Operating a successful selling outlet on Amazon’s massive marketplace entails hurdles that even some seasoned retailers have never encountered. The key to a rewarding seller experience is avoiding internal roadblocks.
One of the biggest hurdles for business sellers on Amazon right now is complying with the online retail giant’s multiple selling options, policies, and guidelines. Knowing how to navigate Amazon advertising rules, Fulfillment by Amazon policies, and Amazon Brand Registry requirements can mean success or failure for the brand.
Those tactics include optimizing product listings, using the right keywords, and leveraging advertising tools to increase visibility and sales. New sellers on Amazon typically find that one of their biggest challenges is not towing the Amazon line.
Selling on Amazon, like any other retail business, comes with built-in expenses and entails the added burden of strictly following the retail platform’s always-changing rules and procedures.
Noncompliance with Amazon’s rules can have serious repercussions and lead sellers to suffer inventory losses, delayed or frozen payments, and even the outright loss of their products being listed, noted Emily Lindahl, vice president of Amazon management and marketing agency Emplicit. Her company is an accredited Amazon partner working with retail clients to grow their marketplace sales presence.
Amazon Seller Statistics
Jungle Scout is an Amazon research service that helps retailers find winning products to sell on Amazon. It can also help sellers estimate sales, research keywords, and keep track of competitors, all from one dashboard. Its accumulation of retail tools can be worth every penny the service costs.
According to the latest postings on Jungle Scout, 45% of sellers make $1,000 to $25,000 monthly. Almost half as many (25%) of sellers make $25,000-$250,000, while 17% of sellers make under $500 per month in sales.
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,” she told the E-Commerce Times.
Challenges of Compliance for Amazon Retailers
Typically, for many retailers, the biggest struggle they face is staying on top of what compliance documents they need. But their worries do not stop there.
Retailers, perhaps more on Amazon’s giant marketplace than a neighborhood storefront, have to wonder and worry about what inventory regulations will look like next week and the week after as they struggle to stay on top of the ever-changing policies Amazon sets, Lindahl explained.
“Amazon does not typically give notice,” she offered.
Forget common courtesies such as issuing notices in advance that management is going to update a particular policy in the next 30 days. For instance, Amazon does not tell its sellers that they have two weeks to label products differently.
So, ensuring a seller is staying on top of changes and updating as needed often requires outside help. That is where Emplicit comes into play, advised Lindahl.
“A lot of our clients rely on us to give them the notifications when policies are being updated,” she said.
Falling Behind Has Consequences
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.
Second Chances Iffy
Very few options exist for a reprieve or appeal. Amazon does have an appeal process, but sellers disputing an action against them still must show that they hit the newly updated guidelines.
“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 ongoing policy updates continuously set new standards for sellers to meet across the board. Changes in advertising policies, fulfillment by Amazon, and brand registry are all part of the problems sellers face. Perhaps the brand registry poses the most pain for sellers.
“With Brand Registry, Amazon is regularly updating its guidelines and requirements to be a registered brand,” noted Lindahl.
The goal is to ensure that all the products sold on its platform are authentic. To enforce that standard, Amazon now requires new documentation. To avoid complications, sellers must make sure they stay on top of pending and current requirements.
Meeting what is now required to be a registered brand is another hurdle sellers run into from the inventory standpoint, added Lindahl. For instance, to help sellers comply with the new inventory controls, Amazon recently rolled out a new inventory management system called the Capacity Manager.
According to Lindahl, in the fourth quarter of last year, many brands could not send in products due to warehouse storage limits.
Leveling the Amazon Selling Field
Amazon provides sellers with tools for managing inventory, brand registry, and marketing and keywords for better search results. Individual retailers can use these with or without the services available from Emplicit, Jungle Scout, and other Amazon partner agencies.
Third-party software is available from Amazon to help brand-registered sellers. Amazon also has rolled out analytics tools that help sellers use keyword data within the platform, noted Lindahl.
“But you need to know how to read the reports and run them to be able to analyze the data,” she offered.
However, it is essential that sellers reach out to take advantage of the Brand Registry material on Amazon’s backend. She pointed out that to be granted access, sellers must adhere to the Brand Registry guidelines and policies.
Finally, Amazon retailers must also become savvy about advertising tricks to learn how to leverage Amazon’s advertising tools. Depending on the product category, each seller’s competition will be a little different, observed 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.”