Operating a profitable selling business on Amazon’s huge marketplace comprises challenges that even seasoned retailers have never faced. Avoiding internal barriers is the key to a rewarding seller experience. Compliance with Amazon’s numerous selling options, policies, and guidelines is currently one of the most difficult challenges for commercial sellers on the platform.
In addition, understanding Amazon advertising guidelines, Fulfillment by Amazon policies, and Amazon Brand Registry criteria can be the difference between success and failure for a brand. To boost visibility and sales, these strategies include optimizing product listings, employing the proper keywords, and leveraging advertising tools. One of the most difficult obstacles for new Amazon sellers is not towing the Amazon line. Selling on Amazon, like any other retail business, has inherent costs as well as the additional burden of precisely adhering to the retail platform’s ever-changing regulations and procedures.
Lastly, noncompliance with Amazon’s standards can have major consequences, including inventory losses, delayed or frozen payments, and even the removal of a seller’s products from the marketplace, according to Emily Lindahl, vice president of Amazon management and marketing agency Emplicit. Her company is an Amazon partner that works with retail clients to increase their marketplace sales presence.
By The Numbers: How Amazon Sellers Perform
Jungle Scout is an Amazon research service that assists sellers in locating profitable products to offer on Amazon. It can also assist sellers in estimating sales, researching keywords, and monitoring competition all from one dashboard. Its retail tool collection may be worth every penny the service charges.
According to the most recent Jungle Scout listings, 45% of sellers earn $1,000 to $25,000 a month. Almost half of all vendors (25%) earn between $25,000 and $250,000, while 17% earn less than $500 each month.
Amazon has always had strict policies and guidelines. Over the last year, it has been aggressively increasing the standards to which they hold their sellers, according to Lindahl. “We have noticed policy changes on inventory, customer service; you name it. It is ever-changing,”
Compliance Issues for Amazon Sellers
Keeping track of the compliance documentation they require is typically the main challenge faced by many merchants. But that is not where their troubles end. Most retail suppliers struggle to keep up with Amazon’s constantly changing policies. According to Lindahl. “Amazon does not typically give notice,” she offered. Therefore, ensuring a seller is keeping up with developments and upgrading as necessary frequently calls for outside assistance.
Ramifications for Falling Behind
Sellers who slip between the cracks, ignore the notices, or do not get it right can have serious consequences. All of a sudden, retailers can find themselves in a no-win situation. For instance, many of them lose their products, which can drastically hurt the business’s profit margin. Some retailers lose their listings completely, so they are not eligible to sell on Amazon to generate any revenue, Lindahl detailed.
“That is in addition to losing all of your products stored at Amazon. So it is kind of a worst-case scenario and shows why staying on top of every change mandated is so important,” she said. This is very common when Amazon identifies a GTIN issue with an existing product. Aside from de-listing, all associated reviews are removed.
There are few alternatives for a reprieve or appeal. Amazon does provide an appeals mechanism, but sellers contesting a disciplinary penalty must still demonstrate that they followed the newly amended criteria.
“So, if you have not updated your supplement, or your packaging, or whatever it is to meet their updated guidelines, you can appeal it all you want. But you are still in the wrong,” said Lindahl.
Amazon’s periodic policy revisions constantly set new standards for all merchants to meet. Changes in advertising restrictions, Amazon fulfillment, and brand registry are all part of the issues that vendors encounter. The brand registry may be the most difficult for merchants.
“With Brand Registry, Amazon is regularly updating its guidelines and requirements to be a registered brand,” noted Lindahl.
The aim is to guarantee the authenticity of any product sold on its marketplace. Amazon now demands fresh paperwork in order to uphold that requirement. Sellers must make sure they are aware of all pending and ongoing regulations in order to avoid problems.
Another challenge sellers have from an inventory perspective is meeting the current requirements to be a registered brand, stated Lindahl. For instance, Amazon recently launched a new inventory management system called the Capacity Manager to assist sellers in adhering to the new inventory constraints.
According to Lindahl, due to warehouse storage restrictions, many brands were unable to ship in products in the fourth quarter of last year.
An equal playing field for Amazon sellers
Amazon gives sellers resources for managing their inventory, brand registry, marketing efforts, and keywords for improved search engine rankings. The services provided by Emplicit, Jungle Scout, and other Amazon partner organizations are optional for individual sellers to use.
Amazon offers third-party tools to assist brand-registered vendors. According to Lindahl, Amazon has also released analytics tools to assist sellers in using keyword information on the marketplace.“But you need to know how to read the reports and run them to be able to analyze the data,” she offered.
However, in order to benefit from the Brand Registry content on Amazon’s backend, vendors must get in touch. She emphasized that in order to be granted access, vendors must follow the Brand Registry rules and regulations.
To use Amazon’s advertising capabilities effectively, Amazon businesses must also become knowledgeable about marketing strategies. Each seller’s competitiveness will vary slightly depending on the product category, noted Lindhal.
“The biggest thing we found in understanding Amazon’s platform is the different ad types. Sellers must develop ad budgets appropriately based on whom you are trying to target,” she suggested.
“So there is definitely benefit in knowing the ins and outs and your category to make sure you are not having any wasted ad spend margin.”
Jungle Scout is a partner of TradingPartner.info.