Amazon Required to Recall Unsafe Products Sold by Third-Party Sellers, Says Consumer Agency
Todd Welch
Helping Brand Sell More on Amazon and Take Control | Over $20 Million Sold | Director & Founder at Welch Products | CIO at Amazon Storage Pros | Consultant at Amazon Seller School
Hello, Fellow Amazon Sellers!
Welcome to another edition of our weekly newsletter, packed with the latest updates, insights, and strategies to help you navigate the dynamic world of Amazon selling. Dive into this week’s top stories and ensure you’re ahead of the curve.
News
A recent ruling by the U.S. Consumer Product Safety Commission (CPSC) mandates that Amazon recall products deemed unsafe that are sold through its platform by independent sellers. This decision follows a lawsuit highlighting serious safety violations in products like children’s sleepwear, faulty carbon monoxide detectors, and unsafe hair dryers sold between 2018 and 2021. Amazon, described by the CPSC as a “distributor” under consumer safety laws, disputes this role, considering itself merely a logistics provider within its Fulfillment by Amazon service. The ruling emphasizes Amazon’s responsibility to not only inform customers about product recalls but also to ensure these products are returned or destroyed, highlighting a significant policy shift affecting all sellers on the platform.
Temu, an online marketplace, is experiencing significant backlash from its suppliers in China due to a shift in its business model aimed at recruiting Amazon merchants with U.S. and EU-based warehouses. This strategic pivot, designed to mitigate potential impacts from new EU customs duties on low-cost goods, would transition Temu to selling bulkier, higher-margin items like furniture, thus promising shorter delivery times. However, suppliers are concerned about bearing increased risks, such as handling shipping, warehousing, and delivery costs. Discontent is growing among suppliers as some report drastic drops in orders and express frustrations over punitive fines for customer complaints and packaging faults, claiming these measures are unfair and detrimental to their businesses.
Corey Thomas reports significant updates to Amazon’s policies affecting Seller-Fulfilled products, particularly focusing on On-time Delivery Rate (OTDR) and Shipping Settings. Starting September 23, 2024, sellers must achieve at least a 90% OTDR to continue offering Seller-Fulfilled Products. Additionally, from August 24, 2024, Amazon will adjust Transit Times to reflect the actual delivery capabilities, setting a maximum of 5 days for Standard Shipping and 8 days for Free Economy shipping within the contiguous US. Another significant change will enforce Automated Handling Time for sellers who manually set a Handling Time two days slower than their actual performance. These changes aim to enhance customer satisfaction by eliminating slow delivery practices, especially from overseas sellers, and align the Amazon delivery experience more closely with Prime/FBA standards. This policy shift could significantly impact sellers who rely on USPS and other shipping services, as any delivery failures could now jeopardize their ability to sell on Amazon.
Amazon has updated its insurance requirements for sellers across its European platforms, mandating that sellers obtain commercial liability insurance once their gross proceeds exceed certain thresholds during any month. These thresholds vary by country, with the UK set at ￡4,000 and other countries like Germany, France, Italy, Spain, Belgium, the Netherlands, Sweden, and Poland having their respective amounts. This policy change, effective May 29, 2024, now applies to all products sold, including those fulfilled by merchants outside of Amazon’s FBA service. Sellers are required to add Amazon as an additional insured party and ensure that their policies cover claims made in the EU and UK. This update complicates the insurance process as sellers must now ensure their coverage meets Amazon’s specific requirements and give Amazon a 30-day notice of any changes to their policy.
Amazon has announced a stricter On-Time Delivery Rate (OTDR) policy effective September 25, 2024, which mandates that seller-fulfilled orders maintain a minimum 90% OTDR to remain listed on Amazon.com. This change primarily affects sellers who handle their own shipping, as those using Fulfillment by Amazon (FBA) are not impacted. The policy update, aimed at reducing late deliveries and improving delivery speeds, includes setting maximum transit times and enabling automated handling time. However, sellers express concerns, noting the policy forces them towards using Amazon’s shipping services, potentially disadvantaging those who opt for other shipping methods like Media Mail for books. Amazon offers OTDR protection for items shipped through its Buy Shipping if sellers use specified tools, aiming to alleviate some of the pressure from the new requirements.
