Promoting products on Amazon’s enormous marketplace presents challenges that even experienced salespeople find difficult. The secret to a successful seller experience is knowing how to avoid internal obstacles.
One of the biggest barriers for sellers on Amazon today is following the e-commerce giant’s various sales schemes, policies and guidelines. Mastering Amazon’s advertising rules, Fulfillment by Amazon program policies and Amazon Brand Registry requirements can be crucial to brand success or failure.
This approach includes optimizing product listings, using relevant keywords and advertising tools to increase visibility and sales. New sellers on Amazon often find that one of their biggest challenges is compliance with all of Amazon’s requirements and regulations.
Trading on Amazon, like any other retail business, entails built-in costs and a commitment to strict adherence to the constantly updated rules and procedures of the trading platform.
Failure to comply with Amazon’s requirements can lead to serious consequences, including loss of inventory, delayed or blocked payments, and even complete loss of the ability to list one’s goods, stresses Emily Lindahl, vice president of agency management and marketing at Amazon Emplicit. Her company, an Amazon accredited partner, helps retail customers expand their presence on the platform.
Statistics on Amazon Sellers
Jungle Scout is an Amazon research service designed to help retailers find products with high potential for sale on the Amazon platform. It also offers sales estimation, keyword analysis, and competitor monitoring capabilities, all available through one easy-to-use interface. Investing in this retail toolkit can pay off.
According to Jungle Scout, 45% of sellers on Amazon have monthly revenues in the $1,000 to $25,000 range. Significantly fewer sellers (25%) have incomes in the $25,000 to $250,000 per month range, while 17% of sellers make less than $500 per month.
Amazon is known for its strict policies and rules. As Lindahl noted, over the past year, the company has stepped up the requirements it places on sellers on its platform.
Navigating Regulatory Obstacles for Amazon Merchants
Usually the main challenge for many retailers is keeping all the necessary documents for regulatory compliance in mind. However, this is only the beginning of their problems.
Merchants, more focused on operating in Amazon’s great marketplace than in their neighborhood store, are forced to constantly think about and worry about what inventory accounting rules will be in effect the next week and the week after, striving hard to keep up with the fickle policies Amazon has set, according to Lindahl. “Amazon doesn’t usually give any warning about that,” she clarifies.
Expect the usual condescension, such as “management plans to update this policy within the next 30 days,” is not. Amazon, for example, does not inform its sellers that they have two weeks to change product labeling.
So it often requires outside help to keep the seller up to date on changes and update them as needed. This is where Emplicit comes into the picture, as Lindahl advises.
“Most of our customers rely on us for notification of policy updates,” she notes.
Lagging Behind Carries Implications
Sellers who don’t pay proper attention to notices, miss details, or make mistakes can face serious consequences. Suddenly, they may find themselves in a situation with no way out.
For example, many of them may lose their merchandise, resulting in a significant decrease in business profitability. Some sellers may lose their product listings altogether, which means they no longer have the ability to sell their products on Amazon for profit, Lindahl explained.
“That goes on top of losing all of your inventory that’s stored on Amazon. So this seems like the worst possible scenario, and it demonstrates why it’s so important to be aware of every change,” she noted.
Uncertainty Surrounding Second Opportunities
Opportunities for deferral or appeal are extremely limited. Although Amazon offers an appeal process, sellers fighting the action taken against them must demonstrate their compliance with the updated guidelines.
“If you haven’t updated your supplements, packaging or anything else to comply with their updated guidelines, you can appeal indefinitely. But you’ll still be wrong,” Lindahl argues.
Amazon is constantly updating its policies, setting new standards for sellers. Changes in advertising policy, Amazon order fulfillment and the brand registry are just some of the problems sellers face. Perhaps most of the problems are caused by the brand registry.
“With the brand registry, Amazon regularly updates its guidelines and requirements for registered brands,” Lindahl notes.
The goal is to ensure that all items sold on the platform are authentic. To maintain this standard, Amazon now requires new documentation. To avoid problems, sellers must be aware of all new and current requirements.
Compliance with registered brands is another hurdle sellers face when accounting for merchandise, Lindahl adds. For example, to help sellers comply with new inventory management rules, Amazon recently implemented a new inventory management system called Capacity Manager.
In the fourth quarter of last year, Lindahl says, many brands were unable to ship items because of stocking restrictions.
Balancing the Amazon Marketplace for Sellers
Amazon offers sellers a suite of tools for inventory management, brand registration, marketing campaigns and keyword optimization to improve search performance. These tools can be applied by independent sellers either on their own or in conjunction with the services of Amazon partners such as Emplicit, Jungle Scout and other agencies.
Amazon offers a third-party software solution to support sellers who have registered with brands. In addition, Amazon has developed analytics tools to help sellers leverage keyword information within the platform, as Lindahl noted.
“It’s important to note that data analysis requires reading and reporting skills,” she added.
It’s imperative that sellers seek help to effectively use brand registry material in Amazon’s back office. To access these materials, she stressed, sellers must follow the principles and policies of the Brand Registry.
Finally, sellers on Amazon must understand advertising techniques in order to effectively use Amazon’s advertising tools. The level of competition for each seller varies slightly depending on the product category, as Lindhal noted.
“The most important revelation in learning about the Amazon platform was realizing the diversity of advertising types. Sellers need to approach their advertising budgets with the target audience in mind,” she argues.
“So it’s imperative that you understand all the nuances and specifics of your category to ensure that your advertising budget is being used effectively.”
