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

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

  1. Amazon’s Latest Moves: New Discount Page, AWD Enhancements, and Eco-Friendly Packaging
  2. Amazon in the Crosshairs: Unveiling Recent Legal Turmoil
  3. Temu’s Shipping Policy Changes & What They Mean for Sellers
  4. Prime Day 2024: Key Dates Announced – What You Should Know
  5. Target Expands Online Marketplace with Shopify Integration
  6. New Amazon Features Across Multiple Selling Programs
  7. From Cart Abandoners Metric to EU VAT Changes: Amazon’s Newest Seller Updates
  8. Panama Canal Drought and Red Sea Crisis Push Ocean Freight Rates to 16-Month High
  9. Amazon Expands A-to-Z Guarantee and Introduces New Tools for Sellers
  10. GenAI Showdown: How Amazon and Walmart Are Raising the Stakes
  11. Ecommerce Update: Amazon’s Apparel Success, Shein’s Flexport Alliance, and the Fight Against Fakes
  12. Amazon Update Alert: Essential Changes for Sellers
  13. Ecomm Battle: How Temu Might Compete with Amazon in the US Market
  14. Amazon’s Classified Operation: The Covert Hunt for Rival Intel
  15. Key Revelations in Jassy’s Shareholder Update and their Impact on Sellers
  16. Top Amazon Policy Updates You Can’t Afford to Miss as a Seller
  17. Empowering Small Businesses: Understanding the UK Procurement Act
  18. Amazon’s Latest Moves: MYCE Tool Closure, Sustainability Accelerator, and Mexico Expansion
  19. UPDATED: AI in eCommerce: Trends Redefining Shopping Experiences
  20. Unpacking the Latest Amazon Tools
  21. UPDATED: Amazon Aggregators: Comments and Concerns
  22. Leverage the Latest Amazon Features and Metrics
  23. UPDATED: Amazon Faces Backlash for Alleged Abusive Practices
  24. 2024 Insights: Online Consumer Trends You Can’t Ignore for Effective Marketing
  25. Amazon Cracks Down on Suspicious Reviews from Bad Actors, Sellers Express Mixed Reactions
  26. Roundup Post: Amazon Seller Tools Update and New Product Safety Requirements
  27. UPDATED: Logistics Showdown: UPS and Amazon Battle for Supremacy
  28. Preparing for Change: Higher Fees on the Horizon for UK/EU FBA Sellers in 2024
  29. Major eComm Players Making Big Changes to Take on Amazon
  30. Brace for Higher FBA Fees in 2024
  31. UPDATED: Battle for Last-Mile Logistics Heats Up as Amazon Expands Same-Day Delivery Network
  32. Register for Amazon Seller Wallet By November 30 to Unlock Cost Savings
  33. Updated: Bid for a Higher Inventory Limit with FBA Capacity Manager
  34. Shop Socially: Amazon and Meta Team Up for One-Click Social Commerce
  35. 4 Updates to Amazon Seller-Fulfilled Prime
  36. Updated: New Amazon Features, Updates and Requirements
  37. New Security Issues Leave Many Sellers Vulnerable to Cyberattacks
  38. The Covert Amazon Program That Could Be Costing You Thousands
  39. FTC Proposes a New Rule to Rein In Fake Reviews
  40. How FTC’s Historic Monopoly Case vs. Amazon Might Impact Sellers
  41. Amazon and Flexport Vie for End-to-End Logistics Supremacy
  42. UPDATED: 60-Minute Amazon Drone Delivery is Now a Reality
  43. UPDATED: Amazon Wants to Take a Bigger Chunk Out of Seller Profits with 2 New Fees
  44. Roundup: Upcoming Amazon Changes and Features
  45. Amazon Tries to Increase Revenue from Existing Shoppers
  46. UPDATED: Amazon Faces Tougher Scrutiny Under EU’s Digital Services Act (DSA)
  47. UPDATED: Shopify Looking to Integrate with Amazon Buy With Prime
  48. Updates to Amazon Return, Refund, and Reimbursement Policy
  49. Amazon is Testing A New Way to Show Product Reviews
  50. Amazon Delays Delivery Date Based Reserve Policy for Some UK Sellers After Backlash
  51. Amazon Working to Bring USPS Ground Advantage to its Buy Shipping Service
  52. Amazon Feature Updates: 3 New Seller Tools and Product Recall Reporting Page
  53. UPDATED: UPS Workers Ready to Repeat 1997 Mass Walkout Over Pay, Work Conditions
  54. Amazon Offers New Fulfillment Fee Discounts on Select ASINs
  55. Sellers Cry Foul Following Amazon’s Decision to End FBA Small and Light
  56. Aggregator Shakeups and Shifts in Strategy
  57. UPDATED: Amazon Taps into $100B Retail Media Market, Invests in New & Cutting-Edge Ad Platforms
  58. FTC Lawsuit Alleges Amazon of Tricking and Trapping Customers into Recurring Prime Subscriptions
  59. Clash of the Titans: Walmart and Amazon Battle for Dominance Intensifies
  60. 4 Major Changes Coming to Amazon
  61. Amazon Delivery Drones Off to a Rocky Start
  62. Shein Moves Into the US Market, But May Struggle to Recruit 3P Sellers
  63. A Purge Could Be Coming for Fake Reviews on Amazon
  64. 25% Growth Rate: Euro B2B Opportunities Expand on Amazon
  65. UPDATED: Amazon Hopes to Restore Consumer Confidence with $1.2B Anti-Counterfeit Initiative
  66. Amazon Announces Further Cuts Amid Economic Uncertainty
  67. Amazon Attempts to Close Loopholes with New Shipping Policy
  68. Updated: Are You Prepared for the Updated Amazon Returns and Refunds Policy?
  69. Updated: Amazon UK Workers to Launch Historic Strike in Early 2023
  70. Amazon Highlights ‘Frequently Returned’ Products You Should Think Twice Before Buying
  71. Amazon Braces for Slowing eComm Growth in 2023
  72. Boost Sales with These New Amazon Seller Tools
  73. Amazon Fees Changes for UK & EU Multi-Channel Fulfillment Orders
  74. Foreign Amazon Sellers Are Closing the Competitive Gap with ChatGPT
  75. Shopify Acquires Deliverr and Takes Aim at Amazon’s Buy with Prime
  76. Amazon Warehouse Automation Increases Concerns over Job Loss and Product Selection Inaccuracy
  77. The Latest Update to Amazon’s Automate Pricing Features
  78. Walmart Launches B2B eCommerce Site to Rival Amazon and Shopify
  79. Prepare for These 6 Major Changes to 2023 Amazon UK & EU FBA Fees
  80. Amazon Automatic Aging Inventory Removal Starts April 15
  81. Amazon Tweaks Logistics Strategy to Streamline Operations
  82. Amazon Makes Play Toward Offering Prime for Non-Amazon Orders
  83. Shipping FBA Inventory from China to UK with SEND: What Could Possibly Go Wrong?
  84. Sellers Feel the Squeeze After Amazon Announces US MCF Fee Hike
  85. Walmart Launches New Ways to Find and Buy Products
  86. 4 New Amazon Seller Tools to Accelerate Business Growth
  87. Amazon Will Pay Customers $2 per Month to Track Their Ad Data
  88. Updated: EU Advised by NGOs to Refuse Amazon’s Flawed Proposal for Antitrust Settlement
  89. Amazon Announces Unbranded Packaging for MCF Orders
  90. Amazon Storage Limit Manager: Would You Pay for Extra Storage Space?
  91. Updated: Bad Actors Book Multiple Inbound Amazon Delivery Dates to Create Scarcity
  92. Is Amazon Prepared for the Holiday Rush?
  93. Amazon Hikes FBA Fees Again: What This Means for Your Business
  94. TikTok Gears Up for US Market Entry
  95. eComm Players Dial Up Rivalry Ahead of the Holiday Season
  96. Amazon UK At Risk for Box Shortages During BFCM
  97. Updated: Amazon Enters the 3PL Space with New Amazon Warehousing & Distribution Program
  98. What Amazon’s New Merchant Cash Advance Program is Going to Cost You
  99. Amazon to Shut Down Appario Amid Allegations of Circumventing Indian Law
  100. UPS Braces for Holiday Delivery Surge in December
  101. Should You Be Selling on These New Sales Channels?
  102. New Ad Strategies for Winning the Holiday Season
  103. Amazon Unveils New Affordable Shopping Hub Just in Time for Holidays
  104. Amazon to Hold Prime Early Access Sale on October 11-12
  105. Non-Amazon Sellers Are Now Stealing Your Ad Space
  106. Amazon To Increase UK Multi-Channel Fulfillment Fees By November 12th
  107. Amazon Now Allowing Email Marketing Campaigns to Repeat Customers
  108. Financial Win for FBA Sellers in PA Court
  109. Boost Conversions with Amazon’s New A/B Testing Features
  110. Amazon FBA Deadlines for Sending In Q4 Inventory
  111. Software Updates For September 2022
  112. Gloves Off: Shopify Warns Sellers Against Amazon Buy With Prime
  113. Amazon Brings Back Restock Limits to Prepare for the Holiday Rush
  114. New Amazon Badges Increase Discoverability and Allow for Values-Based Buying
  115. Royal Mail Strikes to Disrupt Mail and Deliveries Across UK
  116. Amazon’s New Holiday Surcharge Takes Another Bite Out of Seller Profits
  117. Amazon Attribution Update Makes for a More Effective Sales Tool
  118. Software Updates For August 2022
  119. Amazon Releases Inventory Ledger to Streamline Inventory Data Reports
  120. Updated: Amazon Suspension Risk For The Uninsured
  121. Amazon Plans to Hold 2nd Prime Day in October
  122. UPS Shipping Limits for Amazon Threaten to Delay Holiday Deliveries
  123. Shopify Shares Down By 14% After Laying Off 10% of Their Employees
  124. SoStocked Joins the Carbon6 Family Shortening the Timeline to Future Innovations
  125. Shopify Introduces YouTube Shopping Integration to Compete in Live Commerce
  126. Amazon Continues to Dominate B2B While Shopify Plays Catch-Up
  127. Freight Disruption at Port of Oakland as California Truckers Protest AB5
  128. Amazon Reduces Their Private Label Catalog Amid Mounting Regulatory Pressure
  129. Discounts on EU/UK Amazon Partner Carrier Fees
  130. Amazon Intros New Hack to Find High-Demand, No-Competition B2B Products
  131. Software Updates For July 2022
  132. Amazon’s Recent Ban on Mylar Bags and Other Potentially At Risk Products
  133. Reduce Losses Due to INR Scams with Amazon’s Signature Confirmation
  134. Amazon Implements Size Normalization to Ensure Consistency Across Detail Pages
  135. Why Amazon Wants You to Lobby Congress: What Is S.2992?
  136. New EPR Compliance Obligations for Amazon Germany Begin July 1st
  137. Software Updates For June 2022
  138. Amazon Adjusts Fees For Remote Fulfillment With FBA
  139. Amazon Removal Order Fees Get More Expensive
  140. Amazon Implements Surcharge on Aged Inventory Starting May 15th
  141. Software Updates For May 2022
  142. Amazon Updates Their Age-Restricted Bladed Products List
  143. New Product Dimension Attributes for 255 Product Types
  144. New Shipping and Storage Changes Coming to Amazon
  145. Amazon Hits US & EU Sellers With Fuel And Inflation Surcharge
  146. Software Updates For April 2022
  147. Emerging Amazon Marketplaces: UAE and Saudi Arabia
  148. Free Amazon Master Carton Calculator Tool To Optimize Your Packaging
  149. Amazon and EIT Climate-KIC Offer Financial Boost to Sustainable Startups
  150. Qualify for Rebates and Free Liquidations with the Updated FBA New Selection Program
  151. New Dimensional Weight Fees Placing Further Strain on Profit Margins
  152. Amazon Closing Shipping Loopholes May Wreak Chaos for Some Sellers
  153. Amazon Removes “Tons” of Supplement Offers Due to Non-Compliance with New Product Requirements
  154. UPDATED: Claim Reimbursement for Losses Caused by Amazon
  155. UK Launches Export Support Service to Help Businesses Sell Goods Abroad
  156. Three SoStocked Software Deals For New Years (Now Thru January 7, 2021)
  157. Important Update To Restock Limits And IPI Threshold
  158. Use Amazon’s Delivery Promise Tool To Monitor Your FBM Performance
  159. Amazon Storage Limit Updates
  160. New And Improved Amazon HTML Editor + HTML Converter Tool
  161. Send Holiday-Themed Emails To Amazon Followers Through December
  162. Borrow Up To 100K With The Amazon Community Lending Pilot Program
  163. Amazon Has Worked To Smooth Out Climate Pledge Certification
  164. Updated: Amazon Compliance Reference Tool To Ensure Products Meet Requirements
  165. Distribute Your Inventory Across Multiple FCs At No Extra Cost
  166. Beta Amazon Upstream Storage Program Eliminates Restock Limits
  167. Amazon Hikes Referral And FBA Fees For 2022
  168. Amazon Updates Program Policies
  169. Amazon Increases FBA Capacity and Restock Limits
  170. Amazon Launches New Dashboard for Returns Performance
  171. The End Of Rebates, Two-Steps URLs, & Other Search Rank Manipulation
  172. New Carrier Tracking Requirements & Improving OOS Listing Discoverability
  173. Amazon Releases Free Product Research Tool Named ‘Product Opportunity Explorer’
  174. New Documentation for Supplements Required to Avoid Listing Removal
  175. Amazon Inventory Deadlines For Q4
  176. Delivery Time Accuracy With New Amazon Shipping Settings Automation Tool
  177. China’s Widespread Power Cuts Further Strain Global Supply Chain
  178. New Changes To Removal Of Aged Inventory
  179. Amazon Egypt Now Open For Business
  180. Why Have Amazon Sellers Suffered a Significant Drop in Restock Limits?
  181. SoStocked Prices Increasing After Friday, September 17th, 2021
  182. Amazon Search Shadowban For Products That Violate Title Guidelines
  183. Your Amazon Posts Can Now Appear On Your Product Detail Pages
  184. Amazon Grade And Resell Program Rolled Out To Reduce FBA Waste
  185. Amazon Overhauls Its A-to-z Guarantee Policies To Streamline Damages Claims
  186. Now Factor Restock Limits Into Forecasts
  187. Streamline Shipments With “Send To Amazon”
  188. Changes To Amazon Professional Selling Plan Fees
  189. Automated Amazon Stranded Inventory Removal
  190. Typhoon Wreaks Supply Chain Havoc On China’s Eastern Coast
  191. Country Of Origin Now Required For Amazon Products
  192. Prevent Customer Complaints By Putting Seals On Consumables
  193. New Amazon Brand Referral Bonus Program For Amazon Sellers
  194. Four New Certifications Could Qualify You For Climate Pledge Friendly Badge
  195. Amazon IPI (Inventory Performance Index) Update
  196. Potentially Lower Fulfillment Fees Spells Good News For Amazon Sellers
  197. Big News: Sellers Can (Again) Contact Customers About Bad Reviews
  198. Amazon’s APRL Scheme Leaves Sour Taste In Sellers’ Mouths
  199. Blackout Dates: China’s Dragon Boat Festival
  200. Amazon Global Program: Sell Worldwide With No Added Fees
  201. Set a Faster Default Handling Time
  202. Amazon Product Description HTML
  203. Amazon Prime Day 2021 Check-In Dates
  204. Amazon 2021 MCF Fees and Features
  205. 2021 Amazon Restock Limits Update
  206. CBP Announces New Customs Requirements For Low-Value Shipments
  207. Five Seller Facts from Bezos’ Final Shareholder Letter as Amazon CEO
  208. All ASINs Now Require Melting Temperature Attribute
  209. RIP Early Review Program
  210. VAT Services Even When Outside EU
  211. Unsuitable Inventory Policy
  212. Amazon’s New Automated Pricing Tool
  213. A/B Testing Product Images Available
  214. New Shipping Data Requirements
  215. Amazon “Review Commenting” Updates
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Amazon’s Latest Moves: New Discount Page, AWD Enhancements, and Eco-Friendly Packaging

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:

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

Temu’s Shipping Policy Changes & What They Mean for Sellers

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

Prime Day 2024: Key Dates Announced – What You Should Know

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 Expands Online Marketplace with Shopify Integration

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

New Amazon Features Across Multiple Selling Programs

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:

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

From Cart Abandoners Metric to EU VAT Changes: Amazon’s Newest Seller Updates

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

Panama Canal Drought and Red Sea Crisis Push Ocean Freight Rates to 16-Month High

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.

