Amazon keeps adding features for Fulfillment by Amazon (FBA) Sellers, in this case, Amazon FBA adds Discounted Shipping Partner. This has the potential to really help some, and doesn’t hurt anyone, a bonus in my opinion. Its amazing to see how much Amazon has changed shipping in the past year or so when I wrote the Shipping 101, Shipping 201, and updated shipping info posts.
Amazon FBA adds Discounted Shipping Partner
Historically, Amazon has let you use your own shipping carrier, but they always had a preference for UPS. Don’t get me wrong, I’ve found UPS to be a great option. But, for those of you who may prefer FedEx, Amazon is now making it easier to choose them. Furthermore, it looks like Amazon now has a discounted rate with FedEx. Take a look:
There has really been quite a bit of change with Amazon FBA when it comes to shipping. Most of it has been Amazon requiring more information like box level detail. But this latest development is definitely a positive. Who does this impact most? People who may not like using UPS, now have an option to get discounted rates with FedEx. Of course, every carrier operates differently, and every seller has their own preferences. In my opinion, more choice is a win for everyone.
What do you think? Will you try using FedEx as your preferred carrier?
Time reports that a woman bought a house from reselling iPhone 7 phones. That is perhaps not the most impressive part of the story.
BBC reports that a Chinese woman was able to convince her 20 current boyfriends to each buy her a just launched iPhone 7. This was posted on a blog, penned by “Proud Qiaoba.” on the Chinese Tian Ya Yi Du forum (which I’m sure is a favorite of many Tagging Miles readers). The story is about a woman named Xiaoli, the woman who found a way to procure the 20 iPhone 7 phones, then sold them via a “recycling site” called Hui Shou Bao – yet ironically, I can’t find any good data on this site–because we’re all looking for new marketplaces! Back to the story. Xiaoli was able to resell the iPhone 7’s for 14,500 GBP (Pounds Sterling), which was enough for a house.
Of course, the BBC article notes how surprised folks are that a phone that was launched only on 16 September, could have been resold so quickly. Our members in the Mile High Reselling Club who know how important it is to get in and out of some products as quickly as possible. So I’m not particularly surprised on the turn, assuming of course that Hui Shou Bao doesn’t have Amazon’s return policies.
You can watch the full video from BBC here:
I have to say, this is an impressive feat! I never would’ve thought that reselling iPhone 7 phones could generate enough profit to make a down payment on a home. I suppose if you don’t actually pay for the phones, that would of course, change the math.
Did you try reselling iPhone 7 phones? How did you do? Is there a new home in your future?
In what may be the first time ever, Amazon Restricts New Sellers from FBA Q4 2016. This is a huge deal, both for new sellers that have wanted to jump into Amazon but hadn’t yet gotten around to sending in inventory.
All accounts indicate that Amazon has done this without any advance notice. Specifically if you haven’t sent your shipment in by 10 October, you won’t be able to send a shipment in until 19 December. Of course the initial reports of this came out late on 10 October, with more official reports coming out on 11 October. There’s already a short thread on Reddit of folks that are unhappy about this development.
Only so much Fulfillment Center space
The Bloomberg article references Amazon’s fulfillment center (FC) expansion–21 new warehouses this year through September 2016. The fact is, Amazon’s warehouses have been full for quite a while. This has been indicated by Amazon restricting shipment of products that sufficient quantities already existed in FCs, increasing FBA Storage fees, with even more changes, all geared toward getting slow selling units out of centers. After all, how could these cool little robots operate without having some space to move around?
Good for established sellers?
A lot of established sellers see this as a good thing. Fewer sellers to compete with for Amazon Prime buyers. In theory, this helps, especially considering ProPublica’s study saying that Amazon’s pricing algorithm favors Amazon and Prime Sellers over Merchant Fulfilled. For long time sellers, this is not a huge surprise. However, with the right undercutting, Merchant Fulfilled sellers can get the buy box, although that usually comes at a much lower profit. The likely increased number of Merchant Fulfilled sellers could shift the balance for the algorithm, but, it might not.
Still reason for concern for all sellers
This action, along with previous no-notice changes, such as brand restrictions are cause for concern. I’ve made the argument that Amazon is similar to Airline Frequent Flyer programs, in that they have all the power, and we have little leverage. The fact is, more and more, it is important to remember that things can change at any time. This is a very concerning reality, especially as many ramp up for Q4.
