefront will likely intensify competitive pressure on American sellers. Barzvi highlighted the compounding issue of new fees introduced by Amazon earlier this year, which have already pressured sellers’ profit margins.

“The combination of these fee increases and the pressure to lower prices to compete with the new discount platform could make it unsustainable for many small businesses to continue operating on Amazon,” she said.

This comment is shared by other sellers who feel that the fee increases, coupled with the need to compete with bargain prices, may drive many small businesses out of the market.

Concerns About Quality and Product Safety

Sellers also express concerns about the quality and safety of products that will be featured in the new discount section.

One seller from the Sellers Ask Sellers forum commented, “I mean, it’s not FBA so I guess if people wanna wait for cheaper stuff which is most likely not vetted for quality they can.”

There is a fear that highlighting low-cost, potentially low-quality products will undermine the overall quality perception of Amazon’s offerings. Additionally, there are worries about the lack of stringent quality control, with sellers questioning who will take responsibility if something goes wrong with these products.

Related: Amazon Expands A-to-Z Guarantee and Introduces New Tools for Sellers

Potential for Increased Counterfeits and Liability

Another significant concern is the potential increase in counterfeit goods and associated liability. Judah Bergman, CEO of Jool Baby, mentioned his concern about incentivizing “bad apples” by making it easier for Chinese sellers to ship products directly from overseas. Given Amazon’s ongoing struggles with counterfeit products, this move could exacerbate the problem, undermining trust in the platform and posing risks to consumers.

Strategic Shifts and Adaptations

Some sellers view the potential changes as a reason to adapt their strategies. Comments from the Sellers Ask Sellers forum suggest that sellers might need to focus on niche products that are harder to replicate or move away from high-volume, low-margin items.One seller suggested that “building the brand is a real thing,” indicating that a strong brand presence and high-quality products might be necessary to withstand the increased competition from low-cost imports.

Related: How to Craft an Ecommerce Brand That Roars, 5 Top Strategies for a Winning Amazon Product Launch, Emotional Appeal: The Secret Strategy of Ecommerce Seller Success

Impact on the Environment

The environmental impact of the new discount storefront could also be significant. The focus on importing inexpensive goods from China raises concerns about the carbon footprint associated with long-distance shipping.

Additionally, the potential for increased waste from cheap, disposable products could contribute to environmental degradation. This model of fast and affordable retail has been criticized for its unsustainable practices, including the extensive use of plastics and the rapid turnover of low-quality goods.

Final Thoughts

Amazon’s new discount storefront represents a strategic move to compete with rising eCommerce platforms like Temu and Shein. While this initiative may benefit consumers through lower prices and increased product variety, it poses significant challenges for US sellers, and the environment.

To stay competitive, American sellers might need to adapt their strategies, focusing on niche markets and building strong brand identities. 

Overall, the long-term implications of this move will depend on how effectively Amazon can balance these competing interests while maintaining its market dominance.

2. Amazon Expands AWD Capabilities with New APIs and Eligible Products

Amazon has announced significant updates to its Amazon Warehousing and Distribution (AWD) service, aimed at improving efficiency and expanding opportunities for sellers. The eCommerce giant has launched new Shipment Tracking and Inventory Visibility APIs and expanded the range of products eligible for AWD to include shoes.

Launch of Shipment Tracking and Inventory Visibility APIs

In a bid to enhance inventory management and streamline operations for sellers, Amazon has introduced the first set of Selling Partner (SP) APIs for AWD. These include the AWD Shipment Tracking API and the AWD Inventory API.

How It Works

• AWD Shipment Tracking API: This API provides tracking and status updates for inbound shipments. Sellers can now monitor the progress of their shipments to AWD facilities.
• AWD Inventory API: This API offers visibility into inventory levels and states within Amazon’s storage network. Sellers can see current stock levels, identify which items are in storage, and get updates on inventory movements.

Sellers can access these APIs through the SP-API portal by making a developer profile for direct integration or through third-party providers utilizing the APIs.

Benefits for Sellers

• Automated Inventory Management: The APIs help automate inventory planning, integrating seamlessly with existing supply chain management tools.
• Enhanced Visibility: Updates on shipment status and inventory levels allow sellers to make informed decisions and respond swiftly to changes.
• Improved Efficiency: By automating many aspects of inventory management, sellers can reduce manual tasks and focus more on strategic business activities.

Amazon has also announced plans to enhance these APIs further by adding SKU-level granularity for inbound shipment reconciliation and in-transit quantities for end-to-end visibility. Updates will be shared through the Seller Central Forums as they become available.

Expansion of Product Eligibility: Shoes Now Eligible for AWD

In another update, Amazon has expanded the range of products eligible for AWD to include shoes. This move opens up new opportunities for sellers in the footwear category to leverage Amazon’s Warehousing and Distribution services.

How It Works

• Product Eligibility: Footwear, products with no expiration date and not considered dangerous goods are now eligible for AWD.
• Carton Specifications: Conveyable boxes must be smaller than 25 inches on any side and weigh 50 pounds or less.
• Large Standard-Size ASINs: Individual products should be 18 inches long, 14 inches wide, 8 inches high or smaller, and weigh 20 pounds or less.
• SKU Packing: Only one unique SKU per box or carton, so avoid combining different SKUs per box/carton.
• Shipment SKU Limit: Up to 150 unique SKUs for each shipment.

Benefits for Sellers

• Scalability: As sellers grow their business, they can easily scale their operations using Amazon’s extensive warehousing and distribution network. This scalability is particularly beneficial for seasonal spikes in demand, such as during holiday seasons or promotional events.
• Streamlined Logistics: By using AWD, sellers can simplify their logistics processes, ensuring that their products are stored and managed efficiently.
• Save on Certain FBA Fees: With auto-replenishment, AWD takes charge of replenishing sellers’ inventory into FBA for them. As a result, concerns about low inventory levels, storage utilization, and capacity overage fees do not impact sellers at the SKU level when they auto-replenish 70% or more of that SKU to FBA via AWD within the past 90 days.
• Added Benefits of the AWD Integrated Rate: According to Amazon, if using Amazon Global Logistics (AGL) or Partnered Carrier Program as transport service provider for your AWD shipments, you can save $0.12 per cubic foot per month on storage fees. For instance, storing 1,000 cubic feet of inventory would cost $480 per month at the base rate ($0.48/cu ft/month if using your own third-party shipping provider), while the integrated rate (e.g., AWD and AGL) would bring this down to $360 per month, saving $120.

Related: Save on Storage: AWD’s Special Second Month Promotion, Optimize Your Profit with Proven Strategies

3. Amazon Upgrades FBA Tool to Help Sellers with Product Choices and Cost Analysis

Amazon has updated its FBA Enrollment Opportunities tool to help sellers:

Identify Which Merchant-Fulfilled Products To Enroll In FBA

• The tool offers benefits for Merchant-Fulfilled Network (MFN) sellers by providing catalog recommendations for products that could gain from being enrolled in FBA. It helps also sellers identify a prioritized list of ASINs, highlighting those with potential sales uplift and FBA-related discounts, making it easier to decide which products to transition to FBA for optimal performance and cost efficiency.

Identify Low-Priced Product Opportunities

• The tool can identify MFN products priced below $10 that qualify for Low-price FBA fees.
• Sellers can compare these low-price FBA fees with the standard FBA fulfillment fees to make more cost-effective decisions.

Calculate Fulfillment Costs with an Integrated FBA Revenue Calculator

• Net Margin and Proceeds: Calculate net margin, net proceeds, and total costs (both Amazon and non-Amazon costs) for each product.
• Cost Comparison: Compare your own off-Amazon fulfillment costs with FBA costs to identify potential savings.
• Inbound Placement Costs: Calculate costs for inbound placement options based on the region to plan logistics more efficiently.
• Additional FBA Services: Include costs for additional services like labeling and packaging to get a complete picture of expenses.
• Factor Peak and Off-Peak Season Fulfillment Costs: Calculate holiday season (October-December) and off-peak (January-September) fulfillment costs for better long-term planning.

Seller Reactions and Insights

The seller community has provided mixed reactions to this update. Here are some of their insights:

Cost Control Concerns

One seller emphasized the advantages of MFN, or Fulfillment By Merchant (FBM), over other methods on Amazon, stating that it remains the most cost-effective. They noted that with a single known commission on each sale, sellers have better control over their profits compared to other models. According to the seller, FBM eliminates monthly fees that can erode profitability, highlighting its appeal for maintaining financial control in Amazon sales strategies.

New Seller Challenges

Another seller commented, “I’m considering FBM so I can start making a profit. FBA is very convenient and helpful but as a new seller who is struggling to find suitable products to sell it’s becoming daunting.”

Despite these concerns, the enhanced tool is designed to provide greater transparency and support for sellers, particularly new ones, to navigate these challenges more effectively.

The updated FBA Enrollment Opportunities tool offers several benefits:

• Informed Decision-Making: Sellers can make more informed decisions about product enrollment by having a clearer understanding of fulfillment costs and potential profits. And with detailed cost comparisons and insights into additional FBA services, sellers can identify ways to improve their profit margins.
• Cost Efficiency: By identifying low-price products eligible for special reduced fees, sellers can optimize their pricing strategy and reduce overall fulfillment costs.
• Comprehensive Planning: The integrated Revenue Calculator provides a complete breakdown of costs, enabling sellers to plan better and forecast expenses, especially during peak seasons.

In sum, the updated FBA Enrollment Opportunities tool represents a step towards empowering sellers with the information they need to succeed on the platform. While some sellers may still prefer FBM for cost control, the new tool offers a compelling value proposition for those looking to leverage FBA’s convenience and reach.

4. Amazon Announces Upcoming EU Batteries Regulation Requirements for Extended Producer Responsibility (EPR)

Amazon has announced the upcoming requirements for the EU Batteries Regulation related to Extended Producer Responsibility (EPR), which will take effect on August 18, 2025. From this deadline onward, Amazon will be obligated by law to take action, either deactivating non-compliant listings or ensuring compliance on behalf of sellers, contingent upon the regulations in each respective country.

This regulation mandates that all eligible standalone batteries and batteries contained within products sold in the EU must adhere to specific compliance measures, including carrying a Conformité Européenne (European Conformity) mark and having an EU Responsible Person.

Steps to Compliance

Step 1: Registration

Identify as a Producer: In the context of battery regulation in Europe, the term “producer” refers to “any manufacturer, importer or distributor who, irrespective of the selling technique used, including by means of distance contracts (an agreement between a seller (or service provider) and a consumer conducted via methods like phone, internet, mail order, or fax), supplies a battery for the first time for distribution or use, including when incorporated into appliances or vehicles, within the territory of a Member State on a professional basis.”

In many EPR schemes across Europe:

• Manufacturers: These are typically considered the primary producers. They are responsible for ensuring compliance with EPR requirements, which may include recycling, collection, and disposal of products at the end of their life.
• Importers: If the product is imported into the EU, the importer may take on the responsibilities of the producer under EPR regulations.
• Retailers/Sellers: In some cases, especially for products sold under private labels or imported by retailers, they may also be considered producers under EPR laws. This depends on whether they meet the definition of a producer by placing the product on the market for the first time.

Read Amazon’s definition of battery producer for more information.

established in an EU member state and resells batteries within the territory of that member state

If you are considered a producer located within the territory of an EU member state, e.g., Germany, you need to register in that said country.

Alternatively, if you operate as a producer outside the country where your products are sold, designate an authorized representative, AKA Producer Responsibility Organisation (PRO), located within that country. This representative serves as your legal proxy to fulfill all producer obligations required by law.

Available Registrations: You can currently register in the following EU member states:

• France: SYDEREP
• Germany: Stiftung ear
• Italy: Registro Pile e Accumulatori
• Poland: BDO
• Spain: Sede electrónica RII_PYA
• Sweden: Naturvårdsverket

Future Notifications: Amazon will notify sellers when registration opens in other EU member states.

For Resellers: If you use drop-shipping or resell batteries, obtain registration numbers from your upstream suppliers.

Step 2: Proving Compliance

Submit your registration numbers on the upcoming Compliance Portal for each registered EU member state. This portal is expected to go live in Q3–Q4 2024.

Step 3: Annual Reporting and Eco-Fees

Annually report your battery sales and pay the corresponding eco-fees to the relevant EU authorities or PROs. Eco-fees refer to fees that are charged to consumers or producers to finance the costs associated with the collection, treatment, recycling, and disposal of batteries in an environmentally friendly manner.

Ongoing Updates and Support

Amazon will provide updates on country-specific EU batteries requirements for EPR as they are confirmed by the EU member states. Details on how to submit registration numbers and pay eco-fees will also be shared by Q3–Q4 2024.

Additional Information

For more details, visit the EPR requirements: EU batteries page on Amazon Seller Central.By adhering to these new regulations, sellers can ensure their continued compliance and avoid any disruptions to their business operations within the EU market.

Related: A Comprehensive Guide to Global Ecommerce for US Sellers

5. Amazon Implements Major Reduction of Plastic Air Pillows in North America

Amazon has taken a major step towards sustainability by eliminating single-use plastic air pillows from 95 percent of its delivery boxes across North America. This move, announced on June 20, 2024, is part of Amazon’s broader initiative to cut down on plastic waste and transition to more eco-friendly packaging solutions ahead of the 2024 holiday retail season.

The decision to phase out plastic air pillows is expected to eliminate approximately 15 billion of these cushions annually, marking Amazon’s largest plastic reduction effort to date. This follows a similar initiative in Europe in 2022 and reflects Amazon’s commitment to sustainability across its global delivery network.

Related: Amazon Introduces AI-Driven Packaging to Reduce Waste, Amazon and EIT Climate-KIC Offer Financial Boost to Sustainable Startups

How this Move Might Change Your Packaging Practices

For Amazon sellers, this transition means reevaluating how they package their products for shipment. Historically, many sellers have relied on plastic air pillows for added cushioning to protect items during transit.

With Amazon’s shift to recycled paper and other sustainable materials, sellers will need to adapt their packaging strategies to align with these new guidelines.

Key Insights and Considerations

• Environmental Impact: By eliminating plastic air pillows, Amazon aims to reduce its environmental footprint significantly. The switch to paper-based alternatives, which are more readily recyclable and biodegradable, aligns with growing consumer and regulatory expectations for sustainable packaging practices.
• Challenges of Plastic Recycling: Plastic air pillows pose recycling challenges due to sorting and processing issues. In contrast, paper-based materials are easier to recycle and often have existing recycling infrastructure support.
• Technological and Process Changes: Amazon has invested in innovation and testing to ensure the efficiency and effectiveness of its new packaging solutions. This includes redesigning packaging equipment and processes to accommodate the switch from plastic to paper-based materials.

Operational Implications: The adoption of paper-based packaging not only supports environmental goals but also enhances package handling efficiency. Depending on the quality and thickness of the material used, paper may absorb shocks better than plastic pillows, potentially providing improved protection for shipped items.

Related: How Amazon Businesses Can Leverage Sustainability Initiatives to Drive Brand Growth and Reputation

Future Outlook

Looking ahead, Amazon plans to continue phasing out single-use plastics globally, aiming for a more sustainable and efficient delivery network. This initiative highlights the importance of rethinking packaging practices in eCommerce to meet evolving environmental standards and consumer preferences.

As Amazon sets a precedent with its packaging sustainability efforts, sellers are encouraged to explore alternative packaging materials and methods that align with these goals. Adapting to these changes not only supports green initiatives but also enhances customer satisfaction and brand reputation in an increasingly eco-conscious market.

Related: Right-Size Products To Save on FBA Fees, Master Carton Calculator to Optimize Packaging & Reduce Shipping Costs

In recent developments, Amazon finds itself amidst several controversies, highlighting various concerns across different fronts.

From owing over $500 million for patent infringement to facing scrutiny over FDA warning letters, the eComm giant is in hot water. 

Moreover, Amazon’s legal battles extend globally, with fines in Poland for deceptive practices and regulatory investigations in the US for alleged unlawful marketing. 

Read on as we deep dive into the intricacies of these unfolding events and their implications.

1. Amazon Web Services Slapped with $525 Million Fine for Patent Violation

A federal jury has delivered a major blow to Amazon Web Services (AWS), the cloud computing arm of Amazon, by ruling that it infringed on multiple patents held by Kove, a company specializing in computer storage and data management technologies. 

The verdict, announced on Wednesday, mandates Amazon to pay $525 million in damages to the Chicago-based tech firm. 

Kove, founded in the West Loop of Chicago, owns three patents (see below) related to systems and methods for managing storage, search, and retrieval of information across computer networks. 

• Patent 640: Network distributed tracking wire transfer protocol
• Patent 170: Network distributed tracking wire transfer protocol
• Patent 978: Method and apparatus for managing location information in a network separate from the data to which the location information pertains

The patented technology, invented by Kove’s CEO John Overton and Stephen Bailey, significantly reduces computer processing time for data retrieval and serves as the foundation for various critical technologies, according to Renato Mariotti, the company’s legal representative.

The lawsuit, filed in December 2018, alleged that AWS utilized Kove’s patented technology in its cloud computing products (S3 and DynamoDB) without authorization. While the jury ruled the infringement as “not willful,” it still represents a substantial legal victory for Kove. Mariotti expressed confidence in the strength of the evidence favoring Kove and anticipates success if an appeal is pursued.

Although AWS did not immediately respond to requests for comment, the ruling underscores the potential financial and reputational consequences for the retailer’s cloud computing arm. As the most lucrative subsidiary of Amazon, the $525 million damages could dent AWS’s profitability and impact its standing in the highly competitive cloud computing market.

Furthermore, the verdict against AWS highlights the broader implications of patent infringement for tech companies like Amazon. Despite its vast resources, Amazon’s failure to respect intellectual property rights underscores the importance of upholding patent laws and protecting innovation.

The ruling also signals potential legal challenges for other tech companies like Google, as Kove has filed a separate lawsuit against Google for allegedly infringing on the same patents. The outcome of these legal battles could reshape the landscape of intellectual property rights in the technology sector.

In response to the verdict, Overton, Kove’s CEO, emphasized the company’s commitment to innovation and its pursuit of justice. Despite years of litigation, Overton remains steadfast in Kove’s mission to deliver transformative technologies and uphold the integrity of the patent system.

In sum, the jury’s decision in favor of Kove serves as a cautionary tale for technology corporations, highlighting the importance of respecting intellectual property rights and the potential consequences of patent infringement in the digital age. As AWS contemplates its next steps, the verdict underscores the need for ethical and legal compliance in the fiercely competitive tech industry.

2. Amazon Under FDA Scrutiny

In Q4 of 2023, Amazon faced the heat from the US FDA through two warning letters that sparked curiosity and concern in the retail sector. These letters, initially puzzling, shed light on the FDA’s stringent enforcement stance regarding regulated products sold by retailers like Amazon. While the warnings seemed to single out Amazon, their underlying implications hold significance for all retailers navigating compliance in the realm of health and wellness products.

Homeopathic Eye Drop Drug Warning Letter

On November 13, 2023, the FDA issued a warning letter to Amazon, citing the sale of the following homeopathic eye drop drugs.

• Similasan Pink Eye Relief
• The Goodbye Company Pink Eye
• Can-C Eye Drops
• Optique 1 Eye Drops
• OcluMed Eye Drops
• TRP Natural Eyes Floaters Relief
• Manzanilla Sophia Chamomile Herbal Eye Drops

The letter highlighted concerns regarding the safety and labeling of these products, raising questions about retailers’ responsibilities in ensuring compliance with FDA regulations. Despite the apparent specificity of the warning, a deeper examination revealed broader implications for retailers across the board.

Tainted Men’s Health Supplement Warning Letter

Less than a month later, on December 20, 2023, Amazon received another warning letter from the FDA, this time regarding the sale of dietary supplements spiked with active pharmaceutical ingredients (APIs) sildenafil and tadalafil.

Sildenafil, found in Viagra, and tadalafil, found in Cialis, are exclusively prescribed for treating erectile dysfunction and are strictly prohibited in dietary pills. These potent drugs may induce adverse effects like headaches and flushing, and they can pose serious risks when interacting with medications containing nitrates, potentially leading to dangerously low blood pressure. The drugs in question include:

• MANNERS Energy Boost
• Round 2
• WeFun
• Genergy
• Big Guys Male Energy Supplement
• Mens Maximum Energy Supplement
• X Max Triple Shot Energy Honey

The letter underscored the need for retailers to exercise due diligence in product vetting and compliance, even though such obligations traditionally fall on manufacturers and brand owners.

What This Means

While initially perplexing, these warning letters highlight the agency’s focus on safeguarding public health and holding all stakeholders accountable for product safety. Despite the absence of explicit guidance on retailers’ responsibilities, the underlying message is clear: retailers must be vigilant in monitoring and vetting the products they sell to ensure compliance with FDA regulations.

This development draws attention to the evolving regulatory landscape in which retailers operate, emphasizing the need for proactive compliance measures to mitigate risks and uphold consumer safety. In response, Amazon has recently introduced stringent safety measures for dietary supplements, mandating verification by third-party Testing, Inspection, and Certification (TIC) organizations.

Overall, as Amazon navigates these challenges, the broader retail industry must also heed the lessons learned and prioritize regulatory compliance to maintain consumer trust and avoid potential enforcement actions.

3. Legal Battle Fallout: Amazon’s EU Ad Operations Exposed

Amazon has been mandated by the Court of Justice of the EU (CJEU) to provide transparency about its advertising operations within the European Union under the Digital Services Act (DSA). 

This ruling comes after Amazon lost an appeal seeking temporary suspension of its obligation to  

“compile and make publicly available an advertisement repository containing detailed information on its online advertising.” The move towards transparency aims to ensure fair practices among “gatekeeper” platforms like Amazon, as mandated by the Digital Markets Act (DMA). This report delves into the significance of this ruling and its potential impact on Amazon and digital advertising in the EU.

Implications for Amazon

The creation of an Amazon ads library necessitated by the ruling presents a steep challenge for Amazon. While the company contests its designation as a Very Large Online Platform (VLOP) under the DSA, compliance with the transparency rule is now mandatory. 

Failure to adhere to these regulations could result in massive fines (up to 10% of the company’s total global annual revenue), periodic penalty payments, or even structural remedies. Amazon’s assertion of prioritizing customer safety underscores the need for strategic alignment with regulatory requirements.

Impact on Digital Advertising

For marketers and advertisers, the establishment of an Amazon ads library offers unprecedented access to insights into the retail giant’s advertising ecosystem. This transparency enables marketers to optimize their ad campaigns effectively, potentially improving performance and ROI on the platform. By understanding how Amazon showcases and profits from campaigns, advertisers can refine their strategies to resonate better with target audiences and drive desired outcomes.

Analysis of CJEU’s Decision

The CJEU’s decision not to award Amazon the temporary suspension reflects a commitment to upholding the objectives of the DSA and ensuring a fair online environment. By prioritizing the interests defended by EU lawmakers, the court emphasizes the importance of regulatory compliance and accountability for large online platforms like Amazon. The ruling also highlights the significance of transparency in safeguarding fundamental rights and promoting a level playing field in the digital marketplace.

As Amazon deals with the implications of the CJEU’s ruling, the mandate for transparency in advertising operations heralds a new era of accountability for online platforms operating in the EU. While Amazon expresses disappointment with the decision, adherence to regulatory requirements remains paramount.

Marketers stand to benefit from enhanced transparency, gaining valuable insights to optimize their advertising strategies on the platform. Moving forward, regulatory compliance and responsible business practices will be imperative for Amazon and other gatekeeper platforms to maintain trust and integrity in the digital ecosystem, and to prevent the EU from levying heavy fines. 