Extensiv’s recent Market Insights for Q2 2024 reveals a challenging landscape for Amazon and Shopify sellers, with both platforms seeing an increase in seller counts but a decrease in order volumes per seller. This suggests a market saturation where the influx of new sellers is not accompanied by a proportional growth in orders. Notably, while Amazon reported a slight increase in sales during Prime Day, individual sellers did not see significant business growth, highlighting the intense competition. In contrast, other marketplaces like eBay, Walmart, and Etsy recorded gains in both seller numbers and order volumes, indicating a shift as brands diversify their online presence to capture better profit margins and customer reach amidst economic uncertainty.
Starting November 1, 2024, Amazon will implement a new system for proactively reimbursing sellers for items lost within its Fulfillment by Amazon (FBA) centers. This update promises automatic reimbursements immediately after an item is reported lost, which sellers can monitor through the Reimbursements report on Seller Central, streamlining the claims process and reducing the need for manual claims. Additionally, Amazon is updating its eligibility window for manual claims from October 23, with specific deadlines based on the type of claim, such as 60 days for lost or damaged items in fulfillment centers and 60-120 days for FBA customer returns. This change aims to simplify operations for sellers while ensuring timely claim handling.
Starting in October 2024, Amazon is set to reduce the time frame for sellers to file claims for lost inventory in its fulfillment centers. In November, Amazon will also begin proactively reimbursing sellers for lost goods, significantly automating the reimbursement process for issues like lost or damaged items and customer returns. However, sellers will need to manually file for reimbursements that aren’t automatically processed, with specific deadlines such as 60 days for lost or damaged items and 60-120 days for customer returns. This shift aims to streamline operations and reduce the administrative burden on sellers, although it requires adjustments to current processes due to the shortened claims windows.
Despite Amazon’s efforts to encourage cross-border e-commerce, less than 1% of U.S. Amazon sellers are engaging in sales outside of North America, focusing primarily on the domestic market. According to Marketplace Pulse, although 12% of these sellers extend their business to Canada and 5% to Mexico using Amazon’s Remote Fulfillment with FBA, broader international sales remain minimal. Major markets like Japan, Germany, and the U.K., which are significantly larger than Canada or Mexico, attract very few U.S. sellers. This suggests that while Amazon operates a global network that theoretically enables international selling without a physical presence, actual seller participation in global markets is quite low, highlighting the challenges and competitive nature of international e-commerce for American sellers.
Starting August 15, 2024, Amazon will implement revised bullet point requirements to enhance clarity and effectiveness on product detail pages. These changes include restricting the use of special characters, emojis, and certain phrases like refund guarantees, aiming to create high-quality, concise bullet points that facilitate easy product comparison for customers. Additionally, Amazon plans to employ generative artificial intelligence (AI) to optimize listing quality by automatically generating compliant bullet points and removing non-compliant content, with sellers receiving previews of AI-generated changes for approval before publication.
Amazon has updated its approach to selecting images for product detail pages, initially applying to hardlines and expanding to include softlines and consumables in the coming months. This expansion aims to boost sales by enriching product detail pages with more comprehensive visual information, aiding customers in making better-informed purchasing decisions. Images from brand owners will now be prioritized, with Amazon using content from brand-registered sellers only when necessary to replace missing or low-quality images. Sellers must ensure their product detail pages include at least three mandatory images: a product shot on a white background, an environmental shot, and an informational image showing dimensions or nutritional facts.
Seller Tips & Tricks
领英推荐
Dan Brownsher discusses the evolving role of generative AI in e-commerce, specifically how Amazon brands are utilizing it to enhance listing optimization, ad management, and creative content generation. While Amazon offers a suite of AI tools that assist in various aspects including advertising, review management, and image creation, these tools are in the early stages and require human oversight to ensure quality. The article highlights the mixed effectiveness of AI applications, from optimizing ads and dynamic pricing to generating creative content like images for listings. It also stresses the importance of maintaining a balance between leveraging AI capabilities and ensuring brand authenticity to maintain customer trust.
