Always Moving Forward – Amazon TOS Change 2016

We all saw the writing on the wall didn’t we? Today marks yet another Amazon TOS change that set the private label world on fire and sent everyone into chaos. 24 hours later and it looks like things have largely subsided. While many of the industry’s leading review services have posted their interpretation of the rules and how they wish to proceed, I am still not completely convinced of their conclusion and I’ll explain it all.

So what does it mean for you as a seller? What does it mean for Viral Launch and its platform? What does it mean for the Amazon market in general? 

In this post we’ll cover the facts we know around the Terms of Service change, what this policy update means for you as a seller, what it means for the Viral Launch community, and what it means for the private label world as a whole. 

While we are not 100% sure, nor do I think we will ever be (Amazon can be pretty ambiguous with their terminology and can lack uniformity in how they enforce and interpret their rules), I do think we have a pretty good grasp on the impact this TOS change will have moving forward. We will continue to update this blog post with new information and case studies as they come up, but at the very least I wanted to comfort some nerves and hopefully add some peace to the frenzy that has ensued. 

Facts Around the TOS Change

So let’s begin with the actual content posted on Amazon. Firstly, the post that has caused the chaos. Thanks to our friend Chee Chew, VP of Customer Experience at Amazon, we have this “blog post”/“featured post” from mid-day EDT on Oct. 3rd: 

Customer reviews are one of the most valuable tools we offer customers for making informed purchase decisions, and we work hard to make sure they are doing their job. In just the past year, we’ve improved review ratings by introducing a machine learned algorithm that gives more weight to newer, more helpful reviews; applying stricter criteria to qualify for the Amazon verified purchase badge; and suspending, banning or suing thousands of individuals for attempting to manipulate reviews.

Our community guidelines have always prohibited compensation for reviews, with an exception – reviewers could post a review in exchange for a free or discounted product as long as they disclosed that fact. These so-called ‘incentivized reviews’ make up only a tiny fraction of the tens of millions of reviews on Amazon, and when done carefully, they can be helpful to customers by providing a foundation of reviews for new or less well-known products.

Today, we updated the community guidelines to prohibit incentivized reviews unless they are facilitated through the Amazon Vine program. We launched Vine several years ago to carefully facilitate these kinds of reviews and have been happy with feedback from customers and vendors. Here’s how Vine works: 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. We also have ideas for how to continue to make Vine an even more useful program going forward. Details on that as we have them.

The above changes will apply to product categories other than books. We will continue to allow the age-old practice of providing advance review copies of books.

Thank you.

– Chee Chew, VP, Customer Experience

The post can be found here. 

If you follow the link to the Community Guidelines as referred to by Mr. Chew, you’ll see some updated language. Previously, Amazon had very specific language regarding giving discounted or free products in exchange for a review and the stipulations around it such as making sure the product was offered before the review was left, etc. 

If you read the customer guidelines for yourself, you will now see the updated language which attempts to dispel any kind of hope that products can still be given away at a discount in exchange for a review with language such as: 

Promotions and Commercial Solicitations

In order to preserve the integrity of Community content, content and activities consisting of advertising, promotion, or solicitation (whether direct or indirect) is not allowed, including:

• Creating, modifying, or posting content regarding your (or your relative’s, close friend’s, business associate’s, or employer’s) products or services.

• Creating, modifying, or posting content regarding your competitors’ products or services.
• Creating, modifying, or posting content in exchange for compensation of any kind (including free or discounted products) or on behalf of anyone else.
• Offering compensation or requesting compensation (including free or discounted products) in exchange for creating, modifying, or posting content.

To answer all questions more definitively (well for the most part), we also have in the FAQ section of Seller Central these relevant FAQ’s. 

FAQ

Why are we making this change?

Please see our recent announcement.

Can I use third-party services to provide free or discounted products to reviewers? 

No. The policy applies regardless of whether you provide compensation to reviewers directly or through a third party.

When and how will this policy be enforced? 

The policy is effective immediately. If you continue to offer free or discounted products in exchange for a review, your Amazon privileges may be suspended or revoked.  

Can I continue to offer discounts and promotions to customers? 

Yes. You may continue to offer discounts and promotions as long as they are not offered in exchange for reviews. 

What constitutes a review “in exchange” for a free or discounted product?

We do not allow any benefit to be offered, requested, or provided in exchange for a review.

 

Looks pretty black and white, right? 

So according to this: As sellers you CANNOT give free or discounted products away to reviewers in exchange for compensation, BUT you CAN offer discounts and promotions to customers as long as they are, again, not offered in exchange for reviews.

The only way to know exactly how Amazon will choose to enforce these rules is time. Time enough to understand just how they distinguish promotional giveaways from a product awareness standpoint versus giveaways in exchange for reviews.