4. Amazon Fined in Poland for Misleading Customers

On March 27, 2024, Polish regulators fined Amazon EU SARL, the Luxembourg-based operator of Amazon’s Polish website, $7.8 million (PLN 31 million) for deceptive consumer practices. The fine was imposed due to what regulators deemed as misleading information provided to consumers regarding the timing and conditions of their purchases.

The country’s antitrust watchdog, the Office of Competition and Consumer Protection (UOKiK), found discrepancies in Amazon’s disclosure of delivery times, cancellation policies, and consumers’ rights, leading to what they termed as “irregularities” in the online shopping process. 

UOKiK highlighted instances where Amazon canceled orders without promptly issuing refunds, creating inconvenience for customers. The watchdog also identified “dark patterns,” such as countdown timers inducing urgency in purchasing, as tactics aimed at influencing consumer behavior. Additionally, Amazon’s failure to meet self-imposed shipping deadlines further compounded the issue, causing delays and dissatisfaction among shoppers.

In response to the fine, Amazon has stated its intention to appeal the decision, emphasizing its commitment to fast and reliable delivery. The company asserts that it has continuously worked to improve the customer experience on its platform and disagrees with the UOKiK’s assessment and penalty.

This regulatory action stresses the importance of transparency and accountability in eCommerce operations, particularly concerning consumer rights protection. Amazon’s reputation as a reliable online retailer may face scrutiny in the Polish market due to these findings.

The imposed fine serves as a deterrent to Amazon and other eComm platforms, signaling the consequences of non-compliance with consumer protection regulations. Moving forward, Amazon must address the identified issues to regain consumer trust and ensure compliance with Polish laws.

Despite the possibility of appealing the decision, Amazon’s response to these allegations will be closely monitored, as it may impact its standing in the Polish eCommerce landscape and influence consumer perceptions of the brand.

Related: FTC Lawsuit Alleges Amazon of Tricking and Trapping Customers into Recurring Prime Subscriptions, Amazon Faces Tougher Scrutiny Under EU’s Digital Services Act (DSA), Amazon Faces Backlash for Alleged Abusive Practices

5. FCC Probes Amazon’s Alleged Sale of Illegal Electronic Devices

The US Federal Communications Commission (FCC) has initiated investigations into Amazon and other retailers for allegedly marketing and selling radio signal jammers. The investigation comes in response to concerns regarding the sale of equipment without proper FCC authorization, which violates Commission rules. 

Investigation Details

Jonathan Uriarte, Director of Strategic Communications at the FCC, confirmed ongoing investigations into retailers, including Amazon, for potential violations related to the marketing and sale of unauthorized electronic equipment. The focus is on devices sold without proper FCC authorization, which raises concerns about compliance with federal regulations.

Allegations Against Amazon

NBC News reported instances of online retailers, including Amazon, offering radio frequency jammers disguised as drone deterrents or privacy tools. These devices, prohibited by federal laws, were marketed for disabling security cameras and blocking Wi-Fi networks.

The Commission cautions against the use of jammers, citing their potential to interfere with critical emergency communications, disrupt standard phone services, and pose risks such as confusion in airport navigation systems. Emphasizing their illegality, the FCC prohibits the sale, operation, marketing, and importation of jammers in the US. Furthermore, even local law enforcement agencies are not authorized to utilize these devices under legal regulations.

The report identified nine independent sellers on Amazon engaged in the sale of such “jammer” devices.

What this Means for Amazon

• Legal Ramifications: If found guilty of selling unauthorized electronic devices, Amazon could face hefty penalties and legal consequences. Violating FCC regulations may lead to fines, restrictions on product sales, and damage to the company’s reputation.
• Regulatory Compliance: Amazon’s failure to ensure compliance with FCC rules raises questions about its oversight mechanisms and seller verification processes. Strengthening compliance measures will be crucial to avoid future violations and maintain regulatory integrity.
• Consumer Trust: Allegations of selling unlawful devices may erode consumer trust in Amazon’s marketplace. Concerns about product authenticity, safety, and legality could drive customers away, impacting Amazon’s reputation and revenue.
• Marketplace Integrity: The investigation points out broader challenges related to regulating online marketplaces. Ensuring the integrity of product listings and preventing the sale of illegal goods is essential for maintaining marketplace trust and accountability.

The FCC’s investigation into Amazon and other retailers for the unlawful sale of radio jammers focuses attention on the significance of regulatory compliance and marketplace integrity. Amazon faces potential legal and reputational risks, requiring proactive measures to address compliance gaps and restore consumer trust. As the investigation unfolds, stakeholders, sellers and customers alike may monitor developments to assess the impact on Amazon’s operations and regulatory responsibilities.

The legal and regulatory spotlight is shining on the Amazon corporation of late, beginning to chip away at profit and revenue streams. The deep scrutiny of so many aspects of Amazon’s operations will undoubtedly lead to the company taking a more proactive approach to the policies and activities along all levels of its business.

Temu has recently made key adjustments to its shipping policies, reflecting both strategic adaptation and emerging challenges in its competition with industry giant Amazon.

Over the past month, Temu has begun to change its approach to shipping, signaling potential struggles and strategic shifts to maintain its market position, albeit with some drawbacks.

Key Changes in Shipping Policies

Delivery Guarantee Reduction

Initially, Temu offered a £5 credit if a delivery arrived even a day late. This guarantee has now been reduced by 20% to £4, indicating a possible strain on their logistics capabilities and a need to manage customer expectations more cautiously.

Increased Minimum Shipping Limits

According to Channel X, the minimum order value for free shipping has been raised by 50% from £10 to £15. This strategic move aims to increase the average order size, encouraging customers to purchase higher-value products or larger quantities, thereby optimizing shipping efficiency and cost-effectiveness.

Introduction of Land Shipping Discounts

Temu is now offering discounts for customers who choose land shipping over air freight. While air freight promises delivery within 4 to 9 business days, land shipping extends the delivery window to 14 to 25 business days.

For orders over £15, customers can receive a £2 discount, and for orders exceeding £100, the discount can be nearly £6. This option aims to alleviate the burden on air freight logistics while providing cost savings to customers willing to wait longer for their orders.

How Temu’s Shipping Changes Might Affect Customer Experience

Temu’s recent adjustments to its shipping policies can have several implications for customer experience, both positive and negative.

Extended Delivery Times for Cost Savings

• Impact: Customers who opt for the land shipping discount may experience significantly longer delivery times, ranging from 14 to 25 business days.
• Customer Experience: While the discount might be attractive to budget-conscious shoppers, the prolonged wait could lead to frustration for those who are used to quicker deliveries. This might particularly impact customers who need items urgently, are making holiday or seasonal purchases that must arrive on time, who are accustomed to the faster turnaround times typically offered by competitors like Amazon,.

Higher Minimum Order Value for Free Shipping

• Impact: The increase in the minimum order value from £10 to £15 forces customers to either buy more products or higher-value items to qualify for free shipping.
• Customer Experience: This change could be seen as a barrier by customers who prefer making smaller purchases. However, it might also encourage them to explore and buy additional items, potentially increasing their overall satisfaction with the variety and value they find on Temu.

Reduced Delivery Guarantee Credit

• Impact: Reducing the delivery guarantee credit from £5 to £4 means customers receive less compensation for late deliveries.
• Customer Experience: While this reduction might seem minor, it could affect customer perception of Temu’s commitment to timely deliveries. Customers who previously valued the assurance of a higher compensation might feel less confident in the reliability of Temu’s shipping promises.

Potential Positive Outcomes

• Cost Savings and Flexibility: The option to choose between air and land shipping provides customers with flexibility based on their needs. Those not in a hurry can save money, potentially increasing their satisfaction with the overall value provided by Temu.
• Higher Average Order Value: Encouraging larger purchases can lead to customers discovering more products they like, potentially increasing their satisfaction and loyalty.

Potential Negative Outcomes

• Frustration with Delays: Customers accustomed to fast shipping might be frustrated by longer wait times, especially if they are unaware of the trade-offs when opting for discounted shipping.
• Perceived Value Reduction: The reduction in the delivery guarantee credit could make some customers feel that Temu is less committed to compensating for delays, which might impact their trust and satisfaction.

Implications for Temu and the Broader Market

Temu has been heavily reliant on air freight, filling hundreds of planes weekly to transport goods from China to the West. This heavy dependence on air freight has led to global disruptions, particularly with planes often returning to China nearly empty. By incentivizing land shipping, Temu aims to reduce these logistical inefficiencies.

Moreover, this move also suggests a potential future reliance on local deliveries from UK, EU, and US retailers, mirroring a strategy similar to Amazon’s use of local warehouses to expedite delivery times.

A critical challenge for Temu is whether customers accustomed to relatively quick delivery times will adapt to waiting up to a month in exchange for a discount. This change could impact the Chinese retailer’s logistics strategy and overall customer satisfaction.

How Amazon Sellers Can Take Advantage of Temu’s Shipping Changes

Temu’s new shipping limits present a unique opportunity for Amazon sellers to leverage their strengths and potentially capture more market share. Here’s how sellers can take advantage of these changes:

Emphasize Faster Delivery Times

With Temu extending their delivery times for cost savings, Amazon sellers can highlight their ability to provide quicker shipping options, leveraging Amazon’s robust logistics network.

Promote Prime shipping benefits, including next-day or two-day delivery, in marketing materials and product listings to attract customers who prioritize fast delivery.

Competitive Pricing and Value

While Temu offers discounts for longer shipping times, Amazon sellers can focus on competitive pricing without compromising on delivery speed. Highlight the value proposition of getting high-quality products delivered promptly.

Related: Best Amazon Pricing Strategies

Enhanced Customer Service

The reduction in Temu’s delivery guarantee credit might impact customer trust. Amazon sellers can capitalize on this by emphasizing their commitment to customer satisfaction.Ensure exceptional customer service with clear communication, easy returns, and quick resolutions to any issues. Emphasize that your brand is backed by the trust and reliability of Amazon. Highlight positive customer reviews and testimonials that speak to reliable service.

Related: Monitor and Optimize Your Customer Service Performance, Amazon Review Analysis Using AI, Optimizing Amazon Listings With Customer Feedback

Leverage FBA

Amazon FBA can provide an edge in managing inventory and ensuring fast delivery, something that might become a pain point for Temu customers opting for land shipping.

Utilize FBA to ensure products are eligible for Prime. Promote the benefits of FBA, such as faster delivery, free shipping and hassle-free returns.

Increase Marketing Efforts During Transition

During Temu’s transition to new shipping policies, some customers might be looking for alternatives due to longer delivery times.Ramp up marketing efforts to capture these customers. Use targeted ads on Google, social media, and Amazon’s own advertising platform to reach potential buyers who are frustrated with longer shipping times on Temu.

Related: Diversifying Your Ad Campaigns With Amazon DSP, Boost Your Brand with Targeted Strategies, Amazon Cosmo and DSP

Offer Bundles and Value Packs

With Temu raising the minimum order value for free shipping, Amazon sellers can attract customers by offering bundles or value packs that provide better deals at similar price points.

Create product bundles that offer more value for the money and promote these bundles in your listings. Emphasize the convenience and savings of purchasing multiple items together.

Capitalizing on Temu’s shipping changes allows Amazon sellers to position themselves as the more reliable and efficient option. By focusing on faster delivery, competitive pricing, exceptional customer service, and the benefits of FBA, Amazon sellers can attract customers who might be dissatisfied with Temu’s new shipping policies. Increased marketing efforts during this transition period can also help capture a larger share of the market.

Final Thoughts

Temu’s changes in shipping policies reflect strategic moves to manage logistics and costs better, but they come with trade-offs that can significantly impact customer experience.

By offering discounts for longer shipping times and raising the minimum order value for free shipping, Temu aims to streamline operations and encourage larger purchases. However, these changes could lead to frustration among customers who value quick deliveries and lower thresholds for free shipping.

Temu will need to carefully balance these factors to maintain customer satisfaction while optimizing their shipping processes.

Related: How Temu Might Compete with Amazon in the US, Battle for Last-Mile Logistics Heats Up as Amazon Expands Same-Day Delivery Network

Amazon has officially announced the dates for its highly anticipated Prime Day 2024 event, marking the 10th anniversary of this shopping extravaganza.

Set to kick off on Tuesday, July 16 at 12:01am PDT and run through July 17, the two-day event promises Prime members exclusive access to millions of deals across a wide range of brands and product categories.

Prime Day 2024 is expected to feature a plethora of new deals dropping as frequently as every five minutes during select periods, ensuring that members can continuously discover new offers. Additionally, the event will bring back invite-only deals, allowing Prime members to request invitations for exclusive deals anticipated to sell out quickly.

Major invite-only deals include up to 40% off Sony Wireless Headphones and up to 30% off Peloton products.

“Prime Day is a celebration of the value we bring to members all year long, and features millions of deals across more than 35 product categories as well as discounts on Amazon devices, quality entertainment, groceries, travel, and more during the event,” said Jamil Ghani, Vice President of Amazon Prime.

Last year, Amazon customers saved nearly $24 billion from deals and coupons across the whole of 2023, with Prime members enjoying over $2.5 billion in savings during Prime Day alone.

Highlights of Prime Day 2024

1. Exclusive Deals for Prime Members

Brands: Discounts on popular brands such as Clinique, Allbirds, and Kiehl’s.

New Deals: Fresh deals every five minutes during select periods.

Invite-only Deals: Special offers on high-demand items like Sony Wireless Headphones and Peloton products.

2. Back-to-School and Off-to-College Savings

Guides: Comprehensive shopping guides for parents, students, and teachers.

Filters: Convenient filters to search products by price and delivery speed, including Same-Day Delivery in over 110 US metro areas.

Discounts: Up to 40% off on AmazonBasics school supplies and dorm staples, and Amazon Essentials clothing.

3. Early Deals

Access: Prime members can start enjoying early deals on brands like New Balance, HP, and Coach.

Influencer Drops: Exclusive deals dropped by influencers like Jess Sims and Millie Bobby Brown from July 8 to July 15.

For those who are not yet Prime members, now is the perfect time to sign up ($14.99 per month or $139 per year) or start a 1-week $1.99 trial to take advantage of the member-exclusive event.

Rivaling Events to Amazon Prime Day

Amazon isn’t the only eComm powerhouse gearing up for a massive July sales event.

Both Walmart and Target have announced their own sales events leading up to Amazon Prime Day, creating a competitive environment for shoppers’ attention.

Walmart is hosting its largest savings event ever, “Walmart Deals,” which will start on Monday, July 8 at 5pm Eastern and run through Thursday, July 11 at 11:59pm Eastern. Walmart+ members will get early access to these deals starting at noon Eastern on July 8. A free, 30-day membership trial is available. 

Meanwhile, Target has revealed the return of Target Circle Week from July 7 to July 13. This event will feature significant discounts on back-to-school essentials, up to 50% off select toys, up to 40% off kitchen items, and 30% off family apparel, bedding, and bath products.

Last-Minute Preparations: How Can Sellers Leverage Prime Day 2024

For sellers, Prime Day presents a significant opportunity to boost their sales and visibility. Below are the implications and strategies for sellers. 

Increased Traffic and Sales

The massive influx of shoppers during Prime Day can drive substantial traffic to listings. Be sure to prepare by ensuring inventory levels are adequate to meet the surge in demand. You may also want to set up low stock alerts for post-event restock if your sales spikes are greater than anticipated.

Related: Buffer Stock vs Safety Stock vs Anticipation Inventory

Visibility and Brand Exposure

An off-Amazon ads strategy using external traffic ads and DSP can increase page rankings beforehand to increase visibility during Prime Day and drive more customers to your listings during the event. 

Enhanced visibility through featured deals can lead to long-term customer acquisition. Utilize Amazon’s advertising options, such as Sponsored Products and Lightning Deals, to increase exposure.

Related: Amazon Ads and Retargeting with DSP

Optimized Listings

Improved product listings can enhance search rankings and conversion rates. Ensure your listings are fully optimized with high-quality images, detailed descriptions, and relevant keywords. Additionally, keeping your storefront up-to-date with Prime Day promotions is just as important.

Related: The Ultimate Guide to Amazon Creative Listing Optimization

Promotions and Discounts

Competitive pricing and attractive promotions can entice more customers. Consider offering exclusive Prime Day discounts and bundle deals to attract bargain hunters.

Early Engagement

Early access to deals can capture customer interest ahead of Prime Day. Promote early deals and engage with influencers to build hype and drive early sales. You can also send out email campaigns to your customer base highlighting your Prime Day deals.

Related: Two Amazon Marketing Tactics to Implement in 2024

Reduce Storage Fee Liabilities

Prime Day is a perfect opportunity to sell through those slow-selling products gathering dust – and storage fees – on FBA shelves. Create ad campaigns and pricing strategies designed to increase sales and reduce future storage and aged inventory fees. The sales boosts may even revive declining ASINs, turning products from fee liabilities into revenue assets.

Related: Slow Sellers Inventory Strategy

Maximize Profits with Returns Reimbursements

Adopt an effective Customer Returns and Lost Shipments reimbursement plan to retain your earnings. Eager impulse buying can lead to buyer’s remorse and higher than normal returns. The chaos of shipment and fulfillment processes within Amazon’s fulfillment centers leads to an increase in lost shipments. Having a solid strategy to mitigate the losses incurred will maximize your Prime Day profits.

Related: Game-Changing Customer Returns Services for 3P Sellers

Customer Retention

Post-Prime Day, you can leverage new customer relationships to foster long-term brand loyalty. Follow up with customers using Amazon’s Tailored Audiences tool to send emails, e.g., ‘Thank You’ messages or promotional campaigns, to encourage repeat purchases. 

Download Carbon6’s free Prime Day Playbook for a more in-depth guide.

Prime Day 2024 is not just a sales event. It’s a chance for you to significantly amplify your brand presence and customer base. By preparing strategically and leveraging the unique opportunities presented, you can maximize your success during this 2-day sales bonanza.

Target has announced a partnership with Shopify, aiming to expand its eCommerce capabilities and strengthen its marketplace presence. This strategic move is expected to boost Target’s online performance by integrating select Shopify merchants into its third-party digital marketplace, Target Plus, and offering some of these sellers’ products in physical stores.

Boosting Online Sales

Target’s decision to incorporate Shopify sellers is anticipated to enhance its online marketplace, allowing the company to stand head to head with Amazon and Walmart.

Shopify merchants in the US can now apply to sell on Target Plus and manage their orders through Shopify’s Marketplace Connect app. This integration will allow Shopify’s approximately two million merchants to access new sales channels, including possible placement in Target’s brick-and-mortar stores, fostering significant collaboration opportunities for both companies.

Driving Digital Growth

In the latest earnings report, Target revealed a decline in Q1 comparable sales by 3.7%. However, digital comparable sales grew by 1.4%, with same-day services seeing a nearly 9% increase. Drive Up offerings, in particular, experienced a 30-fold increase compared to pre-pandemic levels, generating $2 billion in sales in the most recent quarter. Digital sales represented 18.3% of Target’s total revenue, up from 17.5% the previous year.

Putting More Focus on Target Plus

Target Plus, Target’s third-party eCommerce marketplace, is a critical component of the company’s strategy to compete with retail giants like Walmart and Amazon.

Christina Hennington, Target’s Executive VP and Chief Growth Officer, highlighted the importance of growing relevance in their online assortment through Target Plus. The sentiment was focused around personalization and curation of product selection and marketing strategies.

The platform has more than doubled the number of partners and products over the past year, and the partnership with Shopify is expected to further bolster this expansion.

Target-Shopify Integration Benefits 

Bringing select Shopify sellers’ products into Target’s physical stores could increase foot traffic and drive up activity. Target has already seen improvement in discretionary spending categories like apparel, and integrating Shopify’s diverse range of products could amplify this trend. Shopify’s extensive reach in North America, where 54% of its sales occur, aligns well with Target’s online and physical channels, promising mutual benefits.

Implications for Amazon and Walmart Sellers

The Target-Shopify partnership presents a new competitive dynamic for Amazon and Walmart sellers.

As Target strengthens its marketplace and integrates Shopify’s vast merchant base, sellers on Amazon and Walmart must stay agile and innovative. Here are some ways they can prepare for, or perhaps welcome, this development.

• Diversify Sales Channels: Sellers should consider expanding their presence to Target Plus to leverage the new opportunities arising from Target’s enhanced marketplace.
• Focus on Omnichannel Strategies: Like Target, sellers from rivaling platforms should develop omnichannel strategies, ensuring a seamless shopping experience across online and physical stores.
• Leverage Analytics: Utilize analytics tools to monitor performance and adapt strategies based on consumer behavior and sales trends.
• Stay Competitive: Monitor pricing strategies and offer promotions or exclusive deals to attract more customers and remain competitive in a growing marketplace.

Target’s partnership with Shopify marks a significant step in its eCommerce strategy, promising growth and new opportunities for both companies.

For Amazon and Walmart sellers, this development underscores the need for continuous innovation and strategic adaptation to maintain a competitive advantage in the rapidly-changing eComm industry.

Related: Exploring Multichannel Selling for Sellers, Should You Be Selling on These New Sales Channels, How Amazon Sellers Should Use Shopify To Strengthen Their Profits

Deep dive into the latest feature updates that could change the way you sell on Amazon. 

First, we explore the launch of Subscribe & Save for seller-fulfilled orders on June 27th, which promises to streamline recurring purchases and boost sales. Next, we discuss how increasing sell-through rates with Amazon-recommended Outlet Deals via the FBA Inventory Tool can help you reduce total storage fees.

Additionally, we’ll cover the new Amazon Business features announced at Amazon Business Exchange (ABX), aimed at enhancing B2B interactions and efficiencies.

Finally, we’ll look at Amazon’s expansion of generative AI listing tools to sellers across Europe, marking a significant step in optimizing product listings.

These announcements can be impactful to your business, offering new opportunities and strategies to enhance your operations and stay competitive in the market.

1. Amazon Adds Subscribe & Save Option to Seller-Fulfilled Orders

Amazon has announced that its popular Subscribe & Save (SNS) program will expand to include eligible seller-fulfilled products starting June 27, 2024. Previously available only to FBA sellers, this move aims to provide Fulfilled by Merchant (FBM) sellers with the same opportunities to “boost conversions, drive repeat purchases, and grow brands.”

How SNS for Seller-Fulfilled Orders Works

The Subscribe & Save program offers customers discounts on frequently used products along with the convenience of auto-delivery.

For non-FBA sellers, this means that eligible, replenishable products will be automatically enrolled in the program at the default discount set in the SNS settings. If you previously set a default discount for FBA Subscribe & Save, this same discount will now apply to your seller-fulfilled products.

Amazon will also fund an additional 5% discount for customers who have five or more subscriptions scheduled to arrive on the same delivery day. If you don’t have a default discount set, your eligible products will be added at a 0% seller-funded base discount.

Benefits for Non-FBA Sellers

1. Increased Conversions: By offering discounts and the convenience of auto-delivery, sellers can attract more customers and boost sales.
2. Repeat Purchases: The auto-delivery feature encourages customers to make repeat purchases, fostering customer loyalty.
3. Brand Growth: Being part of the Subscribe & Save program can help small and medium-sized brands gain more visibility and grow their customer base.

Steps to Set Your Default Enrollment Discount

To ensure your products are enrolled at the desired discount, go to Growth > Explore programs > Increase conversion > Subscribe & Save > Learn more.

From this page, you can also:

• Opt out of automatic enrollment
• Update your discount funding for each product after the June 27 launch
• Review your Performance dashboard

For detailed information about product eligibility, refer to the Subscribe & Save for sellers guide on Amazon.