This is not the best of news for new sellers who have been looking at getting into utilizing Fulfillment by Amazon. The fact that Amazon restricts new sellers from FBA without any advance notice is awfully concerning for many. Hopefully this is the last of a string of less than positive actions, but, I suspect that there is still more to come. The real question for me is, whether these actions will help Amazon get the overfilled fulfillment centers under control.
What do you think of these latest developments?
Amazon announced a big deal change that will impact many third-party service providers in the Amazon eco-sphere. You see, Amazon’s Customer Review Policy used to allow sellers to offer discounted codes in return for reviews. The requirement, was that the reviewer disclosed that they received the product for free or at a discount. This is no longer permitted.
Today, we updated the community guidelines to prohibit incentivized reviews unless they are facilitated through the Amazon Vine program.
Amazon Vine program was launched some time ago, however until now, they didn’t make that the only approach for offering discounted products for reviews. Here’s how Amazon describes it:
Amazon – not the vendor or seller – identifies and invites trusted and helpful reviewers on Amazon to post opinions about new and pre-release products; we do not incentivize positive star ratings, attempt to influence the content of reviews, or even require a review to be written; and we limit the total number of Vine reviews that we display for each product. Vine has important controls in place and has proven to be especially valuable for getting early reviews on new products that have not yet been able to generate enough sales to have significant numbers of organic reviews.
Why Amazon’s Customer Review Policy Matters
For Retail and Online Arbitrage sellers, this is probably not a big deal. Many products already have good ranks, otherwise you probably would not have bought them. For sellers that create bundles or otherwise creates listings, this could have an impact, but, I don’t see bundles terribly impacted here.
The real impact is on sellers who do Private Label. Private Label is essentially identifying a product that you believe will sell, and contacting the manufacturer. Many major retailers do private label as well, one of the best known is Costco’s Kirkland brand. Of course, many smaller resellers try out private label as well, because you get the opportunity to build your own brand. This requires a multi-faceted approach, but generally speaking, one of the best indications of a product can be the number of positive Amazon reviews. An example in the mile and point space is TravelMore, Parag, the blogger behind Frequent Flyer University, built a pretty solid brand of private label products oriented toward travel.
This isn’t the end of the world though, because Amazon Vine still provides a way for brand owners to get reviews.
Overall, this is the biggest hit to companies like Seller Labs’ Snagshout and ReviewKick. I suspect that this is probably because Amazon wants more control over the customer experience, which they’ve indicated with other actions. I haven’t played around with Amazon Vine, but I plan to in the near future.
Does this change impact you? What are your thoughts of Amazon’s Customer Review Policy change to a single platform for building brand reviews through discounted products?
That time is upon us! Welcome to Q4! I know. If you’ve been following this blog, you already know what Q4 means. It is the time where we ramp up, send in as much of the stuff we’ve been finding over the past 9 months, and hope we sell before Amazon’s crazy storage fees kick in!
Dates to plan For – Sort’ve
Amazon hasn’t released this year’s dates, but using 2015 as a guide, you’ll want to make sure that your inventory arrives at Amazon by or before 9 November in order to be in stock for Black Friday and Cyber Monday.. Last year it was 11 November, but this year Thanksgiving is 2 days earlier.
You’ll want to make sure your inventory for delivery by Christmas is in by 2 December to be safe.
Box information becomes mandatory effective 1 November
Hello from Fulfillment by Amazon.
As a reminder, effective November 1, 2016, we will require sellers to provide box content information for each box sent to Amazon. By providing box content information, your products move through our fulfillment network more efficiently and become available for sale sooner. If you choose not to provide this information, Amazon will need to process your box contents manually for a fee of $0.15 per unit in November and December. The fee will be $0.10 per unit for January through October. If you provide box content information, you will not be charged this fee.
You will be able to provide box content information (including expiration dates, if applicable) using any one of the following methods:
- Entering the information into a web form in Seller Central
- Uploading an Excel-format or tab-delimited file into Seller Central
- Applying a 2D barcode with box content information to each box
- Uploading an XML file via Amazon Marketplace Web Services
Thank you for selling on Amazon.
The Fulfillment by Amazon team
This is less than fun, especially as we all ramp up for the business time of the year, but the fact remains, Amazon has taken their time in implementing this. Hopefully by November 1st, we’re all comfortable with it, and are not incurring a $0.15 per unit fee.
