Amazon Referral and FBA Fee Changes – How Does it Impact Your Business?

Keeping up with the incredible variety of rule changes, success tactics, and competitor strategies as an Amazon seller is a full-time job in and of itself.  To add to your list of items to keep up on, Amazon has just announced upcoming changes to their fee schedules in three critical areas.

Their goal each year is to take a look at the current fee structures and assess if they are an accurate reflection of the ever-changing dynamics within the industry. Amazon has just announced several changes to their referral fees, FBA fulfillment fees, and Long-Term Storage fees which will inevitably impact every seller, the question is how big of an impact will it have on yours!

Lower Referral Fees for Specific Categories

Amazon’s referral fee is the amount charged for each item sold on their 3rd party marketplace.

Beginning on February 19th, 2019 Amazon is implementing reductions in the referral fees for several categories. This is likely being done with the intent of expanding the products sellers are offering on the marketplace by creating more opportunity for greater margin.

Let’s highlight some of the most impactful changes in the reduction of fees:

  • For items in the furniture category (excluding mattresses), the fee percentage will decrease from 15% to 10% on any portion of your total sales price above $200.  Example, for a couch priced at $350, you would be charged a 15% fee for the first $200 and 10% on the remaining $150. That’s a savings of $7.50 per unit. Imagine if you are selling 500 units per month of that product, that’s an extra $3,750 per month in profit with no additional effort!
  • Amazon is lowering the per item minimum fees from $1.00 to $.30 across all categories where fees apply.  However, the minimum fee for Jewelry and watches have a more significant decrease, from $2.00 down to $.30.
  • For products $10 or under in the Baby (except baby apparel), Beauty, and Health & Personal Care categories, the referral fee will be reduced from 15% to 8%. This reduction does not apply to products with a total sales price that exceeds $10.00. We are very interested to see if Amazon is taking into account the listed price, or the purchase price in the $10 threshold. This could give a slight break to those that run external promotions that price their product under the $10 limit.

(Important to note that the total sales price includes the item price PLUS any shipping and gift wrap charges.)

This was new to us, but Amazon is offering potential referral fee reductions:

  • Temporary referral fee discounts of up to 70% for lowering your product price.
  • 60% referral fee discount when a non-Prime ASIN is added to Seller Fulfilled Prime.

You can get full details on all referral fees here. For the Referral fees with discount opportunities,  click here.

Annual Increase In FBA Fulfillment Fees

On par with previous years, Amazon has announced increases to their FBA fulfillment fees. If your products fall in the small standard or large standard-size category and are under 10 oz, then you get a free pass on fee increases (enjoy!) . All changes, are highlighted in the image below, including fulfillment cost changes.  

You can get full details on all changes to fulfillment fees here.

Amazon Long-Term Storage Fee Change

One of the biggest changes Amazon has made is with their sneaky long-term storage fees.  Effective February 15, 2019, Amazon will no longer charge long-term storage fees for items in storage 181 to 365 days. However, long-term storage fees will still apply for items in storage over a year, at a rate of $6.90 per cubic foot, billed the 15th of every month.

You can get full details on all changes to long-term storage fees here.

If you’ve had a hard time moving inventory or have been using Amazon as an inventory storage option for the last six months, this is a major break! If you’re struggling to rank, we’d be happy to talk through our 2019 ranking strategies.   To get notified when we release our brand new 2019 Amazon ranking strategies, text “RANK2019” to 44222! If you’re using Amazon as a storage facility, there are many cheaper alternatives that we’d love to bring to your attention! Shoot us a text with “STORAGE” to 44222 and we will send you more information.

In all, it’s important to stay connected to sources that are keeping you abreast of the changes within the Amazon industry as they come fast and often.

Viral Launch’s Take On These Amazon Fee Changes

If you sell higher end furniture products this could be a game changer for your margin, however, it could also be a quick race to a new bottom now that sellers have more room for margin. 

The interest in reducing fees in furniture is also likely a play to steal business away from sites like Wayfair and Walmart which have more traditional businesses in the furniture vertical. It will be interesting to see how this impacts those other retailers. In general this type of competition is great for sellers! 

I absolutely expect to see sellers looking to game these new price thresholds by bundling items together to see an aggregated discount on the referral fee (not to mention the savings on shipping).