Seller Insights and Reactions

The announcement has been met with positive feedback from sellers.

One seller commented, “This is great. Nice to see some of the benefits previously limited to FBA becoming available to MFN Sellers. Fingers crossed that BUNDLES gets a similar treatment.”

This sentiment highlights the potential for even more inclusive benefits for non-FBA sellers in the future.

An Amazon representative clarified a key point, “Just to confirm and clarify, opting out from automatic enrollment will not impact existing Subscribe & Save selection. It only prevents the enrollment of additional selection.” This reassurance helps sellers understand that their current Subscribe & Save products will remain unaffected by changes in automatic enrollment settings.

In sum, the expansion of Amazon’s Subscribe & Save program to include seller-fulfilled orders presents a big opportunity for non-FBA sellers. By leveraging this program, sellers can enhance customer experience, increase sales, and build stronger brand loyalty. And with the ability to set and manage discounts, sellers have more control and flexibility to optimize their strategies and succeed on Amazon.

2. Increase Sell-Through To Reduce Total Storage Fees With Amazon UK Outlet Deals Via FBA Inventory Tool

You can now review Amazon UK Outlet deal recommendations in the FBA Inventory tool and create deals to be featured on the Amazon Outlet page once approved by Amazon.

This powerful tool may help enhance sell-through rates, improve cash flow, optimize inventory levels, and reduce total storage fees, making it an essential strategy for efficiently managing excess inventory in Amazon warehouses.

Increasing Sell-Through

By participating in Amazon Outlet deals, you can increase the sell-through rate of your products. Faster-moving inventory means products spend less time in storage, which can lead to higher overall sales and customer satisfaction. This is particularly crucial in a competitive market where quick turnover can give you an edge.

Improving Cash Flow

Outlet deals can help improve cash flow by converting slow-moving or excess inventory into revenue more quickly. This immediate infusion of cash can be reinvested into purchasing new stock, marketing efforts, or other business needs, providing you with the financial flexibility needed to navigate rising Amazon costs and maintain a competitive edge.

Optimizing Inventory Levels

Efficient inventory management is critical for any seller, and Outlet deals provide a way to optimize stock levels. By clearing out excess inventory, you can make room for new products, ensuring that warehouse space is used effectively and that they are always ready to meet customer demand.

Reducing Total Storage Fees

Excess inventory can lead to high storage fees, especially if products remain in Amazon’s fulfillment centers for extended periods. Participating in Outlet deals helps reduce these fees by moving products out of storage more quickly. This not only lowers costs but also prevents long-term storage fees that can erode profit margins.

How Outlet Deal Recommendations Work

To get started with Amazon Outlet deals, you can review the recommendations provided in the FBA Inventory tool. ASINs must meet the following criteria to be eligible for listing on Amazon Outlet:

• Have inventory in Amazon fulfillment centers for at least 90 days
• Have at least 1 unit of inventory on-hand
• Be in New condition
• Have a product rating of at least 3 stars or no reviews
• Are not currently enrolled in another deal promotion such as Lightning Deals
• Have not appeared as an Outlet deal in the past 60 days
• Is not restricted for sale in your store

For more detailed information and to manage Outlet deals effectively, refer to the Amazon Outlet guide, which covers:

• Create And Manage An Amazon Outlet Deal
• How To Check The Status Of An Outlet Deal
• Cancel An Amazon Outlet Deal Submission
• Combined Amazon Outlet Deal And Voucher Discount
• Amazon Outlet Best Practices
• Frequently Asked Questions

By leveraging these Outlet deal opportunities, you can maintain a lean, efficient inventory while boosting sales and improving your overall business performance amid the ever-increasing costs and competition on the Amazon marketplace.

3. Streamlining Procurement: Amazon Business Introduces New Tools and Enhancements

At the 2024 Amazon Business Exchange (ABX) event, Amazon Business rolled out a series of new features and improvements aimed at simplifying and modernizing the procurement process for large business customers.

These enhancements include the Amazon Business App Center, Cross-domain Identity Management, and updates to Budget Management and Guided Buying solutions.

Designed to address the complex needs of multinational enterprises, universities, government agencies, education organizations, and healthcare networks, these tools promise to transform how businesses shop for supplies.

Addressing Procurement Challenges

Recent study by Amazon Business revealed that UK procurement teams face significant challenges in driving efficiencies within their organizations. The research found that 49% of respondents cited the complexity of systems and multistep processes as primary obstacles.  

Consequently, 70% of UK procurement leaders acknowledged the need to optimize their procurement functions. Business buying was described as cumbersome and time-consuming, with teams spending excessive time on tasks related to processing orders. Improved procurement tools were seen as a crucial solution to these issues.

New Amazon Business Features

Amazon Business App Center

The Amazon Business App Center is a new one-stop shop where business customers can discover, quickly set up, and connect their Amazon Business account with more than 25 third-party apps.

These apps cover integrated shopping, accounting management, expense management, inventory management, rewards and recognition, and business analytics. This centralized hub saves time and money by eliminating the need for custom solutions, streamlining the discovery and integration process.

Cross-Domain Identity Management

This feature addresses the challenge of managing purchasing powers within large organizations. Cross-Domain Identity Management automatically syncs users and group data from an organization’s identity provider with their Amazon Business account. This automation helps admins maintain and update accounts more efficiently, ensuring that only active employees retain purchasing capabilities.

Budget Management Feature Upgrade

The enhanced Budget Management tool simplifies setting and reviewing time-bound budgets across an organization. Business customers can set spend thresholds, make budget amounts visible to buyers, and receive notifications when a budget is about to expire.

This feature also includes real-time tracking, usage reports, pre-purchase approvals, and the ability to create a single purchase order (PO) instead of multiple manual orders. These updates enable procurement buyers to make informed purchasing decisions while reducing the time leaders spend auditing purchases.

Improved Guided Buying

Guided Buying helps leaders manage employee spending by guiding buyers towards decisions that align with organizational preferences and goals.

A new toolbar allows account administrators to prefer products with sustainability certifications in the Climate Pledge Friendly program with a single click. Leaders can also restrict, block, and require approvals for certain product categories. This feature helps procurement leaders save time educating employees on appropriate purchases through easy-to-follow visuals.

Implications for B2B Businesses

Amazon Business aims to revolutionize how companies shop for supplies through unmatched selection, deep discounts, and smart capabilities. These new features are designed to address the most significant challenges faced by procurement teams, allowing businesses to use their resources more effectively and navigate unexpected challenges.

As Shelley Salomon, Worldwide VP of Amazon Business, stated, “We don’t just react to the biggest challenges our customers have shared with us; we get ahead of them with new technologies so our customers can use their resources to navigate the unexpected and continue expanding their business.”

By implementing these new tools, Amazon B2B empowers organizations to streamline their procurement processes, improve efficiency, and drive growth.

Related: Understanding the UK Procurement Act, Euro B2B Opportunities Expand on Amazon, Amazon Continues to Dominate B2B While Shopify Plays Catch Up

4. Amazon Expands Generative AI Listing Tools to Sellers Across Europe

Amazon has unveiled a significant expansion of its generative AI listing tools, now available to sellers in France, Germany, Italy, Spain, and the United Kingdom. These innovations aim to simplify product listing creation and enhance existing listings, thereby resonating more effectively with customers and boosting sales.

Amazon has a history of leveraging AI to support sellers, from personalized product recommendations and demand forecasting to dynamic pricing strategies and premium content generation.

The recent rollout of generative AI tools across Europe marks a strategic move to empower small and medium-sized enterprises (SMEs) by streamlining the listing process. Sellers can now quickly generate high-quality product titles, descriptions, and other details by inputting a few descriptive words or uploading a product image, significantly reducing the time spent on these tasks.

For instance, sellers can use one of the following options in the “List Your Products” feature to:

• Enter a few keywords describing their product.
• Upload a product image from their device.
• Directly enter keywords or upload an image in a blank form.

The tool then generates the product title, bullet points, and description attributes, which you can review and edit before publishing. This not only saves time but also enhances the customer experience by providing richer, more comprehensive product information.

Research conducted in May 2024 among 2,500 SMEs across the mentioned EU countries revealed that AI significantly benefits businesses by saving time, improving content quality, and enhancing profitability.

For example, SME owners reported that using AI reduced the time spent writing product descriptions from eight hours to one hour. Additionally, 33% of SMEs felt that AI-generated content increased a product’s discoverability.

Amazon’s gen AI tools are continuously learning and evolving, promising further enhancements in the future. 
Go to List Your Products and Add one product at a time to get started.

Related: AI Trends Redefining Shopping Experiences, Generative AI Showdown: Amazon vs Walmart, AI and Automation

In this week’s post, we’ll delve into the new Cart Abandoners feature, designed to tackle the persistent challenge of customers failing to complete the checkout process.

Next, we’ll explore the updated Feedback Manager tool in Seller Central, which now offers insights into seller-fulfilled customer service performance through metrics like contacts, response time, and buyer sentiment.

We’ll also cover the AWD storage promotion, providing sellers with a 100% discount on storage fees for their second month if their first shipment is received within the promotional period.

We’ll discuss the upcoming changes in VAT collection for UK and EU sellers, effective August 1, 2024.

Finally, we look at the new FBA Inventory Age & Excess Analytics page that offers valuable trends and key metrics to help sellers manage aging and excess inventory more effectively.

1. Amazon Tackles Cart Abandonment with New Feature

Potential revenue is slipping away daily. Baymard Institute reports 70.19% of online shopping carts are abandoned. Imagine the boost in sales if you could convert even a fraction of those lost opportunities.

Enter Amazon’s Cart Abandoners feature!

This tool enables you to re-engage customers who have left items in their carts, presenting a significant opportunity to boost sales and enhance the overall customer experience.

Leveraging Cart Abandoners for Increased Sales

The Cart Abandoners feature could be a game changer for your business. Here’s how you can utilize this new tool:

• Craft Special Offers: Extend exclusive discounts to cart abandoners to entice them back. These targeted promotions can be the nudge needed to convert hesitant shoppers into buyers.
• Employ Display Ads: Using Sponsored Display Views Remarketing Campaigns, you can target audiences that have visited your product pages but did not buy within the next 90 days. This strategy keeps the products in front of potential buyers, reminding them of their interest and encouraging a return visit to complete the purchase.

What This Means for Your Business

The introduction of the Cart Abandoners feature is a key development for Amazon sellers.

By leveraging this tool, you can fine-tune your marketing strategies and improve your listings. Understanding which products are frequently abandoned can provide insights into potential areas for improvement, such as pricing, product descriptions, or images. Recognizing these pain points is the first step toward resolving them.

More importantly, the ability to re-target potential customers who have shown interest in products but have not yet completed their purchases can lead to higher conversion rates and increased sales. This feature not only enhances the customer experience by offering personalized incentives but also empowers you with actionable data to drive performance improvements.

Amazon’s Cart Abandoners feature is a valuable tool for optimizing your operations, engaging customers more effectively, and boosting your sales amid increasing FBA costs and competition.
To get started, go to Brand Analytics > Customer Loyalty Analytics.

Related: 5 Proven Strategies for Boosting Sales with CVR Marketing and Targeted Personalization

2. Monitor and Optimize Your Customer Service Performance

Amazon recently unveiled an update to its Feedback Manager tool in Seller Central, offering you deeper insights into your seller-fulfilled customer service performance. The update enables you to track three critical metrics:

• Preventable Contacts: This metric refers to customer inquiries or order issues that could have been avoided with better processes, information, or support from the seller. These are interactions where the customer needed to reach out due to a problem or a lack of information that ideally should not have arisen in the first place. For example, customers contacting you because they did not receive their order on time, or the order was incorrect or damaged. Improving order accuracy and ensuring timely deliveries can reduce these contacts.
• Average Contact Response Time: This refers to the average time it takes for a seller to respond to customer inquiries or messages.
• Buyer Dissatisfaction Rate: This key metric measures the percentage of customers who express dissatisfaction with their interactions or experiences with a seller. Calculated based on customer feedback, the BDR includes factors such as negative feedback, customer service complaints, and return or refund requests. This metric helps Amazon ensure high standards of customer service and satisfaction.

With these insights, you can identify areas for improvement in your customer service practices, ultimately enhancing the overall shopping experience for buyers. The tool provides trends for the prior four-week period on a rolling basis, allowing you to stay proactive in addressing customer concerns.

According to Amazon, your account health won’t be affected by these insights, emphasizing their educational purpose.

In response to the update, sellers have expressed mixed sentiments. While some welcome the enhanced visibility into customer service performance, others reported that they were not immediately able to see the changes in their account. Some sellers also suggested additional features for gathering actionable feedback from customers.

Despite the varying feedback, the consensus among sellers is the importance of continuously monitoring and improving customer service practices to maintain a positive reputation and drive success on the Amazon platform.

With access to comprehensive performance data, sellers can refine their customer service strategies and bolster their competitive edge in the marketplace.

Go to Customer Service Insights on Feedback Manager for more details.

Related: Tips to Improve Customer Experience and Reduce Returns

3. Save on Storage: AWD’s Special Second Month Promotion

To incentivize greater AWD adoption, Amazon introduces the Amazon Warehousing and Distribution (AWD) Second Month Free Storage Promotion.

This enticing offer provides sellers with a 100% discount on storage fees for the second month following their first-ever shipment to AWD so long as it is received between May 1, 2024, and July 31, 2024. 

How it Works

The promotion’s eligibility criteria are straightforward.

If your first-ever shipment lands at AWD during the specified promotional period, you automatically qualify for the discount on your second month’s storage fee. This initiative aims to incentivize you to leverage AWD for your inventory storage needs, offering significant cost savings and enhancing profitability.

The discount will be applied automatically and reflected in your monthly fee report.

Suppose your initial shipment reached AWD on May 15, 2024; you’d qualify for a complete waiver of storage fees for June 2024. This discount will reflect in the subsequent fee charging cycle, scheduled for July 2024.

Additionally, you can run the AWD Monthly Storage Fee report from Seller Central to track the dollar amount of the promotional discount.

Promo Runs for a Limited Time Only

Note that the promotion is time-limited, running from May 1, 2024, to July 31, 2024.

To ensure eligibility, you must have your first-ever AWD shipment received at an AWD facility within this period. The promotional discount applies solely to AWD storage fees and cannot be combined with other offers.

While offering these benefits to sellers, Amazon emphasizes adherence to the promotion’s terms and conditions. Any violation may result in the invalidation of the offer, forfeiture of incentives, and potential reversal of applied discounts.

Overall, the AWD Second Month Free Storage Promotion presents an attractive opportunity for you to optimize your inventory management, reduce costs, and maximize profitability.

By taking advantage of this limited-time offer, you can unlock significant value and further enhance your success on Amazon.

Related: Brace for Higher FBA Fees in 2024, Amazon Enters the 3PL Space with AWD, Supply Chain by Amazon

4. Amazon Announces Changes to UK and EU Seller Agreements and VAT Collection

Amazon has announced a pivotal change effective August 1, 2024, impacting its European sellers’ VAT handling.

The transition from Amazon Services Europe S.à r.l. (ASE) to Amazon EU S.à r.l. (AEU) will see sellers invoiced by AEU, with VAT now collected by Amazon and remitted directly to tax authorities. As of this writing, the standard VAT rate in the UK is 20%, while rates across EU member states differ, with a minimum standard rate of 15%.

Under this adjustment, sellers in the UK and select EU countries will see VAT charged on their Amazon fees as some local VAT rules require. This will require sellers to potentially have to recover any overpayment of VAT via their VAT return process. 

Concerns arise among sellers, particularly those on the UK flat rate VAT scheme, who fear overpayment due to the standard VAT collection rate. 

Amazon charges UK sellers VAT based on the location from which the services are billed and the nature of the services provided. Here’s how it works:

1. Advertising Fees

• Previously: UK VAT-registered sellers paid VAT on advertising fees billed from Amazon’s office in London.
• Now: This remains the same, but from August 1, 2024, all other fees will also be subject to UK VAT.

2. Other Fees (Selling on Amazon, FBA, etc.)

• Previously: These fees were billed from Amazon’s office in Luxembourg (ASE) and generally fell under the Reverse Charge Mechanism, where sellers self-account for VAT in their VAT returns.
• Now: Starting August 1, 2024, Amazon will bill these fees from within the UK. As a result, Amazon will charge VAT directly on these fees, and sellers will have to reclaim this VAT through their VAT returns.

Impact on UK Sellers

• VAT Collection: Amazon will collect 20% VAT on all applicable fees and remit it to the HM Revenue & Customs.
• VAT Reclaim: Sellers will need to reclaim the VAT charged by Amazon on their VAT returns, which adds an additional administrative step and stifles cash flow. 

Sample Calculation

Previous Method (Reverse Charge Mechanism)

• Seller receives an invoice for £100 from Amazon Luxembourg (ASE).
• Seller accounts for £20 VAT in their VAT return (Reverse Charge).
• No VAT payment is made to Amazon.

New Method (Post-August 1, 2024)

• Seller receives an invoice for £100 from Amazon UK.
• Amazon charges £20 VAT, totaling £120.
• Seller pays £120 to Amazon.
• Seller reclaims £20 VAT in their VAT return.

Concerns for Small UK Businesses on Flat Rate Scheme

For small businesses on the flat rate scheme, Amazon’s VAT update can result in overpaying VAT because the applicable VAT percentage may be lower than the standard 20% VAT. The discrepancy between the flat rate percentage and the standard 20% VAT charged by Amazon will reduce cash flow and potential profitability if the VAT is unrecoverable.

For example, a seller on a 7.5% flat rate scheme collects £10 from sales and owes £0.75 VAT. Under the new rule, Amazon collects £2 VAT, creating a disparity where the seller is charged £1.25 per sale. 

This poses a significant threat to the viability of small UK businesses, especially when compared to larger companies benefiting from bulk order discounts. Such changes jeopardize the advantages traditionally enjoyed by startups and smaller firms, posing challenges to their sustainability and growth.

Potential Impact on VAT Reclaim Processes

VAT reclaim refers to the process by which businesses can recover the VAT they have paid on goods and services purchased for business use. 

While Amazon’s transition from ASE to AEU aims to streamline VAT collection, concerns loom over the impact on small businesses, especially regarding VAT reclaim processes across multiple countries and the strain on cash flow.

For instance, sellers operating in multiple EU countries may now face more complex VAT reclaim processes. Each country has its own VAT regulations and reclaim procedures, which they must navigate. This could add administrative burden and require a thorough understanding of each country’s VAT system.

Additionally, VAT reclaims in some countries can be slow and cumbersome. France, for example, has a reputation for lengthy reclaim processes, causing cash flow issues for businesses.

But according to Amazon, if your business is registered in the UK, invoices will be issued by the AEU branch located in your country of establishment. This means the invoices will include local VAT charges and you’ll be able to recover that VAT from the HMRC the standard way.

Still some sellers urge for clarity and support, emphasizing the potential financial strain and operational challenges posed by the VAT adjustment.

Amazon’s new VAT collection rules may help streamline the process of VAT collection and remittance but potentially at the cost of increased complexity and financial strain for some sellers specifically in the reporting and recovery processes. Those operating in multiple EU countries may find this especially cumbersome.

Understanding these changes and preparing for the administrative challenges ahead will be crucial for sellers to maintain compliance and manage their cash flow effectively.
Visit Update to Amazon UK and EU seller services entity and VAT treatment to learn more.

5. New Tool for Aging and Excess Inventory Analysis

Amazon has introduced a new tool, the FBA Inventory Age & Excess Analytics page, designed to assist you in analyzing your aging and excess inventory effectively. This feature offers a summarized view of past aging inventory trends, FBA sales, and historical aged inventory surcharges.

Additionally, it provides recommendations for managing excess inventory. With access to one year of historical data, you can make informed decisions to optimize your FBA operations.

Sellers are encouraged to provide feedback to further enhance this tool’s effectiveness in Seller Central.

Related: Amazon Excess Inventory: Why It’s Bad and How to Reduce It, Navigating Amazon’s Increasing Fee Stack

Ocean freight rates surged to their highest level in 16 months, driven by a combination of geopolitical crises, seasonal demand spikes, and logistical challenges.

Transport Intelligence’s (Ti) Ocean Freight Tracker Q1 2024 report shows that headhaul rates—prices for the primary leg of a freight route from major export to import regions—have soared to 153.6 index points, marking a 173.8% increase compared to the previous three months. 

According to Freightos, in early February 2024, the cost of shipping a 40-foot container on the following routes reached:

• China to US East Cost: $6,589, a 193% rate increase since October 2023
• Asia to North Europe: $5,758, a 286% rate increase since October 2023
• Asia to Mediterranean: $4,697, a 412% rate increase since October 2023

Freight rates may unfortunately continue to rise due to shipping giants implementing peak season surcharges starting from Q2 and general rate increases to account for the additional costs associated with dealing with ongoing geopolitical tensions around major trade routes. More on that below.

Note: A Freight Rate Index is a benchmark that tracks and measures the cost of shipping goods by sea over specific routes. It reflects fluctuations in freight rates, which are influenced by various factors including supply and demand, fuel prices, port congestion, and global economic conditions.

4 Biggest Factors Driving the Surge

1. Red Sea Crisis

The crisis in the Red Sea has significantly impacted shipping routes, capacity, and rates. Since October last year, Houthi rebels in Yemen have been attacking commercial ships, exacerbated by Israel-Hamas hostilities. These attacks have forced shipping companies to reroute vessels (e.g., choosing the Cape of Good Hope route to avoid Suez Canal), leading to increased spot rates – short-term freight pricing – and additional surcharges.

According to Drewry, an independent maritime research consultancy firm, spot rates on routes from Asia to Europe/Mediterranean have increased by over 300% since mid-November, and rates from Asia to the US East and West Coasts have risen by more than 90%.

2. Panama Canal Disruptions

The Panama Canal, a crucial waterway for global shipping, has been gravely affected by the El Niño weather phenomenon. October 2023 was the driest month on record for the canal basin, raising concerns about its future capacity.

The reduced water levels have caused delays and increased costs, as ships are forced to find alternative routes. This could involve longer routes around South America or increased use of US West Coast ports like Los Angeles.

In fact, the restricted capacity of the Panama Canal has made it significantly more expensive to ship containers from Shanghai to Houston than Shanghai to LA.

According to Xeneta, the spread in spot rates for shipments from Shanghai to Houston compared to Shanghai to LA has exceeded $2,000 per FEU (40-foot equivalent unit). This substantial difference illustrates how the canal’s disruption affects shipping costs on routes passing through it versus those that do not.

3. Peak Season

As the ocean peak season draws near (August through October), the volume of freight is climbing. 

Global demand for ocean freight space has increased by 9% year-over-year and is anticipated to rise further in the upcoming months, Norman Global reported. This increase is largely driven by a major uptick in US imports from Asia, which have already surged over 19% year-over-year in 2024. Retail businesses are predicting that this growth will continue into fall peak season, indicating robust market activity and heightened demand for shipping services.

4. Coordinated Price Increases by Shipping Lines

The ongoing conflict in the Red Sea region and the disruptions in the Panama Canal have led shipping lines to coordinate increases in freight rates to cover the higher costs associated with longer reroutes and enhanced security measures.

Moreover, preparing for the upcoming peak season has also contributed to the rate increases. In periods of high demand, shipping lines typically introduce peak season surcharges (PSS). These surcharges are typically coordinated to ensure that all industry players can capitalize on the heightened demand without engaging in price undercutting.