We are entering the busiest time of the year for resellers. Of course, this should also be the most lucrative time of the year for most resellers. It will be an exciting few months!
What are you doing to prepare for Q4, and how will you be maximizing the next two months?
Amazon has clearly been working hard to free up space in its Fulfillment Centers. First, preventing folks from sending in units when “sufficient supply existed in warehouses,” then increasing storage fees in July. Well, out today, Amazon has announced that they will no longer exempt one unit of each product, from the long term storage fee.
Long Term Storage Fee Assessed on all inventory effective 15 February 2017
Per Amazon’s notification:
In the past, one unit of each ASIN in storage has been exempt from the twice-annual Long-Term Storage Fee. Effective with the February 15, 2017, Long-Term Storage Fee assessment, this exemption will end. A Long-Term Storage Fee will be assessed on all inventory that has been in a U.S. fulfillment center for six months or more. There are no additional changes to the Long-Term Storage Fee at this time, other than there will no longer be a single-unit exemption effective February 15, 2017.
I think it is positive that Amazon is giving us what I would say, is sufficient notice. In fact, Amazon is also providing free removal of one unit of every ASIN, for which you remove between 19 September and 14 October.
Is this a huge deal? Not really. In the big scheme of things though, its just one more straw on the camel’s back, and its been a rough few months for Amazon Sellers.
What do you think? Is the latest change in storage fees a big deal or not so big a deal?
This past week, we hosted the third ResellingDO. I’ve intentionally not posted very much about the events in the past, partially, because I want to cultivate people sharing openly. That’s also why we’ve kept it small.
On Sunday 11 September 2016, we hosted roughly 75 people at the Jailbreak Brewery, in Laurel, MD. This was the same site of the first ResellingDO. This time, we rented out the taproom for the entire day. It really was a great event.
We covered such topics as:
- Recent brand restrictions (link)
- Using gift cards to supercharge your margins
- Reconciling Inventory
- Utilizing data to increase your margins
- Storage Fees (which will soon go up-link),
- Buyers, and more Accounting for resellers
As you read through these topics, you are probably thinking, as I did, that we were really moving at an intermediate to advanced level. The truth is, that was the goal, but I didn’t want to advertise it as such. All too often, you see a conference or meet-up that is marketed as “Advanced” only to find out that the content really isn’t.
The challenge I see going forward though, is how we can make reselling accessible to new folks, and help to get them up to speed, as we continue to push the level of expertise for many of the presentations, to that next level of advanced. This is particularly important, because over the past 3 events–which have grown by about a third each time–I’ve been truly impressed with the number of repeat attendees.
Looking ahead to ResellingDO 4
During ResellingDO 3, I announced a “Save the Date” for ResellingDO4. A lot of folks pulled me aside and asked me to consider a slight date change of a week or two. I originally announced a date that, due to spring breaks across the country didn’t work. I should’ve learned my lesson after this past year.
We’re setting the date: 4 March 2017
I’ve also started to refine my thinking on the kind of topics I am gearing up for. Things like creating listings, discussions of Private Label, Wholesale, the next level down for sourcing. The challenge, is that as we push for more and more advanced topics, people naturally become cagey. I totally understand the hesitancy to share the secrets to one’s business. So finding a balance is something I’ll be very focused on over the next couple of months.
Really the point of this post, was to highlight some of the topics that get discussion at ResellingDO events. Also, to highlight the fact that we’re already planning for the next ResellingDO, and I hope you will attend.
Last week, I wrote that it was a dark time for Amazon Sellers. I still believe it is, but there may be a silver lining. Much like some airline programs–I’m looking at you Delta–Amazon doesn’t always communicate the most efficiently with its sellers. I totally get that. I run into communication issues in my day job all the time.
That all said, lets get to the good news!
$1,500 ungating fee won’t apply to existing merchants
Courtesy of Ben Turnbull and CNBC, we learn that Amazon won’t apply to existing merchants. This is both reassuring and concerning at the same time. Reassuring because, those Amazon sellers who have sold the brands that Amazon is now clamping down on, should be ok. But what about those folks that have also been around, but not sold a particular brand? I mean, I’m sure there are some Amazon sellers who have been around, but, somehow been under a rock with regard to some brands that are popular four letter brands. Worse yet, what about the new sellers, who legitimately want to build a business selling on Amazon? Now, they must do the calculation as to whether paying $1000-1500 to get ungated in a particular brand is worth it. That assumes they can even get a letter, or acceptable receipt, if that is a requirement.