Steven Pope reveals a potent strategy for enhancing Amazon listings called the “Main Image Hack,” which significantly increases click-through rates (CTR) and drives sales growth. By creatively adding a label or tag that includes the main keyword onto the main product image—though it’s not part of the actual product—sellers can effectively attract more clicks. This technique is Amazon-approved and has been proven to double or even triple CTR. Pope emphasizes the importance of A/B testing to see dramatic improvements and advises sellers to prioritize their main image as a key strategy for competing on Amazon.
Amazon product insert cards offer sellers a strategic advantage by enhancing the customer unboxing experience and fostering brand loyalty. These cards allow sellers to communicate directly with customers, providing everything from thank-you notes and product care instructions to promotional offers. However, adherence to Amazon’s stringent guidelines is crucial to avoid policy violations. This article by Nived Uthaiah from SellerApp delves into the creation and optimization of these insert cards, emphasizing their role in boosting customer reviews and repeat purchases while ensuring compliance with Amazon’s standards.
Dave Bryant explored the effect of directing external traffic via Google and Facebook ads to Amazon listings, spending $5,000 over 90 days. His experiment aimed to investigate whether such traffic could boost organic rankings on Amazon, as sales from external sources are often considered more valuable by Amazon. Despite improvements in keyword rankings for the products targeted, the advertising cost of sales (ACoS) was 72.3%, indicating the campaigns were unprofitable. This experiment suggests that while external traffic may slightly enhance organic rankings, the financial viability of such strategies remains questionable unless highly optimized.
Amazon is inviting sellers to submit deals for the upcoming Labor Day sale, running from August 26 to September 3, 2024. This promotional event is an excellent opportunity for sellers to increase the visibility and sales of their products. Sellers can submit their deals through the ‘Advertising’ tab on Seller Central by selecting a qualified ASIN and setting the deal for the week of August 26. Detailed guidance on deal submission and eligibility is available on the Amazon deals help page.
Amazon encourages sellers to prepare for the upcoming holiday season by sending inventory to FBA centers in August and September, with a final inventory deadline of October 19, 2024, to ensure products are Prime badge-ready by Black Friday. The focus shifts from receiving to order processing in November and December, and storage capacity will be limited during these peak months. Amazon has also removed overage fees for storage as of July 1, 2024, to ease operations for sellers. For optimal planning, sellers can utilize the Capacity Monitor tool, and further guidelines are available in the peak readiness playbook.
The Amazon Seller School offers an exclusive Inner Circle Membership designed to help sellers maximize their Amazon business. Members can access live coaching, private chat groups, exclusive training videos, and significant discounts on one-on-one coaching sessions. The membership aims to provide continuous learning and direct support from industry experts, enhancing sellers’ abilities to navigate Amazon’s competitive marketplace effectively. The program also includes access to all previous recordings of coaching sessions and trainings, making it a comprehensive resource for both new and experienced sellers.
Video of the Week
Strong Opinions
Kevin King warns of significant changes impacting FBA sellers due to new strategies by Amazon and competitive moves by Walmart and emerging platforms. Amazon’s Factory Direct Discount section and Walmart’s recruitment of Chinese factories signify a shift towards more direct factory sales to U.S. consumers, potentially displacing current FBA sellers. These developments, coupled with the Chinese government’s support for cross-border e-commerce, signal an increase in competition from low-priced Chinese products. Sellers are advised to differentiate their products, protect their intellectual property, and focus on quality marketing to stay competitive in this evolving landscape.
Corey Thomas highlights a significant competitive disadvantage for most 1P brands on Amazon, especially when compared to 3P sellers. 1P brands face delays in accessing sales data, only able to see catalog-wide sales data with a significant time lag, while 3P brands can view hourly sales data with minimal delay. This discrepancy makes it challenging for 1P brands to compete effectively, especially during critical sales periods like Prime Day. The faster access to data by 3P brands significantly enhances their ability to make strategic decisions swiftly, compounding their competitive advantage over time.
Tops Amazon Events
Stay informed, adapt to changes, and keep optimizing your strategies to achieve success on Amazon.
Happy Selling,
Todd Welch
Amazon Seller School
Business Consultant | E-commerce Specialist | Amazon FBA, TikTok Dropshipping & eBay Dropshipping Expert??
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7 个月Great advice!
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7 个月Thanks for keeping us up to date with the trends, Todd Welch
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8 个月Love these updates, you're the best amazon seller news