Aside from implementing PSS, shipping companies may also lower capacity and limit available slots to manage the balance between supply and demand while leveraging market conditions to their advantage. By controlling capacity, they can ensure their vessels are fully loaded, maximizing efficiency and reducing the number of partially filled voyages during peak season. However, with limited capacity, they can also create a supply constraint which can drive up freight rates.

This strategic reduction has resulted in general rate increases and Peak Season Surcharges, thereby significantly elevating the freight market.

• Maersk introduced rate increases for North Europe Freight All Kinds (FAK) rates effective from June 1st, with charges up to $6,000 per 40-foot container.
• CMA CGM: Announced new FAK rates for routes from Asia to North Europe starting June 15th.
  • 20’General Purpose (GP) container: $3,700
  • 40’ GP: $7,000
  • 40’ High Cube container: $7,000
  • 40’ Reefer: $7,000
• Hapag-Lloyd: Implemented PSS for shipments from East Asia to North America. The following surcharges are applicable for containers checked in from June 1st to 14th:
  • 20′ Container: $480
  • 40′ Container: $600
  • 45′ Container: $600

A higher PSS will apply to containers gated in from June 15th, and until further notice:

• 20′ Container: $1,000
• 40′ Container: $2,000
• 45′ Container: $2,000

Industry Outlook

According to Linerlytica, the Shanghai Containerized Freight Index (SCFI), a well-known freight rate index that tracks the cost of shipping containers from Shanghai to various destinations around the world, surged by 18.8% after May 1st, reaching its highest level since September 2022. The ongoing disruptions in the Red Sea and Panama Canal are the primary drivers behind these rate increases.

However, there is potential for a significant downward shift in rates if these issues are resolved, given the large number of ships on these routes. Despite this, industry sentiment for the first quarter of 2024 leans towards continued rate increases, particularly on the Asia to Europe Northwest route.

Implications for Amazon Sellers

For Amazon sellers, the surge in ocean freight rates has several implications:

1. Increased Shipping Costs

Amazon sellers importing goods from Asia to Europe or the US will face significantly higher shipping costs, impacting profit margins. 

If you’re an Amazon seller who imports from China to sell in the US or European market, expect to face significantly higher shipping costs due to the increased freight rates and surcharges.

Suppose you previously paid $3,000 per 40-foot container, you might now pay up to $6,000. This increase could erode your profit margins unless you:

• Increase product prices to offset the higher shipping costs.
• Negotiate better rates with freight forwarders or shipping companies, or explore different shipping routes.
• Optimize inventory management to ensure you have enough stock to cover potential delays without overstocking.

Related: Amazon Supplier Negotiation Strategy, Lead Time in Inventory Management for Amazon Sellers

2. Supply Chain Disruptions

Rerouting and surcharges due to the Red Sea and Panama Canal issues can cause delays, affecting inventory levels and order fulfillment timelines. Sellers must closely monitor their supply chain and consider alternative shipping routes or methods to mitigate disruptions.

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

3. Inventory Management

Higher freight costs and potential delays necessitate better inventory planning and management. Sellers may need to increase their inventory levels to buffer against delays, which ties up more capital in stock.

Related: Buffer Stock vs Safety Stock vs Anticipation Inventory

4. Competitive Pricing Pressure

With increased costs, maintaining competitive pricing on platforms like Amazon becomes challenging. Sellers may need to explore cost-cutting measures elsewhere or adjust their pricing strategies to remain profitable.

5. Strategic Adjustments

Diversifying suppliers and exploring different regions for sourcing products can help mitigate the impact of regional disruptions. Utilizing Amazon’s fulfillment options like Pan-European FBA can optimize inventory distribution across Europe, potentially reducing shipping costs and improving delivery times.

Final Thoughts

The first quarter of 2024 has seen unprecedented increases in ocean freight rates due to geopolitical conflicts and environmental disruptions. While these challenges pose significant hurdles, proactive measures and strategic adjustments can help sellers navigate this turbulent period in global shipping.

Related: Right-Size Products To Save on FBA Fees, Master Carton Calculator to Optimize Packaging & Reduce Shipping Costs

In this article, we’ll be unwrapping the latest Amazon announcements set to impact sellers on the platform.

First up, Amazon is expanding its A-to-Z Guarantee for customers in the EU, UK, and Canada, offering protection in the event that a defective product causes property damage or personal injury—this service is already live in the US.

Additionally, brands can now add size charts using a new self-serve tool, streamlining the process of providing accurate sizing information. Another similar development is the rollout of Fit Insights, a tool that provides apparel and shoe brands with fit-specific data to better meet customer sizing expectations and reduce returns. 

Lastly, Amazon introduces the Package Decision Engine, an AI-driven solution using deep machine learning, natural language processing, and computer vision to determine the most efficient packaging for each product.

Let’s delve into how these changes could impact your business.

1. Amazon’s A-to-Z Guarantee Adds Property Damage and Personal Injury Coverage for Customers in the EU/UK and Canada

Amazon’s recent expansion of the A-to-Z Guarantee to include customers in the EU/UK and Canada marks a significant improvement in consumer protection, previously available only in the US.

This expansion means that customers in these regions are now covered for property damage or personal injury caused by defective products purchased through Amazon. The coverage applies to all physical products, including those sold by Amazon’s two million selling partners.

Taking Steps to Mitigate Risks

Amazon’s decision to expand its A-to-Z Guarantee to cover personal injury claims in the EU, UK, and Canada likely stems from several factors:

• Legal Liability and High-Profile Cases: There have been numerous lawsuits against Amazon and other marketplaces due to damages and injuries from defective products. Notable incidents, such as the hoverboard fires and the tragic death caused by a teething necklace bought on Etsy, have heightened awareness and concern over product safety, resulting in Amazon’s increased desire to mitigate legal risks.
• Proactive Risk Management: By including property damage and personal injury claims in its A-to-Z Guarantee, Amazon aims to protect itself from liability and ensure a safer shopping environment. This move helps Amazon manage potential risks and reduce the chances of facing significant legal battles and associated costs.
• Insurance Requirements for Sellers: Amazon requires sellers to have valid commercial liability insurance when their sales exceed a certain threshold (e.g., $10,000 sales in one month on Amazon.com). This ensures that sellers are financially responsible and capable of covering claims related to their products. For sellers sourcing from reputable producers, this should not be a problem. However, where product testing and certification might be inadequate, some sellers could face difficulties securing insurance.
• Mitigating the Risk of Unbranded and High-Risk Goods: Some sellers might struggle to find insurers willing to cover unbranded, high-risk goods. This suggests that such products might not be safe to sell, and without insurance, they pose a significant financial risk to sellers. By enforcing insurance requirements and managing customer claims, Amazon can reduce the likelihood of unsafe products being sold on its platform.
• Boosting Consumer Confidence: Expanding the A-to-Z Guarantee to include property damage and personal injury claims helps enhance shopper confidence. Customers are more likely to trust a marketplace that offers comprehensive protection against defective products. This added layer of security reassures buyers that Amazon stands behind the safety and quality of the products sold on its platform.

Amazon’s expansion of the A-to-Z Guarantee to cover personal injury claims in additional regions is a strategic move to manage legal risks, enforce product safety standards among sellers, and boost consumer trust in its marketplace.

Related: Updates to Amazon Return, Refund, and Reimbursement Policy, Breaking Down the 2024 Amazon Reimbursement Policy Updates

How the Updated A-to-Z Guarantee Works

The A-to-Z Guarantee aims to simplify the resolution of property damage and personal injury claims for both customers and sellers. If a defective product causes damage or injury, customers can file a claim by contacting Amazon’s Customer Service.

Amazon then facilitates the resolution process by notifying the selling partner and assisting them in addressing the issue.

For claims under €1,000 /  £1,000 / CAD$1,000, Amazon may directly compensate the buyer at its discretion, provided the claim is proven to be valid. Amazon handles these smaller claims without seeking reimbursement from the seller, as long as the seller has valid insurance and adheres to Amazon’s policies.

For claims exceeding €1,000 /  £1,000 / CAD$1,000, Amazon will work with the seller to verify the claim and ensure the buyer is compensated.

Related: Amazon Suspension Risk For The Uninsured, Amazon Overhauls Its A-to-Z Guarantee Policies To Streamline Damages Claims

Impact on Sellers

Liability Management

By taking on the investigative and resolution responsibilities, Amazon reduces the burden on sellers to handle claims independently, allowing them to focus more on their core business operations.

However, as you may already know, the Amazon marketplace is littered with returns scams, one of which involves dishonest customers falsely claiming that a product caused injury for financial gain. Unfortunately, this type of fraud can be particularly serious and can have significant repercussions for sellers. 

For instance, a customer buys an electric kettle and claims it malfunctioned, causing boiling water to spill and burn them. They provide fake photos of burns and medical reports.

Amazon reviews the claim, and due to the serious nature of injury claims, might prioritize the customer’s safety and issue a refund or compensation quickly to avoid legal complications, often before thoroughly verifying the claim.

The seller then loses the sale, incurs costs, and faces potential reputation damage, which brings us to the next point.

Related: Claim Reimbursement for Losses Caused by Amazon, Maximize Gains and Minimize Hassle With Amazon Reimbursement Services

Insurance Requirements

Sellers must maintain a valid commercial liability insurance policy that covers each Amazon country site where they sell. While this may mean additional costs, this can help sellers better prepare themselves to handle potential claims, protecting their financial interests.

In addition, implementing processes to verify the authenticity of injury claims, such as requesting detailed documentation and evidence, is just as important to deter fraudulent activities.

Related: Reduce Losses Due to INR Scams with Amazon’s Signature Confirmation

Reputation and Customer Satisfaction

The A-to-Z Guarantee helps sellers build a positive reputation by ensuring that any issues with defective products are resolved swiftly and fairly, enhancing overall customer satisfaction.

Overall, sellers should be proactive in understanding and complying with Amazon’s insurance requirements to avoid any liability issues. It’s crucial to source products from reputable suppliers who have proper certifications and insurance, particularly when dealing with high-risk or unbranded goods. Failure to comply can result in financial liabilities and impact to the seller’s standing on Amazon.

Related: Troubleshooting and Reactivating Inactive Amazon Listings

2. Amazon’s New Tool for Adding and Refining Size Charts

Amazon’s new self-serve size chart tool is designed to help brands enrolled in the Brand Registry easily add and refine size charts for their products. Here’s how the new tool works and how it benefits sellers:

How the Tool Works

1. Automatic Enrollment: Brands enrolled in the Brand Registry are automatically granted access to the size chart tool upon registration.
2. Convenient Features:
   • Refinement of Existing Charts: Sellers can refine and enhance existing Amazon size charts.
   • Template Usage: Pre-existing size chart templates are available for creating new size charts, streamlining the setup process.
   • Bulk Application: Sellers can apply a single size chart to as many as 1,000 ASINs across various product types simultaneously.
   • Real-Time Instructions: The tool provides real-time guidance to improve the accuracy and relevance of size charts.
3. Accessing the Tool: To use the tool, go to Seller Central > Catalog drop-down menu > Add size charts.

Benefits for Sellers

• Improved Customer Experience: Accurate and relevant size charts help customers make better purchasing decisions, reducing the likelihood of returns due to sizing issues.
• Efficiency and Scalability: The ability to apply size charts to multiple products at once saves time and effort, particularly for sellers with large catalogs.
• Enhanced Product Listings: Refined and precise size charts make product listings more informative and attractive, potentially increasing conversion rates.
• Real-Time Adjustments: The tool’s real-time instructions ensure that size charts are always up-to-date and accurate, enhancing customer trust and satisfaction.

In summary, this new self-serve tool helps sellers enhance their product listings with detailed size information, leading to a better shopping experience for customers and potentially boosting sales.

Related: The Ultimate Guide to Amazon Creative Listing Optimization

3. Sellers in Europe and India Can Now Access Fit Insights Tool

Amazon’s Fit Insights tool is designed to help apparel and shoe brands in EU and India improve their product sizing accuracy, thereby reducing return rates and enhancing customer satisfaction.

This advanced tool leverages artificial intelligence and machine learning to analyze various data points, including returns data, size charts, and customer feedback on fit, quality, and price.

How it Works

• Data Analysis: Fit Insights uses AI and machine learning to scrutinize returns data and customer feedback, offering a comprehensive analysis of size-related issues.
• Product Categorization: The tool categorizes products by their return health, ranging from very poor to excellent, enabling brands to swiftly identify and prioritize updates to their listings.
• Benchmarking: It compares the return rates of a brand’s products against best-in-class benchmarks for similar products, helping brands understand how their items stack up in the market.
• Customer Insights Summary: Fit Insights provides a summary of both positive and negative customer feedback, giving brands a clearer understanding of customer preferences and pain points.
• Size Chart Recommendations: The tool offers specific recommendations to resolve size chart issues and better align with customer sizing expectations.

Why Use this Tool

• Improved Customer Satisfaction: By refining size charts based on data-driven insights, brands can meet customer sizing expectations more accurately, leading to higher satisfaction.
• Reduced Returns: Enhanced sizing accuracy directly contributes to fewer returns, saving costs and improving overall efficiency.
• Informed Decision Making: Brands can make better-informed decisions regarding their product listings and sizing, backed by comprehensive AI-driven analysis.
• Competitive Edge: Understanding how their products compare against market benchmarks allows brands to stay competitive and make necessary adjustments to maintain or improve their market position.

For additional information, visit Fit Insights tool page.

Related: Tips to Improve Customer Experience and Reduce Returns

4. Amazon Introduces AI-Driven Packaging to Reduce Waste, Sellers Voice Concerns

The eComm giant’s new AI model, the Package Decision Engine, leverages deep machine learning, natural language processing, and computer vision to determine the most efficient packaging for each product.

This system aims to reduce packaging waste while ensuring product protection.

For instance, the AI can identify when durable items like blankets can be shipped with minimal packaging or when fragile items like dinner plates need sturdier boxes. This approach has contributed to a significant reduction in packaging materials, saving over 2 million tons worldwide since 2015.

Related: Is Amazon Climate Pledge Certification Worth It For Sellers?

Why Sellers Should Care

• Efficiency and Sustainability: The AI optimizes packaging decisions, which helps to reduce the use of cardboard boxes, air pillows, tape, and mailers. This can lead to a smaller environmental footprint.
• Scalability: Prior to the AI implementation, packaging decisions were made through physical testing, which was not scalable. The Package Decision Engine automates this process, allowing for more consistent and efficient packaging decisions across a vast number of products.
• Focus on Other Challenges: By automating packaging decisions, Amazon associates can redirect their efforts towards other sustainability challenges, potentially leading to more innovative solutions in the future.

Seller Reactions

Despite the intended benefits, many sellers on the news announcement page have voiced their dissatisfaction with the current performance of the Package Decision Engine. Comments from sellers highlight ongoing issues with inappropriate packaging sizes and insufficient protection:

• Overly Large Packaging: Sellers have reported receiving returns in boxes that are far too large for the products, leading to damage during transit. This suggests that the AI may need further refinement to better match box sizes to product dimensions.
• Insufficient Protective Measures: Instances of fragile items being shipped in inadequate packaging, such as bubble mailers for expensive teacups or video game consoles, have been mentioned. These cases indicate that the AI’s decisions may sometimes lack the necessary protective measures, resulting in damaged goods and dissatisfied customers.
• AI Limitations and Human Oversight: Some sellers believe that common sense and human oversight should still play a crucial role in making packaging decisions, especially for unique or high-value items. There is a call for Amazon to allow seller feedback on packaging to improve the system.

Related: Amazon Warehouse Automation Increases Concerns over Job Loss and Product Selection Inaccuracy

While Amazon’s Package Decision Engine aims to enhance packaging efficiency and sustainability, the feedback from sellers indicates a need for ongoing adjustments and improvements.

Ensuring that the AI can balance reducing waste with adequately protecting products is important for maintaining seller trust and customer satisfaction. As Amazon continues to refine this technology, incorporating seller feedback and enhancing the AI’s decision-making capabilities will be essential steps toward achieving optimal packaging solutions.

Related: How Amazon Businesses Can Leverage Sustainability Initiatives to Drive Brand Growth and Reputation, Save Money With Minor Changes To Your Product And Package Sizes

Amazon and Walmart are both leveraging generative artificial intelligence (AI) to enhance their operations and capture a larger share of consumer spending. We dive in to explore yet another facet of the ever-evolving fight for supremacy.

Related: Walmart and Amazon Battle for Dominance Intensifies

How Amazon Harnesses AI to Lead the eCommerce Industry

In March 2024, Amazon announced an additional $2.75 billion investment in Anthropic, an AI startup based in San Francisco. This move brings Amazon’s total investment in Anthropic to $4 billion, emphasizing its commitment to advancing AI technologies.

This partnership focuses on developing foundation models, which are the backbone of generative AI systems. Under the agreement, Anthropic will leverage AWS as its primary cloud provider and utilize Amazon’s custom chips for building, training, and deploying AI models. 

Additionally, AWS customers will gain access to these models through Amazon’s Bedrock service, an AI app development platform. Major companies like Delta Air Lines and Siemens are already utilizing Bedrock to tap into Anthropic’s AI capabilities.

One month later, Amazon introduced custom AI capabilities to Bedrock, allowing companies to use their own gen AI models. This initiative is part of Amazon’s broader strategy to stay competitive in the rapidly evolving AI and cloud-computing market.

1. Custom AI Model Integration

AWS now permits companies to integrate their own generative AI models into Bedrock. This enhancement simplifies collaboration between enterprise developers and data scientists.

By enabling the addition of DIY models, Amazon aims to make its platform more adaptable and appealing to businesses seeking customized AI solutions.

Impact on Businesses

• Enhanced Flexibility: Businesses can tailor AI models to their specific needs, leading to more effective and personalized AI solutions.
• Improved Collaboration: The integration fosters better collaboration between developers and data scientists, streamlining the development process.
• Competitive Edge: Companies can innovate faster and create unique offerings by leveraging their proprietary data and AI models.

2. New AI Models Released

Amazon introduced two new AI models: the Titan image-generator model, which creates images from text, and the Titan text-embeddings V2 model, designed for Q&A chatbots and personalized recommendations.

Impact on Consumers and Businesses

• Improved User Experience: Consumers benefit from more accurate and personalized interactions with AI-driven applications, enhancing engagement and satisfaction.
• Diverse Application: Businesses can utilize these models for a wide range of applications, from customer service to marketing, thereby expanding their AI capabilities.

3. Positioning as a Neutral Provider

AWS has positioned itself as a neutral provider, offering a variety of AI models, including its own, proprietary models from other companies like Anthropic, and open-source models such as Meta’s Llama 3. This approach contrasts with competitors like Microsoft and Google, who are more invested in their own models.

Impact on Businesses

• Model Variety: Businesses have access to a broad spectrum of AI models, allowing them to choose the best fit for their needs without being locked into a single vendor’s ecosystem.
• Reduced Testing Time: AWS’s model evaluation tool helps businesses save time on testing and analyzing different models, accelerating the deployment of AI solutions.

4. Addressing Market Needs

The strategy to offer multiple AI models aligns with market trends, where companies are still exploring which AI technologies provide the best return on investment. By being a “home for every model,” AWS caters to businesses that seek flexibility and the ability to experiment with various AI models.

Impact on the Market

• Increased Adoption: Businesses may be more inclined to adopt AWS’s services due to the flexibility and variety of models available.
• Innovation Facilitation: The diverse model offerings can drive innovation, as companies can experiment with and deploy the most effective models for their use cases.

Related: Key Revelations in Jassy’s Shareholder Update and their Impact on Sellers

Walmart’s GenAI Capabilities and Their Impact on Consumers and Businesses

Earlier this year, Walmart introduced new AI features into its app, leveraging large language models (LLMs) from Microsoft’s Azure OpenAI Service alongside its own retail-specific models to enhance search functionality. This strategy aims to keep Walmart competitive with Amazon’s marketplace advancements by improving its own customer experience through AI technology.

Enhanced Search Functionality

Walmart’s integration of GenAI into its app primarily focuses on enhancing search capabilities. 

In his Consumer Electronics Show 2024 Keynote speech, CEO Doug McMillon highlighted that the most significant improvement so far has been in search, with generative AI enabling a more solution-oriented search experience for customers. This improvement means that shoppers can find products more easily and receive more relevant results, leading to a more efficient and satisfying shopping experience.

Impact on Consumers

• Improved Shopping Experience: Consumers benefit from more accurate and relevant search results, reducing the time and effort needed to find desired products.
• Personalized Suggestions: With AI-driven insights, shoppers receive tailored recommendations that align with their preferences and past behaviors.

Impact on Businesses

• Increased Sales: Enhanced search functionality can lead to higher conversion rates as customers find what they need more quickly.
• Better Customer Retention: A smoother and more intuitive shopping experience can boost customer satisfaction and loyalty.

Shoppable Media Initiatives

Walmart is also expanding its shoppable media footprint, collaborating with platforms like TikTok, Roku, and NBCUniversal’s Peacock to integrate shopping features into entertainment content. This strategy allows consumers to purchase products directly from the media they are consuming, seamlessly blending entertainment and shopping.

Consider the “Add to Heart” series, which was modeled after a Hallmark holiday movie, as an example. This 23-part series allowed viewers to purchase products seen on screen, offering a novel and engaging shopping experience.

Impact on Consumers

• Convenient Shopping: Consumers can buy products directly from their viewing content without leaving the entertainment environment.
• Engaging Experience: Shoppable media transforms passive viewing into an interactive experience, seamlessly integrating shopping into daily activities and making it more enjoyable.

Impact on Businesses

• Increased Impulse Purchases: Integrating shopping into entertainment can drive impulse buys, boosting sales.
• Enhanced Marketing Opportunities: Brands can leverage popular media to showcase their products, reaching a wider audience in a captivating manner.

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

Competitive Landscape: Walmart vs. Amazon

While Amazon currently holds a commanding lead in consumer spending with a market share of 4.4% compared to Walmart’s 3% as of Q4 2023, Walmart’s introduction of GenAI capabilities aims to close this gap. Both retailers are focusing heavily on leveraging AI to enhance their offerings and improve customer experience.

Impact on Consumers

• More Choices: Competition between Walmart and Amazon drives innovation, providing consumers with better services and more options.
• Improved Services: As both eComm giants strive to outdo each other, consumers benefit from enhancements in delivery speed, product recommendations, and overall shopping convenience.

Impact on Businesses

• Increased Pressure to Innovate: Smaller retailers need to adopt similar technologies to stay competitive.
• Collaborative Opportunities: Businesses can partner with AI technology providers to enhance their capabilities and remain relevant in the competitive retail space.

Overall, Amazon and Walmart investing in generative AI can profoundly transform their consumer-facing operations.

GenAI enables the analysis of extensive customer data to create personalized marketing content, including product recommendations, targeted ads, and customized email campaigns. This personalized approach enhances engagement and boosts conversion rates by aligning marketing efforts with individual customer preferences and behaviors.

Moreover, GenAI can streamline customer service through automation and can leverage GenAI to develop virtual try-on solutions, allowing customers to see how products would look on them before purchasing.

These innovations promise significant benefits for consumers through more customized and convenient shopping experiences, while businesses stand to gain from increased sales and optimized marketing efforts.

As Walmart and Amazon continue to innovate with AI, the retail landscape is set to become more dynamic and consumer-centric.

Related: AI Trends Redefining Shopping Experiences, AI & Automation

In this week’s post, we’re diving into some major developments in online retail that are shaping the eCommerce landscape.

First up, we’ll explore how Amazon has regained its position as America’s most-shopped clothing and footwear retailer.