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

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

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

GenAI Showdown: How Amazon and Walmart Are Raising the Stakes

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

Ecommerce Update: Amazon’s Apparel Success, Shein’s Flexport Alliance, and the Fight Against Fakes

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

Amazon Update Alert: Essential Changes for Sellers

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

Ecomm Battle: How Temu Might Compete with Amazon in the US Market

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

Amazon’s Classified Operation: The Covert Hunt for Rival Intel

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

Key Revelations in Jassy’s Shareholder Update and their Impact on Sellers

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.

Top Amazon Policy Updates You Can’t Afford to Miss as a Seller

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

Empowering Small Businesses: Understanding the UK Procurement Act

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’s Latest Moves: MYCE Tool Closure, Sustainability Accelerator, and Mexico Expansion

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

Unpacking the Latest Amazon Tools

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

UPDATED: Amazon Aggregators: Comments and Concerns

Amazon Aggregators Comments And Concerns

UPDATE 02/28/2024: Thrasio, one of the biggest Amazon aggregators, has finally taken the step of filing for Chapter 11 bankruptcy protection in a New Jersey court. 

When a company files for Chapter 11 bankruptcy, it seeks court-supervised restructuring to alleviate financial distress while continuing its operations. This type of bankruptcy is commonly used by businesses looking to address overwhelming debt, negotiate with creditors, and develop a plan to emerge as a financially viable entity.

What happens next?

The Massachusetts-based company is embarking on a path of financial restructuring, seeking the court’s oversight to implement an agreement with its financial stakeholders. Based on a press release dated February 28th, outcomes that may occur for Thrasio in Chapter 11 include:

  • Continued Operations: Unlike Chapter 7 bankruptcy, which often leads to liquidation, Chapter 11 allows the to continue its operations, including “providing customers with the amazing products they have come to expect from Thrasio’s brands, paying vendors and suppliers for goods and services provided on or after the filing date, partnering with sellers to elevate brands and position them for growth, and paying employee cash compensation and providing benefits as normal.” Existing management may also continue to run the business as a debtor in possession, making day-to-day decisions.
  • Development of a Reorganization Plan: The company, with the assistance of financial advisors, legal counsel, and sometimes a bankruptcy trustee, develops a comprehensive reorganization plan. This plan outlines how the company intends to address its financial challenges, including how it will treat each class of financial stakeholders.
  • Negotiation with Creditors: The company engages in negotiations with its creditors to gain their approval for the reorganization plan. This may involve discussions about debt repayment terms, interest rates, and other financial arrangements.
  • Debt Repayment: The company repays its creditors according to the terms outlined in the reorganization plan. This may involve partial repayment of debts, extended payment periods, or other negotiated arrangements. According to Thrasio, the Restructuring Support Agreement (RSA), encompassing the majority of its revolving credit facility lenders (81%) and term loan lenders (88%), is poised to eliminate a significant portion of the company’s existing debt, amounting to approximately $495 million. Additionally, under the agreement, all interest payments in the initial year following the emergence from Chapter 11 will be deferred.
  • Monitoring and Compliance: The company continues to operate under the oversight of the court and may be required to report regularly on its financial progress. Compliance with the terms of the reorganization plan is crucial to maintaining the company’s financial stability.

In tandem with this move, Thrasio has successfully secured an emergency capital of $90 million from undisclosed existing lenders.

The Amazon aggregator giant also said that the $90 million capital “is expected to provide sufficient liquidity to support the Company throughout this process and beyond. In particular, the financing will enable the continued operation of Thrasio’s brands, support ongoing business operations and provide the Company with access to new capital upon emergence from Chapter 11 to support go-forward business operations.”

Rebuilding with New Financing or End of an Era?

With a history of raising over $3 billion in a combination of equity and debt to drive its consolidation strategy, Thrasio’s entry into bankruptcy protection stands out as one of the major instances reflecting the challenges currently faced by high-growth ecommerce and tech companies.

Top 100 Amazon seller, Aaron Cordovez, took to X to share his piece on the matter:

“Thrasio files for Bankruptcy. It’s no longer a rumor. This is the end of an era of Amazon aggregators that come from the Venture world,” suggesting that a new business model could emerge from Thrasio’s collapse. For example, the downfall could give rise to search funds (vs. venture capital-backed aggs) as potential buyers for Amazon businesses.

The search fund model involves an individual or group of entrepreneurs raising funds to finance the search and acquisition process. Once a suitable business is identified, the searcher takes on the role of CEO or manager to grow and improve the acquired business. In contrast, venture capital involves firms managing pooled funds from various investors. These firms invest in a portfolio of startups and high-growth companies across different industries, including ecommerce.

Cordovez also left a comment on TechCrunch’s article about Thrasio’s bankruptcy stating “Thrasio showed the world the business model, but failed to execute it properly. Why rack up so many expenses on teams that don’t know ecommerce?”

Despite the disappointment, there is a subtle note of optimism expressed in the rest of his comment. Cordovez suggests that acquisitions remain a viable option for growth when executed correctly, and declares his active engagement in buying brands within the same space, indicating a belief that success is achievable with the right approach.

“Acquisitions are still a great option for growth when done right. We are actively buying brands in the space. It can be done.”

The sentiment, shared by others within the community, reflects a recognition of Thrasio’s role in shaping the industry, coupled with a critique of its execution and a belief in the continued potential for success in Amazon aggregators when approached strategically.

In sum, the bankruptcy filing marks a strategic pivot for Thrasio as it navigates the complexities of its financial landscape, aiming to emerge stronger and more resilient to “be better equipped to support our brands, scale our infrastructure and enable future opportunities,” CEO Greg Greeley said in a statement.
Related: Amazon Aggregator Shakeups and Shifts in Strategy

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. 💯

Leverage the Latest Amazon Features and Metrics

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

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

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

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

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

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

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

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

Related: Recalls and Product Safety Alerts Page for US Customers

2. New Metrics on the Build Your Brand Page

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

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

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

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

Related: How to Improve CTR & CVR

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

Related: Amazon Now Allowing Email Marketing Campaigns to Repeat Customers

Leverage these metrics to:

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

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

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

3. Instant Replacements for Seller-Fulfilled Returns

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

How it Works

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

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

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

What Sellers Say

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

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

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

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

4. Lower FBA Fulfillment Fees with Ships in Product Packaging

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

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

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

Pros and Cons

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

Pros

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

Cons

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

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

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

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

5. Redesigned Premium Navigation Carousel

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

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

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

Optimization Opportunity for Sellers

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

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

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

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

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

UPDATED: Amazon Faces Backlash for Alleged Abusive Practices

Amazon Faces Backlash for Alleged Abusive Practices

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

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

Algorithm Favoring Pricier Goods

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

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

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

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

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

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

Prime Video Changes Lawsuit

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

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

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

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

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

Final Thoughts

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

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

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

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

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

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

To address these concerns, Amazon has offered to:

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

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

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

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

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

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

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

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

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

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

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

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

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

Amazon Braces for the Massive Antitrust Case

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

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

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

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

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

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

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

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

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

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

Using Seller Data to Copy Products

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

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

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

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

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

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

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

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

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

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

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

Manipulating the Search Algorithm

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

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

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

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

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

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

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

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

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

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

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

Price Fixing

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

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

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

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

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

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

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

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

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

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

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

Sellers and Industry Groups Band Together to Fight Amazon

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Amazon Lending and SellersFi Line of Credit Solution

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

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

Amazon Lending x SellersFi LOC Solution Features

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

Is LOC for You?

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

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

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

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

Related: 5 Amazon Inventory Financing Options for Sellers

Update Your Listings with Supported Document Types by Feb 26

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

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

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

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

EU General Product Safety Regulation (GPSR) Update

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

What to Expect

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

What Some Sellers Have to Say

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

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

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

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

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

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

New UK FBA Returns Dashboard Features

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

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

The newest FBA Returns dashboard update includes the following additions:

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

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

Related: Tips to Improve Customer Experience and Reduce Returns

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

Planning to expand in EU and Japan marketplaces? 

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

Compare Product Prices

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

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

Reach International Customers

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

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

Check Subscribe and Save Eligibility for Your FBA Products

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

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

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

Set a Window to Auto-Approve Buyer Cancellation Requests

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

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

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

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

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

It May Not Be for Everyone

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

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

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

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

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

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

UPDATED: Logistics Showdown: UPS and Amazon Battle for Supremacy

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

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

What is a Data-Driven Commerce Platform?

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

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

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

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

What does this mean for Amazon? More competition.

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

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

Shared Opinions on FedEx’s Strategic Move

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

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

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

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

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

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

Amazon’s Rise

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

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

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

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

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

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

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

Amazon’s Record-Breaking Delivery Numbers

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

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

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

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

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

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

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

Comparative Analysis with UPS and FedEx

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

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

UPS Counters Amazon’s Dominance with Bold Moves

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

Beefing Up its Returns Network

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

Why it matters?

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

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

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

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

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

Offering a Major Pay Bump

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

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

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

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

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

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

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

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

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

Looking Ahead

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

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

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

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

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

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

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

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

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

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

2024 EU FBA Fee Changes at a Glance

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

FBA Fee Changes: The Yearly Seller Squeeze

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

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

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

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

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

Refer to the rate table for details on these adjustments.

Pan-EU Low-Level Inventory Fee

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

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

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

The following sellers are also exempted from this fee:

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

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

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

Monthly Storage Fee Changes

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

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

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

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

January-September Storage Utilization Surcharge

October-December Storage Utilization Surcharge

FBA Aged Inventory Surcharge

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

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

FBA Return to Seller, Disposal and Liquidation Order Fees

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

Return to Seller Fees

Disposal Order Fees

Liquidation Processing Fees

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

Related: 5 Best Options to Quickly Liquidate Amazon Inventory

Pan-EU FBA Oversize Eligibility Updates

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

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

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

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

Sample calculation below:

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

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

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

Other Upcoming Changes

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

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

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

Final Thoughts

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

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

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

Major eComm Players Making Big Changes to Take on Amazon

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

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

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

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

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

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

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

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

Fueling the Rise in Power of Chinese Amazon Sellers

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

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

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

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

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

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

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

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

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

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

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

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

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

Increasing customer interest in Temu and Shein

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

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

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

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

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

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

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

TikTok braces for battle with Amazon and Walmart

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Who should Amazon be most concerned about?

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

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

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

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

Brace for Higher FBA Fees in 2024

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

2024 FBA Fee Changes at a Glance

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

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

Inbound Inventory Placement Fee

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

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

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

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

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

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

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

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

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

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

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

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

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

Lower FBA Fulfillment Fees

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

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

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

See the updated FBA Fulfillment Fee Rates here.

Low-Level Inventory Fee

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

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

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

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

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

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

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

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

Additional Changes

Amazon is implementing further changes, which encompass:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What is Amazon Shipping?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How Amazon Hub Delivery works

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Other Initiatives to Handle Greater Parcel Volume 

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

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

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

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

Expanding Next-Day Delivery Coverage with More Sortation Centers

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Trends that Drive the Need for Ultrafast Delivery

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

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

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

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

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

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

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

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

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

What is Amazon Seller Wallet?

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

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

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

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

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

ASW Primary Features

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

ASW Cost Benefits

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

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

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

How to Get Started

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

Click here to learn more about Seller Wallet.

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

SoStocked Bid for a Higher Inventory Limit with FBA Capacity Manager

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What you can do

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

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

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

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

Quick recap

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

How much should you bid?

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

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

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

When is the right time to bid?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Convincing Sellers to Adopt Capacity Manager

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

Under the new system, Amazon will:

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

Here’s how performance credit works according to Amazon:

Performance Credit Examples

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

Using Capacity Manager may not be for you if:

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

Final Thoughts

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

That’s the best-case scenario.

⚠️ The worst-case?

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

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

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

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

Related: Would You Pay for Extra Storage Space?

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

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

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

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

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

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

Meta Amazon Tie Up
Source: Marketplace Pulse

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

What does this Team Up Mean for Sellers?

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

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

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

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

4 Updates to Amazon Seller-Fulfilled Prime

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

What’s New?

1. SFP fee has been removed

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

2. Enrollment is subject to certain requirements

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

Pre-qualification criteria include:

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

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

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

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

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

Click here to update your SFP handling time settings.

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

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

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

What Sellers Are Saying

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

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

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

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

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

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

Updated: New Amazon Features, Updates and Requirements

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

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

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

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

Too Much Work

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

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

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

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

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

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

  1. Track your FBA Shipments from China with ShipTrack Carriers

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Go to Archived Orders for more details.

3. New Product Listing Attributes Required for New Listings

Amazon is adding 206 attributes across 199 product categories!

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

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

Product TypeAttribute Name
BABY_BOTTLEage_range_description
BABY_BOTTLEbottle_nipple_type
BABY_BOTTLEbottle_type
BABY_BOTTLEcapacity
BABY_BOTTLEcolor
BABY_BOTTLEis_dishwasher_safe
BABY_BOTTLEitem_weight

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

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

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

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

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

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

New Security Issues Leave Many Sellers Vulnerable to Cyberattacks

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

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

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

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

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

What happens if you get hacked?

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

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

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

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

The Covert Amazon Program That Could Be Costing You Thousands

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

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

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

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

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

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

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

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

A New Costly Nightmare?

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

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

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

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

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

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

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

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

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

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

How to Opt Out

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

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

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

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

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

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

Related: Amazon Offers New Fulfillment Fee Discounts on Select ASINs

FTC Proposes a New Rule to Rein In Fake Reviews

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

Coalition for Trusted Reviews

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

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

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

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

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

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

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

Minimizing Regulatory Risk

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

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

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

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

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

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

Factors that Compelled the FTC to Take Action

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

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

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

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

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

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

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

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

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

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

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

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

FTC’s Efforts to Address Rampant Fake Reviews

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

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

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

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

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

Product Review Practices Prohibited Under the New Proposed Rule

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

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

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

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

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

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

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

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

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

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

Companies Subject to the Proposed Rule on Fake Reviews

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

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

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

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

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

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

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

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

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

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

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

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

Making the Case

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

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

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

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

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

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

Amazon’s Antitrust Violations

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

Multiple “Anti-Discounting” Tactics

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

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

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

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

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

Project Nessie

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

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

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

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

Rigging Search Results

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

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

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

Abusing the Featured Merchant Algorithm

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

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

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

Favoring Prime Sellers Over Non-Prime

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

What’s Not Included in the Lawsuit

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

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

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

Amazon Strikes Back at FTC

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

Key points from Zaplosky’s response include:

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

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

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

Should Sellers Be Worried?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Tale of the Tape

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

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

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

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

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

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

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

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

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

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

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

60-Minute Amazon Drone Delivery is Now a Reality

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

What is BVLOS?

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

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

Disruptive Potential of BVLOS in Last-Mile Delivery

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

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

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

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

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

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

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

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

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

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

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

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

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

9 Years in the Making

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

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

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

Amazon-Air-MK27

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

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

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

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

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

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

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

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

What’s Next for Prime Air

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2023 Holiday Peak Fulfillment Fee for FBA and MCF Orders

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

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

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

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

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

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

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

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

2% Fee On Each Product Sold for Seller Fulfilled Prime

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Roundup: Upcoming Amazon Changes and Features

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

1. Set competitive prices with new Similar Product dashboard

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

3. Update to FBA removals policy

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

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

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

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

Try to maintain a regular removal schedule, whether on a weekly or biweekly basis, by going to Automated Unfulfillable Settings, select your preferred return option, and provide a valid return address. This will grant you the flexibility to manually initiate removal orders for your (unsellable) returns at any point before your chosen automated removal date.

Related: Amazon Return, Refunds and Reimbursement Policy Updates

Amazon Tries to Increase Revenue from Existing Shoppers

Sellers may soon not be the only ones bearing the brunt of Amazon’s restructuring efforts to boost profits.

The retail giant is reportedly testing a higher free shipping minimum for some non-Prime customers and charging Prime members a fee for in-garage deliveries beyond the designated Amazon Delivery day. While this may help Amazon generate an additional source of income, they (and Amazon sellers) also risk losing customers to competitors that offer surprisingly low prices like Temu, TikTok Shop, and Shein.

Related: Amazon is Testing a New Way to Show Product Reviews 

Raising the Free Shipping Threshold

In a statement to CNBC, Amazon spokesperson Kristina Pressentin confirmed that the company is testing a new free shipping minimum for some non-Prime members in selected regions.