Mr. Chew mentions that all ‘incentivized’ reviews are prohibited unless they are run through their Amazon Vine Program. The Vine program is expensive, open only to Vendors, limits the number of products a brand can enter, and has a ceiling of around 100 units to give for a review depending on your product’s category. This is obviously a significant difference from what some sellers are used to, especially in competitive markets.  

He also mentions that there will be updates to the Vine program coming soon, but is not very specific as to what it will entail. Will they remove the Vendor requirement to join the program? 

TechCrunch also published an article giving a statement from an Amazon Spokesperson saying, “reviews that were received prior to the policy change are only being retroactively removed if they are excessive, and don’t comply with prior policy.” As well as, “if it [Amazon] finds anyone is attempting to manipulate reviews by tying reviews to discounted products, it will take action against them, starting today.”

What does “tying reviews to discounted products” mean exactly? To me it sounds like you better make sure that customers receiving a discount do not leave a review. Again what does “excessive” mean? 100? 1000? A function of the percentage of monthly organic sales? We’re left to chance to find out only once the line has been crossed.

Why I Have A Hard Time Trusting The Current Industry’s Interpretation of the Amazon Policy Update

My biggest apprehensions are two-fold: 

1. How does Amazon know the intent of the seller handing out coupons? 
2. And, just because now reviews won’t have the disclosure “I purchased at a discount in exchange…” in them, doesn’t mean that the reviews are now legitimately unbiased. If you pay $1 for something, you are going to be inevitably biased in how you review the product. So that would mean Amazon’s new TOS update served no purpose but to remove the disclosure from reviews essentially. Seems sneaky by Amazon to hide the fact from their buyers.

I am in no way advocating the behavior mentioned in this paragraph, but for example’s sake let’s say I run a promotion giving discounted products to customers without asking for reviews and 30% of them choose to leave a review of their own choice. That seems completely legitimate according to both Amazon’s terms and how review services are interpreting Amazon’s policy change. But, how does Amazon know whether or not you told the customer they were receiving the product in exchange for a review? If that is the case, then theoretically, a seller could still give thousands of products away at a discount in exchange for a review without getting in trouble just so long as the reviewers do not state in the review that they received the product at a discount in exchange for a review. 

Amazon cannot be in on every conversation on the internet to know whether a product was given in exchange for a review or not. To Amazon, a review left on a discounted product looks the same whether it was offered in exchange for a review or not (so long as the customer does not state the fact of course). So how are they able to enforce this rule if a seller coaches their own VIP list not to leave the disclosure in the review? They can’t!

This leaves two possibilities. 

1. Amazon released this statement as a show of good faith to their large consumer audience. The holidays are coming up, so it is an important time for them to reassure buyers that reviews are still priority when making informed purchasing decisions. However, as I mentioned before, reviews from discounted purchases are likely still biased even under the new regulations. Although they may not be able to enforce it to the standards they speak of, they still want to publicly display their position.
2. Amazon is not interpreting the terms the same as our industry leaders (and Viral Launch) and may start to enforce these new updates in ways that are likely unfavorable (suspensions, etc.). 

Why Amazon Will Not Suspend You For Getting Reviews From Promotional Sales

Again, this is all my interpretation and logical thought process on the information I’ve received. We are currently running 200+ launches a day and will have enough data to talk in definitives here soon.  

I have a hard time seeing Amazon punishing sellers who are running promotions that just so happen to also generate reviews. If that were the case, the door would be flung wide-open for competitors to use  “ghost-accounts” (accounts that have been well seasoned by sellers to appear legitimate to outside eyes) to post reviews to their competitor’s listings after purchasing. This would be hard to detect whether it was a legitimate customer or not and could be devastating. 

Another example: let’s say you run a 30% off holiday discount and a percentage of those buyers leave a review because they love your product. Is Amazon going to punish you? Seems unlikely.

What History Tells US About Amazon TOS Changes

For those who don’t recall Amazon’s, “the sky is falling announcement” back in August of 2015 we recap it here. There was just about as much chaos and concern caused by their latest TOS announcement, but how did affect us? What devastating impact did it have on us and our clients? LITERALLY NONE!! Sure it had an impact in terms of fear, etc. But it did not actually affect any of us. We saw not one complaint to our clients running white-hat honest businesses. 

So for better or worse, it eases my concerns as to the impact this change will have. From what we’ve covered already, I don’t see this as having too much of a real impact on the Viral Launch platform and our clients directly, but we’ll get into that more further along in this blog.

How This Affects You As A Seller

Are Review Services Dead?