Then, we’ll look into Shein’s new partnership with Flexport for fulfillment services. Flexport, already a key player for merchants on Shopify and Walmart, will now extend its visibility and efficiency to the sellers Shein is working to onboard.

Lastly, we’ll review Amazon’s latest brand protection report, which highlights how the company identified, seized, and disposed of more than 7 million counterfeit products worldwide in 2023, ensuring these items didn’t harm customers or re-enter the retail supply chain.

Stay tuned as we unpack the details and what they mean for the future of eComm entrepreneurs. 🙌

Amazon Leads Again: 2024 Survey Shows Dominance in US Clothing and Footwear Market

Amazon has once again solidified its position as the leading clothing and footwear retailer in the United States, outpacing even the most formidable competitors like Walmart. This comes as no surprise, given the eComm giant’s relentless focus on customer satisfaction, efficient logistics, and competitive pricing strategies. 

According to the latest US Consumer Survey, Amazon sold over $56 billion in clothing, footwear, and apparel accessories in 2023—over 70% more than its nearest competitor. For Amazon sellers, this presents a huge opportunity to leverage the platform’s vast customer base and consumer trust.

Amazon’s Resilience and Strategic Advantages

Despite the ongoing challenges in the apparel sector, including rising input costs, Amazon has demonstrated remarkable resilience. Its ability to maintain high shopper numbers in such a turbulent market highlights its superiority over traditional store-based retailers.

In a corporate blog post, Anand Kumar, Associate Director of Retail Research, emphasized the potential for subscription models like Amazon Prime to enhance customer loyalty and retention, driving overall sales growth. This model is a significant competitive advantage that other retail giants, such as Target, could learn from to boost their own customer engagement and sales.

Key Drivers for Amazon’s Apparel Success

One of the primary reasons consumers prefer Amazon for their apparel purchases is the platform’s emphasis on delivery cost and speed.

The survey revealed that over half of Amazon’s apparel shoppers prioritize lower delivery costs and faster delivery times over brand loyalty. This focus on logistical efficiency has increased the number of Prime memberships, despite recent hikes in fees.

This suggests that Amazon’s delivery advantages are a crucial factor in attracting and retaining customers, which means Prime-eligible products often benefit far beyond non-Prime items.

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

Changing Consumer Perceptions and Private Label Strategies

Interestingly, the survey also noted a shift in consumer perceptions regarding Amazon’s pricing. 

In 2024, only 29.1% of consumers expected to pay less than full price on Amazon, a significant drop from 49.7% in 2018. This change indicates a movement away from viewing Amazon as a discount retailer. Concurrently, interest in Amazon’s private label offerings, such as Amazon Basics and Amazon Essentials, has fluctuated, with a major decline in 2024.

For sellers, this trend suggests they should focus on quality and value rather than just competing on price. The fluctuating interest in Amazon’s private label products also opens up opportunities for sellers to differentiate their brands and build customer loyalty.

By aligning with Amazon’s strengths in logistics and customer experience, and by adapting to evolving consumer preferences, sellers can enhance their competitiveness and drive growth on the platform.

Related: 5 Inventory-Minded Marketing Techniques for Scaling Your Amazon Business

Implications for Competing Retailers

Amazon’s comprehensive approach to retail, combining competitive pricing, vast product selection, and superior logistics, sets a high bar for other retailers.

Those unable to match Amazon’s diverse brand offerings, affordable and fast delivery, or user-friendly website functionality may struggle to compete. Competing retailers must consider investing in these areas to stay relevant.

Related: How Temu Might Compete with Amazon in the US Market, Exploring Multichannel Selling for Sellers

Leveraging Amazon’s Strengths

The findings from the 2024 US Consumer Survey underscore the importance of aligning with Amazon’s strengths in delivery, convenience, and customer experience.

For Amazon sellers, this means focusing on efficient logistics, leveraging FBA for Prime eligibility, and prioritizing customer satisfaction. Additionally, with changing consumer perceptions and preferences, sellers should concentrate on building strong brands and offering unique products to stand out from both competitors and Amazon’s own private label products.

By staying agile and responsive to these insights, sellers can maximize their potential in Amazon’s thriving apparel and footwear market.

Related: How Does Amazon FBA Work, 5 Top Strategies for a Winning Amazon Product Launch, 6 Tips for Launching and Scaling Your Amazon DTC Business

Shein US Partners with Flexport for Logistics

Just as consumers are starting to see Amazon as an online fashion store destination, Shein, the fast-fashion powerhouse, is making strategic moves to strengthen its foothold in the US marketplace by partnering with Flexport for fulfillment services.

Recently announced on LinkedIn, this partnership aims to enhance delivery speed and efficiency, crucial factors for competing in the cut-throat eCommerce industry.

The collaboration with Flexport, a well-established logistics provider known for its integrations with Shopify and Walmart, marks a significant step for Shein. This partnership is designed to address some of the challenges Shein has faced in the country, including its stalled IPO and difficulties in attracting American marketplace sellers.

By teaming up with Flexport, Shein can offer its sellers a familiar and trusted logistics solution, potentially increasing seller confidence and participation.

Flexport’s role in Shein’s marketplace will streamline the fulfillment process, making it more efficient and reliable. For instance, orders placed on Shein’s marketplace will automatically initiate shipping and logistics processes through Flexport, promising seamless inventory management and sales operations.

This integration is expected to improve delivery times and overall customer satisfaction, which are critical factors for success in the fast-paced eCommerce environment.

But Shein is not stopping at Flexport. The company has also announced a partnership with ShipStation, another logistics provider known for its extensive integrations with major ecommerce platforms like eBay, Amazon, and Shopify.

This move ensures that Shein’s marketplace sellers can benefit from faster fulfillment, multiple shipping carrier options, and preferential rates, increasing the overall efficiency and cost-effectiveness of their operations.

Delivery Speeds that Could Rival Amazon

For consumers, these partnerships mean quicker and more reliable deliveries, which can significantly enhance the shopping experience on Shein. The improved logistics capabilities can help the company maintain high customer satisfaction levels and compete effectively with other fast-fashion and general merchandise platforms like Temu – which has taken a different approach by partnering with Chinese logistics companies WinIt and Easy Export.

For sellers, the implications are profound. The Shein / Flexport partnership offers a robust and reliable logistics framework, making it easier for sellers to scale their operations and manage their supply chains efficiently.

This could attract more US-based sellers to Shein’s marketplace, knowing that they have access to a logistics partner that is already trusted and widely used within the industry. Additionally, the integration with ShipStation provides sellers with more flexibility and choice in shipping options, further enhancing their ability to meet customer demands promptly.

In an industry where delivery speed and efficiency are paramount, Shein’s strategic partnerships position it well to enhance its market share and seller base in the US. By playing to the strengths of established logistics providers like Flexport and ShipStation, Shein can offer a compelling proposition to both consumers and sellers, driving growth and reinforcing its presence in the US market.

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

Amazon’s 2023 Brand Protection Report: Seller Reactions and the Realities of Counterfeit Prevention

Amazon’s Brand Protection Report for 2023 highlights significant strides in ensuring the authenticity of products and deterring bad actors. These include:

• Amazon’s robust seller verification process has dramatically reduced the number of bad actor attempts to create new selling accounts, from 6 million in 2020 to just 700,000 in 2023.
• Amazon’s proactive measures have intercepted over 99% of suspected infringing listings before brands needed to identify and report them.
• Since 2020, the retailer has achieved a more than 30% reduction in infringement notices, demonstrating the success of its automated brand protections and collaboration with brands enrolled in Brand Registry.
• The Counterfeit Crimes Unit, established in 2020, has pursued over 21,000 bad actors through litigation and criminal referrals. In 2023 alone, Amazon identified, seized, and disposed of more than 7 million counterfeit products worldwide.

For consumers, these initiatives mean greater assurance that the products they purchase on Amazon are authentic and safe.

For Amazon sellers, the strengthened brand protection measures may help create a more trustworthy and competitive marketplace. Sellers could benefit from Amazon’s rigorous vetting processes, which aid in eliminating fraudulent competition, and from enhanced consumer trust, drive sales growth.

However, seller reactions posted on the Seller Forum news page reveal a more nuanced and often critical perspective on the efficacy of these measures.

Redefining Counterfeits and Challenges in Seller Vetting

One of the key criticisms from sellers is an overly simplistic and misleading definition of “counterfeit,” causing, at time, legitimate sellers to be caught in the cross-hairs.

This issue is compounded by what sellers perceive as superficial vetting processes that may allow bad actors to re-enter the marketplace under new accounts. A veritable whack-a-mole situation until marketplace onboarding practices change.

Despite Amazon’s claims of advanced verification technologies, the lingering question remains: how many bad actors are truly stopped, and how effective are these measures in the long term?

Impact of Automated Filters and Notice of Infringement Reporting

Sellers express frustration with Amazon’s automated filters, which they feel erroneously flag legitimate listings. The term “valid” notices of infringement is contentious, with sellers considering that it may have actually become harder for them to report counterfeiters effectively. 

One seller suggests that, more than a resource, Seller Support acts as a barrier to sellers reporting true instances of counterfeiting.

Counterfeit Enforcement and Buyer Fraud

A recurring theme in seller feedback is the perceived inefficiency in Amazon’s enforcement of counterfeit rules. Sellers recount instances where counterfeit listings reappear even after being reported, undermining the integrity of the platform.

Additionally, there is significant concern over buyer fraud, where unscrupulous customers purchase products, switch them out with knockoffs, and return them for refunds. Sellers feel inadequately protected against such abuses, with some suggesting that allowing sellers to block buyers by ZIP code could mitigate this issue.

The Reality Behind the Numbers

While Amazon touts its achievements in seizing counterfeit products and collaborating with law enforcement, sellers question the practical impact of these measures. They point out that high-profile cases and statistics often mask the daily struggles they face with counterfeiters and fraudulent buyers.

The report of stopping 7 million counterfeit items is seen as a surface-level solution that doesn’t address deeper, systemic issues within Amazon’s marketplace.

A Call for Better Support and Practical Solutions

Sellers are calling for more transparent and effective support from Amazon. Suggestions include clearer guidelines on counterfeit definitions, more robust seller education on compliance, and enhanced protection against buyer fraud. There is also a demand for Amazon to address internal issues, such as inconsistent enforcement of policies.

A Need for Real Change

While Amazon’s 2023 Brand Protection Report showcases efforts to combat counterfeits and support genuine sellers, the feedback from the seller community highlights significant gaps.

For Amazon to truly foster a secure and fair marketplace, it needs to address these concerns head-on, ensuring that its policies not only look good on paper but also translate into meaningful action and support for its sellers.

Related: Amazon Hopes to Restore Consumer Confidence with $1.2B Anti-Counterfeit Initiative, Amazon in the Crosshairs: Unveiling Recent Legal Turmoil, Amazon Cracks Down on Suspicious Reviews from Bad Actors, Sellers Express Mixed Reactions

Stay ahead of the curve with our latest roundup of Amazon updates! 🙌

We review the major changes to the UK Multi-Channel Fulfillment fees, ensuring you have clarity on your costs and can make informed decisions about your fulfillment strategies. 

Additionally, we highlight essential Amazon policy updates that could impact your selling journey, emphasizing the importance of staying compliant with the platform’s guidelines. We’ll also unveil some cool upgrades to Price Discounts, Fulfillment Insight, and Buy Shipping.

Keeping abreast of these developments is crucial for maintaining a competitive edge and ensuring continued success on Amazon.

UK/EU Amazon Fee Changes

2024 UK Multi-Channel Fulfillment (MCF) Fee Updates

Effective May 16, 2024, expect to see upcoming changes to Amazon’s MCF fees in the UK. These adjustments are being made to accommodate the rising costs of fulfillment and transport. 

Below are the key updates:

1. Fee Increases

• On average, UK MCF fees will rise by approximately 5.6%.
• The extent of the fee changes will vary based on ship speed, size tier, and the number of units in an order.
• Some size tiers, such as standard shipping envelope size tiers below 460 g, will not experience any increase.

2. Introduction of New Size Tiers

• Six new small-parcel size bands (ranging from 150 g to 3.9 kg) and one extra-large envelope size band will be introduced.
• These new bands aim to better reflect the weight and dimensions of your products, providing more accurate fee assessments.

Note that the impact of these fee adjustments on your business will depend on the specific mix of size tier and shipping speed (standard or expedited) for your products. We encourage you to review the updated fee structure carefully to understand how it may affect your fulfillment costs.

Related: How Amazon Dimensional Weight Pricing Hurts FBA Seller Profits

Here are examples of fee changes based on the new fee structure:

Standard Shipping

This table illustrates how fees for different size tiers and unit per order (UPO) quantities will change before and after May 16, 2024, reflecting Amazon’s adjustments to UK MCF fees.

Considering the upcoming adjustments in MCF fees for most size tiers, it’s important to be strategic in your fulfillment approach for 2024 and beyond to maintain profitability.

One option is to adjust your pricing to accommodate these fee changes effectively. Alternatively, you might consider transitioning to Low-Price FBA (for items priced below £10) or joining the Ships in Product Packaging program, benefiting from reduced fulfillment fees.

Another approach could involve encouraging customers to purchase multiple units within a single order, enabling you to qualify for shipping discounts (25% on average) offered through MCF. 

Evaluating these strategies can help to optimize your fulfillment processes and ensure continued profitability amidst evolving fee structures.

Related: Navigating Amazon’s Increasing Fee Stack in 2024, Tools and Tactics to Dominate Amazon’s Fees

Amazon Reduces Referral Fees for Low-Priced Clothing and Accessories

Possibly as a play toward remaining competitive with competitors such as Shein and Temu, starting May 15, 2024, Amazon is set to implement a reduction in referral fees for low-priced Clothing and Accessories.

This move will see the referral fee drop from 15% to 8% for Clothing and Accessories priced below £15 in the UK, below €15 in Germany, France, Italy, Spain, the Netherlands, and Belgium, and below SEK 175 in Sweden.

In Poland, the referral fee for Clothing and Accessories priced below PLN 65 will be lowered from 10% to 8%. While this reduction specifically targets low-priced Clothing and Accessories, referral fees for other category types will remain unchanged. 

This adjustment holds significant implications for sellers, offering them the opportunity to expand their product offerings, particularly in the low-price range. With lower referral fees, sellers can offer customers a wider selection of affordable products, catering to various budget ranges and potentially driving increased sales.

Related: How Temu Might Compete with Amazon in the US Market

As Amazon implements these changes, sellers will want to re-evaluate their product pricing strategies and determine whether reduced pricing could lead to increased profits.

Amazon Policy Updates

Amazon’s Annual Business Info Check for INFORM Act

As of April 2024, Amazon has implemented a new policy requiring sellers with 200 or more transactions or $5,000 or more in revenue over a continuous 12-month period to annually review and certify their business information. 

This initiative, mandated by the US INFORM Consumers Act, aims to enhance transparency and accountability. Sellers are encouraged to proactively review and update their information on the Account Health page to avoid potential account deactivation.

While sellers will receive formal notifications for review and certification, taking proactive steps now can prevent account deactivation later. Sellers are urged to visit their Account Health page and review their information promptly. Certification must be completed within 10 days upon viewing the Notice and Certification page. 

If encountering certification challenges, they may stem from eligibility criteria, such as sales thresholds, or the requirement for the primary user with specific permissions to certify, according to Vanessa Hung, Seller Assist Co-Founder.

Neglecting certification can result in account suspension due to INFORM, which occurs when Amazon cannot verify updated information within the specified timeframe or if certification is not completed within 10 days of receiving the notice.

In a LinkedIn post, Hung reminds sellers that ocassionally, even after completing the certification, they may still receive a notification. In such instances, allow Amazon a window of 48 to 72 hours to update and remove the notification automatically. There’s no requirement for recertification or further action on your part during this period.

Click here to view the step-by-step process for certifying your business.

Amazon Grants More Time for Adjustment to Low Inventory Fee

Amazon’s recent announcement regarding adjustments to the low-inventory-level fee for third-party sellers has sparked a mixed response within the seller community.

Originally introduced as a means to cover costs associated with enhancing delivery speeds and in-stock levels, the fee has prompted concerns among sellers due to its potential impact on their businesses.

However, Amazon’s decision to extend the credit period for sellers affected by the fee until May 14th has been met with some relief. Sellers can expect to receive credits by May 31st, providing them with additional time to adjust to the new fee structure.

Furthermore, Amazon has introduced several changes aimed at mitigating the fee’s impact in certain situations. These changes include:

• Exempting products with low sales volume (less than 20 units in the last 7 days) from the fee.
• Crediting sellers for any low inventory level fees incurred due to excessive inbound delays caused by Amazon.
• Providing a time-bound exception on the fee for products featured in select promotional Amazon Deals like Prime Day.

While some sellers have welcomed these adjustments, others have expressed frustration over the complexity of managing the fee. Concerns have been raised regarding the lack of transparency surrounding the fee, as well as its impact on low-margin products and the overall seller experience.

Despite these challenges, sellers are hopeful that Amazon will continue to listen to their feedback and work towards implementing solutions that address their concerns effectively.

Related: What are Amazon FACOS? How to Calculate and Lower Amazon FBA Fees

Preparing for the General Product Safety Regulation (GPSR) on Amazon

Amazon has recently shared crucial updates regarding the impending implementation of the GPSR in the EU, including Northern Ireland under the Northern Ireland Protocol.

Set to take effect on December 13, 2024, this regulation marks a significant milestone in ensuring the safety and integrity of non-food consumer products in the EU market.

For sellers operating on Amazon UK, no additional information submission is required. However, for listings on Amazon EU-based stores, compliance with GPSR mandates is necessary. Sellers are urged to follow instructions published on Seller Central for the EU-based store where they sell products within the scope of GPSR.

GPSR Scope and Requirements

Under GPSR, most non-food consumer products offered for sale in the EU are subject to compliance, including used, repaired, and reconditioned items. 

Key Requirements:

• Responsible Person (RP): Assign an RP within the EU for non-food products and ensure products are labeled with their contact information in one of the EU’s official languages.
• Manufacturer Information: Ensure that your products are labeled with the manufacturer’s contact details and, where applicable, the importer’s information. Make sure this information is prominently visible on both the physical products and their online listings.
• Labelling and Traceability: Comply with the regulations outlined in the GPSR and adhere to existing labeling mandates. Guarantee that each product is equipped with a distinctive identifier for effortless recognition. Furnish essential warning and safety details, both visibly on the product and within online listings.

What Sellers Need to Do

To maintain compliance with GPSR and Amazon’s policies, sellers are advised to take the following actions:

• Demonstrate Compliance to Amazon: Guarantee adherence to GPSR regulations for EU-based stores to avoid potential listing removal and maintain eligibility for flash sales.
• Brand Owners: Prove product compliance, register with Amazon Brand Registry, designate an RP, provide manufacturer information, and publish essential information on product pages.
• Resellers: Prove product compliance, designate an RP, provide manufacturer information, and display product images and safety details.
• Removing Products from Sale: If not continuing sales in EU stores, remove affected products from inventory via Manage Inventory dashboard or FBA.
• Displaying Information on Product Pages: Within 24 hours of confirmation, product detail pages will feature details of your RP and manufacturer, accompanied by relevant images and safety documentation.

Submitting Compliance Details to Amazon

Use the Add Compliance Information widget in the Manage Your Compliance dashboard to provide necessary details. Submit Responsible Person and manufacturer information for FR, DE, IT, ES.

Related: A Comprehensive Guide to Global Ecommerce for US Sellers

New Seller Tools and Updates

Amazon Launches the New Manage All Inventory BETA Tool

Amazon recently introduced the Manage All Inventory BETA tool to streamline inventory management. With improved visibility by displaying up to 250 listings per page, sellers will get a more comprehensive view of their inventory at a glance. The tool offers both a condensed view and a more detailed layout.

To set your tool defaults, click the gear icon in the dashboard to navigate to the Preferences page, where you can customize your view according to your unique workflow.

Variations are now tied to parent ASINs and can be expanded or contracted in their parent/child groupings.

The “All filters” option provides a convenient way to sort and organize inventory based on specific criteria such as listing conditions.

Another welcome addition to the Manage All Inventory BETA tool is the ability to add business prices and quantity discounts directly from the inventory management interface. This feature simplifies the process of setting competitive prices and incentivizing bulk purchases, helping sellers maximize their sales potential.

Another welcome addition to the Manage All Inventory BETA tool is the ability to add business prices and quantity discounts directly from the inventory management interface. This feature simplifies the process of setting competitive prices and incentivizing bulk purchases, helping sellers maximize their sales potential.

For sellers looking to learn more about the new Manage All Inventory BETA tool and explore its full range of features and capabilities, Amazon offers a comprehensive tour of the product updates.

Visit the Manage All Inventory BETA page to access valuable resources and guides to help them make the most of this new tool.

Amazon Unveils New Price Discounts Dashboard

In a bid to empower sellers and enhance their ability to manage inventory effectively, Amazon has released the Price Discounts dashboard. This new feature allows sellers to offer discounted prices on limited quantities for up to 30 days, providing a strategic avenue to sell through inventory and stimulate sales.

When a price discount is activated, shoppers browsing the platform will see the reduced price prominently displayed alongside a strikethrough reference price. This visual representation serves to highlight the potential savings, effectively capturing the attention of potential buyers and encouraging conversions. Once the designated period elapses or the allocated quantity is exhausted, the discounted price seamlessly reverts to its regular rate.

Pro tip: Take it a step further by offering customized percentage-off or flat-rate discounts on products with brand-tailored coupons. Choose “Brand” as the audience type to effectively target high-intent customers within distinct categories, including repeat customers, recent customers, brand cart abandoners, and high-spend customers.

Strategic Discount Pricing

The flexibility of the Price Discounts tool allows sellers to execute pricing initiatives on a global scale. Sellers have the freedom to select the Amazon store in which they wish to offer discounted prices, tailoring their approach to specific market dynamics and consumer preferences.

The comprehensive performance tracking capabilities of the Price Discounts tool extend beyond individual listings, offering sellers valuable insights into their global sales performance. Sellers have the option to analyze performance metrics by region, Amazon store, and ASIN, facilitating informed decision-making and strategic planning.

Overall, the introduction of the Price Discounts tool heralds a new era of flexibility and control for Amazon sellers, offering a powerful solution to address inventory challenges and drive sales growth. By leveraging this innovative tool, sellers can effectively navigate seasonal fluctuations, clear excess inventory, and capitalize on strategic sales opportunities to maximize profitability.

Personalized Recommendations Now on the Fulfillment Insight Dashboard

Amazon’s latest introduction of the Fulfillment Insight Dashboard brings a powerful tool for sellers to enhance their delivery performance.

With this dashboard, sellers gain valuable insights into their fulfillment operations, particularly for seller-fulfilled, non-Prime orders. The dashboard offers personalized recommendations tailored to specific categories like handling time and on-time delivery rate, enabling sellers to address any issues that may be impacting their fulfillment performance.

This not only ensures a smoother experience for customers but also helps sellers maintain high standards and meet Amazon’s stringent requirements.

Monitor SAFE-T Claims Summary with New Dashboard

Amazon has recently launched a new SAFE-T dashboard aimed at giving sellers the ability to track their SAFE-T claims and related reimbursements more effectively.

This dashboard provides sellers with detailed insights into their claims, including the percentage of claims granted, claim amount granted, top three claim denial reasons, and the top three products with claims.

SAFE-T, which stands for “Sold as New, Fulfilled by Amazon, Transferred Customer Returns,” allows sellers to appeal Amazon’s decision to issue a customer refund. In cases where Amazon determines that sellers were not at fault, they may be issued a reimbursement at Amazon’s sole discretion.