Non-Prime customers generally have to place an order with a minimum value of $25 to qualify for free shipping. But that changed for some shoppers on August 28, when Pressentin said Amazon has increased that threshold to $35, while “Prime members continue to enjoy free delivery on over 300 million items.”

The new change seems like an effort by Amazon to align its shipping minimums with that of Walmart, perhaps in hopes of attracting a larger customer base to its Prime service that offers free 1 to 2-day shipping and a host of membership benefits for an annual fee of $139 or a monthly fee of $15.

On the one hand, non-Prime customers may start comparing free shipping offers from different sales channels and decide to take their business somewhere more affordable.

On the other, this could be an opportunity for sellers to increase their sales by implementing value creation strategies that will make customers see the worth of buying add-ons or more expensive products to meet or exceed Amazon’s new free shipping minimum.

  • Product bundling. Grouping related products for a slightly lower price than buying individually.
  • Cross-selling. Encouraging customers to buy items that complement the product they wanted to purchase. For example, a customer adds a  $25 French Press Coffee Maker in their online shopping cart. With cross-selling, you could recommend them accessories like a milk frother, coffee mug, espresso brush, or reusable straw to ensure a higher single order value.
  • Upselling. Influence customers to buy pricier items or upgrades to increase their order value. Suppose a customer is eyeing that $25 French Press. In that case, you can highlight an upsell offer for a $50 coffee maker that has more advanced features.

Related: Tiered Discounts on Multi-Unit Orders

Free to Fee: In-Garage Delivery Service

Amazon Prime members currently enjoy free In-Garage Delivery, a service that ensures packages find a secure haven inside garages equipped with Amazon Key openers (accessible via an app), safeguarding them from theft and bad weather. However, this perk is about to change, contingent on the timing of package deliveries.

Starting from October 4th, Amazon is introducing a $1.99 fee for those choosing In-Garage Delivery outside of the designated Amazon Day delivery slots.

As highlighted by reports from The Verge, discontent among members is palpable as posts circulating on Twitter reveal their dissatisfaction with this impending price adjustment, saying “Amazon Key In-Garage Delivery is by far one of my favorite services, but they’re going to charge $1.99 PER DELIVERY unless you choose the Amazon Delivery day option.”

Other customers who commented on the The Verge’s post also share the same sentiment, with one wondering if the change is “bad for Amazon? This was a “safe” option for a lot of consumers and beats dealing with potential package theft when your packages are left outside. I’m not sure what Amazon really wins here outside of trying to force more people to choose their Amazon Day shipping.”

In reply to said comment, one poster wrote “Not completely bad. Just bad for those that want deliveries outside of their designated “Amazon Delivery Day of the week”. So, are you patient or needs things ASAP? ASAP will cost money, like it should IMHO.”

Some customers speculate that the extra time drivers take to access the codes to open garages is slowing down deliveries, which can cost Amazon money.

Delivery is expensive business, so it is no surprise Amazon is trying to get as much juice from the squeeze as possible. In a study conducted by the data validation firm, Loqate, it was found that within a sample of over 140,000 online orders, ecommerce companies experienced an 8% initial delivery failure rate. These mistakes, with an associated average cost of $17.20 per occurrence, collectively incurred a substantial expense of over $193,000 among the 300 companies included in the survey.

In addition to delivery cuts, Amazon has been aggressively reducing costs through job cuts and eliminating excess warehouse space. The company has also recently brought back its holiday peak fulfillment surcharge for FBA sellers and started charging an extra fee for those who participate in the Seller Fulfilled Prime program

All of this contributes to the effort Amazon has been making in recent years to pull up out of the post-Covid tailspin it found itself in. Time will only tell whether these changes will be good or bad news for the retailer. Unfortunately, unless you factor in the broad possibility of more financial stability for Amazon, we can’t see an angle on this that serves the customer or the seller.

UPDATED: Amazon Faces Tougher Scrutiny Under EU’s Digital Services Act (DSA)

UPDATE 09/06/2023: The European Union has intensified its efforts to curb the dominance of Amazon, Alphabet, Apple, Meta, Microsoft, and ByteDance in the region. This move involves the implementation of comprehensive regulations designed to provide consumers with greater choices and level the playing field for fair competition.

According to the Commission, a total of 22 core platform services operated by these six “gatekeepers” have been designated for regulation under the Digital Markets Act (DMA)

The DMA consists of a set of rules, or “dos and don’ts,” that aims to streamline users’ ability to:

  • Transition seamlessly between rival services – for example, making it possible for WhatsApp users to send messages to others without needing to be concerned about which messaging platform they are using.
  • Retain control over the use of their data for personalized advertising. Gatekeepers must ensure that performance data regarding ad campaigns and pricing information for ads are accessible to business users.
  • Exercise a choice in selecting their preferred search engine or web browser rather than being constrained by default settings. 

“The most impactful online companies will now have to play by our EU rules,” European Commissioner Thierry Breton said on X, previously known as Twitter.

“DMA means more choice for consumers. Fewer obstacles for smaller competitors. Opening the gates to the Internet.”

This also means Amazon could soon be prohibited from ranking their own in-house brands or services higher than their competitors in search results pages, as covered in the “don’ts” section of the DMA.

The retail giant already started providing European shoppers with more choices when it settled antitrust investigations by agreeing to giving sellers equal treatment on the platform’s Buy Box and adding another “buy box” with a different delivery option or price for the same product.

To enforce compliance, fines of up to 10% of the company’s global revenue loom overhead, and there’s even the potential for the tech giants to begin to divest specific segments of their operations in order to secure their foothold in the European market.

DMA is set to take full effect in six months, during which the six gatekeepers will be required to communicate their strategies for compliance with the digital act to the Commission.
Related: Amazon Faces Backlash for Alleged Abusive Practices, FTC Lawsuit Alleges Amazon of Tricking and Trapping Customers into Recurring Prime Subscriptions

A cohort of corporate giants, including Amazon, Apple, and an additional 17 industry leaders, have been identified and classified by the European Union (EU) as “very large” online platforms or search engines.

Consequently, these companies are subject to enhanced scrutiny and more stringent regulatory measures, accompanied by the possibility of substantial fines should they veer from the newly established Digital Services Act (DSA) within the region.

Obligations Under the DSA

In late 2020, the European Commission, the executive body of the EU, laid out a fresh set of services-related regulations aimed at intensifying oversight of tech behemoths.

These regulations, known as the Digital Services Act (DSA), have been in effect for approximately four months now, granting regulators the authority to actively monitor online content, curbing the spread of harmful comments, and establishing guidelines for the utilization of AI.

This significant step highlights EU’s commitment to fostering a safer online environment and ensuring responsible practices by big tech operating within its jurisdiction. These platforms are defined as entities that reach a significant number of users (more than 45 million active users) and that have a significant impact on the EU market.

The DSA intends to impose various obligations on these major platforms, such as:

More user empowerment and protection

DSA aims to empower users and protect their rights online. Users will have clearer information about recommended content and the ability to opt-out of profiling-based recommendation systems.

Platforms must diligently process reports of illegal content from users. Advertisements based on sensitive user data are prohibited, and platforms must label ads and disclose the promoters. Tech giants are also required to provide easily understandable summaries of their terms and conditions in the languages of the Member States where they operate.

Overall, the DSA prioritizes user empowerment, combating illegal content, protecting privacy, enhancing advertising transparency, and improving communication online.

Increased transparency

Platforms will be required to provide clear information about their terms and conditions, content moderation policies, and advertising practices. They may also need to undergo third-party audits to assess their compliance with the DSA’s requirements.

Strong protection of minors

Platforms will be required to undertake significant system redesigns to prioritize the privacy, security, and safety of minors. Specifically, platforms must implement measures that safeguard children from targeted advertising based on profiling techniques, ensuring their online experiences are free from such practices. 

To assess the potential risks to minors’ mental health and well-being, platforms will need to conduct special risk assessments. These assessments must be provided to the Commission within four months of designation and, at the latest, be made publicly available within a year. 

By doing so, platforms will contribute to a better understanding of the potential negative effects on mental health associated with their services.

Content moderation and removal

Platforms will be expected to implement effective measures to combat illegal content, hate speech, and disinformation. They will also be required to provide mechanisms for users to appeal content removal decisions.

The companies falling under the scope of the DSA regulations are given a grace period of four months to facilitate a smooth transition, enabling them to adapt the new antitrust policies and procedures within a reasonable timeframe.

Non-compliance with these provisions may result in significant consequences, including potential fines amounting to 6% of the company’s global turnover.

In more severe cases of persistent non-compliance, platforms could face temporary bans from operating within the EU. These stringent measures underscore the importance of adhering to the DSA guidelines and reinforce the commitment to ensuring a responsible and accountable digital environment.

Impact of EU’s Digital Acts on American Online Service Providers

In this report dated November 2022, economist Kati Suominen estimates that the EU’s DSA and Digital Markets Act (DMA) would cost leading US digital service providers like Amazon between $22B and $50B in additional compliance and operational costs. 🧐

As a result, this might force them to either pass the added costs to their customers or let go of crucial business opportunities in the region. 

Suominen also believes that “if US digital services increased their costs on American companies by just 5% due to EU regulation, US companies could incur over $97B in new costs, with $45B carried by SMEs.”

Sellers currently selling in or planning to expand to the EU should watch closely how Amazon will respond to its DSA obligations. More importantly, sellers should brace for any potential cost increases once Amazon starts implementing new compliance requirements related to these digital acts.

Related: EU Advised by NGOs to Refuse Amazon’s Flawed Proposal for Antitrust Settlement, Amazon Faces Backlash for Alleged Abusive Practices, Why Amazon Wants You to Lobby Congress

UPDATED: Shopify Looking to Integrate with Amazon Buy With Prime

Shopify Looking to Integrate with Amazon Buy With Prime

UPDATE 08/30/2023: 📣 It’s official! Shopify announced on Wednesday that Amazon will release Buy with Prime in the platform’s app ecosystem, marking a ceasefire between the two eCommerce giants.

For Prime customers, this collaboration holds the potential for a more dependable checkout and delivery experience across a wider array of retail brands outside of Amazon.

For some sellers, this announcement may come as a surprise after Shopify cautioned its merchants against attempting integration of Buy with Prime on their respective online stores, citing breaches of its terms of service and the emergence of security vulnerabilities.

The subtleties surrounding this app integration provide insights into concessions orchestrated by both companies.

Customers who log into their Amazon Prime accounts on a Shopify store equipped with the “Buy with Prime” feature can choose to utilize a payment mechanism linked to their Amazon wallets. Yes, Amazon Pay will be added as another payment option within Shopify.

However, instead of Amazon Pay, the payment processing will be handled by Shopify’s checkout system, allowing the company to:

  • Keep the entire or a portion of the revenue generated by processing Prime orders within Shopify Checkout. It’s unclear whether both parties entered into a revenue sharing contract, where the income made from Buy with Prime transaction fees on Shopify is split between the two companies.
  • Help Shopify sellers “maintain 100% control of their brand and their customer data in Shopify’s admin,” the company said in a statement. 👏 

The program rolled out on August 30, initially catering to selected sellers on Shopify’s platform. By the end of September, it will become accessible to all Shopify sellers interested in leveraging Amazon’s extensive fulfillment network, Amazon said.
With Shopify out of the way, Amazon now stands to capture more non-Amazon merchants via wider Buy with Prime adoption, while existing sellers face increasing competition and fulfillment fees.

On Shopify’s Q4 2022 earnings call, President Harley Finkelstein revealed the company is currently in talks with Amazon about adding Buy With Prime (BWP) in Shopify-powered stores. 🫣

“We think any company that’s going to make their infrastructure available to merchants to sell more a great thing,” Finkelstein said during the earnings call.

“We’re going to talk to the Amazon now to make that work, but it has to be done in a way that we think is important for merchants to have a relationship with their end consumer,” Finkelstein added.

That’s great news for merchants and aggregators interested in using both Shopify and BWP, but not for those who don’t want to give up their customer data to Amazon. 🤔

BWP is a Fulfillment-as-a-Service (FaaS) program that allows merchants to offer 1 to 2-day shipping, free delivery, and free returns on their own websites outside of Amazon.com.

However, checkout is done via Amazon Pay, which requires a customer to create or log in to their Prime account to be able to complete a transaction. This process could allow Amazon to take a peek into the customer’s name, address, and possibly even contact details (for shipping purposes) that they could then use to launch remarketing and retargeting campaigns to that customer.

In September 2022, Shopify itself issued a warning to merchants about the potential security issues they could face when installing BWP. Moreover, taking the checkout process outside of Shopify is currently a violation of the platform’s Terms of Service.

But given Shopify’s recent complete turnaround on the issue, the warning may primarily have beenn due to its plans to launch its own FaaS program, Shopify Fulfillment Network (SFN). The service was first introduced in 2019, but has reportedly made little progress since.

Turning to Amazon to Overcome Challenges Ahead

The broader rollout of SFN unfortunately happened at a time when the company’s Q4 2022 shares fell nearly 7% and revenue growth slowed amid escalating Amazon rivalry, indicating a rough time ahead.

That might explain why Shopify is looking for a partnership with Amazon instead of competition, a business strategy called “Co-Opetition.” 🤔

Welcoming its rival into the fold might help the company reduce competitive intensity levels while expanding its customer reach with Prime, which currently has over 200 million members worldwide.

Same goes for Amazon, a collaboration presents an opportunity to tap into the rival’s customer base while keeping them at an arm’s length, as well as maintain its lead over Walmart.

The risk, however, is potentially greater for Shopify as it stands to loosen their grip on their merchants’ customer data. Additionally, BWP could eat into its profits. The Canadian eComm giant mostly generates revenue from transaction fees. 

For that reason, analysts recommend not allowing Amazon to take over checkout. But it seems unlikely to happen given that Amazon Pay has always been conditional to BWP, unless both parties come up with a fair revenue sharing arrangement.

If no deal is taken, Shopify might have to find other companies that can take Amazon’s place in solving this challenge for them.

Shopify Tries to Stay in the Fight 

Recent moves suggest that Shopify is not backing down in its fight for market share. It has teamed up with Flexport to expand its fulfillment capabilities globally and compete with Amazon Global Logistics.

The company also released new tools and features that will help merchants sell across channels, boost conversion, and run their stores more efficiently.

Meanwhile, Amazon continues to beef up Buy with Prime by making it available to US merchants that use BigCommerce. The Texas-based shopping site builder launched an app that allows sellers to easily enable BWP features on their stores with no coding required.

In sum, while integrating with BWP could temporarily hurt Shopify, the company also stands to gain some wins, such as the ability to offer faster delivery without doubling its fulfillment network, i.e., cut costs.

It all probably just comes down to how the two eComm giants will split the revenue from BWP transactions on Shopify stores. It will be interesting to see how it all shakes out. 

Updates to Amazon Return, Refund, and Reimbursement Policy

Updates to Amazon Return and Refund Policy

Update 08/24/2023: Currently in invite-only beta, Amazon introduced a new feature that allows some select sellers to disable the evaluation of returns, giving them more control over the return process. This means sellers no longer have to rely on Amazon’s evaluation of a returned product’s condition, which is not always accurate. 

🚩 Imagine a customer receiving a damaged or counterfeit product because an Amazon associate did not carefully check the returned item. An upset customer may choose to leave a negative review that will not only dent your reputation and Amazon order defect rate but also profits – Amazon does not reimburse customer-damaged units.

👌 By disabling returns evaluation, Amazon will automatically mark returned products as “unfulfillable,” instead of putting them back to your available inventory to be sold again. You may then create a removal order so that Amazon can return the items to your warehouse. From there, inspect the returned products yourself and decide whether to resell or dispose of them.

Note: Think twice before opting to have Amazon automatically get rid of returned orders for you. Some sellers lack confidence in the retailer’s ability to properly dispose of unwanted or damaged goods, saying that these items will somehow find their way onto pallets and be auctioned off on an inventory liquidation site or sold at a flea market.

Preserving the integrity of your brand, especially higher-end products, is crucial. The thought of these damaged goods re-entering the market troubles artisan sellers that they would rather cover the removal fees, recover whatever is salvageable, and recycle what they can.

How to disable evaluation of returns?