So does this mean that review services with 80%+ review rates that were requiring their user bases to leave a review in order to get access to more products are dead? Yes. After reading Amazon’s TOS, I’m not sure how you can interpret it any differently. A few times they mention ‘incentivized reviews’ as being prohibited while explaining that ‘incentivized reviews’ are reviews posted in exchange for a free or discounted product. In Amazon’s FAQs (listed above), they very explicitly state that you cannot give products away at a discount in exchange for reviews.

The majority of review groups that have announced their interpretation of the policy change and how they will proceed will continue running promotions but are removing the requirement to leave a review post purchase. They will no longer hand out coupons with the agreement that the product is being given in exchange for a review. The services are now focusing on leveraging promotional sales to focus on “sales velocity”. 

If you sell in markets where a competitive number of reviews on page one is around 100 reviews, or even under 500 reviews, then this update doesn’t seem like it will have much of an impact on you. Sure it may slightly decrease the speed at which you can get a product up and selling at a high level organically, but with a little extra time, strategy, and work, you’ll get there just the same. 

If you sell in markets where a competitive number of reviews is in the thousands…it looks like you have your work cut out for you. Impossible? Not at all. More expensive and time consuming? I am afraid so. Making intelligent decisions on which products to source is now more crucial than ever! We have a new tool dropping by the end of the month to help you do just that! (Don’t worry we’re not trying to replace any current tool you’re using like Jungle Scout!)

The days of giving away thousands of products through review groups (Viral Launch is not a review service) to compete with page one sellers in a matter of a month or two are likely over. 

Adjustments To Make..

• Make sure you do not have any “drip” campaigns running on review services (not Viral Launch) still giving products away in exchange for a review which you are currently subscribed to and cancel any campaigns that are supposed to kick off soon. 
• Keep your eyes out for new information! Facebook groups are incredible news aggregators for Amazon news. I will also be updating this post with new information and case studies as they become available.
• Be weary of rumors!! Oh goodness how rumors spread in this space. We actually have a whole blog series planned on busting common myths in this space so watch for those! But check your facts and even feel free to check with our free-of-cost Account Executives if you have a question regarding a rumor. Unfortunately we see a lot of sellers misled by “authorities” in the space that are sometimes misinformed themselves.
• OPTIMIZE YOUR FEEDBACK SERVICE’S EMAIL FOLLOW-UP SEQUENCES!!! – I cannot stress enough how important having a highly optimized feedback service is! If the only way to generate reviews now is through organic sales, you better put everything you have into converting those organic sales into customer reviews!

Is The Gold Rush Of Amazon Private Label Over?

So overall what does this mean? Are we/sellers going to pack our bags and go home? Is the Amazon gold rush over? Are your chances of a self-sustaining Amazon lifestyle business over?

NOT AT ALL! And I really hope I don’t hear that from any of you. As entrepreneurs it’s our nature to overcome the obstacles we find before us! We can’t give up because the rules of the game we’re playing change. If that’s your mentality in life, you’ll never survive. You’ll never achieve your dreams of running a successful business no matter if you’re selling on Amazon or working in another industry. We have to fight for our success!

When changes arise in the market, we have to look at it as opportunity. Yeah, things are shaken up and may seem to be more difficult for you, but they are shaken up for everyone and just as difficult for your competitors as well. That means you have to figure out the new rules of the game, adjust with tact and move forward full steam ahead. If you hang on to the past, you’ll be left behind. 

I’m extremely confident that we’ll be able to successfully navigate the market after Amazon’s new policy update to launch products to success! We always will! And that, ladies and gentlemen, is the mindset of true entrepreneurs. I hope that you’ll ascribe to that way of thinking with me!

How This Affects the Viral Launch Platform

Short Answer: This has a very minimal affect on us and the effectiveness of our platform. For starters, we are so much more than a promotional giveaway platform now. We have also never been a review service. We have never required our users to leave reviews. Our focus in promotional giveaways has always been on providing a platform for sellers to help drive promotional sales targeted at improving keyword ranking, and we will continue to operate almost exactly the same! (Read below to see what change will be made)

Looking at Amazon’s FAQ…

Can I continue to offer discounts and promotions to customers? 

Yes. You may continue to offer discounts and promotions as long as they are not offered in exchange for reviews. 

It looks like everything is good to go for promotions to drive traffic and promotional sales which we all know help improve a product’s keyword ranking in search results.

We have completely removed all language around reviews on the Viral Launch buyer’s side. We never required or incentivized reviews as many of the review services did. We did however offer a kind reminder for coupon grabbers to leave a review on the products they purchased, but that has now been removed. Therefore, based on Amazon’s direct language, the Viral Launch platform should be compliant with Amazon’s new TOS update.