However, sellers have expressed various concerns and frustrations regarding the claims process. Some have highlighted the absence of a standardized form for submitting claims, suggesting that such a form could potentially reduce the likelihood of claim denials.

Others have emphasized the need for policy clarification and consistent adjudication, particularly concerning return shipping charges. There is a consensus among sellers that adherence to rules and policies does not always guarantee reimbursement, leading to feelings of frustration and confusion. Some sellers have questioned the fairness and transparency of Amazon’s policies and procedures.
Overall, while the new SAFE-T dashboard represents a step forward in providing sellers with greater visibility and control over their claims, there remains a need for ongoing improvements and enhancements to ensure a fair and equitable claims process for all sellers.

Related: Claim Reimbursement for Losses Caused by Amazon, Maximize Gains and Minimize Hassle With Amazon Reimbursement Services

Amazon Adds UPS Ground Saver to Buy Shipping

In response to the evolving needs of sellers and customers alike, Amazon has recently integrated UPS Ground Saver into its array of shipping options available through Amazon Buy Shipping. This addition offers sellers a reliable solution specifically tailored for residential deliveries, ensuring packages reach their destinations efficiently and effectively.

With UPS Ground Saver, sellers can purchase shipping labels directly through Seller Central, Shipping API v2, or select multichannel shipping integrators. This service brings several advantages to the table, including the ability to deliver seven days a week and cater to non-urgent residential packages.

Moreover, UPS Ground Saver extends its reach beyond traditional addresses, allowing deliveries to PO boxes, US territories, and military addresses worldwide. 

Another notable feature of UPS Ground Saver is its flexibility in accepting packages of varying sizes, accommodating parcels up to a maximum size of 130 total inches.

For sellers utilizing multichannel-order management tools or proprietary software linked to Amazon’s APIs, integrating UPS Ground Saver into their shipping methods may initially require manual configuration. However, this setup paves the way for seamless automation of order fulfillment processes using this convenient shipping option.

By leveraging UPS Ground Saver, sellers can streamline shipping operations, expand delivery capabilities, and ultimately drive greater satisfaction among their customer base.
Visit UPS shipping services and restrictions for more information.

Related: Amazon Working to Bring USPS Ground Advantage to its Buy Shipping Service

Temu represents a fresh wave of Chinese eCommerce entrants reshaping Western markets. Since its September 2022 launch in the US, it has expanded to 56 countries. With monthly sales surpassing US$2 billion and showing steady growth, Temu is making significant strides in the global eCommerce arena.

Behind Temu’s Meteoric Rise in the US

Introduced by Chinese eCommerce powerhouse Pinduoduo (PDD) in July 2022, Temu has swiftly amassed 50 million downloads globally, surpassing Amazon in popularity. This meteoric rise stems from its exceptionally competitive pricing, bolstered by savvy social commerce strategies, several 30-second Super Bowl commercials, and influencer marketing tactics.

This puts Temu front and center of American consumers, posing a potential challenge to Amazon’s dominant position in the US eCommerce market.

To compete with Amazon, Temu could leverage its strengths in several key areas:

Low Price Strategy to Lure Customers

Imagine discovering your regular Amazon buys at unbelievably discounted rates on Temu? Consumers are eager to seize such opportunities, as reflected in its $3 billion in revenue by the first half of 2023.

Temu’s business model hinges on affordability. The platform offers a diverse range of products, from affordable $12 dresses to $20 sneakers, alongside a variety of holiday decorations, storage solutions, and toys reminiscent of items found in dollar stores. This approach targets a wide customer base, especially bargain seekers, by offering cost-effective products.

As inflation rates climb, American shoppers gravitate towards Temu for their purchases. The company’s catchy slogan “Shop like a billionaire” has propelled it to claim 17% share of the US market, disrupting established American retailers like Amazon.com, Dollar General, Dollar Tree, and Five Below.

Low Operational Costs

Unlike Amazon, Temu specializes in unbranded or white-label products, akin to Shein’s approach. 

Temu primarily offers mass-produced goods from China, leveraging the country’s low-cost manufacturing. Its efficient supply chain aggregates products for unified packaging, reducing logistics expenses. For example, shipping costs from Guangzhou to the US per small parcel can be remarkably low.

While Amazon boasts broader product offerings and brand recognition, Temu thrives on affordability, catering to a specific consumer niche.

Lower Spending on Inventory and Warehousing

Temu uses a semi-hosted model, through which sellers are responsible for overseeing products in their own warehouses, setting supply prices (which are still validated by Temu buyers), and fulfilling orders, similar to Amazon’s Fufilled by Merchant method.

Until recently, the Chinese eComm giant used a full hosting model, where it oversaw pricing entirely. Under this model, the suppliers simply deliver goods to Temu’s domestic warehouses, where it handles logistics, warehousing, customer service, and marketing. However, implementing and maintaining a full hosting model can be expensive due to the need for infrastructure, technology, and manpower. Plus, sellers have less control over fulfillment and inventory management.

For that reason, the semi-hosted approach is integral to Temu’s cost-cutting and efficiency-boosting plan. This model may help reduce expenses and improve fulfillment efficiency. 

Some sellers speculate that Temu’s semi-hosted approach might offer an alternative for Amazon sellers aiming to liquidate excess inventory. Considering the expenses linked to storage and shipping charges on Amazon, this model could present a financially viable option.

Reverse-Manufacturing Model

Similar to Shein, Temu operates under a reverse-manufacturing approach that revolutionizes the industry with its Demand-Driven Planning strategy. Beginning with limited product quantities, it swiftly adapts to consumer demand by restocking popular items and replacing less successful ones.

This dynamic model ensures responsiveness to market shifts and evolving consumer preferences, setting a new standard in business agility and efficiency. It also enables a broader product selection compared to traditional retail methods.

For instance, Shein successfully churned out 150,000 new products in 2020, surpassing its rivals significantly. Temu’s adoption of a similar strategy in the global eCommerce landscape is now garnering attention, overshadowing Shein’s achievements. 

In contrast, Amazon employs a dynamic pricing approach (thereby pricing sellers with less competitive offers out of the market) and imposes multiple seller fees (making the marketplace a viable option for those with wider margins). But the retail giant’s success can be attributed, in part, to its adept navigation of critical shopping periods like Prime Day, Black Friday, and the broader holiday season along with its delivery speed and decades-long foothold.

Temu’s Impact on US Rivals

As one of the rapidly expanding eCommerce platforms today, Temu has indeed significantly influenced various business models across the US, whether they operate online or offline.

Versus Amazon

Temu’s rapid rise presents a formidable challenge to Amazon’s traditional business approach, particularly Jeff Bezos’s “flywheel theory,” which prioritizes competitive pricing and enhanced user experience to drive traffic and attract more sellers to the marketplace.

However, Temu’s aggressive pricing undermines this model, leading Amazon to exclude Temu from its price comparison system in June 2023, citing concerns over product authenticity. This move highlights Amazon’s struggle to match Temu’s pricing strategy.

Challenging Amazon’s Middleman Model

Unlike Amazon’s middleman model, where it facilitates transactions between sellers and consumers, Temu directly connects manufacturers with buyers, bypassing intermediaries. While Amazon’s model has dominated the US eCommerce market, the rise of Temu challenges its reliance on intermediaries, potentially disrupting its pricing structure and market dominance.

Versus Dollar Stores

Though dollar stores have retained their appeal for customers purchasing food, beverages, and household products like detergent, they face challenges due to changing consumer preferences and operational issues.

For instance, as part of its ongoing restructuring efforts, Amazon has disclosed plans to reduce its Buy with Prime team by 5%, potentially impacting retailers relying on its fulfillment and delivery services for their off-Amazon sales.

Dollar General’s yearly profit outlook has been reduced thrice due to cautious spending by budget-conscious shoppers, shifting toward lower-margin consumables. Margins declined as markdowns on excess inventory increased, exacerbated by retail theft. 

Earnest Analytics reports Dollar General saw a decrease in customer spending, dropping from 60% to 51% compared to the previous year. Dollar Tree experienced a similar decline from 30% to 26%. Conversely, Temu’s share of customer spending rose significantly from 0% to 14%. Meanwhile, spending at specialty discounters like Five Below remained consistent.

This report suggests that Temu is capitalizing on consumer weariness due to elevated prices and inflation.

Overall, as the market undergoes constant transformation, it becomes intriguing to observe the response of current industry leaders to Temu’s disruptive strategies.
Perhaps, for Temu, the difficulty lies in preserving its pricing superiority, particularly amid potential shifts in global trade regulations, consumer preferences, technological innovations, and policies influencing tariffs and taxes. Changes to these regulations could directly influence Temu’s pricing approach and its competitive position.

Related: Major eComm Players Making Big Changes to Take on Amazon

In the heart of Seattle’s Denny Triangle, Amazon’s clandestine subsidiary, Big River Services International, operates under the guise of a bustling ecommerce enterprise, the Wall Street Journal reports, republished on LessWrong.com. But behind this facade lies a secretive mission: Project Curiosity.

Since its inception in 2015, Project Curiosity has orchestrated stealthy corporate strategies aimed at infiltrating ecommerce platforms and gathering critical intelligence on competitors. Under the cloak of fictitious brands and covert operations, Amazon has deployed Big River to penetrate rival marketplaces and extract invaluable insights.

Big River’s modus operandi involves creating and selling products under fabricated brands, allowing Amazon to gather data on competitor platforms while concealing its true identity. From scooping up liquidated goods to penetrate Walmart’s marketplace to crafting streetwear brands in Japan, Big River operates on a global scale, gathering data across 13 different ecommerce marketplaces.

Although initially unable to qualify for Walmart as a seller, Big River eventually secured entry onto the platform, boasting multiple product listings under the seller name “Atlantic Lot,” all while collecting data on Walmart’s operations without its knowledge. Reports show that in 2023 alone, Big River raked in an annual revenue of $125,000 through sales facilitated on Walmart.com and approximately $1 million in annual sales by retailing goods across various ecomm platforms, such as eBay, Shopify, and Amazon.

Note: Walmart is on the lookout for seasoned sellers with a proven track record of steady and significant sales. While exact revenue thresholds remain undisclosed, it’s generally suggested that sellers demonstrate annual sales of at least $500,000 across platforms like Amazon or other sales channels. While exceptions may be made for sellers with slightly lower sales volumes, a strong history of sales performance stands as a criterion for consideration.

The operation’s reach extended into logistics, with Big River discreetly engaging with FedEx to gain early insights into pricing and operational terms, feeding back valuable information to Amazon to inform its competitive transport strategies.

Moreover, Big River’s employees operated under a veil of secrecy, adopting policies not to share documentation via email to reduce the paper trail, using non-Amazon email addresses and conducting meetings in private areas to ensure confidentiality. They even infiltrated eBay’s seller conference, gathering exclusive intel intended for eBay sellers and funneling it back to Amazon.

Despite Amazon’s claims that Big River primarily serves to understand how selling partners experience its platform rather than spying on rivals, many questions remain unanswered regarding the covert nature of its operations. Concerns over antitrust implications arise as Amazon’s stealthy tactics may provide it with unfair advantages in the marketplace, potentially stifling competition and harming smaller sellers.

For sellers directly competing with Amazon, the revelation of Project Curiosity raises concerns about fair competition and data privacy. With Amazon gaining access to extensive competitor data through covert means, smaller sellers may find themselves at a significant disadvantage, struggling to compete on an uneven playing field.

In light of these revelations, the impact of Amazon’s secret operation on both competitors and sellers underscores the need for increased transparency and regulatory scrutiny in the ecommerce sector. As Amazon faces mounting antitrust scrutiny globally, the revelation of Project Curiosity adds fuel to the fire, raising questions about the tech giant’s market dominance and its potential abuse of power.

Related: Amazon Reduces Their Private Label Catalog Amid Mounting Regulatory Pressure, 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

In his annual letter to Amazon shareholders released April 11, CEO Andy Jassy expressed even greater enthusiasm for Amazon’s future, citing a remarkable 12% increase in revenue for 2023.

The letter also covered “continued customer experience improvements across our businesses,” including the transformative potential of Generative AI and the advantages of Amazon’s regionalized warehouse network.

Jassy also highlighted the company’s ongoing efforts to cut costs, underscoring its commitment to efficiency and growth. Although Amazon has yet to announce a date for its first-quarter earnings report, shareholders can anticipate updates during the annual shareholder event scheduled for May 22.

However, despite Jassy’s optimism, some longtime sellers were left feeling disillusioned after his recent CNBC interview, which coincided with his shareholder letter announcement. While Jassy praised the benefits that Amazon provides to sellers, his comments clashed with the frustration felt by sellers over new fees imposed by the tech giant. 

Pivoting to AI

Jassy is enthusiastic about artificial intelligence, particularly Generative AI, which he believes is the next frontier.

“Generative AI may be the largest technology transformation since the cloud – which itself, is still in the early stages – and perhaps since the internet,” Jassy wrote.

In his letter, he emphasized that Amazon’s AI initiative will involve a three-tiered approach:

• The foundational layer is geared towards developers and tech companies constructing or training their own AI models.
• The middle layer allows customization of existing models with user data, facilitated by Amazon’s Bedrock service. This layer is suited for a wider range of industries looking to build and scale custom generative AI apps.
• Finally, the top layer comprises various AI applications integrated across Amazon’s consumer businesses, such as Rufus, an AI shopping assistant, and enhanced Alexa features, alongside expanded advertising capabilities.

While these AI efforts may seem beneficial to customers and sellers, concerns arise about AI’s impact on major tech platforms. In a podcast interview, New York Times columnist Ezra Klein lamented the decline of internet quality due to AI-generated content flooding search results and social media feeds with misinformation and spam.

This flood of AI-generated content exacerbates existing issues like fake reviews on platforms like Amazon.com. Despite these concerns, he feels that companies like Amazon haven’t taken proactive steps to address the problem, leaving customers wary of the quality of their online experiences, which we’ve discussed in this article.

In fact, the term “generative AI” is mentioned multiple times, with Jassy expressing satisfaction in maintaining the broadest retail selection, potentially making it harder to combat fraud on the platform.

Jassy elaborated on Amazon’s pivot to AI during an interview on CNBC’s Squawk Box, highlighting its transformative potential in enhancing customer experiences. 

Faster Delivery Speeds

As the retailer transitioned to a regional model, outbound shipping expenses saw a significant decrease. Amazon strategically stocked thousands of highly demanded products in warehouses across various US regions, facilitating same-day and overnight deliveries.

In 2023, over 7 billion products were delivered within this timeframe, with more than 4 billion in the US and 2+ billion in the EU, indicating that speedy logistics and fulfillment are essential for the ecommerce success of sellers. To enhance efficiency further, Amazon plans to double the number of same-day warehouses, aiming to pick, pack, and ship many items in as little as 11 minutes.

These same-day facilities are expected to benefit Amazon’s grocery and pharmacy divisions, with plans to offer rapid delivery of perishable and non-perishable foods, as well as commonly ordered medications within an hour, supported by the expansion of the drone delivery business.

Continued Cost-Cutting Efforts

Jassy noted a significant decrease in the company’s “cost to serve” on a per-unit basis globally, marking the first decline since 2018, with US figures showing a decrease of over 45 cents per unit compared to the previous year. These reductions are attributed in part to Amazon’s regionalization efforts, which have effectively minimized transportation distances and associated costs.

The company also witnessed a 201% year-over-year improvement in operating income for 2023. As it sets its sights on 2024, Jassy reaffirms Amazon’s dedication to further cost reduction endeavors. This includes a continued focus on optimizing fulfillment architecture and enhancing inventory placement strategies to drive efficiencies across its operations.

Amazon is reportedly doubling down on integrating robotics into its operations, with more than 750,000 robots now working alongside its workforce. 

Despite being the world’s second-largest private employer, with 1.5 million employees, there has been a reduction of over 100,000 workers since 2021. This shift is notable considering that retail giant had 520,000 robots in 2022 and only 200,000 in 2019. While it is adding hundreds of thousands of robots annually, it is concurrently reducing its human workforce.

Warehouse robots are engineered to automate repetitive tasks, enhancing efficiency, safety, and delivery speeds for customers. This may sound great for sellers and customers, but this raises questions regarding the future role of human labor within the Amazon’s operational framework. The potential effect on employment, especially in roles characterized by high repetition and susceptibility to automation, is a subject of widespread concern.

Related: Amazon Warehouse Automation Increases Concerns over Job Loss and Product Selection Inaccuracy, Amazon Tweaks Logistics Strategy to Streamline Operations, Amazon Announces Further Cuts Amid Economic Uncertainty

Amazon’s Advertising Arm Booms

Amazon Ad Business has emerged as a key revenue driver, surging from $38 billion in 2022 to $47 billion in 2023, marking a notable 24% increase, which is twice the growth rate of the company’s overall revenue. This highlights the sellers’ need to heavily invest in Sponsored Ads to ensure their products gain visibility.
Failure to do so risks losing market share to competitors who are actively engaging in Amazon ad campaigns. The prevalence of advertising on marketplaces, including platforms outside of Amazon, indicates a fundamental shift in the ecommerce industry. As advertising becomes increasingly ubiquitous, sellers must factor in additional costs when calculating margins to remain competitive on Amazon and beyond.

Related: 3 Ways to Level Up Your Amazon Advertising Strategy, How To Optimize Amazon Attribution – the Secret to Off-Amazon Marketing, How to Use Amazon PPC to Scale Your Amazon Business

Backlash Against Amazon CEO: Sellers Criticize New Fees

When questioned by interviewer Andrew Ross Sorkin about the Federal Trade Commission’s antitrust lawsuit concerning Amazon, which alleges that the retailer exploits its influence over its selling partners, Jassy stood by the company’s treatment of SMEs, asserting its fairness and supportiveness.

However, Jassy’s claim of a great relationship with sellers has sparked criticism from those who feel their connections with Amazon are at an all-time low.

“It’s not hard to actually create software to put up an e-commerce website or storefront. It’s much harder to get distribution and access to customers, which is what Amazon gives sellers,” Jassy said.

“Sellers are making a lot more money selling on Amazon than they could on their own,” he added.

“If you look at things like FBA, which is our service that allows you to store your products with Amazon, we’ll pick, pack and ship it for you and it also is available for Prime shipping… It costs money, so we charge a fee for it, but it’s much more cost-effective for sellers. And while there’s always things we can be doing better for sellers and we work really hard at it, we have a great relationship with sellers.”

While the CEO asserts that sellers greatly benefit financially from Amazon, some disagree, citing increased margin pressure and complexity imposed by the company. Specifically, Amazon’s implementation of new fees on sellers, including inbound placement fees, fees for low inventory in warehouses, and fees for items with high return rates, adds to their discontent and challenges on the platform.

Sellers have taken to social media and forum site Sellers Ask Sellers to express opinions over Jassy’s comments, with many claiming that Amazon’s relationship with them is deteriorating. Here are some insights from longtime sellers’ views on Andy Jassy’s CNBC interview.

• Perception of Disparity: Many sellers believe Amazon’s relationship with them is beneficial primarily from Amazon’s perspective, as it allows the company to make profits while dictating terms and fees. They feel that their needs and perspectives are often overlooked.
• Sellers’ Adaptation: Some sellers acknowledge that selling on Amazon can be profitable, but only for those who can adapt to Amazon’s changing requirements and fees. Those who find the terms too stringent may struggle, while others navigate the system successfully.
• Tone-Deaf Remarks: Jassy’s claims about having a great relationship with sellers have been perceived as tone-deaf by some sellers. They feel his comments do not reflect the challenges and frustrations they face, suggesting either a lack of understanding of their experiences or a disingenuous platitude.
• Vulnerability and Dependence: Sellers feel a sense of vulnerability and dependence on Amazon, which can be a “horrible way to do business,” as stated by one commenter. They acknowledge Amazon’s advantages, but also express concerns about the company’s ability to control every aspect of the seller’s experience.
• Need for Diversification: Sellers recognize the importance of diversifying their business beyond Amazon to reduce dependency and cope with Amazon’s terms and fees.

Overall, these insights point to a complex and often strained relationship between Amazon and its sellers, with sellers seeking more understanding and fairness in their dealings with the ecommerce giant. 

While Amazon may have made progress in its “financial results and customer experiences,” sellers may wonder whether Amazon’s gains will translate into their losses.

From postponing new fees to implementing stricter safety standards, sellers continue to have to navigate through Amazon’s ever-changing policies.

For some product categories, Amazon is implementing compliance changes, including one for dietary supplements that became effective immediately upon release of the policy.

Be sure you are prepared for these changes. Read on to learn more about how they could affect your Amazon business.

1. Amazon Halts Rollout of Controversial Fee

Amazon has decided to postpone the recently introduced low-inventory-level fee for sellers utilizing its FBA service after facing uproar.

While the fee will still be charged for low inventory levels incurred between April 1 and April 30, Amazon plans to credit sellers for all fees incurred during this period. However, the fee will be reinstated without credit on May 1.

According to Dharmesh Mehta, Amazon VP of Worldwide Selling Partner Services, the goal of the credit is to help sellers determine if adjustments are needed to avoid the fee in the future, with any initial fees incurred being credited back.

The fee, first announced in December, applies to products with consistently low inventory levels relative to their unit sales, with the threshold set at less than 28 historical days of supply. Amazon argues that maintaining sufficient inventory levels allows for effective product distribution across its fulfillment network, improving fulfillment speeds and ideally generating more sales.

However, sellers have criticized the new fee, particularly those also charged for having excess inventory. The decision to postpone the fee comes amid continued scrutiny of Amazon’s seller fees, which generated $140 billion in revenue in 2023.

In a post on Seller Central Forum, many sellers express concerns about the practicality and fairness of the fee, highlighting challenges such as seasonal fluctuations, supply chain issues, and the impact on their business operations. Some sellers question Amazon’s motives, suggesting that the fee may be another revenue-generating tactic rather than a solution to logistical challenges.

One seller wrote, “With the new placement fees, Amazon is telling us where to ship our items based on historical data and consumer trends and we are now paying the burden of this. Then on the back end, when we don’t keep up with 28+ days of supply we get hit with a fee.

Not only that, but some units are seasonal and do better certain times of the year which change the level of items needed in the warehouse. Of course Amazon isn’t going to take this into account and the fees will keep on rolling in. Nothing about any of this makes any sense other than to collect more fees.”

Others raise specific issues regarding the fee’s implementation, such as its application to parent listings (historical days of supply is calculated at the Parent-ASIN level) and the lack of clarity on how it affects non-reorderable products.

Overall, sellers are calling for more transparency and consideration of their diverse business needs. These insights underscore the importance for sellers to stay informed and advocate for their interests in navigating Amazon’s changing policies and fees.

Related: Brace for Higher FBA Fees in 2024, What are Amazon FACOS? How to Calculate and Lower Amazon FBA Fees, Navigating Amazon’s Increasing Fee Stack

2. Low-Inventory Cost Coverage Fee (Pan-EU)

Amazon’s latest announcement spells big changes for sellers enrolled in the Pan-European FBA program. The introduction of the Low-Inventory Cost Coverage Fee (Pan-EU) starting April 1, 2024, targets the issue of low inventory levels, particularly for standard-size units shipped across Germany, France, Italy, and Spain. As highlighted above, April fees will be refunded meaning that the program will, in actuality, take effect May 1. 

Here’s What You Need to Know

This fee applies to products with historical inventory levels falling below 28 days of supply compared to demand, assessed using 90-day and 30-day metrics. Sellers meeting both criteria face the fee, which ranges from €0.06 to €0.54 per unit.