  • Log in to your Seller Account > FBA Inventory Evaluation Settings > Click Disable
  • Choose Disable Returns for All ASINs or Disable Returns for Select ASINs
  • Click Update

Visit FBA Inventory Evaluation Settings or read the Terms and Conditions for Disabling Returns Evaluation for more details.
Related: Claim Reimbursement for Losses Caused by Amazon

Update 06/15/2023: In an email, Amazon announced they’re introducing a revised reimbursement policy for Multi-Channel Fulfillment (MCF) in the US.

Effective from July 15, 2023, the maximum reimbursement limit for eligible units lost or damaged during the fulfillment process will be set at $300 per item. This adjustment ensures that MCF’s reimbursement policy remains consistent with prevailing practices within the industry.

You may file your claim for reimbursement on eligible MCF orders no more than 90 days after the promised or estimated delivery date. You can monitor the status of your existing claims by going to your Amazon Fulfilled Inventory report or the Payments dashboard.

Amazon has not shared the formula for calculating a product’s reimbursement value, but per company policy, the goal is to provide a (cash) reimbursement amount that aligns with the estimated proceeds (minus MCF fees) you would receive from selling your item.

Note: In the event that Amazon stumbles upon your lost units one day, they may nullify the cash reimbursement by deducting it from your forthcoming deposit. They will also reinstate your lost units into your inventory, thereby granting you the opportunity to sell said items once again.

In cases where Amazon lacks sufficient data to calculate the estimated sale price using multiple price indicators, they will assign an approximate value based on the price of a similar product. Occasionally, an Amazon rep might also request additional information or documentation from you to assist them in determining the reimbursement value accurately.

If the value of your item exceeds the max reimbursement amount, Amazon recommends purchasing third-party insurance for additional coverage. But if Amazon frequently loses your inventory, it may be worth taking your fulfillment needs elsewhere, especially if you sell a lot of high-value items. For instance, you may want to consider fulfilling luxury goods through a different 3PL provider with better reimbursement coverage and only leave products below $300 up to Amazon MCF or FBA. 
Be sure to read this blog post to learn how to minimize lost or damaged inventory.

Update 12/15/2022: 😩 Another fee will take a bite out of your profits in 2023! Starting January 14, Amazon will no longer cover carrier shipping correction charges on seller-fulfilled returns with “incorrect return label information.”

Correction charges can be applied when:

  • The return address label is invalid – for example, text is illegible or part of the address is incorrect or missing. According to Amazon, the carrier will charge $18 per undeliverable package. 
  • The package weight or dimensions do not match the information you provided. You will be responsible for the difference in cost between the initial label you paid for and the label correction cost. Fortunately, you may also be credited for any overpayment made due to these factors.

This update has drawn the ire of many FBM sellers, arguing that they don’t have control over how customers return unwanted products. A customer may return a small item in a box 5x to 10x its size, for instance. 

Some sellers call on Amazon to instead push these correction charges on shoppers who use unnecessarily large boxes when shipping items back, as they rarely receive returns in the original packaging anyway.

But considering Amazon’s customer-centric policies, that’s very unlikely to happen. So the only paths forward sellers seem to have are to either, as per usual, suck it up and just cross fingers that the majority of customer returns come back without additional charges, or to switch to FBA. Otherwise, they’ll be paying the price as another line item to add to the profit and loss. 🤔
Go to Shipping Correction Charges for Seller-Fulfilled Returns to learn more.

Update 11/11/2022: 📢 Amazon just updated their Reimbursement Policy! Effective November 11, 2022, eligible unfillable units “will be reimbursed at a discounted rate to reflect the actual fair value of the item” rather than their regular retail price.

Unfillable items are returns from customers that can’t be sold as “New” on Amazon. If an unfillable item is lost or sent back in damaged condition, Amazon will reimburse you at a discount on the regular price. 😦

This could impact a lot of sellers that get a lot of returns in Q4. Profit is less in case a customer returns a heavily worn item (and thus unsellable) or Amazon loses them.

👉 Be sure to read on to learn more about the latest on Amazon’s Return and Refund Policy, as well as some pro tips for reducing unnecessary returns and abusive claims.

Amazon has updated its Return and Refund policies in preparation for Q4! 🚚

Extended Returns Window

For US sellers, the eCommerce giant is temporarily extending the standard returns window for early holiday shoppers.

Amazon recently confirmed that it will hold a 2nd Prime Day sale on October 11-12 to give (inflation-weary) consumers a head start on finding and shopping the best deals online.

Most orders have a 30-day return window, but for products bought between October 7 and December 31, 2022, customers can return them until January 31, 2023. That’s a 3 to 4-month extension, which is good for buyers, but some sellers don’t see the benefit of this update.

It could allow unscrupulous individuals to use their products for free for 3 months and return them in January when they’re “no longer wanted or needed”’ – for example, buying Christmas decor in November and then sending it back after the holidays. 🤦‍♀️

But do note that the returns eligibility remains unchanged for all orders, so not all returns will be accepted.

Refund at First Scan (RFS) for Seller-Fulfilled Returns

Amazon is postponing the release of RFS for seller-fulfilled returns in the UK until October 24, 2022. It was supposed to take effect on September 30th.

Initially introduced on May 4th, RFS is part of the Prepaid Return Label program that allows a shopper to receive a refund after their designated carrier has successfully scanned their returned item using the prepaid return label issued by Amazon.

During the scanning stage, sellers have no way of inspecting the item themselves, so the risk of receiving a knock-off version (or worse, a brick!) instead of the original item is high. 😓

If the product is received in damaged condition, sellers can file a SAFE-T claim on their Seller Central account within 60 days of the refund charge. However, this means Amazon may still deny your claim and you will bear some losses. It also means much more manual oversight.

To minimize unnecessary returns, consider employing tactics like having highly detailed product descriptions, images, and product sizes and dimensions or offering live chat support to address customer concerns immediately. 

You can also try to reduce abusive claims by establishing some oversight mechanisms such as manual inspection of returned items, documenting each order (before and after photos), or using signature confirmation on premium products.

⚠️ Proper documentation of orders, from preparation to order tracking to delivery (e.g., signature confirmation on high-value items), is highly recommended to have a solid SAFE-T claim. 

Sellers should be aware of these refund and returns changes and factor these into your cost of doing business this holiday season.

Amazon is Testing A New Way to Show Product Reviews

Amazon is currently overhauling its product reviews system amid FTC’s pending rule on fake reviews.

In a recent blog post, top-100 Amazon seller and Zulay Kitchen Co-Founder Aaron Cordovez calls to attention the new review formats that Amazon is A/B testing to possibly find a better way to display key customer reviews stats like review count (number of reviews, e.g., 1,000) and overall product star rating (ranging from 1 to 5 stars) on its search engine results pages (SERP).

As Cordovez lays out, these are the major changes being seen by some customers on Amazon’s platform.

Test #1: Removing Review Count

Amazon Review Count Changes

Amazon has always featured product review count typically expressed in complete format (2,000; 20,000; 200,000) on search. However, in one of its A/B tests, review volume was hidden, which may not be a smart move.

A high review count is an essential metric that helps paint a picture of a product’s quality and size of customer base, thereby increasing the likelihood of shoppers to purchase.

A PowerReviews survey shows 80% of customers are less likely to purchase a given product if it has zero reviews. This impression most likely impacts new (though not necessarily inferior) products on the market, possibly giving Amazon a reason to hide review count to somehow level the playing field. 

Cordovez himself believes that “Amazon wants to test if there is a better way for new products to be discovered. This is a bullish sign for innovative products and more creative minds re-imagining the E-commerce space with better products.”

Removing review count may also help shift customers’ attention to “total units bought in past month,” which would be another way to create a positive first impression of your product.

Cordovez speculates that if a product with thousands of reviews from several years ago has gone stale, then letting customers rely on review count when making purchase decisions may not be a good idea.

“Number of units purchased last month gives much stronger social proof. It is taking away stale products from Amazon’s catalog,” Cordovez explained.

In terms of its impact on combating fake reviews on Amazon, there’s an upside and downside to hiding review count. On the upside, customers will be less likely to make purchase decisions based on this metric that can be easily inflated with fake reviews and review hijacking, essentially weakening the influence of these black hat tactics on consumer behavior.

On the contrary, Amazon could use this approach to make it difficult for ASIN alert tools and perhaps even antitrust watchdogs to track changes in review count during a particular period. 

As previously reported, we noticed in April that on some of Amazon’s own Basics line products, hundreds of thousands of reviews were removed overnight. It remains unclear whether the reviews purge included authentic low-star reviews or false positive reviews or was in any way motivated by a desire to avoid possible pending violations and penalties in the face of the potential FTC rule change on reviews.

Test #2: Changing the Review Count Format

Perhaps seeing how removing review volume altogether may negatively impact long-term sellers’ conversion rates, Amazon seems to be considering another alternative:

  • Changing the unabridged review count format to % of 4 or 5-star customer reviews
  • Replacing 5 review stars rating format with a single star icon while an inconspicuous drop-down menu button is provided to enable full view of a product’s customer star ratings.
Review Count 4 Star Percentage Format

The initial version displayed products with a percentage of 4+-star customer reviews, but as currently seen on Amazon search results pages, the reviews system now shows products with a percentage of 5-star reviews instead, irrespective of product type, total units bought in past month, and overall star rating. See example below.

Amazon Review Count 5 Star Percentage Format

On the one hand, this new format gives more weight to positive customer reviews, which could potentially help you generate more clicks.

On the other, less discerning customers or those that don’t have time to read online reviews and just rely on initial information presented may be misled to think they’re buying a high-quality product with that 5-star review percentage. They may overlook the actual lower star reviews and simply focus on the 5-star %. If the new format makes some customers less likely to spend time reading online reviews, it also increases their chances of falling victim to products with fake positive reviews or falsely inflated overall star ratings. 

In contrast, other customers may think that a product that has a high 5-star review % may be too good to be true, forcing them to seek out negative reviews.

Additionally, Amazon has also replaced the legacy 5 review stars format with a single star icon. At first glance, it appears you’re looking at one-star products, which some customers may find off putting.

To fully view a product’s customer star ratings (and facilitate smarter buying decisions), customers will have to hover their cursor over the small drop-down menu button next to the single star icon. 

New Product Star Ratings Art Format

Test #3: Hiding Product Star Ratings

Product Review Rating number is hidden but the star visual presentation is retained to still provide some form of social proof.

Hidden Review Star Ratings

Amazon may be testing how the star rating format (full or half stars icon) versus rating numbers (2.5, 3.7, or 4.8 out of 5) influence product preference.
This paper suggests that when looking at star ratings with a half star representing a decimal point, “consumers perceptually fill in the missing fragment by extending the yellow retained area to cover the grey cutout area.”

Star Rating Format

Interestingly, the “perceptual fill-in of the missing part of the rating unit will upwardly extend the decimal to the nearest integer [whole number, e.g., 4.0] and result in a visual rounding-up of the rating. Consequently, the non-rectangular (star) rating format will make the focal product seem more favorable.”

Test #4: Changing the Review Counter to Estimated Number of Thousands (27.2K instead of 27,220)

New Review Counter Format

The review system appears largely unchanged, except for the review counter, which now displays estimates with a “K” plus indicator which means thousand(s) instead of the exact review number. One seller in this discussion board believes this downplays the significance of presenting the review count in full. 

This change may again have something to do with how certain visual presentations influence customer buying decisions or simply optimizing the review stats section for improved user experience.

Sellers Weigh in on the Issue

In the comment section of Cordovez’s Facebook post regarding the matter, one seller summarizes this whole A/B testing best, “the new test version gives all the advantage to new sellers, and removes all advantages of being a long term, relevant player in your niche.” 

Another seller who has products that have more than 3,000 reviews also expressed concerns about increasing competition. Someone with three 5-star reviews (which, therefore, may appear as 100% 5-star review score on search) could have a better chance of selling or landing on prominent sections of search results pages than seasoned sellers with 88% 5-star review percentage, for example.

In this Reddit post, most sellers expressed dislike toward the new formats, with some saying “conversions will drop” and they “will only benefit products with fake reviews more than others.”

One seller offers a cautiously optimistic view on the anticipated reviews shakeup, saying it is “good for new brands, but limits older brands. But if your product is good, it doesn’t matter.”

When all is said and done, according to Cordovez, Amazon could re-adopt the traditional reviews system, or perhaps just modify the review count to reflect the number of thousands. Alternatively, the company might completely revamp the system, concealing either the review count or the overall product star rating. Many sellers are sure to be well-engaged in observing how all of this unfolds.

Amazon Delays Delivery Date Based Reserve Policy for Some UK Sellers After Backlash

In response to strong criticism from UK sellers who feared potential business closures, Amazon has decided to implement its revised payment schedule gradually, the Guardian reported.

Last week, the eCommerce titan announced that it would no longer provide instant credit to UK and EU sellers upon the completion of an online sale. This is to help Amazon ensure that sellers will have enough funds to cover the cost of customer returns or claims.

Under the new arrangement, however, sellers will encounter a delay of one week between the product being delivered and the receipt of their funds, also known as Delivery Date Based Reserve. 

Suppose you ship an item on August 17, and the delivery date is August 20, then the sale proceeds will be available for disbursement starting August 27. Previously, sellers faced a waiting period of around three days for the money to become available in their accounts, but because of the new reserve policy, many may have to endure a 7-day (or longer) wait after delivery before gaining access to the funds.

This rule change has triggered concerns about the viability of many Amazon businesses. For small sellers, for instance, having to wait 7 days to receive their money could lead to difficulty in paying employees and loans.

In an email sent out to affected sellers four months ago, Amazon itself acknowledged that implementing the Delivery Date Based Reserve policy may result in “a one-time cash flow disruption.”

However, according to BBC, some sellers said that “this email was not clear, or in many cases, went to their junk mail folder,” leaving them totally unprepared when the new policy finally took effect on August 3.

Consequently, some UK sellers turned to their Members of Parliament (MPs) for help. A UK government minister has reportedly started demanding Amazon for answers.

Following growing pressure from both sellers and the UK government, Amazon told The Guardian it was postponing the policy change for some sellers until January 31, 2024. The retail giant specifically said it was “extending the transition date for a small number of sellers who have contacted us and need support.

However, one seller believes that this move only delays the inevitable and that their business could still go under, thanks to the 7-day cash flow disruption.

That said, preparation is key to minimizing the rule’s impact on your cash flow. Ensure you have sufficient funds to cover any disruption to your earnings. You may also want to consider short-term financing options, if needed, though, as always, be well-informed of the terms of any funding you accept.

It would also be wise to keep an eye on your customer orders and their actual delivery dates. Depending on carrier and shipment options (standard or expedited), it might take your carrier up to 5 days to get items delivered.

In that case, if it is under your control, calculate the difference between the cost of using same-day or next-day delivery service providers and the potential impact of cash flow disruption on your business. It might be worth paying extra for faster delivery speeds than delaying inventory orders for Christmas because you couldn’t access your funds on time, for example.

It could also be worth taking a bit more action than that as, currently, Amazon is “listening to sellers’ concerns and is in contact with those who have experienced a one-time cashflow disruption,” as reported by The Guardian.


Consider reaching out to Amazon or contacting your MP to express your concerns. A large number of complaints could force the retailer to take similar action as Etsy did. The online crafts marketplace recently had to revise a policy that held back up to 75% of some UK sellers’ earnings for 45 days to appease those that initiated a boycott against the platform. Presently, Etsy expects that the standard withheld amount will now be around 30%.

Related: Amazon Faces Backlash for Alleged Abusive Practices

Amazon Working to Bring USPS Ground Advantage to its Buy Shipping Service

In a recent announcement, Amazon revealed its ongoing efforts to incorporate USPS Ground Advantage (GA) into Buy Shipping, a service that allows FBM sellers to purchase and print shipping labels for orders they receive from shoppers on Amazon. This service helps sellers save time and effort by integrating the label purchasing process directly into the Amazon platform.

We’ll take a deeper dive into USPS’s newest shipping solution and see how it might benefit your Amazon business, plus a few tips to help you deal with unexpected hiccups during this transition period.

What is Ground Advantage?

Launched on USPS on July 9, GA is a new service offering that rolls First Class Package Service (for letters and parcels under 1 lb), Parcel Select Ground (for packages weighing between 1-70 lbs), and Parcel Select Cubic (priced based on parcel dimensions) into one.

That means you will now be able to ship items that weigh up to 70 lbs through a single USPS ground delivery service.

Previously, USPS business customers such as Amazon FBM sellers who buy and print shipping labels with an online postage service provider had to use different service options for different types of shipments and sizes. For example, First Class for letters and lightweight parcels and Parcel Select or Priority Mail for medium and large items, causing seller confusion and indecision.

