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.

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.

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.

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).

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Chelsea Cohen

Chelsea Cohen is an Amazon seller, speaker & consultant. An Amazon expert, her regular clients include 7 & 8-figure sellers. She has been featured on AM/PM Podcast, 7-Figure Sellers Summit, and the Prosper Show & Amazing Summit stages, among others.