I have to say “should be”, because with any rule made by Amazon, they are ambiguous, or at the least, leave unanswered questions. 

Two of those unanswered questions: 

1. By “…promotions to customers” are they referring to a specific set of people? 
   1. By “customers” are they referring to your past customers? 
   2. Amazon “customers” only? Meaning lightning deals, etc. 

I think I may be thinking too hard about it, but at the same time with how vague Amazon can be, I’d rather be safe than sorry. 

1. How will Amazon determine whether or not the discount was offered in exchange for reviews? How do they know the intent of the coupon distributor?

My honest inclination is that they do not care so long as the reviewer is not posting in the review that they got the product at a discount in exchange for a review AND so long as you are not actually offering products in exchange for a review.

Questions I continue to ask:

1. Are they looking at the buyer account of product’s purchased at a discount? Meaning if it is a buyer that frequently leaves a review on a discounted product, Amazon assumes it was given at a discount in exchange for a review? Seems grossly inaccurate and unlikely. 
2. Are they looking at products that have reviews posted saying, “…purchased this product at a discount in exchange for my unbiased review”? Again seems grossly inaccurate, but more likely. If this is the case it’s likely just one method of identification. The largest issue here is if sellers coached reviewers not to leave the disclaimer, they could potentially rack up thousands of reviews very quickly still.
3. Are they monitoring referrer traffic? Meaning, “did this purchase just come from reviewsite.com? Okay it must have been in exchange for a review.” This would be the worst case of the above mentioned because it would be incredibly inaccurate and would be devastating for a lot of sellers and service providers.

 

What If You Lower The Price Of A Product For A Couple Hours Then Run Traffic To The Product So Reviewers Can Buy For Low And Still Leave A Review?

We will absolutely not being doing this! This seems like review manipulation and we are not that type of company. This is the type of activity that seems to have a high probability of you ending up being sued, suspended, or banned from Amazon. Viral Launch will stay far away from this. 

Moving Forward

If all of the hype is exactly as it seems to be (no reviews left in exchange for a discount), we are going to be coaching our clients on a completely new launch strategy designed to help you succeed with a new set of parameters. For seasoned sellers with a solid review foundation, the launch strategy is unlikely to change. For sellers just bringing a product to market, depending on what that market looks like, we will put together an updated launch strategy which we will be covering later this week. Getting off the ground successfully without the ability to gain traction with initial reviews is going to change the name of the game, but it will be your ability to adapt that will help you beat out competitors trying to do the same thing. 

This is an opportunity for those of you who are focused on building a well rounded business to overcome those sellers who were spending money to take the shortcut. The Viral Launch arsenal is now more valuable than ever, allowing you to build an incredible private label business from the ground up. If you were looking to take shortcuts, you were already in trouble. Its time to double down and get ahead by doing everything better than your competitors.

We are working harder than ever to help optimize email follow-up campaigns to help increase the review rate driven by feedback services. We’ll keep you updated as we see advances. In the meantime, we highly suggest finding a feedback service that works well for you and optimizing it to drive as many reviews as possible from organic sales. 

To Summarize

I know this was about 10X longer than most posts, but I’m more of a skeptic and with the limited amount of data we’ve been able to gather over the last 24 hours, I want to make sure we do not mislead anyone. I also think it’s important to question and discuss the market we all work and thrive in to constantly increase our perspectives of it. It is only going to help to make you a better seller and entrepreneur in the space.

• Viral Launch will continue to give coupons without incentivizing reviews as before, but will be coaching reviewers on Amazon’s new review policy guidelines.
• We will continue to monitor the space to help enhance our perspective and hopefully reinforce our confidence in our interpretation by providing definitive data or cases. 
• Optimize your feedback sequence! We’ve always pushed email follow-up sequences, but now is the time to leverage a feedback service with a killer email sequence to maximize the number of organic reviews you are able to drive.
• Should go without saying, but don’t give products away for free or at a discount in exchange for a review.
• Now more than ever, the key to success on Amazon is not a silver bullet. You need an arsenal to effectively attack every aspect of private label selling on Amazon. You need to focus on each element of your business to outsell your competitors.

At the end of the day, it’s our mission to help our clients achieve success. You can guarantee we will be vigilant in staying on top of this situation, but if history repeats itself (which it often does), then we are all pretty safe and know exactly what is going to happen moving forward. 

Our focus at Viral Launch is to be your launchpad to success, whether that entails promotional giveaways or simply coaching. We’re are an incredibly dynamic team of 15 with a large breadth of skills, experience, and knowledge in the Amazon space. This is our focus and we are here to help in anyway possible.

We would love to hear your thoughts, your perspective, and your interpretation of the update and our position on it in the comments! I’ll be open to talk as always!