Aside from offering a streamlined shipping option, USPS also sweetens the pot by adding these benefits:

  • Up to $100 insurance
  • No fuel or residential surcharges
  • Available for shipping hazardous materials (HAZMAT)
  • Package forwarding and return-to-sender endorsements are included for all USPS Ground Advantage shipments

Pricing by Weight and Zone

Ground Advantage’s fee structure features tiers based on package weight and postal zones or distance.

For packages weighing less than a pound (previously known as First Class Package), rates will be determined at 4-oz increments (4 oz, 8 oz, 12 oz, and 15.999 oz). Rounding up to the nearest tier also applies. For example, if your parcel weighs 3.5 oz, then you’ll pay the 4 oz price. 

For packages weighing over a pound, rates will be calculated in 1-lb increments, extending up to 70 lbs (aka Parcel Select Ground). There will also be dimension-based cubic rates for weights over 1 lb, previously known as Parcel Select Cubic.

2 to 5-Day Delivery Promise

USPS is also making use of its “improved service standards and modernized operational structure” to increase delivery speeds across 50 US states. GA promises 2 to 5-day delivery within the continental US, which is as fast as First Class and faster than the previous standard of up to 8 days for Parcel Select.

Price-to-Win Strategy

To provide you with greater savings, GA rates will be lower compared to its previous offerings, with the legacy carrier looking to the new ground delivery service as a way to boost profits after posting a $2.5 billion net loss and lower parcel volume in Q2 2023.

In a statement dated May 10th, USPS said that the “published prices for GA will decrease 1.4% relative to current Parcel Select Ground and First Class Package Service pricing. USPS Ground Advantage Retail prices will decrease by 3.2% and USPS Ground Advantage Commercial published prices will decrease 0.7%.”
Presented below are the changes in commercial pricing for Ground Advantage in contrast to First Class Mail Package, Parcel Select Ground, and Priority Mail services.

Ground AdvantageFirst Class Mail PackageParcel Select GroundPriority Mail
Delivery speed (days)2 to 51 to 5 2 to 8 1 to 3
Tracking IncludedIncludedIncludedIncluded
Insurance$100; you can buy additional insurance coverage up to $5,000$0; No for letters (unless you buy certain other add-on services)$0; but you can buy external insurance options$100; you can buy additional insurance coverage up to $5,000
Package pickupIncludedIncludedNot includedIncluded
Commercial Pricing as of July 9, 2023 (4 oz)$3.59 to $4.13 (from Zone 1 to Zone 9)Large envelope: From $1.551(4 oz) to $3.711 (13 oz) N/AFlat Rate Envelope: From $8.05
USPS Mailing Box (Flat Rate): From $8.55 
Your Own Box By Weight/Zone: From $8.55 to $45.07
Commercial Pricing (15 oz, Zone 1 to Zone 9)$5.85 to $6.78N/A – Max weight is 13 ozFrom $2.84 to $5.06 depending on destination entry$7.64 to $18.03
Commercial Pricing (3 lbs, Zone 1 to Zone 9)$7.17 to $11.43N/A$3.91 to $6.17 depending on destination entry$8.43 to $37.43
Commercial Pricing (10 lbs, Zone 1 to Zone 9)$9.38 to $18.73N/AFrom $4.70 to $9.02 depending on destination entry$10.82 to $91.62
Pricing (up to 0.20 cubic, Zone 1 to Zone 9) $6.32 to $8.03N/A$7.07 to $10.12Large envelopes and Parcels: $8.23 to $27.59
Pricing (up to 0.50 cubic, Zone 1 to Zone 9) $7.52 to $13.15N/A$7.36 to $13.66$8.74 to $56.29
Pricing (1 cubic, Zone 1 to Zone 9) $9.45 to $18.82N/A$9.30 to $17.68N/A

First Class (1C) and Parcel Select (PS) may be cheaper than Priority Mail (PM), but they come with certain disadvantages. 

While 1C’s delivery speed is faster than PS, it offers limited shipping weight options, requiring you to shift to other services that have a higher max weight limit. You could opt to use Parcel Select for heavier packages over Priority Mail to cut costs, but you’d have to sacrifice delivery speed. Plus, PS doesn’t come with built-in USPS insurance.

By merging 1C and PS into Ground Advantage, however, USPS presents a competitive shipping alternative in contrast to Priority Mail. You could see savings of as little as $1 to as much as $43 per package, specifically in larger cubic shipments. This could be huge given how FBA fees have substantially increased in the last two years, mainly due to dimensional weight pricing and surcharges.

Not only does GA come with $100 insurance and decent delivery promise (albeit depending on destination and time of year it could be slower than 1C and PM), it also employs a pricing structure that adjusts according to weight, zone, and dimensions. That means you could get affordable rates for shipping compact packages over shorter distances. 
Conversely, rates may go up for longer or larger, lightweight items like pillows and tiki torches, as they take up more space. Being charged by dimensional weight (plus any applicable non-standard size fees) rather than your product’s actual weight can lead to higher shipping costs that can cut into your profits, unless you implement a price hike or resize your packaging to get to a lower size tier.

Related: Master Carton Calculator to Optimize Packaging and Reduce Shipping Costs

Another workaround is to buy USPS labels through Amazon, Shopify, ShipStation, or Pirate Ship to potentially save on fees. These online shipping label providers offer negotiated rates that are typically lower than the published rates.

Amazon, for instance, recently announced it’s now offering the lowest commercial USPS rates available, with an average of 35% off USPS Ground retail rates

Pirate Ship boasts even bigger savings. Its USPS Commercial Pricing offers discounts “up to 89% off what you’d pay at the Post Office.” 

Check out the full USPS price list here.

A Few Caveats

While some sellers may like the fact that they can now ship heavier packages without having to go the Priority Mail route, which is more expensive, others may not be happy about:

  • Slower delivery times. The 2 to 5-day delivery speed may be too slow for time-sensitive parcels or when trying to get your goods delivered on time during peak season. So, be sure to factor these variable into your process. Alternatively, you may also use Priority Mail for urgent shipments.
  • Transitioning issues. On June 30, USPS experienced some technical issues in preparing its system for the shift from First Class and Parcel Select to the new Ground Advantage shipping service.

    “Our IT teams are currently investigating the issues and plan to resolve these issues on July 2, 2023. Display issues on other eVS reports related to USPS Ground Advantage instead of First-Class Package Service, will be resolved as a part of the July 9, 2023 Release.”

    A few days after GA went live on eBay, however, several merchants reportedly run into some problems. For example, the USPS scanners failed to recognize the QR codes for the new shipping service, the listing form on the seller side displayed inaccurate pricing, and the vague wording of eBay’s announcement left many sellers confused about the steps they need to take to update their listings with the previous USPS services to Ground Advantage.

    It would be very concerning if these technical issues continue through Q3 because that’s when most sellers start to prepare for BFCM and the holiday sales period. Sellers want to make sure that there are no delays when shipping a large volume of packages during the busiest time of year. Exercise prudence by meticulously reviewing all facets concerning USPS shipping and billing, particularly as soon as Amazon launches GA, to preempt any potential issues during crunch time. 

Related: 3PL Logistics Backup Plan for Amazon Sellers

Many Amazon sellers are also not happy about the fact that it’s taking Amazon so long to enable Ground Advantage on its Buy Shipping platform, as this means they’re still stuck with the slower Parcel Select service and paying the additional insurance. Worse, a couple of sellers reported that their First Class parcels were refused by their local postal office locations, one stating that “USPS in my region is refusing to accept any First Class packages. They are rejecting all package with a First Class label printed from Amazon.”

Unfortunately, no official launch date has been released yet by Amazon. But according to USPS, it will still accept all First Class and Parcel Select services without penalty until September 30, 2023, allowing for an easier transition.

While Amazon is still playing catch up (perhaps working through some implementation issues), consider buying GA shipping labels from other service providers to be able to enjoy the mentioned benefits. If you’d like to stay with Buy Shipping, continue using the outgoing legacy services for your orders in the meantime. Just make sure to inform Amazon of any postal offices that refuse to accept parcels with First Class or Parcel Select labels to resolve the issue immediately.

All things considered, Ground Advantage seems to be a welcome improvement over First Class Mail with the max shipping weight limit expanded from 13 oz to 1 lb (plus insurance), Parcel Select with the faster delivery speeds and built-in $100 insurance coverage, and, with significantly lower rates, over Priority Mail as well.

Related: How to Ship to Amazon FBA (And Speed Up Check-In Times)

Amazon Feature Updates: 3 New Seller Tools and Product Recall Reporting Page

Over the last two weeks, Amazon has made a series of announcements introducing new features and dashboards for Amazon sellers. Let’s recap.

  1. View Insights on Your FBA Returns (UK)

    Introducing a fresh addition to UK Seller Central is a dedicated page that shares comprehensive insights into your FBA customer returns. Find out the reason behind the return, customer feedback, grading disposition, and return status updates, so you can take action on returns that may be eligible for reimbursement.

    Amazon has established clear guidelines concerning customer returns and associated refund processes. Should a return fail to align with these guidelines, sellers may request a refund reversal for the amount that Amazon debited from their account.

    For instance, you may have a return request with “Customer refunded” status, but the customer never sent the item back. Or, Amazon reps themselves mistakenly accepted a return with missing parts or approved a return and refund request past the 30-day return period.

    In that case, file a reimbursement claim with Amazon 60 days (and no later than 18 months) from when the customer refund occurred.
    Visit FBA Returns to learn more.
  1. Brand Tailored Promotions to Customize Promo Codes

    Just in time for the second Prime Day in October, Amazon introduces a new marketing tool that lets you to create and send discount codes to various types of customers.

    Called Brand Tailored Promotions, you can use this free tool to entice potential new customers, brand followers, repeat shoppers, big spenders, and cart abandoners (those who have added some of your products in their cart but haven’t bought in the last 90 days) with discounts ranging from 10% to 50%. Offering discounts will not only help you to expand your customer base but also encourage recurring transactions and boost customer retention.

Here’s how to get started:

  • Go to the Advertising tab in Seller Central and click on Brand Tailored Promotions.
  • In the drop-down menu, choose the brand and audience type you want to create the special offer for. The discount will be applied to all ASINs within the selected brand and each eligible shopper can only redeem the discount on a single purchase.
  • Fill out the Promotional Details section with your preferred promo name, discount percentage, budget, and promo start and end dates.

Note that unlike Amazon Tailored Audiences, Brand Tailored Promotions do not allow email messaging your existing customers. Instead, the tool showcases your promotional discount to your target audience type(s) on your product listing, search result pages, and Amazon’s dedicated promotional shopping pages. 

Visit Brand Tailored Promotions to learn more.

  1. Free 20,000 Transparency Codes for One Year

    Every new product enrolled in Amazon’s Transparency program by December 31, 2023, entitles brands to receive free 20,000 Transparency codes for a duration of one year.

    Distinctive for each product, a Transparency code is an alphanumeric, non-sequential barcode. When affixed to your product’s packaging, it means that the product is authentic, thereby protecting customers against counterfeit or inaccurate product variations, such as differences in compatibility, color, materials, language, and regulatory compliance. 

    Before enrolling in the program, be aware that applying a Transparency code to each qualified unit requires a bit of work.

    One seller commented that they have to “scan each transparency code” and “upload it to each and every order”, and thus, “should get reimbursed for the hassle, time and extra training we have to give to all employess to do this.”

    Given this, the benefits of Transparency are generally found with businesses prone to counterfeiting or unauthorized sellers.

    If the Transparency program fails to meet your expectations, you may reach out to Brand Registry Support to unenroll products. However, withdrawing participation from the program may be challenging, and sometimes unsuccessful, according to some sellers. 

    To make an informed decision, learn more about this special offer by contacting Amazon or checking out this presentation.

Related: Amazon Hopes to Restore Consumer Confidence with $1.2B Anti-Counterfeit Initiative

  1. Recalls and Product Safety Alerts Page

    On July 26, Amazon launched a new page that provides customers with details about recalls and product safety alerts related to their orders.

    This means Amazon customers will no longer need to go hunting for information about recalled products on various news outlets or relevant government websites such as recalls.gov, National Highway Traffic Safety Administration (NHTSA), US Food and Drug Administration (FDA), and the US Department of Agriculture (USDA). They can simply go to “Your Recalls and Product Safety Alerts” page within their accounts. Furthermore, any recall or product safety announcement will also be dispatched to customers via email.

    Amazon is also making efforts to provide accessibility to this new system for third-party sellers as well. Sellers in the US will have the option to participate in Amazon’s Recalls Logistics Service (RLS).

    By opting in, sellers can effectively communicate with their customers who have purchased items that are subject to recalls. Meanwhile, Amazon will take on the responsibility of handling refund issuance on behalf of sellers and overseeing the intricacies of return logistics.

    However, a limitation of this system lies in its focus on US sellers and its reliance on an opt-in model. A considerable portion of Amazon’s marketplace sellers operate from overseas locations, often within regions that lack the same rigorous safety standards found in the US. 

    This discrepancy has led to instances where hazardous products from third-party sellers have found their way into the hands of American consumers.

    A CBS News investigation in 2019 highlighted examples like unsafe children’s toys entering the market through Amazon. The retailer has since removed said products from its eCommerce site. A Product Safety Team has also been put in place to keep an eye on the products sold on Amazon.com and investigate product safety concerns.

    The team normally takes their information from public recall alert websites, manufacturers, and sellers. And when they learn of a recall, they may:
  • Remove the product from Amazon.com and hold any available stock in FBA.
  • Reach out to sellers and manufacturers for more details about the recalled product or its potential safety hazards.
  • Add a warning label to the product detail page.
  • Inform relevant government agencies of any product safety complaints or incidents.
  • Contact customers that purchased recalled or potentially hazardous products to tell them the next steps to take, such as refund, return, or repair.

In this way, Amazon hopes to make its platform a safer, more trustworthy retailer for consumers, assuring that they will not get their hands on items that don’t meet the standards set by the Consumer Product Safety Commission (CPSC).

UPDATED: UPS Workers Ready to Repeat 1997 Mass Walkout Over Pay, Work Conditions

UPS Workers Ready to Repeat 1997 Mass Walkout Over Pay, Work Conditions

UPDATE 07/25/2023: 💪UPS and Teamsters have just set a higher labor standard for the logistics industry after reaching an agreement.

Described as “historic” and “overwhelmingly lucrative” by the union, the five-year tentative contract includes pay raises for all 340,000 workers, additional full-time positions, and several workplace safety improvements.

Each UPS union worker is set to enjoy a $2.75 per hour salary hike during the present year, followed by a series of gradual wage increases totalling $7.50/hour over the subsequent five years. These increases will push UPS’s average top rate for its unionized full-time drivers to $49 per hour, making them the highest paid delivery drivers in the US.

Part-time employees, comprising half of the workforce, will see their starting wage rise to $21 per hour, marking a significant improvement from the current starting hourly rate of $16.20, albeit lower than the $25 an hour advocated by a group of part-timers. But through general wage increments, plus longevity bonuses of up to $1.50 per hour, part-timers may still be able to reach their desired hourly rate over the next five years.

Another significant win was claimed by UPS and Teamsters with:

  • The establishment of 7,500 new full-time positions, which will provide part-timers with more opportunities to transition to full-time jobs.
  • The addition of Martin Luther King Day as a paid holiday and putting an end to forced overtime on off days.
  • Removal of the two-tier wage system. All second-class drivers, or 22.4s drivers (see article below), would be reclassified to Regular Package Car Drivers and promoted based on seniority.
  • Enhanced working conditions for UPS drivers. Starting from January 1, 2024, UPS will be installing air-conditioning units in all of its new delivery vehicles. Moreover, to guarantee optimal ventilation within the cargo compartments, UPS will also install two fans and air induction vents in all of its vehicles.

According to Teamsters, over 60 total changes and improvements were made to the National Master Agreement.

“UPS has put $30 billion in new money on the table as a direct result of these negotiations. We’ve changed the game, battling it out day and night to make sure our members won an agreement that pays strong wages, rewards their labor, and doesn’t require a single concession. This contract sets a new standard in the labor movement and raises the bar for all workers,” said union President Sean O’Brien.

On July 31, representatives of the UPS Teamsters locals will meet to review and recommend the tentative offer. The endorsed agreement will then be put to a vote by the union members from August 3 to 22.

UPDATE 07/19/2023: A UPS protest on August 1 remains possible, as no agreement has yet been reached between the carrier and Teamsters. 