Exceptions and Exemptions

New sellers, new parent-level product listings, and low-volume products are exempt, easing the burden for those new to the Amazon EU marketplace or dealing with niche products.

Understanding Fee Calculation

Fees vary based on product size and historical days of supply. Detailed rates are available on Amazon’s low-inventory policy page for sellers to anticipate and manage costs.

Strategies for Monitoring and Mitigation

Sellers can track historical days of supply on the FBA inventory page, enabling proactive adjustments to avoid or reduce fees.

How to Access Inventory Metrics

Go to the FBA inventory page and click Details in the Historical Days of Supply column for important data guiding inventory management decisions.

Adapting to Change

Stay informed and adjust inventory management practices to thrive amidst these fee changes. For a comprehensive overview, visit Amazon’s 2024 EU Fee Changes page.

With proactive monitoring and strategic adjustments, sellers can navigate this new landscape and sustain success in the Pan-European FBA program.

3. Dietary Supplements Policy Update

Amazon has implemented new guidelines for dietary supplements, prioritizing safety in its marketplace. All dietary supplement products must now undergo verification by a third-party Testing, Inspection, and Certification (TIC) organization. True to form, Amazon made this announcement on April 2, 2024, effective immediately leaving sellers with questions as to how this will affect their business and asking for clarification as to what is required of them. 

Amazon pointed sellers to the Manage Your Compliance dashboard, listing non-compliant supplement listings and their due dates. Failure to comply by the deadline could result in listing removal. 

To ensure compliance, use the dashboard to initiate testing with a TIC organization. Once initiated, work directly with the TIC company for testing completion. For detailed instructions, visit the dashboard’s Add or Appeal Compliance > Request Lab Service. The dashboard also links out to Amazon’s Service Provider Network where sellers can find companies that can conduct the testing and certification.

Upon receiving a compliant test result, your product will regain eligibility for sale on Amazon, ensuring adherence to the company’s updated policy.

However, should you hold the belief that your products do not require testing verification, go to Manage Your Compliance > Appeal request and select an appeal reason > click Submit.

What this means for sellers?

The comments from sellers on Seller Forum offer insights into the impact of Amazon’s updated dietary compliance requirements:

• Potential for higher costs: One seller expressed concerns about potential increased costs associated with verifying their products through third-party TIC organizations. This could pose financial challenges for sellers, especially smaller brands with limited resources.
• Transparency and information access: The seller also highlighted the need for more transparency and accessible information regarding the new compliance requirements. Meanwhile, on SellersAskSellers forum, another expressed frustration over Amazon’s vague requirements, the identity of TIC organizations involved, and the overall process.
• Barrier to entry for smaller brands: The updated compliance requirements may create barriers to entry for smaller brands. Compliance with the new regulations could be more challenging for smaller businesses due to financial constraints and limited resources.

Additionally, sellers speculate about the potential implications of these changes, including Amazon’s own compliance standards and the impact on product availability and listing disruptions. Some express doubts about the effectiveness of the new measures and anticipate pushback from the industry.

In general, sellers are apprehensive about the practical implementation and the broader implications for the supplement industry on Amazon.

However, it’s also hard to deny that under these updated guidelines, the Amazon marketplace undergoes a transformation, shifting from an unregulated assortment of dietary supplements to a curated selection meeting stringent safety, quality, and transparency criteria.

This move aligns with consumer expectations, bolstering the credibility of Amazon’s supplements offerings.

Visit Dietary Supplements policy page for more details.

Related: Amazon Removes Tons of Supplement Offers Due to Non-Compliance with New Requirements

4. Changes to Customs Clearance and Shipping Services Promotions

Effective March 1, 2024, adjustments have been implemented to the pricing, promotions, and terms and conditions of Customs Clearance and Shipping Services, Amazon’s shipping solution for transporting inventory between the UK and the EU. As part of the updated program, new sellers are now offered an enticing incentive: complimentary brokerage services valued at €60 for their initial shipment.

Taking advantage of this new promotion may provide new sellers with a valuable opportunity to save on initial costs and streamline their entry into the Amazon EU marketplace. By waiving the brokerage fee, Amazon is effectively reducing the financial burden on new sellers and making it more affordable for them to start selling their products on the platform.

This offer not only helps new sellers save money but also encourages them to explore the benefits of using Amazon’s Customs Clearance and Shipping Services right from the beginning of their selling journey. Additionally, leveraging this incentive allows new sellers to gain experience with Amazon’s logistics infrastructure and better understand how to navigate the complexities of international shipping, ultimately setting them up for success in the competitive ecommerce landscape.

Related: A Comprehensive Guide to Global Ecommerce for US Sellers, Mastering HS Codes in Global Supply Chains

5. Policy Update for Automotive and Marine Emissions Tuners

Starting March 11, 2024, sellers on Amazon are now mandated to submit a California Air Resources Board Executive Order (CARB EO) number for both new and existing listings of automotive and marine emission tuners. This requirement aims to ensure compliance with the Clean Air Act, which prohibits the sale of any device that unlawfully interferes with or disables an engine’s emission controls, commonly known as defeat devices.

By implementing this new rule, Amazon aims to prevent the sale of such defeat device tuners. Failure to provide a valid CARB EO number for a listing may result in its removal until the necessary documentation is provided.
For further information regarding compliance requirements and instructions on how to submit a CARB EO number, refer to Automotive and Powersports and California Air Resources Board (CARB).

Related: Amazon Seller Tools Update and New Product Safety Requirements

With the introduction of the UK Procurement Act, a new era of opportunity has emerged for small and medium-sized enterprises (SMEs) businesses in the UK. Let’s delve into what the UK Procurement Act entails, and the significant implications and benefits it offers for SMEs across the country. This effort demonstrates Britain’s commitment to strengthening this business segment.

Defining the UK Procurement Act

The UK Procurement Act, enacted in 2023, is a comprehensive legislative framework designed to govern the procurement process within the public sector. It sets out the rules and regulations that public sector organizations must follow when purchasing goods, services, or works. The Act aims to promote transparency, fairness, and value for money in public procurement, while also encouraging competition and supporting SME participation. The defined guidelines of the act are, in part, meant to funnel more public sector dollars into SMEs rather than only large corporations.  

Implications for SMEs

Leveling the Playing Field

One of the primary implications of the UK Procurement Act for SMEs is the leveling of the procurement playing field. Historically, SMEs have faced barriers to entry, such as complex contract bidding processes and requirements that favor larger companies. The Act introduces measures to simplify procedures and reduce bureaucracy.

Streamlined processes can save time and resources, making it more feasible for SMEs to engage in public procurement opportunities or compete on a more equal footing with larger corporations.

In a related move, Amazon Business UK has recently introduced a new feature called “Prefer Small and Medium Enterprises,” empowering business clients to make tailored purchases from SMEs. This functionality allows procurement specialists to pinpoint sellers with fewer than 250 employees and revenue below €50 million while sourcing supplies through Amazon B2B.

Enhanced Access to Opportunities

By promoting transparency and competition, the UK Procurement Act creates greater visibility and accessibility to public sector contracts for SMEs. Public sector organizations are encouraged to publish contract opportunities in a clear and accessible manner, allowing SMEs to identify and pursue suitable contracts more effectively. Additionally, the Act prohibits unfair practices such as bid rigging and discrimination, further opening up opportunities for SMEs to participate in public procurement processes.

Stimulated Growth and Innovation

Engaging in public sector contracts can drive growth and innovation within SMEs. The Act encourages public sector organizations to consider factors beyond price when evaluating bids, such as social value and innovation. This incentivizes SMEs to differentiate themselves through innovative solutions, driving creativity and competitiveness in the market.

Long-Term Sustainability

Securing public sector contracts can contribute to the long-term sustainability of SMEs. Public sector contracts often provide a stable source of income, offering SMEs greater financial security and resilience, especially during economic downturns or market fluctuations.

Empowering SMEs through Procurement Reform

The UK Procurement Act represents a significant milestone in public procurement reform, with far-reaching implications and benefits for SMEs in the UK. By fostering transparency, competition, and fairness, the Act opens up new opportunities for SMEs to participate in public sector contracts, driving growth, innovation, and long-term sustainability. Amazon’s new PreferSMEs feature may be a sign that Amazon seeks to snag more of public sector dollars through its representation of SME eCommerce brands.

Related: EU B2B Opportunities Expand on Amazon, 11 Powerful B2B Email Templates that Win Customers

Amazon Update! Let’s go!

First up, the Manage Your Customer Engagement (MYCE) tool for brands has been discontinued. What should you do now and next?

Brand owners with early-stage EU businesses can join the Amazon Sustainability Accelerator program, offering valuable opportunities for growth and sustainability initiatives.

For Amazon Business sellers: Amazon Business launches in Mexico, making it the 10th country where this service is available.

New UK feature! “Prefer Small and Medium Enterprises,” has also been launched, enabling business customers to specifically support SMEs.

Dive in below.

1. Amazon Discontinues Manage Your Customer Engagement (MYCE) Tool

MYCE for brands has been discontinued as of February 16, 2024. Amazon has determined that the tool did not consistently meet its standards for quality and value delivery to both sellers and customers. Amazon only made this announcement 2 weeks ago, 3 weeks after it stopped delivering campaigns.

Amazon points to alternative tools like Brand Tailored Promotions and Brand Customer Reviews to assist in fostering brand loyalty by offering customized discounts and addressing important customer feedback. If you want to preserve your MYCE data, campaign metrics will remain accessible on the dashboard until April 30, 2024.

What Sellers Say

There are mixed reactions among sellers. Some express cynicism, highlighting Amazon’s policy that buyers are considered Amazon’s customers rather than the sellers’. Another seller sarcastically mocks the notion of Amazon effectively addressing critical customer feedback. 

However, there are also those who acknowledge the tool’s limited effectiveness but express curiosity about potential innovative marketing solutions Amazon may introduce to enhance sales organically, indicating a willingness to adapt to changes. 

2. Accelerate Your Startup’s Growth with Amazon’s Sustainability Program

EU/UK sellers can now apply for the Amazon Sustainability Accelerator program, designed to empower entrepreneurs in scaling their sustainable businesses.

In partnership with EIT Climate-KIC and Founders Intelligence, this year’s program is open to climate-tech startups in the following areas:

• Consumer Products: Early-stage startups offering sustainable physical consumer products that are either recently launched or nearing market introduction.
• Circular Economy: Startups developing solutions aimed at prolonging product lifespans through reverse logistics, user-accessible repair capabilities, and similar innovations.
• Energy in Buildings: Startups dedicated to supporting building decarbonization efforts through the utilization of AI and advanced materials.
• Packaging: Startups specializing in packaging materials, closed-loop reusable systems technology, and related areas.

Program Features

• £20,000 in grants and credits
• 10-week program
• Expert mentorship
• Immerse yourself in workshops, bootcamps, and insights from industry experts
• Access the program virtually from the EU Economic Area, UK, or Switzerland, with in-person options available.
• Events and community
• Free account management

With a focus on skill development and environmental impact, the Accelerator has already aided over numerous startups, offering grants, credits, and assisting in sales growth and fundraising efforts.

Applications for the inaugural cohort, concentrating on the circular economy, energy efficiency in buildings, and packaging, must be submitted by April 5th, 2024. Accepted candidates will be revealed in the spring. The deadline for the subsequent cohort, emphasizing consumer products, is July 31st, 2024, and successful applicants will be announced in the fall.

Startups in the UK, Spain, Germany, Italy, France, and the Netherlands can apply online starting today.

3. Amazon Business Now in Mexico

Amazon Business has extended its reach to Mexico, marking its latest global expansion. This move positions Mexico as the tenth country where Amazon Business operates, alongside established markets like Germany, Canada, and the US. This newly unveiled B2B marketplace is tailored to address the sourcing requirements of businesses of all sizes.

What to Expect

• Offering selection and convenience: Amazon Business extends the same product selection and convenience enjoyed by customers on Amazon to Mexico’s B2B space.
• High brand discoverability: Business customers quickly find deals, business-only pricing, and quantity discounts.
• Designed to suit various business needs: Its tailored features accommodate businesses of all sizes, encompassing business-only pricing for eligible selections, multi-user accounts for streamlined purchasing, and dedicated support for your unique business needs. 

In a press statement, Pedro Huerta, country manager for Amazon Mexico, mentioned that Amazon Mexico currently hosts nearly 18,000 domestic sellers, predominantly consisting of small and medium-sized businesses, accounting for 99% of the total. These businesses collectively offer over 3 million listed products, contributing significantly to job creation with approximately 57,000 direct and indirect employment opportunities.

“We are thrilled to expand our North American reach and offer the comprehensive sourcing support of Amazon Business to the 5 million small and medium-sized businesses based in Mexico,” said Huerta.

According to PYMNTS, this move is part of Amazon’s ongoing effort to “help SMBs move from the process of ordering business products to a procurement mindset.”

Amazon aims to facilitate an efficient procurement process by making it easy for customers to find and purchase goods in the correct form sizes and packs, diversifying payment options, and introducing credit and installment plans.

4. New Tool Facilitating Large Customer Purchases from SMEs

Amazon Business UK has introduced a new feature called “Prefer Small and Medium Enterprises,” designed to facilitate targeted purchases from SMEs selling on the platform. This feature allows procurement professionals to easily identify sellers with fewer than 250 employees and revenue below €50 million when sourcing supplies on Amazon Business.

SMEs play a vital role in the economy, contributing significantly to employment in various sectors. However, many SME owners struggle to scale their businesses online. 

Research conducted by Amazon Business indicates a growing trend among business customers in the UK, who have increased spending with SME selling partners by over 60% year-over-year. This highlights the strategic importance of supporting SMEs for larger organizations.

In addition, recently passed legislation is pushing for increased spending with SMEs. The UK government has enacted new procurement laws mandating public bodies to prioritize SMEs in their procurement procedures. This legislation intends to facilitate SMEs in securing a larger portion of the annual £300 billion expenditure.

By leveraging Amazon Business, SMEs, ranging from regional suppliers to family-owned businesses, gain increased visibility and access to multinational companies. This enhanced exposure improves their chances of securing larger orders and driving business growth.

Related: EU B2B Opportunities Expand on Amazon

ChatGPT has witnessed a decrease in recent months, but the enduring presence of AI remains unwavering. In response, eCommerce platforms are diligently forging their own AI solutions, whether through in-house development or strategic acquisitions, to amplify their product listings, refine search functionalities, and elevate the level of personalization offered to their customers.

The use of AI in professional settings is also on the rise, with a massive increase projected. At present, over 58% of users employing generative AI technologies are applying them in their jobs.

To illustrate the impact of this trend, here are several instances of how leading eCommerce platforms are embracing generative AI solutions.

Amazon

AI-Generated Summaries of Customer Reviews 
In August, Amazon introduced a major improvement to its customer reviews system through the implementation of generative AI technology. The primary goal of these brief review summaries is to provide shoppers with a quick overview of a product’s standout features and potential drawbacks, streamlining the decision-making process.

Each review summary spotlights commonly referenced product attributes and customer feedback extracted from written reviews. In addition, predefined keywords associated with specific product attributes enable customers to easily delve into more comprehensive details with a simple tap.

Suppose a customer seeks to gauge the product’s user-friendliness, a simple click on the “ease of use” attribute grants access to review highlights from other shoppers pertaining to that specific quality.

It’s important to highlight that the review summaries are generated solely from verified purchases found within Amazon’s review database. This method guarantees that customers can promptly assess collective feedback with a single glance, establishing a trustworthy benchmark for informed decision-making.

AI for Product Listing Creation

In September, Amazon unveiled a tool harnessing the power of generative AI for the creation of product listings. This technology is designed to assist sellers in rapidly generating and optimizing their listings on a larger scale.

The tool works by requesting sellers to input a selection of keywords or prompts to describe their product. It then generates a variety of content options for sellers to incorporate into their listings, such as product titles, bullet points, and detailed descriptions. Sellers may use this tool for crafting new listings from scratch or for fine-tuning and enhancing their current ones.

While enhancing the volume of high-quality listings represents a major application of Amazon’s AI tool, sellers must exercise due diligence by thoroughly reviewing their listings to eliminate any inaccuracies or the use of off-brand language.

Walmart

In a demonstration for TechCrunch, a Walmart representative explained the company’s ongoing exploration of generative AI to enhance the shopper’s journey at every step, ranging from the initial page browsing and search phase to the final purchase decision.

Three upcoming features on the horizon encompass a shopping assistant, generative AI-driven search capabilities, and interior design functionality.

AI Shopping Assistant

Set to debut in the weeks ahead, the shopping assistant offers an improved, interactive, and conversational engagement for customers. It possesses the capability to address inquiries, offer tailored product recommendations, and provide comprehensive information about particular products. For example, it can assist shoppers by suggesting Christmas gift ideas suitable for Christmas parties.

AI-Driven Product Recommendations

Soon, shoppers will have the ability to input contextual inquiries directly into the search bar. Leveraging advanced generative AI technology, Walmart’s search tool possesses the capability to grasp contextual clues and create a curated selection of products that match a single query.

For instance, if a shopper is looking to organize a unicorn-themed birthday party, the AI will showcase a diverse assortment of items, including balloons, paper napkins, streamers, and more. This innovative feature not only streamlines the process but also eliminates the need for customers to conduct multiple separate searches, thus enhancing efficiency and saving valuable time.

According to Walmart execs, this latest tech initiative aims to give customers the means to discover a broader range of products and brands. This vision is enabled by the platform’s advanced personalized features, starting with an improved search function that effectively organizes and categorizes products.

“Now, we can answer more complex and ‘mission-based’ customer questions, like giving lots of party planning ideas, instead of just returning a single item, like balloons. This means a wider range of products and brands can be seen in response to single queries,” Jon Alferness, Walmart US Chief Product Officer, told PYMNTS.

AI Interior Design Assistant

In addition to a generalist shopping chatbot, Walmart is also actively working on an interior design assistant to aid customers in transforming their living spaces. Alongside harnessing generative AI capabilities, this feature seamlessly integrates augmented reality (AR) technology into the process.

To get started, customers are required to upload a room photograph, after which the system captures images of each item within the space. Subsequently, they can engage the chat assistant for redecoration advice, and the AI will recommend item placements within the room. 

Customers retain the freedom to express their preferences regarding which items to retain or purchase. Furthermore, the AI inquires about a designated budget, enabling it to suggest affordable items that align with the customer’s financial constraints.

The forthcoming AI tools are set to be released a few months following the company’s initial foray into generative AI.

Back in August, Walmart unveiled a specialized AI tool designed to cater to the requirements of approximately 50,000 corporate employees. This tool, integrated into the recently launched Me@Campus super app, empowers employees with the means to efficiently manage various aspects of their Walmart work experience.

During this launch, the company expressed its intentions to simplify tasks like document summarization, meeting readiness, and project advancement, all while receiving favorable responses from users.

Shopify

Back in February, Shopify launched Shopify Magic, an AI tool for generating product descriptions for sellers. Now, the company is extending its capabilities with the introduction of a new AI technology, building upon the foundation laid by Shopify Magic.

Called Sidekick, the new AI-driven assistant is tailored to enhance your eComm operations by providing personalized assistance rooted in your Shopify data, streamlining your daily tasks for optimal efficiency and effectiveness.

Sidekick will be seamlessly integrated as a button within Shopify, offering quick responses to seller inquiries, which covers a wide range of information, such as sales trends and more.

The assistant is also capable of aiding you in keeping your Shopify stores up to date. For instance, it can swiftly implement site-wide discounts upon request, ensuring all items on the website reflect the desired price adjustments.

eBay

eBay has recently introduced a new AI-powered listing creation tool that uses images provided by sellers to automatically populate additional product details.

This new feature is poised to streamline the selling process, catering particularly to beginner sellers who might find themselves daunted by the exhaustive information required to create a listing.

It uses the photos uploaded by sellers to autonomously fill out essential listing details, such as product titles, descriptions, item categories, and other pertinent information crucial for potential buyers.

However, eBay’s AI direction seems to have left many long-time sellers dissatisfied with the platform’s recent developments.

The official eBay community forum frequently visited by sellers is increasingly inundated with grievances about the subpar performance of eBay’s listing generator. This tool, which has been undergoing limited testing, has raised concerns, with one community member, vssoutlet, asserting that the AI-generated content is not only misleading but, in some cases, entirely inaccurate.

Vssoutlet highlights an example involving a Pentax SLR camera listing, where eBay’s AI erroneously claimed the camera came with a lens kit—a glaring error (that has since been fixed).

At present, this feature is exclusively accessible through the iOS app, with forthcoming plans, as reported by TechCrunch, to extend its availability to Android users in the near future.

Google Shopping

Intending to recreate the virtual fitting room experience, Google has rolled out an advanced virtual try-on feature powered by generative AI. Initially, this tool was exclusively accessible for women’s tops.

Customers have the option to choose items bearing a “Try On” badge, which enables them to pick a virtual model for trying on tops offered by brands such as H&M, Loft, Everlane, and Anthropologie.

This cutting-edge technology aids people in envisioning how these clothing items might appear on a diverse range of models, spanning from size XXS to 4XL, with varying skin tones, body shapes, and hair types.

Google has additionally enhanced its shopping filters, allowing users to fine-tune their search based on factors such as color, style, and pattern. These filters, initially accessible for tops, harness the power of machine learning and visual matching algorithms to streamline the shopping experience.

Related: Should You Be Selling on These New Sales Channels

Impact of AI-Generated Content on Sellers

AI-generated content like product descriptions and review summaries carry substantial consequences for sellers, given their prominent placement on search results or product detail pages.

For example, Amazon’s review summaries are accompanied by a disclaimer, clearly stating that it originates from AI analysis of customer reviews. 

While sellers with predominantly positive product reviews stand to gain advantages, the introduction of AI-generated content introduces certain challenges for other sellers as well.

Amazon’s AI can assess a collection of reviews and oversimplify apparent product issues. The summarization process might fail to capture subtle nuances, such as instances of user error, which may turn potential customers away thinking that the product was defective.

Even when a product boasts an excellent overall rating, AI-generated summaries might highlight a single negative aspect frequently cited in customer feedback. This singular negative emphasis, driven by AI, could be enough to steer customers toward alternative product offers.

In addition, the potential for inaccuracies or even “hallucinations” (content that deviates from reality) in AI-generated customer review summaries should be a point of concern for sellers. Ill-executed AI content holds the potential to create misconceptions and unjustly tarnish reputations.

In fact, Amazon itself has recently required some authors to disclose the use of AI in their books following increasing complaints from the Authors Guild.

Per Amazon’s guideline, content, be it text, images, or translations within a book, is regarded as AI-generated when an AI tool played a significant role in its creation, even if the writer later made extensive edits. Conversely, if the writer initially generated the content and subsequently utilized AI for editing, or creative brainstorming, the content is categorized as AI-assisted.

Overall, AI-generated content has a direct influence on sellers, as it helps shape the way prospective customers view their products.

Although the advantages of a more effective and simplified shopping experience are evident, sellers may be right to be concerned about the potential of these AI tools to generate inaccurate descriptions or impartial reviews.

As eComm companies continually explore generative AI solutions, sellers must stay vigilant, recognizing the advantages and possible pitfalls associated with AI technology.

Related Post: AI in Ecommerce: How Artificial Intelligence is Transforming Online Businesses

Amazon has just dropped a new set of tools and compliance updates. Here is a roundup of what’s new.