What this all means for Amazon Sellers
Candidly, I’m not sure that this changes much. The fact of the matter is, Amazon is changing things up. They are attempting to rid their marketplace of counterfeit items. I totally get that. I love that. It’s a reason why I never do commingled inventory, even if it is easier. But the fact remains. This will erect additional barriers to entry to reselling on Amazon. Some say that Amazon has had a huge influx of sellers lately, I think, if there wasn’t the concern of counterfeit merchandise, that Amazon would love this. Competition forces prices down. Amazon is in a business to provide the customer–read: not seller–the lowest, competitive price. The challenge, however, is when Amazon lets many businesses that may be based off-shore, that results in counterfeit products being introduced into the Amazon supply chain. I think it’s still a to be determined, to see how this all ends up.
Overall, this was a welcome sign at the end of the week. I still feel like there is much uncertainty. This is part of the reason that I always advocate that you add a product to inventory before buying. It takes only a few seconds, but can save minutes, if not hours of heartache. Other than that, there are a bunch of groups–subscription like Mile High Reselling Club, and non-subscription based–that have talked about the various brands, like Lego, Nike, and others, and potential changes as time goes by. Overall, this is a very uncertain time, which is most unfortunate, as we are fast approaching Q4, the best time of the year for resellers!
Have you been restricted on any particular brands as an Amazon Seller? Please share in the comments.
The past week or so has been met with a lot of concerning news for Amazon Sellers. This is, perhaps a direct opposite of the experience many in the miles and points community has experienced with the Chase Sapphire Reserve.
You see, for one reason or another, Amazon is restricting brands. In fact, there’s a reddit post that lists many of the brands being restricted.
I haven’t experienced this myself (thankfully!), but a friend of mind shared the below graphic. Its concerning to say the least:
The most concerning part is the fact that Amazon is requiring a non-refundable $1,000 payment. I get it. Amazon wants to ensure that you are committed to the brand. The problem is, that for many resellers, we can’t commit to just a few brands. Further, many resellers just can’t afford to pay $1,000 per brand, just to be able to sell products that we’ve been permitted to sell before.
My Read of This Change for Amazon Sellers
There have been numerous reports of brand owners like Birkenstock that have decided to stop selling on Amazon because of counterfeit products. Amazon isn’t saying that this is their attempt to get rid of counterfeit products, but, I really think it is. There are numerous articles about counterfeits on Amazon. It is one reason why I have advocated for folk’s doing non-commingled, when selling on Amazon. The sad part of this, however, is the fact that because Amazon’s own stock is commingled, they ultimately ship products, sold directly by Amazon, that are counterfeit.
The counterfeit issue became abundantly clear to me, when I saw on a listing for Yeti Cooler’s where there were half a dozen “Just Launched” sellers that “shipped from China.”
That said, this really hurts all sellers, not just the bad guys.
How can you protect yourself?
Well, first of all, if you’re selling a product that Amazon restricts, you may not have recourse. I don’t have personal experience here, but if I saw a product, that I have a track record of selling, I’d submit a case to Amazon, demonstrating my history of selling the product, and asking for leniency.
But I think what a lot of folks may be looking for, is how to not buy something that may eventually be restricted. I don’t have a crystal ball. I wish I did–I’d be able to predict airline devaluations, and more importantly, the hottest sellers on Amazon. That said, the easiest thing you can do, is to add products to your inventory before you buy them. You could go one step further, and create a shipping plan. We learned back in March, that Amazon was restricting what could be shipped in, because warehouses were just too full.
I’m not sure that there is any good news here. Be vigilant when you buy anything. What I’m most concerned about, or, rather, curious about, is how this will impact Amazon’s bottom line. We have “Q4” – the time when many retailers finally get into the “Black” – aka, they get into profit (thus the name of Black Friday). If Amazon were to restrict its catalog, by, I’d say, restricting 40% of sellers, I have to believe that Amazon will see a drop in sales, and overall transactions. Will this drop result in a change of how Amazon interacts with its business partners (aka sellers)? One can only hope, however, there is a lot to be determined.
Have you had a brand that you’ve sold before, suddenly become restricted? Did it require a $1,000 payment as well as receipts?