On July 5, contract talks collapsed, with both parties accusing each other of walking out of the bargaining table.

Teamsters reportedly refused to take UPS’s “unacceptable offer,” while the logistics giant denied it ended the negotiations.

According to the union, “UPS refused to give the Teamsters a last, best, and final offer, telling the union the company had nothing more to give,” adding it has “repeatedly made clear that UPS members will not work beyond the expiration of the current contract.”

Two weeks after talks broke down, UPS announced it will re-engage in negotiations with Teamsters, presenting an improved offer. The primary objective behind this move is to prevent the looming threat of a potentially detrimental strike scheduled for August 1st.

“We are prepared to increase our industry-leading pay and benefits, but need to work quickly to finalize a fair deal that provides certainty for our customers, our employees and businesses across the country,” UPS said in a statement.

UPS accounts for nearly a quarter of all parcel shipments within the US. That makes the company second only to USPS with 32% and ahead of Amazon with 23%, according to global shipping and mailing firm Pitney Bowes

This means any widespread disruption to its operations may not only delay UPS deliveries in the country but also overwhelm other carriers left to pick up the slack.

A huge financial loss may also result. A new report from the Anderson Economic Group shows that a 10-day strike at UPS could cost the US economy over $7 billion, with customers and small businesses themselves losing roughly $4 billion.

If that happens, it would be the costliest work disruption in a century, and the largest protest (over 340,000 workers) against an employer in the country’s history, the economic group found.

But amid disagreements and roadblocks, many transportation analysts remain optimistic that a deal will be struck between UPS and Teamsters well before the deadline. The underlying reason for this positive outlook is the interdependence that exists between both sides.

“Both sides are going to suffer if there is a strike and there is no revenue flowing to the company and no wages to the workers. They’re both going to lose in the end, because some shippers will shift to other carriers and not come back. And there will be other challenges to disappointing your customers that rely on you,” Paul Bingham, Director of Transportation Consulting at S&P Global Market Intelligence, told Transport Topics.

Amazon Taking Measures Ahead of the Potential UPS Strike

In a statement to USA Today, Amazon rep Steve Kelly said the company has been working to streamline its logistics network.

Amazon has recently installed same-day sites in major cities and is actively recruiting local businesses in rural areas as delivery partners for improved Prime delivery speeds. This could help minimize the impact of the looming strike on their logistics operations.

However, there could be some delays for sellers and customers in areas that heavily depend on UPS, experts warn.

“Amazon’s delivery service providers, the Amazon vans, those are more for denser urban areas where you have a lot more package density,” supply chain expert Jason Miller explained.

“So your Amazon shoppers in rural areas, and just in general areas that have less customer density, they’re the ones that are most likely to be affected.”

Amazon sellers that handle their own fulfillment and delivery “could also take more time since there’s a good chance that they could be using UPS.”

In that case, consider discussing your other options with your 3PL. For instance, you may want to implement backup carriers to stay flexible during supply chain disruptions.

🪧 In August 1997, around 185,000 UPS employees staged a 16-day long protest over pay and job security, causing a nationwide service disruption that cost America’s largest courier $780 million in losses.

The aftermath of the strike also left a lasting concern among customers that it could occur again, a warning that may soon proved prophetic if UPS fails to reach a deal with its unionized workers by July 31, 2023.

Teamsters Prepare for Contract Talks with UPS

The existing five-year contract between UPS and Teamsters, a labor union representing 350,000 UPS workers, is set to expire by the end of July. Negotiations over the new work terms and conditions will start in April.

Currently, the union’s UPS National Screening Committee is reviewing thousands of proposals for contract terms they should include in the Master Agreement.

Key issues that Teamsters aim to address include:

  • Pay gap between regular drivers and second-tier delivery drivers, known as 22.4 drivers after contract Article 22.4. In 2017, UPS rolled out Saturday Delivery to keep up with Amazon, FedEx, USPS, and gig workers that make weekend deliveries. To offer this service, the company hired second-class drivers whose rate ranges between $20.50/hour and $30.64/hour, whereas regular drivers’ can reach up to $40/hour. That’s a huge pay gap issue that Teamsters General President Sean O’Brien and some senior drivers aim to close by removing 22.4 employee classification or UPS’s two-tier wage system and expanding the number of full-time offers.
  • Part-time salary increase. O’Brien will push for a $20 starting rate (from $15.50) for part-timers (drivers and warehouse workers) and urge UPS to reward those who have been holding a long-term part-time position. Part-timers should also be given an opportunity to convert to full time.
  • Excessive overtime. A report from More Perfect Union reveals UPS forcing some of its drivers to take 12-hour shifts and constant overtime on the weekend, thereby ruining several marriages and families.

    In an interview with Insider, O’Brien said that the union is “open to finding a solution to the seven-day week delivery.”

    For instance, FedEx has been offering weekend deliveries for a couple of years, but has recently reduced Sundays in an effort to cut costs amid slowing eCommerce demand. 

    UPS may follow suit but that could also mean laying off numerous employees or hiring more seasonal workers.

    The stakes are higher at UPS, however, as the job cuts could impact 350,000 unionized workers responsible for handling and shipping the courier’s 21.1 million US daily package volume, which Teamsters could use as leverage. A mass walkout might force UPS to stop its operations until an agreement is reached.
  • Personal Vehicle Drivers (PVDs) or subcontractors. PVDs are temporary drivers hired to help full-timers deliver items while using their own vehicles. 

    Based on the existing contract, UPS can outsource jobs to seasonal drivers as long as the company gives priority to union workers. That means independent contractors may not be entitled to some benefits or incentives.

    Teamsters aim to eliminate “outsourcing” to ensure every UPS worker is “classified, treated, and paid as an actual employee, protected by a Teamster contract,” a spokesperson told Insider.

Related: California Truckers Protest AB5

  • Surveillance cameras. UPS has reportedly installed front-facing and driver-facing cameras inside their trucks that act as motion detectors to alert drivers when they don’t fasten their seatbelts or they’re using mobile devices while driving.

    However, for O’Brien, the inward-facing cameras are an “invasion of privacy,” and therefore, must be removed.

    “That’s just another tool to increase productivity and hold our members hostage,” he added.
  • Heat protection. 24-year-old UPS trucker, Esteban Chavez, Jr., died from heatstroke after finishing his last delivery in July 2022. This incident has prompted union members to demand UPS to put in place better heat-related safety initiatives like getting a fan installed in their vans or not giving them 12- to 15-hour routes during the hotter months.

If no agreement is reached on time, hundreds of thousands of UPS workers may hit the pavement in August to demand higher pay and better working conditions. 

In a statement to CNN in 2022, O’Brien said that the union will make use of its $350 million protest fund to get every advantage they need to win the contracts they want. The contract negotiations will also serve as an example for other workforces that have yet to unionize.

“Striking is a last resort, but if a company is not negotiating in good faith, we’re going to get what our members deserve.”

In other words, if Teamsters end up launching a protest this summer, it’s UPS’s fault. And given the fact that UPS handles more than 6% of the country’s gross domestic product (the only company to do so), the strike could create a massive void that the other courier service providers may not be able to fill, putting thousands of small businesses in a vulnerable position.

Consumers will most likely also have to endure delivery delays. 😫

UPS CEO Addresses Labor Issues

During the company’s Q4 2022 earnings call, UPS CEO Carol Tome assured analysts that a “win-win-win” agreement would be reached by July 31st.

“I would submit that a win, win, win is very achievable because we are not far apart on the issues. And let me make this real for you by giving you a few examples. First, both Teamsters and UPS agree that a healthy and growing UPS is good, good for Teamsters, good for our people, and good for our customers. In fact, we’ve added more than 70,000 Teamster jobs since 2018. So, we’re aligned that a growing and healthy UPS is good. To be growing and healthy, we need to be competitive and make sure that our offerings meet the needs of our customers.”

Tome also thinks that resolving these labor issues will only require “just a few tweaks” to the company’s existing contract with Teamsters. 🤔

These tweaks might include:

  • Implementing “new technology and hydration measures” to keep drivers and warehouse staff safe in sweltering heat.
  • Drivers, specifically 22.4 drivers, may opt not to work 6 days a week to reduce pressure on the workforce with weekend operations.

The company remains vague about raising pay rates, though. Moreover, Teamsters’s O’Brien also refused to disclose what the bottom line is for launching a strike.

The 1997 protest was won by getting UPS to agree to:

  • Increase pensions by up to 50%
  • Give hourly rate increases: $3.10 for full-time workers and $4.10 for part-timers over the next five years, the biggest salary increases at the time
  • Offer full-time positions to the company’s 110,000 part-timers

If union members go on strike this year, UPS reportedly has contingencies in place to reduce the event’s impact on its network.

According to sources interviewed by Freight Waves, UPS has requested its managers “not to schedule any paid time off during July and August in case parcels are required to be moved,” indicating the company’s desire to stay operational if Teamsters push through with its plans to walkout en-masse.

Other Things You Can Do

💪 Consider the following actionable tips when building your own contingencies in preparation for the potential Teamsters protest in August.

  • Discuss logistics strategies with your 3PL partner so you can stay flexible during disruptive protests.
  • If not working with a 3PL, consider splitting your shipments between UPS and other carriers like FedEx.
  • If using FBA, book delivery appointments ahead of time.
  • Make sure you have enough inventory stored in Amazon, 3PL, and/or supplier’s warehouse to avoid stocking out due to inbound delivery delays caused by the mass walkout.

Related: Amazon UK Workers to Launch Historic Strike in Early 2023, How to Ship to Amazon FBA (And Speed Up Check-In Times), Amazon Inventory Risks + 5 Tips to Mitigate Them, Bad Actors Book Multiple Inbound Amazon Delivery Dates to Create Scarcity

Amazon Offers New Fulfillment Fee Discounts on Select ASINs

📣 ICYMI: Amazon quietly introduced a new discount program Sufficient Inventory Level Promotion. This limited-time offer grants eligible sellers reductions on forthcoming fulfillment fees. 

To unlock these cost-saving benefits, you must have ASINs that meet Amazon’s eligibility requirements for the program and send in the suggested unit quantities for those products during specific time frames.

Are your products eligible?

Enrollment in this promotion is limited to specific ASINs only, determined by several factors including forecasted demand. 

Unit Demand Forecast is Amazon’s FBA restock tool for high-velocity products.

The graph above shows two main prediction levels: optimistic forecast model and mean prediction level, which Amazon describes as:

If the forecast shows you’re likely to stockout during the next quarter for example, you may receive a new recommended minimum that you should send in by a given ship date. Not only will this help you to stay in stock, but also qualify for a discount.

Amazon may want to incentivize efficient sellers because keeping a good amount of inventory at FBA allows the company to bring products closer to customers and therefore, fulfill orders faster. 

Note: If you’re using a third-party inventory forecasting platform or Economic Order Quantity model, you may notice your own forecasts may differ from Amazon’s depending on the restock recommendation settings used.

For example, SoStocked helps you generate a more accurate inventory forecast by allowing you to include in many variables not factored into most basic forecasts, such as adjusted daily velocity (accounting for stockout days to avoid under-ordering), sales spikes, lead times, future marketing plans, and more. This is a feature that Amazon’s tool currently doesn’t have so its forecasts may be inaccurate when compared to a more sophisticated inventory management software.

That means you may end up ordering too much or too little inventory and as a result, incurring additional fees, possibly canceling out the benefits of the promo offer.
Read this blog post to learn more about Amazon’s restock algorithm.

To see which ASINs are eligible for the promotional fee discount, you have a couple of options. 

  • Go to the “Fee Discount (New)” column on the Restock Inventory page or utilize the Send to Amazon workflow.
  • Download the Restock Inventory Report or use the Fee discount filter on the Restock Inventory page, which provides a list of ASINs that qualify, along with the corresponding fee discounts and ideal minimum units.

Discount Period Dates

Qualify for the fee discounts by shipping the recommended minimums to FBA during these three “goal periods.”

  • May 15 to June 14 (Past)
  • June 15 to July 14 (Current)
  • July 15 to August 14 (Upcoming)

Credit Period 

After each goal period concludes, expect a processing time of two to four weeks for Amazon to verify whether you have met the requirements and the subsequent application of discounts as reductions in your future fulfillment fees.

According to Amazon, discounts will be applied to all of your eligible ASINs, not just to the ASINs that met the minimum-units requirement.

Let’s say one of your eligible ASINs earned a $40 discount for meeting the replenishment goal in May-June. Instead of applying the discount on that single ASIN, Amazon may apply a one-time $40 fulfillment fee discount across all your ASINs. 

However, it is unclear where the discounts (pick and pack, referral, etc.) will be applied specifically. The policy just states:

“Your goal status, total units received, and discount earned will show on the Restock Inventory page and Restock Inventory report within two to four weeks after each goal period.”

What happens if you don’t meet the minimum threshold?

If you sent in some units but didn’t meet the minimum threshold, no partial or prorated discount will be given to you – for example, splitting a single shipment into smaller batches to try to earn a partial discount each time you ship one batch in.

Moreover, surpassing the recommended minimum for the specific goal period will not result in higher discounts.

Fortunately, you can try to increase your chances of earning fee discounts by:

Related: How to Automate Amazon Inventory Forecasting, 4 Ways to Improve Your IPI Score, Pros and Cons of Amazon Inventory Placement Service, How to Avoid Delays in Purchasing Inventory, 11 Benefits of Amazon Inventory Trackers

Sellers Cry Foul Following Amazon’s Decision to End FBA Small and Light

Amazon just found more pennies to squeeze out of sellers! 💰

On June 29, 2023, the etailer announced they will be replacing US FBA Small and Light (SnL) with a new program that will, in some ways, be similar to the current SnL program and in other ways much different. 

The first strange thing to note about this change is this, back in January, the SnL price cap for eligible products increased from $10 to $12. Now, 7 months later Amazon will be sunsetting SnL and shifting to this new program called Low-Price FBA, effective from August 29, 2023.

This change, however, sets the price threshold back to $10. That means although the new rates may still offer financial advantages to qualified items, they, for the most part, do not match the substantial benefits that the new 2023 SnL provided.

Per Amazon, general estimates suggest that:

The above messaging is a bit of Amazon sleight-of-hand. They lead with the benefit to sellers not currently enrolled and boast an average $0.77 savings on these products. However, these products should already have been getting this savings anyway but if they were not enrolled, they missed out.

And while it is true that Low-Price qualified products will save significantly over standard rates, a majority of those currently enrolled in the SnL program will actually see their fees increase and by an average $0.30 per unit by Amazon’s estimation, a significant impact to the under $10 product segment with already razor thin margins. 

Others in the $10 – $11.99 range will be fully priced out of their current discounted rate starting August 29th.

Check out the table below to see the price changes in detail (SnL vs Low-Price FBA vs Standard FBA) and their potential impact on your margins.

Size TierShipping WeightSnL Rates (as of January 17, 2023)Low-Price FBA Rates excluding apparel (Starting August 29, 2023)Standard FBA Fulfillment Rates (2023)
Small standard4 oz or less$2.47$2.45$3.22
4+ to 8 oz$2.54$2.63$3.40
8+ to 12 oz$2.61$2.81$3.58
12+ to 16 oz$3.15$3.00$3.77
Large standard4 oz or less$2.66$3.09$3.86
4+ to 8 oz$2.77$3.31$4.08
8+ to 12 oz$2.94$3.47$4.24
12+ to 16 oz$3.77$3.98$4.75
16+ oz to 1.5 lb$4.42$4.63$5.40
2+ to 2.5 lb$5.19$5.33$6.10
2.5+ to 3 lb$5.40$5.62$6.39
3+ to 20 lb$6.40 + $0.16/half-lb above first 3 lb$7.17 + $0.16/half-lb above first 3 lb
Small oversize70 lb or less$8.96 + $0.42/lb above first lb$9.73 + $0.42/lb above first lb
Medium oversize150 lb or less$18.28 + $0.42/lb above first lb$19.05 + $0.42/lb above first lb
Large oversize150 lb or less$89.21 + $0.83/lb above first 90 lb$89.98 + $0.83/lb above first 90 lb
Special oversizeOver 150 lb$157.72 + $0.83/lb above first 90 lb$158.49 + $0.83/lb above first 90 lb

While it appears that Low-Price FBA is indeed cheaper than standard FBA, it generally still has higher rates than Small and Light. 🤔

Suppose you have an SnL product that weighs 1.5 lbs and retails for $11.99. Under SnL, shipping would only cost you $4.42 per unit, but once Low-Price takes effect, your per unit FBA fee would move to standard rates, jumping to $5.40. That’s a $0.98/item increase – enough to potentially make products under $11.99 unprofitable.