If you sell in the UK, be sure your products comply with the latest Extended Producer Responsibility (EPR) obligations for packaged goods in the UK. This could me additional fees or cost and non-compliance may result in listing suspension so be sure you understand exactly what is needed. Amazon has also launched a new “Pay on Behalf” program to make compliance smoother for sellers.

Navigate the complexities of Multi-Channel Fulfillment (MCF) integration with a new Amazon tool to ensure that you find the right fulfillment solution for your business needs. 

On the marketing front, Amazon has implemented new coupon pricing requirements for both UK and US sellers to thwart coupon practices that may not be truly beneficial to customers.

Read on to learn more about what this means for you and your business. 

1. New EPR Obligations for Packaged Goods in the UK and Pay on Behalf Service

Amazon has introduced revisions to its EPR guidelines, impacting sellers involved in the trade of packaged goods or empty packaging within the United Kingdom. This adjustment mirrors the environmental regulations of the UK, seeking to enhance the accountability of producers regarding the entire life cycle of their products, with a specific focus on waste management and recycling practices.

New EPR Requirements Explained

The new EPR obligations require businesses involved in producing, supplying, or importing packaged goods to bear the responsibility for the post-consumer phase of their products. This includes guaranteeing the collection, recycling, and environmentally friendly disposal of packaging.

Your obligations under the Extended Producer Responsibility (EPR) regulations are contingent on the size classification of your organization, determined by specific criteria outlined below:

• Business type: Individual business, subsidiary, or group based in the UK 
• Annual turnover of £1 to  £2 million for small businesses and over £2 million for large businesses
• Used or supplied the following amount of packaging in a year:
  • More than 25 tons of packaging for small businesses
  • More than 50 tons of packaging for large businesses
• Involved in any of the following packaging activities: supplying packaged goods to the UK under their own brand, packaging goods without branding when supplied, importing packaging products into the UK, selling products through online marketplaces like Amazon UK, and renting or leasing reusable packaging. Additionally, businesses involved in supplying empty packaging are also considered covered by these regulations.

For both UK sellers and sellers operating outside the country, Amazon has introduced a “Pay on Behalf” service, streamlining compliance with these regulations. Through this service, Amazon will report sales data to the relevant agency and handle eco-contributions for these sales using a Producer Responsibility Organization (PRO) chosen by Amazon.

Important: Starting April 1, 2024, Amazon retains the authority to apply eco-contributions to your account, mirroring the contributions made to ensure your sales align with the EPR requirements for third-party sellers in the United Kingdom. This measure guarantees the compliance of your products for sale on Amazon.co.uk. More details can be found at the EPR services on Amazon Pay on Behalf page. Non-compliance may result in Amazon removing your listings from the UK marketplace.

For producers based in the UK, visit EPR Requirements: United Kingdom to access comprehensive details on ensuring compliance.

2. Easily Choose the Right MCF Integration Solution for Your Business

With its new MCF Integration Selection Tool, Amazon provides a diverse range of over 100 integration options. These include “Built by Amazon” apps, third-party apps, inventory and order management solutions, and custom APIs. 

Running an ecommerce business involves managing complex operations across various functions such as product development, operations, finance, and marketing. Outsourcing logistics to a third-party logistics (3PL) provider can alleviate the challenges associated with ecommerce.

Leveraging the 3PL’s expertise and infrastructure helps optimize end-to-end logistics operations, including order fulfillment and inventory management. Partnering with a 3PL offers benefits like access to state-of-the-art integrations, connecting ecommerce sales channels with 3PL and back-end systems, allowing for automated order fulfillment and various business advantages.

That’s also why selecting an ecommerce integration is a significant decision, requiring a thorough evaluation of available options to identify the solution that aligns best with your business requirements.

With the newly introduced MCF Integration Selection Tool, Amazon seeks to offer a convenient way to identify the most suitable integration for your business. Leverage this tool to find apps you can use to automate your shipping process for orders outside of Amazon, enabling you to save time and provide your customers with an excellent shopping experience across various sales channels.

3. New Coupon Pricing Requirements

Amazon is implementing a new guideline concerning coupon pricing to ensure customers genuinely benefit from coupon offers. Starting March 12th for US sellers and March 18th for UK sellers, products must possess a sales history to qualify for a coupon, and the promotional price must be lower than either the “was price” or the most recent lowest price. In addition, coupons are still required to have a discount percentage between 5% and 50% off. 

This measure is aimed at enhancing the value of coupon promotions for customers and to deter sellers from employing deceptive pricing tactics to present false discounts, a practice that goes against FTC rules.

Manipulating previous prices poses a significant challenge within ecommerce marketplaces, with Amazon having encountered past class action lawsuits accusing false advertising linked to fake strikethrough pricing on Prime Exclusive discounts.

As Amazon’s rolls out policies to combat deceptive pricing tactics, some sellers express apprehension that the algorithmic standards, especially during events like Prime Day with special limited deals, might compel them into a competitive downward pricing spiral. The 

concern stems from the potential impact on legitimate sellers who fear being pushed toward a “race to the bottom” pricing scenario.

Others criticized the lack of sufficient notice provided by Amazon about the coupon pricing update, indicating frustration and dissatisfaction among sellers. However, a few sellers acknowledged the potential benefits of the new policy in curbing scams and deceptive practices related to fake discounts on the platform. Overall, the general tone appears largely critical, with sellers questioning the impact on their pricing strategies and the platform’s effectiveness in addressing fraudulent activities.

Overall, as Amazon continues to operate in the face of government regulations, we can expect to see more changes to policies and guidelines in line with the various laws, rulings and investigations within this global landscape.

Related: Amazon Faces Backlash for Alleged Abusive Practices, How FTC’s Historic Monopoly Case vs. Amazon Might Impact Sellers, FTC Lawsuit Alleges Amazon of Tricking and Trapping Customers into Recurring Prime Subscriptions

Thinking of selling your Amazon business? 🤔

Whether you’re starting a new venture or feel like your business has a higher potential for growth with greater resources, Amazon brand aggregators may be able to help you move forward by acquiring, scaling, and expanding your business.

The good news is that Amazon sellers planning to exit their business have about 100 active Amazon aggregators to choose from.

⚠️ The not-so-good news? They have to sift through almost 100 companies to see who might be a good fit to sell their business to.

Some of these companies have seen massive growth and continue to thrive, while others are facing challenges from lawsuits to funding. 

Choosing the right aggregator is critical not only to your business’s continuous operations but also to your income. After all, depending on your deal structure, your earnings may depend on how well the aggregator has scaled and run your business. 🚀

If you have an earnout over time based on performance, you want to make sure the aggregator you sell to can deliver, or even that they will still be around by the time your earnout date arrives. 

So let’s check in on how some of these Amazon Aggregators have been fairing in recent times. 

Choppy Waters

Perch

Perch is one of the leading Amazon aggregators that has shown a lot of promise since its early days. The company reached a unicorn status after achieving a 10-figure valuation just one and a half years after it was founded in November 2019. After acquiring more than 80 brands (including Web Deals Direct for upwards of $100 million last year) and expanding its business internationally, the company has made headlines again, but for the wrong reason.

Freya Pratty, a reporter for the European publication, Sifted, wrote in an article published last month that the company is facing a lawsuit.

Perch acquired the business of Gutter Games, Inc. but another company named That’s What She Said, Inc. claims it already had a contract with Gutter Games before Perch acquired it. As a result, Perch and Gutter Games are facing a lawsuit for breach of contract.

As Perch has achieved an enviable level of success in the competitive eCommerce aggregator industry, these types of lawsuits are bound to happen, but it’s something to be aware of when considering your options.

Simply put, Amazon sellers should make sure legal battles such as this that plague some aggregators could have an impact on the company as a whole, something which may impact a seller’s second exit, where they receive their final earnout money.  

Perch remains silent on this issue.

Seller X

Like Perch, Seller X is another aggregator that has reached a significant level of success in a short span of time. After launching in September 2020, the company added more than 40 brands to its portfolio within one year and has raised over $750 million in funding.

But after allegedly committing a breach of contract, the company is now facing a lawsuit.

According to an article written by Melissa Daniels and published in Modern Retail last month, the aggregator bought Regal Games’ Chalk City and agreed to pay Regal Games $900,000 one year after its purchase, except when the sales of the product fell to over 15%.

The lawsuit filed by Regal Games claims that Seller X intentionally avoided performing its obligations – such as exploring new markets, investing in ads, and having enough stock of the products on hand – so when the sales of Chalk City dipped to over 15% (which they did), the aggregator would not be bound to pay Regal Games the $900k.

There has been no court ruling in this case to substantiate these claims so we will have to see how this case develops, but it should open sellers’ eyes to the fact that they should be structuring their deals and working with aggregators that will best secure their earnouts.

Seller X said it is ready to defend itself in court.

Telos Brands

Unlike Perch and Seller X, Telos Brands is not facing any legal battles. But they have recently been reporting less-than-stellar financial performance.

Among all the Amazon aggregators, Telos Brands has one of the lowest amounts of capital raised at only $2.1 million. The fact that they raised this capital last September 2021 could be cause for even more concern about this company’s financial status. 

Funding for aggregators is dwindling this year. Hopefully, it hasn’t fully dried up for Telos Brands but time will tell.

Smoother Sailing 

While multiple aggregators are losing steam, some are still holding strong. 

Acquco

Founded in 2020 by two former Amazon employees and an investment expert, Acquco is one of the youngest and fastest-growing Amazon aggregator companies on this list. 

The company buys leading Amazon brands and, using its proprietary technology, data, algorithms, and Amazon expertise, grows and scales them so they will become household brands. 

Despite it being a young player in the field, Acquco has shown an impressive financial and operational performance so far: it generated a revenue of over $420 million for the year 2021, amassed more than $450 million in funding, grew its team of seven to more than 250 worldwide, and acquired 40 brands to date. The company also launched its own in-house tech and analytics divisions earlier this year, emphasizing its highly measured and strategic approach to identifying, valuing, acquiring, and managing brands.

Aside from these figures, the company takes pride in its seller-friendly approach throughout the process. Their thorough and transparent due diligence, flexible deal structures, legal assistance, dedicated support team, and streamlined processes give Amazon sellers a convenient, efficient, and hassle-free way to exit their business confidently in as little as 23 days (on average).

Last but not the least, Acquco’s brands have purportedly, up to tripled their growth after acquisition. If you’re looking for an aggregator with a proven track record in growing businesses, this company may be the one for you.

Benitago

Benitago was founded by two Computer Science majors and Amazon sellers in 2016. The company has raised $380 million in funding to date.

This aggregator targets businesses with annual revenues of $3 million and innovative products that other aggregators may not be interested in. 

They have an excellent record of growing Amazon FBA businesses, with more than 20 products in their portfolio having more than $250,000 in sales and achieving Best Seller Rank Improvement Trailing Twelve Months (TTM) 12 times. They also helped scale more than 300 products from over 15 categories such as beauty, electronics, health, maternity, orthopedic, and pet supplies. 

Benitago’s acquisition process involves just three steps: business evaluation; intensive business data analysis; contract drafting and payout. This is perfect for sellers who want a short and fast exit from their Amazon FBA business.

The company also used to offer qualified Amazon sellers an Aggregator Offer Match Guarantee where they matched the amount offered by another aggregator for your business and give you an extra $250,000 if you sell it to Benitago. 

In terms of post-acquisition performance, their brands show a 30% year-on-year growth rate, so there’s a high chance your business will also grow under their management. 

Elevate Brands

Founded towards the end of 2016, Elevate Brands has emerged as another leader in the Amazon aggregator world. 

The company buys FBA businesses based in North America, Europe, and the UK, preferably those that hold patents and those from the groceries, pets, and supplements categories. They have acquired over 25 brands and generated more than $500 million in funding to date.

What sets Elevate Brands apart is their focus on the relationships they build with Amazon sellers, founded on the fact that they started out as Amazon sellers themselves. Their relationship-first strategy seems to be working well, as their pet brands show a 57% growth in sales, and their grocery brands show a whopping 1556% growth in ad sales. 

Their world-class mergers & acquisitions (M&A) team ensures sellers will also have an easy and seamless exit from their businesses in less than 30 days. 

Merama

With headquarters in Mexico City, Merama positioned itself as the aggregator for Latin American brands looking to scale and grow to be $1B businesses. The company is valued at $1.2B and has raised $445 million in funding.

Their strategy is very different from the other aggregators, however: instead of buying many brands at a time, Merama will invest in only a few leaders in their respective categories and work at scaling and growing them exponentially. They currently have more than 20 brands in their portfolio. 

Another thing that separates them from other aggregators is their Future Exit Option. Instead of buying your entire business from you, Merama will initially invest and become a strategic partner of your business, taking a significant stake but not owning 100% of it. Together, they will help you grow it to become a $1B business by providing you access to non-dilutive capital and human resources, then give you options to exit your business three to five years later.

Latin American sellers who want to stay hands-on in growing their businesses will find Merama’s strategic partnership approach ideal. Apart from their solid financial backing and proven track record in growing Latam brands, they also promote inclusivity as their brands come from a wide range of product categories.

Razor Group

Berlin-based Razor Group was founded in 2020.

A major player in the Amazon aggregator industry, Razor Group has raised more than $1B in funding from leading investors, manages over 200 brands, and has evaluated over a million FBA businesses from their five offices in Europe, Asia, and North America.

The company has a fair, fast, and forward-thinking approach in how they evaluate businesses. They’re interested in businesses with products that have high product quality and great reviews, low complexity, robust growth, promising potential, and sales ranging from $1 to $15 million. Their acquisition process has only three phases and takes only a few weeks from evaluation to closing, which is ideal for sellers in a rush to sell their business. 

In summary, the stressor is to know who you are getting into bed with when you sell your company. It is important to look at not just the numbers but also the track record and future prospects for the aggregator you may essentially be going into business with. That is essentially what you are doing when you are selling your business with an earnout on the back end. 

Knowing more about the aggregators you are in talks with towards your exit will help you to narrow down your decision to make the right choice for your business. 💯

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

As consumer preferences and digital marketplaces maintain their rapid pace of change, what trends are expected to influence sellers in 2024? 🤔

Channel Shopping

A new study by Rithum, an ecommerce network and platform, reveals that three in four consumer now explore three different marketplaces when making online purchases.

Despite the growing popularity of challengers, Amazon retains significant trust, with 42% of consumers expressing confidence in the platform, while 34% go to a merchant’s direct-to-consumer site, and 21% explore other private marketplaces.

Ecommerce execs, reflecting on 2023 performance, identified the competitive marketplace and reduced consumer spending as major challenges. However, those who outperformed expectations credited marketplace diversification, emphasizing the importance of expanding sales channels.
As sellers gear up for 2024, Amazon and eBay stand out as top marketplace choices, signaling a need for sellers to diversify their marketplace strategies. With multiple sales channels to manage, however, seller strategies are becoming more robust, exploring more diverse marketing tactics, such as marketplace advertising and social media marketing, and leveraging more sophisticated tech stacks.

Related: How Amazon Sellers Should Use Shopify to Strengthen Their Profits, Walmart: The Future of Online Shopping

Fear of Missing Out (FOMO)

Customers’ desire to stay abreast of the latest trends and to avert the fear of being left out frequently leads to impulsive purchasing decisions. Sellers face the challenge of understanding and leveraging this behavior strategically by positioning their products to evoke a feeling of exclusivity and urgency. Recognizing the impact of FOMO on consumer behavior allows sellers to craft campaigns that tap into the innate desire to be part of the latest and most exclusive trends.

Consumers’ FOMO on deals specifically influences purchasing decisions, with marketplaces like Amazon playing a significant role, according to Rithum.
Rithum’s study shows that 39% of consumers made a purchase after encountering an ad on Amazon. Alternatively, 23% of buyers discovered products through Google ads, indicating that for some products, this additional external traffic can prove to be a good addition to marketing strategy.

Related: 3 Ways to Level Up Your Amazon Advertising Strategy, How to Use Google Ads to Improve Amazon SEO, 3 Little Known External Traffic Types that Will Boost Sales & Rank for Your Amazon Business

Reduced In-Person Shopping

According to PYMNTS, about half of Amazon Subscribe & Save members prefer online shopping over in-person retail. This suggests that digital retail subscriptions are gaining traction, providing consumers, particularly millennials, with convenient scheduled deliveries.

The study also found that subscribers to services like Stitch Fix (a personalized clothing and accessories) and Chewy’s Goody Box (pet supplies) are reducing their in-person shopping, emphasizing the appeal of personalized experiences accessible from desktops and smartphones.

While convenient, these online retail subscriptions the impact to in-store shopping is not yet staggering as a dual approach is still the norm and likely will be for some time. Fewer than 5% of subscribers claimed subscriptions entirely replace in-store visits for specific item categories. This underscores the coexistence of both online and in-person shopping experiences, showing that retail subscriptions have not entirely eliminated the need for physical store visits in certain product categories.

What does this mean for you?

Sellers must prioritize seamless customer experiences, from subscription membership to shopping to delivery. Poor service or frequent stockouts increases cancellation likelihood from customers bound to put their subscription dollars into competitors’ pockets.

It also means that initially capturing that subscription relationship proves very important, as once set, you are likely to receive recurring orders from that buyer for some time. 

You also need continuous subscription innovation for lasting loyalty. This includes diverse payment options, improved inventory systems, accurate product information, and reliable delivery services. Similarly, we may expect to see traditional stores developing enhanced in-store experiences and integrate digital subscriptions to stay competitive.

Rising Return Rates

Barriers expected in 2024 include meeting customers’ sustainability expectations and handling increased return rates. 

Over the last two years, major retailers have been adopting measures such as shortening refund and exchange windows and introducing restocking fees to curb the surge in return rates.

According to a survey conducted by Appriss Retail and Incisiv, 91% of retailers are grappling with return rates that are outpacing their revenue growth rates. The dilemma lies in the fact that many of the returned items are unsuitable for resale or must be subject to a pricey grade and resell services, resulting in profit and revenue losses and contributing to significant waste.

In response, retailers have implemented a return fee as a deterrent for shoppers. For instance, ecomm giant Amazon has introduced a fee for some UPS returns in April 2023, encouraging shoppers to reconsider before initiating a return.

Similarly, J.Crew and Gap Inc.-owned stores such as Athleta, Gap, Banana Republic, and Old Navy have opted to trim their return windows as a strategic move to reduce overall return rates. These initiatives highlight the industry’s collective effort to address the challenges posed by escalating return rates, aiming to strike a balance between customer satisfaction and sustainable business practices.

However, this move could have an adverse impact on profits, as asking customers to pay a fee for returns could affect brand loyalty. As a result, shoppers may decide to cut back on purchases or turn to other retailers.

Therefore, rather than centering efforts solely on optimizing the returns process, retailers should concentrate on tackling the root causes of returns, such as quality, fit and style issues, and enhance the image quality of products on their websites. Amazon negative product reviews and the FBA Returns Dashboard can provide insights into areas of improvement. This approach may also involve integrating technologies like augmented reality (AR) try-on tools or showcasing items in a See It In Your Space capacity. 

Simplifying this aspect of the shopping experience can instill confidence in consumers, fostering a sense of certainty in their purchases. Ultimately, this improved experience has the potential to sway even the most budget-conscious shoppers into making purchase decisions with greater assurance.

Shoppable Features within Social Commerce Sites

A shoppable feature refers to interactive elements within ads that enable users to directly explore and purchase products without leaving the platform. These elements, found on social media sites like Instagram, Facebook, Pinterest, TikTok, and Google, enhance user engagement by incorporating clickable product links, in-ad purchases, product tags, shopping catalogs, and even augmented reality try-ons. 

This frictionless integration of shopping capabilities into ads transforms static content into dynamic and actionable experiences, providing users with a convenient pathway from product discovery to purchase. Shoppable features not only enhance user convenience but also offer advertisers a more direct and measurable way to drive sales through their online ad campaigns. 

For that reason, TikTok is testing a shoppable feature, potentially transforming all posts into sales opportunities. The new feature automatically identifies objects within videos on TikTok, which prompts viewers to explore related items on TikTok Shop by directing them to a page showcasing various products. This marks a departure from the previous norm, where only authorized influencers and brands had the privilege of tagging products in their posted content on TikTok.

Meanwhile, Meta’s collaboration with Amazon streamlines on-platform purchasing, simplifying the user experience and enhancing ad targeting within Facebook and Instagram.

If your goal is to capitalize on expanding social commerce horizons, prioritizing and refining shops and product catalogs is crucial. By concentrating efforts on optimizing these features, you can position yourself at the forefront of the future online shopping experience, taking advantage of the widespread availability of product ads on prominent social platforms.

Related: AI in eCommece: Trends Redefining Shopping Experiences

Key Takeaway

The bottom line is consumer behavior is continuously evolving, shaping new opportunities for sellers. To continue meeting customer expectations and gain a competitive edge, sellers are faced with adapting to consumer trends, diversifying marketplace strategies, and exploring innovative solutions like automation tools to provide personalized shopping experiences.

The challenge lies in knowing which horse to back. With so many changes happening at once, and so many competing innovations, sellers must decide which ones are the most likely to grow legs. Picking the right strategy and avoiding being consumed by short-lived trends will undoubtedly be a contributor to the success of sellers in 2024.

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

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

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:

• The relaunch of Amazon Shipping (pickup and delivery services for FBM and non-Amazon sellers)
• The integration of USPS Ground Advantage with Buy Shipping
• The establishment of same-day delivery sites in closer proximity to major urban centers
• The enlistment of local small businesses in rural areas as valuable delivery partners
• Implementing major changes to the Partnered Carrier program. Sellers can now input warehouse hours and special instructions for pickups. The pickup date information for less-than-truckload, full-truckload, and intermodal shipments has been improved and includes updates due to disruptions or delays. Additionally, a new PDF guide offers detailed information on creating and sending shipments with Amazon partnered carriers.

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

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: France	Size tier: Large oversizeShipping weight: ≤ 9.76 kg
Historical inbound-sales quantity	Historical inbound-sales quantity: < 0Long-term historical inbound-sales quantity: < 0Short-term historical inbound-sales quantity: < 0
Total fulfilment fees	Standard 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.

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)

Size	Weight	Premium FBA Inbound Placement Service Fee (send to a single location)	Discounted FBA Inbound Placement Service (Send to multiple locations)
Small standardMax 15x12x0.75 inches	16 oz or less	$0.21-$0.30	Receive up to 100% discount based on number of shipments and inbound locations.
Large standardMax 18x14x8 inches	12 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)

Size	Weight	Premium 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 $2.67	Receive 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

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.

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.

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.

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:

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?

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.

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

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.

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 Type	Attribute Name
BABY_BOTTLE	age_range_description
BABY_BOTTLE	bottle_nipple_type
BABY_BOTTLE	bottle_type
BABY_BOTTLE	capacity
BABY_BOTTLE	color
BABY_BOTTLE	is_dishwasher_safe
BABY_BOTTLE	item_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

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

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

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

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

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 Features	Supply Chain by Amazon	Flexport Revolution
Factory Pickup	Yes	Yes
Freight Management (ocean, air, and truckload)	Yes	Yes
Storage	Yes	Yes
Prep and Handling	Yes	Yes
Integrated Replenishment Transfer from an upstream storage facility (e.g., Amazon Warehousing & Distribution or AWD) directly into FBA or 3PL	Yes (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 Fulfillment	Yes	Yes
Parcel Delivery to Customers	Yes (within 1 to 2 days)	Yes (within 1 to 3 days)
Multichannel Distribution Across Physical Stores or Retail Partners	Yes (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 financing	No (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.
Pricing	Transportation, 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)