The other strange thing is that, while, with SnL, eligibility capped at 3 lbs or less, Amazon has eliminated the weight and size restrictions from the Low-Price FBA program which allows both Large Standard products over 3 lbs as well as oversize products.

The joke here is that those heavier products have to be priced at under $10. So, while the product types newly included in this program can technically qualify, the fees almost certainly guarantee that the product, after Amazon fees, will be losing money. 

For a bit of solace in the face of this change, what makes up for the higher fees, according to the retailer, is the faster fulfillment speed which “customers love.”

SnL may have the lowest fees, but the program also provides slower shipping times than standard FBA. And given how the last-mile battle among eComm giants has been heating up lately, Amazon getting rid of SnL to offer customers faster delivery speeds across all product types and sizes might be one way to maintain edge – to say nothing about increasing their bottom line. 

For some sellers, the trade-off may be worth it, but for those who make just enough money or are struggling to stay afloat amid rising inflation, losing SnL may result in a substantial change to their business economics. 
As previously mentioned, Low-Price FBA only applies to products under $10. Without SnL, ineligible sellers might be forced to:

  • Absorb the fee increase and consequently, operate with thinner margins
  • Resize product packaging to achieve a lower size tier and to be able to ship as many units per carton/pallet as possible, thereby reducing shipping and storage costs
  • Implement a price hike
  • Reduce their prices to meet the new Low-Price threshold
  • Stop selling small and light products that don’t meet the new price limit
  • Ditch Amazon for a more affordable sales channel

What’s worse is that SnL sellers only have a little over a month left to prepare for this (unwelcome) change. Those who have inventory that’s scheduled to arrive after August may have to adjust their strategy now to account for the potential fee increases. 

What Sellers Are Saying

Amazon’s decision to decrease the cap from $12 to $10 was understandably met with dissatisfaction among sellers, who expressed their discontent.

A comment by one seller emphasized the importance of reevaluating the products falling within the $10-$12 price range. 

Another seller said that this change is “another example of Amazon taking a bite out of 3rd party sellers profit. If anything the price should have increased from $11.99 to 12.99, not gone backwards. Many customers do not care about delivery times like they used to obsess over it.” 

One suggests “If Amazon brought it up to $20, I would lower my prices to under $20 and I think the volume increase would be a triple win – Amazon, customers and our business.”

In summary, this news may catch sellers with products enrolled in SnL off-guard, as Low-Price FBA could have a significant adverse effect on a substantial number of customers, causing negative repercussions for everyone involved, including Amazon itself. Most items under $12 will likely see a retail price increase of up to $5 due to this change, further reinforcing the association of Amazon with higher prices.

As what many sellers suggest, it would be best for Amazon to reconsider and either maintain the $12 threshold or, better yet, raise it to a more favorable price point. Otherwise, the upcoming SnL replacement and the noticeable increase in prices may drive many Amazon customers towards competing eComm platforms and social commerce sites.

Related: 2023 Amazon FBA Increases, Pallet Calculator to Optimize Load Capacity, Master Carton Calculator to Reduce Costs

Aggregator Shakeups and Shifts in Strategy

Online sales growth is slowing after a huge spike during the pandemic, driving Amazon aggregators, or aggs, to implement various strategies to combat funding slowdown and declining revenue.

Strategy Shifts

In 2021, investors injected more than $12 billion into a new generation of startups that set their sights on acquiring Amazon marketplace sellers. However, beginning the first half of 2022, the flow of funding has considerably diminished, and the once-vibrant landscape of dealmaking has come to a near standstill.

“The private market almost shut down,” said Riccardo Bruni, Co-Founder of UK-based aggregator Heroes, in a statement to the Financial Times.

“For a certain period of time access to capital became impossible.”

The slowdown can be attributed to cooling demand amid inflationary pressures and recession fears – a confluence of events that has overall sparked caution among investors, leading to a more reserved approach.

Compounding the issue are the escalating FBA fee hikes implemented by Amazon, surging over 30% since 2020. This has significantly impacted the profitability of both sellers and aggregators. 

As a result, several aggregators find themselves compelled to make the following measures to foster margin improvements.

Layoffs 

Boosted Commerce, a California-based company, made the decision to downsize its workforce by 20% earlier this year. Similarly, Thrasio, a leading aggregator, had to lay off an undisclosed number of employees in 2022.

Thrasio’s new CEO, Greg Greeley, revealed in an interview with Forbes magazine that the company had mistakenly assumed that the demand for eCommerce would remain at pandemic-era levels. As a result, Greeley emphasized the need for Thrasio to readjust its expectations, ensuring that excessive inventory is not held and that acquisition prices are not set too high.

Other aggs with layoffs last year include the Benitago Group and SellerX.

Putting Acquisitions on Pause

As brick-and-mortar stores reopened, eCommerce demand slowed, making small sellers less appealing to potential buyers. Consequently, the estimated valuations of these smaller sellers plummeted, leading some aggregators to halt their acquisition efforts.

According to industry insiders who spoke to the Financial Times, the number of major aggregators actively pursuing new sellers has dwindled to less than ten. In the past, these aggregators were even willing to incur significant debts, often accompanied by steep interest rates of around 18%, all for the sake of finalizing acquisitions.

These acquisitions, in some cases, were completed at multiples as high as 7x the sellers’ adjusted valuation or earnings before interest, taxation, depreciation, and amortization (EBITDA). However, by Q1 of 2022, these brands were not performing as well as aggs had expected, primarily because for the first time in history, in-store shopping grew faster than eCommerce. That means aggregators have paid inflated prices for a large portion of those brands

With sales and funding shrinking dramatically in 2022, aggs have come to realize that relying solely on acquisitions for growth is not always a sustainable approach. As a result, some companies are opting to launch their own brands instead of acquiring existing ones.

For instance, Amazon aggregator Upexi is cautious on acquisitions spending 90% of its time building the business organically and 10% of its time on Mergers & Acquisitions (M&A).

Strategically Buy Up Quality Brands at Lower Prices

The long-term value of established aggregators may decline if the products they offer are considered common commodities. In a highly competitive market, only those who offer unique products are likely to survive.

So, while some aggs had to stop dealmaking completely, others have shifted their focus from doing rapid acquisitions to selectively “buying great assets at 20%-30% lower prices.”

Thrasio, for example, has expressed its growing involvement in emerging sectors that pose greater challenges for market entry. 

In an interview with Modern Retail, Thrasio President Danny Boockvar said that the company is actively expanding its portfolio by acquiring brands that they identify as a growth category, such as cleaning. These particular categories present higher barriers to entry (gated or regulated) due to the complexities associated with manufacturing products involving various chemical components.

Olsam, a European aggregator, disclosed to Modern Retail its strategic expansion into uncharted territories of patents and intellectual property, moving beyond conventional performance indicators such as seller ratings and product reviews.

Smaller aggs such as Heroes, Cap Hill Brands, and Gravitiq have also taken steps to streamline their operations and concentrate on a narrower range of categories.

Foundry Brands, in particular, exemplifies this trend by prioritizing quality over quantity as part of its aggregation strategy. Since its establishment in 2021, the company has strategically acquired fewer than 10 brands in total, emphasizing a selective approach.

Simultaneously, the prevailing economic conditions have presented an opportunity for aggregators to acquire high-quality brands at more affordable prices compared to the previous years.

Consolidate through M&A with other Aggregators

Facilitating strategic alliances and synergies is one way to create growth in times of austerity. From buying up online sellers, aggregators pivot to purchasing each other.

  • Acquisitions. To navigate the challenges, aggs have started acquiring one another, often expanding their reach globally. In a recent acquisition, Berlin-based SellerX purchased Elevate Brands, headquartered in Austin. By taking over Elevate Brands, SellerX will now oversee 80 Amazon marketplace brands, generating an impressive annual sales figure of $426 million. This also gives the heavily Euro-focused agg a better foothold into the US Amazon marketplace.

    Other noteworthy acquisitions took place in 2022 when Olsam acquired Flywheel Commerce and Marketfleet, and in April 2023 when Razor Group snapped up Stryze.
  • Mergers. Two smaller US aggregators, Suma and D1 Brands, recently merged to form a consolidated entity known as The Ambr Group. This unified business now manages a portfolio of over 30 enterprises, amassing a substantial annual revenue exceeding $100 million.

Less accomplished aggregators looking for cash in these tough economic times, however, could face the pressure of liquidation. 

According to Marketplace Pulse, there are 93 active aggregators across the world, 5 of which – namely Thrasio, Berlin Brands Group, Perch, Heyday, and SellerX – raised over $7 billion in 2021.

What’s Next for Amazon Aggregators?

Aggregators interviewed by Modern Retail believe that it’s not all bad news. There’s still a lot of growth opportunities in 2023, whether that means finding growth through M&A with other aggs, exploring beyond Amazon, or applying a more selective aggregation approach.

As Forum Brands CEO Brenton Howland puts it, “For sellers who are out there and want to know what the future state of the Amazon ecosystem is, as it relates to acquisitions, its continued health and activity. It may not be quite at the rate at the level that we saw in 2021. In 2023, we’ll see a healthy return to normalcy for business models that from a fundamentals perspective are outstanding and will continue to be that way.” 

Related: Amazon Aggregators: Comments and Concerns, Amazon Braces for Slowing eComm Growth in 2023

UPDATED: Amazon Taps into $100B Retail Media Market, Invests in New & Cutting-Edge Ad Platforms

Update 06/30/2023: Amazon just rolled out two new advertising features and revealed plans to add an ad-supported tier for Prime Video to boost its booming retail media business!

  • Add videos to sellers’ listings. EU Announcement. If you’ve been an Amazon seller for three months or more, you now have the opportunity to enhance your product pages by incorporating video content, such as product demos, installation guides, and setup tutorials. The addition of videos can significantly amplify your sales and reduce returns. Visit Amazon’s video upload page to get started.
  • 3D product pages with Hexa. Amazon has collaborated with Hexa, a Tel-Aviv based 3D visualization platform, to enhance its product pages with 3D images. Leveraging the power of AI, Hexa’s innovative tech transforms the conventional 2D product images provided by merchants into lifelike 3D models. These 3D images can be seamlessly integrated into websites, social media platforms, and augmented reality (AR) applications.

    Notably, these models offer an interactive experience as users can effortlessly maneuver and explore the product from various angles using their cursor. Hexa further assists its users by offering comprehensive services such as storage, management, distribution, and analysis for the 3D models they create.
  • Ad-supported tier to Prime video. According to Axios, Amazon is considering launching an ad-supported tier for its video service to boost revenue and attract more subscribers through less expensive subscription plans. The launch date, however, remains unclear.

    The move comes as more ad dollars shift from traditional TV to streaming platforms. Video streaming rivals Netflix, Disney+, and HBO have recently introduced their own ad-supported tiers. In its favor, while some rivals have only recently established their ad products, Amazon already has an established advertising team and other ad-supported video products, such as Freevee. This should play a significant role in guiding and enhancing the tech giant’s efforts in this area.

Amazon’s ad business is growing rapidly, with Q1 2023 ad revenue reaching $9.5 billion, a significant surge compared to the previous year. The company is also expected to capture 40% of new search ad dollars in 2023, per Insider Intelligence. It is possible that these figures may skyrocket even further once the new features roll out more widely and ads were to be introduced on Prime Video.

Not too long ago, retail media, aka marketplace advertising, caught the attention of advertisers as a rising digital channel, yet only a few big retailers like Amazon, Walmart, and Target dared to explore its potential.

Back in 2012, Amazon’s ad revenue amounted to just $609 million, and during that period, retail media was merely synonymous with advertising on Amazon itself.

Retail media networks like Amazon leverage their first-party customer data to serve customers relevant ads across search, display, or product pages. These ads can come in many forms, such as exclusive offers, coupons, and sponsored ads that appear during a shopper’s active browsing session on Amazon or other ad channels like Google Search and Facebook.

Related: Amazon Attribution Update Makes for a more Effective Sales Tool

Fast forward to 2022, retail media has experienced a phenomenal surge, primarily driven by the eCommerce boom. Advertisers allocated more than $40 billion toward retail media initiatives, with Amazon capturing an impressive 37% share of the total investment. Meanwhile, retail rivals Walmart and Target collectively accounted for a 36% share.

In a statement to Marketing Dive, Todd Krizelman, MediaRadar CEO, chalked it up to Amazon having such a “tight grip on the digital space that they really sit in a category of their own.”

“Other players are growing quickly, but it will be difficult for legacy brick and mortar retailers to beat Amazon on its own terrain.” 

Overall, these major players dominated the retail media landscape, commanding 73% of total ad investment in 2022. And over the next few years, the $40B market could potentially more than double.

Future is Bright for Retail Media

Touted as the “new frontier” of advertising, retail media is the world’s third-largest digital channel behind social ads (2nd) and paid search (1st).

Consulting firm McKinsey & Co estimates that the expansion of retail advertising networks in the US has the potential to surge up to $100 billion in ad spending by 2026. Moreover, these advertising investments prove to be immensely lucrative, yielding operating profit margins ranging from 50% to 70%.

Media investment company, WPP & GroupM, also predicts that retail media will increase by 60% by 2027.

Such projections highlight the tremendous growth and profitability that retail media is poised to achieve in the coming years, with Amazon leading the way. 

Leaning on the $100B retail media sector may catapult Amazon into the second spot of the overall US digital ad market, just behind Meta. 

Peaking at the Right Time

Insights from Insider Intelligence suggest that while Google and Facebook continue to see growth in their advertising businesses, their pace is comparatively slower than other areas of the US online ad market.
In the midst of this landscape, Amazon has been steadily gaining market share.

Per Insider Intelligence, Amazon accounted for 11.8% of US digital ad spending in 2022. This figure is projected to increase to 12.9% in 2023 and further to 14% in 2024. 

By 2025, the total online ad market share gap between Amazon and Meta will be down to just 3.2% points. This goes to show that Amazon’s ad business has become one of its key strengths. And sellers are well-positioned to take advantage of this growth area with Amazon’s advertising tools.

Amazon’s Working to Expand its Ad Business to Accelerate Growth

With momentum on its side, the retail giant wasted no time in beefing up its advertising division. The company recently:

  • Launched Amazon Anywhere, a groundbreaking program which allows customers to seamlessly browse and purchase tangible products from Amazon in virtual environments, such as video games, augmented reality (AR) experiences, and third-party mobile applications. With Amazon Anywhere, the boundaries between virtual and physical shopping blend, creating a truly immersive and convenient retail experience.
  • Assembled a team to build an AI-powered tool that will generate images and videos for advertisers.
  • Overhauled the Amazon Demand-Side Platform (DSP) to introduce more advanced machine learning and predictive algorithms to “enhance bidding and pacing decisions” and help advertisers reach “previously unaddressable audiences.” With these upgrades, users reportedly saw a 12.6% increase in click-through rate, 24.7% reduction in cost per impression, and 34.1% increase in return on ad spend.
  • Hired Kelly MacLean, a seasoned monetization product engineer at Meta, as VP of Amazon’s DSP business. According to Business Insider, she will play an important role in demonstrating DSP’s new offerings to agencies and non-Amazon advertisers. 

For sellers, these advancements could provide a new and better way to diversify their ad investments, optimize ads for performance, or reach untapped markets and thus, drive sales. For customers, improved search relevancy enhances the shopping experience by allowing sellers to offer them a more targeted product selection in real-time.

With this in mind, consider adopting a retail media strategy and seamlessly integrate it into your comprehensive marketing plans, if you haven’t done so already. This approach allows you to maximize the potential of Amazon’s available resources and leverage emerging opportunities in response to evolving customer behavior.

Related: Walmart Launches New Ways to Find and Buy Products, Amazon Will Pay Users $2/Month to Track Their Data, Amazon Now Allowing Email Marketing Campaigns to Repeat Customers, How to Optimize Amazon Attribution

FTC Lawsuit Alleges Amazon of Tricking and Trapping Customers into Recurring Prime Subscriptions

Right on the heels of Amazon’s 2023 Prime Day announcement, the Federal Trade Commission (FTC) has filed a complaint accusing the tech giant of duping customers into signing up for Prime and “knowingly” making it hard for them to opt-out.

What are the details of the complaint?

According to FTC, for years Amazon has employed what is being described as “manipulative, coercive, or deceptive tactics” in an effort to steer customers towards signing up for Prime, even if the customers may have harbored reservations at enrolling. Subsequently, these subscriptions were set to auto-renew, resulting in a monthly charge of $14.99 or an annual fee of $139.

Prime holds a major role within the tech giant’s retail empire, as its members tend to exhibit heightened shopping activity and expenditure. As of 2020, Amazon had a total paying Prime members of 200 million.

However, the current FTC lawsuit claims that a portion of these subscribers may have been acquired through deceptive means.

What are Dark Patterns?

Coined by British User Experience (UX) designer Harry Brignull, dark patterns are “deceptive user interfaces” designed to get people into performing an action that they didn’t mean to. Common types of dark patterns include:

  • Disguised ads – The individual, under the false impression, assumes they are interacting with an interface element or genuine content, unaware that it is, in fact, a cleverly disguised ad. For example, popular software download site Softpedia features a conspicuous download button that bears a striking resemblance to the genuine download button for the desired software. Consequently, users inadvertently fall prey to this deceptive design, mistakenly clicking on the ad thinking that they are initiating the actual software download.

    Another example of this type of dark UX may be observed in Amazon’s search results. The Washington Post reveals that unbeknownst to many Amazon users, the initial search results they encounter when looking for a product are primarily comprised of advertisements rather than organic listings. This exposes Amazon’s questionable tactics, as the company compromises the trust placed in its search results in order to generate additional revenue.
  • Bait and switch – When deceptive data or false information is presented, it revolves around the user’s interests and triggers their curiosity. Once the user expresses interest and proceeds by clicking, the information or data undergoes a complete transformation or shift. Bait and switch tactics are commonly employed by businesses to attract more clicks.

    Such a strategy enables site owners to generate additional revenue from ad impressions, while advertisers enjoy the advantages of enhanced click-through rates, potentially leading to increased sales.
  • Hidden subscription – The covert scheme of hidden subscriptions works by utilizing sneakiness and misdirection. Users are led to believe they are making a one-time purchase, unaware of a concealed legal provision that commits them to an ongoing subscription. After signing up, the service operates discreetly, refraining from sending any emails or notifications to remind users about the recurring payments. This lack of communication ensures that payments go on for an extended duration. Additionally, this tactic is commonly coupled with the hard-to-cancel deceptive pattern.
  • Hard-to-cancel subscriptions – Signing up is easy but canceling is difficult. More on that later.
  • Buried terms or hidden costs – Companies entice consumers by advertising only a fraction of the product’s total price while conveniently omitting any mention of mandatory fees until the later stages of the buying process. In a notable case involving LendingClub, the FTC accused the online lender of utilizing prominent visuals (design elements like art, text, and color that grab attention) to deceptively assure loan applicants that they would receive a specific loan amount and encounter “no hidden fees.” However, the mention of mandatory fees was cleverly tucked away behind tooltip buttons and inserted amidst more conspicuous text.
  • Tricks to obtain user data – These deceptive tactics often disguise themselves as granting users the power to make decisions regarding their privacy preferences or data sharing. However, their true intention is to deliberately guide users towards the choice that surrenders the greatest amount of personal information. According to FTC, smart TV manufacturer VIZIO was accused of facilitating default settings that enabled the company to gather and distribute consumers’ viewing habits to third parties. Only a small number of consumers received a brief notice regarding this practice.

Trick and Trap Tactics Allegedly Used by Amazon

FTC’s case involving Amazon focuses on the company’s hidden subscription and difficult-to-cancel tactics. By employing these devious mechanisms, Amazon has presumably violated the FTC Act and the Restore Online Shoppers’ Confidence Act.

FTC says throughout Amazon’s online checkout process, customers encountered multiple instances where they were presented with the chance to become Amazon Prime subscribers at a monthly cost of $14.99.

Often, it proved challenging for customers to find the option of buying items on Amazon without subscribing to Prime. Additionally, in certain situations, the button provided to finalize the transaction did not explicitly indicate that by choosing that option, customers were also agreeing to enroll in Prime for a recurring subscription.

Source: pudding.cool

To strategically dissuade members from leaving, especially after raising membership fees from $119 to $139 annually, Amazon has implemented a laborious opt-out process called the “Iliad Flow.” This process draws parallels to Homer’s epic poem about the decade-long Trojan War. In other words, if customers wanted to unsubscribe from Prime, it will take them ages to effectively do so.

In a blog post published September 2022, market analyst Dr. Pierre-Nicolas Schwab shares how Amazon used two dark pattern mechanisms to discourage members from terminating their Prime subscriptions.

  1. Make it difficult to find Prime in the menu.
  2. Put in place multiple confirmation prompts.

Allegedly, Amazon deliberately obscured the cancellation process, making it challenging for customers to locate. Upon discovering the cancellation flow, they were then directed to a series of pages enticing them with various offers, such as discounted subscription rates, the option to disable auto-renewal, or the choice to retain the service. It was only after navigating through these pages that members could ultimately proceed with canceling the service.

Based on internal Amazon documents reviewed by Insider in early 2022, it is believed that the company possessed knowledge of customers being involuntarily enrolled and encountered difficulties when attempting to opt out of Prime. And yet, the execs reportedly neglected to tackle these concerns until they were notified of FTC’s investigation.

Worse, FTC’s lawsuit also alleges that Amazon made deliberate efforts to delay the Commission’s investigation on several occasions.

Amazon’s Response

In an email to The Verge, Amazon spokesperson Heather Layman told the media outlet that the claims put forth by the Commission were entirely unfounded both in terms of factual accuracy and legal basis.

“The truth is that customers love Prime, and by design we make it clear and simple for customers to both sign up for or cancel their Prime membership,” Layman explained. 🤔

It is worth noting that the Commision recently proposed a new provision requiring sellers to make unsubscribing as easy as signing up. So, it looks like the FTC wanted to make an example of Amazon by filing suit.

“The proposed rule would require that companies make it as easy to cancel a subscription as it is to sign up for one. The proposal would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties.” said FTC Chairperson Lina Khan.

If proven guilty, Amazon may find themselves paying up to $50,120 in civil penalties per violation of an FTC rule. Considering how quickly these penalties can add up, now’s the best time for the tech giant to review their business practices to ensure FTC compliance.

Related: A Purge Could Be Coming for Fake Reviews on Amazon, Amazon Faces Tougher Scrutiny Under EU’s Digital Services Act, S.2992: Why Amazon Wants You to Lobby Congress

Clash of the Titans: Walmart and Amazon Battle for Dominance Intensifies

Clash of the Titans: Walmart and Amazon Battle for Dominance Intensifies

Update 06/21/2023: Following in on Amazon’s footsteps, Walmart just launched an inventory distribution program called Inventory Transfer Services (ITS). 

“Our new solution allows for the seamless and efficient transfer of inventory to Walmart fulfillment centers, optimizing supply chain logistics and enabling faster delivery to customers,” said Jaré Buckley-Cox, VP of Walmart Fulfillment Services, in a LinkedIn post.

According to Buckley-Cox, ITS aims to enhance the availability of sellers’ inventory across Walmart fulfillment centers, cut down on inbound shipping costs by consolidating goods at a central hub, and provide faster shipping options.

The launch comes after the retailer announced they’re building small warehouses within their existing supercenters and four next-gen fulfillment centers (FCs) over the next few years. These high-tech FCs will be equipped with “a powerful combination of people, robotics, and machine learning,” allowing Walmart to take their 12-step fulfillment process down to just five.

With improved fulfillment speed and capacity, these next-gen FCs “could provide 75% of the US population with next- or two-day shipping on millions of items, including Marketplace items shipped by Walmart Fulfillment Services.”

When combined with traditional Walmart FCs and store locations, the retailer can reach 95% of US shoppers with 1 to 2-day shipping and 80% of the population with same-day shipping.

By contrast, Amazon has FCs within one hour of 77% of the US population. And given how both of these retail giants have many products with similar prices, customers will likely prefer the one with the fastest delivery.

No wonder Walmart is making huge strides in setting their stores and FCs up to fulfill online orders. Not only will these upgrades allow them to keep up with increasing demand for same-day shipping but also potentially to outdeliver Amazon.

🆚 For years, Amazon and Walmart have been pulling out all the stops to win customers and sellers. Both retail giants are offering a wide range of products at low prices and ramping up free, 1- to 2-day shipping and return services to maintain dominance.

While Amazon leads US eCommerce, Walmart rules over brick-and-mortar stores. But the battle for dominance intensifies as Walmart encroaches more deeply into eCommerce territory after:

With Walmart going after Amazon’s market share, it’s not surprising to see Amazon unveil new marketing capabilities for sellers during the recently concluded Accelerate event in an attempt to stay dominant.

On September 14, 2022, Amazon announced a new lineup of marketing tools to attract more e-commerce businesses to its marketplace. These include:

Interestingly, shortly after Amazon made these announcements, Walmart responded by introducing the updates to its display ad services, Search Brand Amplifier. 🔥

In a press release, Mike Greenberg, Head of Marketplace Walmart Connect, reveals that SBA is coming to sellers in October to help them reach more customers, especially this holiday season. 

New sellers or brands with new products that may not yet have high organic search rankings will benefit greatly from SBA, as it offers them the opportunity to showcase their products in prominent places within search results similar to Amazon’s Sponsored Brand ads.

Brand-registered sellers are eligible for the ad program. You can also take advantage of the following features to help scale your business:

  • Faster enrollment with automated onboarding at the Walmart Ad Center
  • Additional application programming interface (API) partners to support sellers in China, Canada, UK, India and other countries
  • New resources to help sellers optimize Sponsored Search campaigns 

Walmart’s Booming Ad Business

The move to open SBA to marketplace sellers also came after Walmart made $2.1 billion in ad revenue in 2021, which represents an important growth area for the company.

According to Doug McMillon, Walmart’s president and CEO, the ad business played a crucial role in elevating customer experience on the site by highlighting better deals and the right products.

Therefore, “the relationship between digital growth, marketplace growth and advertising is something that we’re trying to take advantage of,” said McMillon.

Aside from generating revenue, the ad business will also provide Walmart with valuable insights into the way customers shop on the site.

In fact, Walmart has recently added Innovation Partners to its ad network to connect advertisers with potential customers on TikTok, Snapchat, and Roku. Through this new program, you can:

  • Serve ads on popular social media platforms, including TV streaming site Roku
  • Create engaging shoppable videos via Firework and TalkShopLive
  • Measure your advertising campaign’s impact on your sales

Innovation Partners seeks to help sellers connect with Gen Z shoppers. But for Walmart, it allows them to take a crack at the elusive US live commerce market, which no other retail company, even Amazon, has figured out yet. For instance, Shopify’s attempt found them partnering with YouTube while Amazon released Amazon Live. 

If Walmart succeeds, it would give them a huge competitive advantage over their rivals. 
Amazon’s $31 billion ad business may be far up there with behemoths like Google and Meta, but with Walmart’s growing ad network, the competition will only get tougher in the future, especially as the lines continue to blur between in-store and online shopping. 💪

4 Major Changes Coming to Amazon

Stay in the know! Amazon has recently announced the following changes that sellers should prepare for.

1.INFORM Consumers Act: Amazon Threatens Non-Compliant Sellers with Account Deactivation

What is the INFORM Consumers Act and why should you care?

In the Consolidated Appropriations Act of 2023, an extensive bill governing federal government expenditures for the upcoming year, an important addition called the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act, also known as the INFORM Consumers Act, was included.

On December 29, 2022, this Act was officially enacted into law. Its primary objective is to eradicate organized retail crime syndicates from online marketplaces through the authentication of seller identities. The Act additionally seeks to establish the responsibility of eComm platforms in preventing the sale of fake goods.

In accordance with the INFORM Consumers Act, online marketplaces like Amazon are now obligated to collect, verify, and divulge specific identification details relating to “high-volume third-party sellers.”

These sellers are classified as individuals who have completed more than 200 transactions and generated revenues exceeding $5,000 within a span of 12 months. If you’re eligible, you will be required to provide Amazon with your:

  • Personal Information (name and phone number)
  • Government ID
  • Tax ID
  • Business Address
  • Bank Information

Severe consequences await those who fail to adhere to this legislation. The Act empowers the FTC to impose hefty fines of $46,517 per violation, applied to each instance where an online marketplace neglects to gather, verify, or disclose the necessary information. Moreover, state attorneys general are granted the authority to initiate legal proceedings against non-compliant online marketplaces if their respective state suffers adverse consequences.

In order to adhere to the INFORM Consumers Act, online marketplaces must establish and implement policies, procedures, and controls by June 27, 2023.

With the deadline fast approaching, Amazon is intensifying their efforts, much to the dismay of sellers, to provide the required information within a short period of time.

The company has sent out an email blast to sellers who are at risk of account deactivation because they have some missing information. To ensure compliance ASAP, sellers are advised to click on and execute the action items enumerated in the email.

Things can get complicated if your information is fraudulent, outdated, or simply does match with Seller Central’s records. If outdated, promptly update your details in Seller Central.

It is unclear whether Amazon will let sellers who rely on a blend of personal information or personal bank accounts for their business operations to continue without encountering potential issues down the line. Be sure to check your Account Health Dashboard for verification status updates or contact an Amazon representative to learn more.

After June 27, sellers who neglect to comply might encounter a temporary suspension of their payments and potentially face account deactivation. 

Related: A Purge Could be Coming for Fake Reviews on Amazon, Amazon Faces Tougher Scrutiny Under EU’s Digital Services Act, What is S.2992?

2. Amazon Replaces Inventory Overview Page with FBA Dashboard

In a Seller Info email, Amazon revealed that the trusty Inventory Overview Page, aka Planning Page, will bid farewell on June 5, 2023, making room for the brand new FBA Dashboard.

FBA Dashboard

Embracing innovation, the FBA Dashboard takes the foundation laid by Inventory Overview and enhances it further. It presents a comprehensive and “unified view of your FBA business,” encompassing vital data such as the Inventory Performance Index score, inventory age, shipment information, and expert inventory management recommendations.

Head over to FBA Dashboard for more details.

3. Marketplace Web Service Migrating to Selling Partner-API 

UK/EU Announcement: Sellers who have utilized Amazon’s legacy Marketplace Web Service (MWS) API program to develop tools to interact with the marketplace are required to switch over to Selling Partner (SP) API by August 31st in order to avoid any disruptions to their business automation.

Previously, through MWS, sellers were able to build apps for their own or others’ seller accounts. These applications facilitated various tasks such as searching for products to sell, retrieving orders for fulfillment, confirming shipments, and generating reports.

However, starting from August 31st, 2023, sellers must transition from MWS to SP-API. Alternatively, they can opt to replace their current application with a 3rd party app that supports sections that will soon be discontinued, namely Merchant Fulfillment, Orders, and Reports API sections.

In addition, effective April 1, 2024, Amazon will shutdown all other remaining MWS API sections

In their recent announcement, Amazon emphasized the benefits of using SP-API, which includes a more streamlined and consolidated authorization process, more granular data access controls, and the ability to access information for both seller and vendor accounts.

To assist sellers in this transition, Amazon recommended reading this migration guide or exploring the Selling Partner Appstore, where they can find reputable 3rd party apps that have been vetted and deemed of high quality, serving as suitable replacements for the company’s existing MWS integrations.

Sellers who have never developed their own applications using Amazon APIs to exchange data between their systems and Amazon’s systems need not be concerned about these changes.

4. Heavy and Bulky Items No Longer Eligible for Amazon Vine

This announcement is for Amazon Vine users in the UK.

Effective immediately, the option to create new Amazon Vine enrollments for heavy and bulky items will be unavailable in an effort to enhance FBA’s fulfillment process. However, if you have already enrolled such an item, it will remain eligible for reviews until the end of your enrollment period.

Amazon considers products weighing more than 30 kg (66 lbs) or 1.5m in length as heavy and bulky. This might be yet another cost-cutting move given that these oversized items take up more space and usually have special handling or delivery requirements (e.g., using larger trucks). Therefore, they cost a lot to ship, which not only eats into Amazon’s profits but also sellers’.

Amazon Delivery Drones Off to a Rocky Start

AMAZON DELIVERY DRONES OFF TO A ROCKY START

Update 05/18/2023: Since launching in December 2022, Amazon Prime Air has just completed 100 deliveries in Lockeford, CA and College Station, TX. This figure only represents 1% of the company’s target delivery goal of 10,000 by the end of 2