One trend we continue to see picking up steam among our Amazon customers selling $10m+/year is a move to Seller Fulfilled Prime through the use of 3rd Party Logistics (3PL) providers. This is a topic we will be covering more and more in the new year as we see it as an inevitable next step for many sellers. Seller Fulfilled Prime offers incredible flexibility, opportunity to fulfill to other marketplaces such as Walmart, and in a lot of cases reduced costs while still being able to support same day and two day Prime shipping.

Summary

Changes are inevitable and pervasive in the world of selling on Amazon. These fee changes should come as no real surprise as they have become a staple to the start of each new year. Amazon is simply passing along the general fees of operating their massive logistics empire, which makes complete sense. If these minor fulfilment fee increases are any cause for major concern, then you likely have bigger issues around your unit economics than anything.

Staying up to date on Amazon’s latest changes is imperative to making smart informed business decisions. Make sure to subscribe to our newsletter to make sure we can help you stay ahead of such a dynamic and ever changing market! And if you’re determined to make 2019 your best sales year yet, you can pre-register for our free event, “How to Rank in 2019” by texting “RANK2019” to 44222!

Best of luck in your Amazon endeavors!

Amazon Terms of Service: A Quick Recap

When you signed up to be an Amazon Seller, you agreed to a long list of seller policies and terms of use. Over time, the Amazon Terms of Service can become a distant memory and as Q4 ramps up, you may be looking for tactics to push your sales. In the flurry of the holiday season, it is easy to make a rash decision that might fall on the wrong side of the rules, risking future sales or your entire Amazon business.

 

 

Luckily, we are here to give you a quick refresher on the important policies and regulations to help keep your account safe. We have compiled an overview of Amazon Terms of Service, including code of conduct, selling policies and prohibited actions to jog your memory and help you avoid any questionable tactics.

Let’s get started!

Seller Code of Conduct

Amazon strives to provide a safe and trustworthy online marketplace for millions of customers across the globe. They require sellers to adhere by a strict code of conduct to ensure shoppers trust their purchases and continue to return to the site. This code of conduct also protects you as a seller in that it keeps your competitors from using unfair tactics to outsell you and other rule-following sellers.

If Amazon discovers that you have violated their Code of Conduct, they typically take quick action. This can include suspending your seller privileges and/or removing you from the entire Amazon Marketplace.

Amazon Selling Policies

In order to protect consumers, Amazon has rules and requirements on what types of products can be sold on their site. Be sure you are not planning to sell any questionable items on the marketplace. Amazon does not allow you to list products that:

Prohibited Seller Actions

Amazon prohibits certain actions by sellers in order to protect both sellers themselves and shoppers. The site does its best to keep the playing field level for all sellers, so any action that gives you an unfair advantage over your competitors is not permitted. Chances are if you are worried whether a tactic you are considering using may be against the rules, it probably is. Here is a quick recap of some prohibited actions:

1. Diverting traffic from Amazon

Sellers are not permitted to use any sort of language or web links that push traffic away from the Amazon website. This includes any advertisements, special offers or calls to action that encourage shoppers to leave the site.

2. Unauthorized business names

All business names must accurately identify the seller, must not mislead shoppers and must be a name that the seller is permitted to use (i.e. it cannot be a brand or trademarked name that you do not have appropriate permission to use). Business names cannot contain an email suffix (i.e. .com, .biz, .net, etc.).

3. Inappropriate email communications

Sellers are not allowed to send any unsolicited emails to customers other than those needed for order fulfillment or customer service. Marketing emails to customers are not permitted.

4. Improper use of customer phone numbers

Customer phone numbers are provided to sellers who fulfill their own orders so they are able to comply with carrier label requirements. These phone numbers must be handled in accordance with Amazon’s customer personal information policy, which can be found in the Seller Agreement.

5. Multiple seller accounts

Sellers are not permitted to operate and maintain multiple seller accounts. If you have a legitimate business need for multiple accounts, you can apply for an exception by visiting the Contact Us section of your seller account. Click on Selling on Amazon, then select Your Account, then Other Account Issues. You must provide an explanation of your need for multiple accounts in your submission.

6. Misuse of the Amazon seller service

Sellers that upload excessive amounts of data repeatedly or use the service in an excessive or unreasonable way may face restricted or blocked access to product feeds or any other function they are misusing. Amazon decides what constitutes this misuse at their own discretion.

7. Misuse of ratings, feedbacks or reviews

Sellers are strictly prohibited from engaging in any action that may manipulate ratings, feedback, or reviews. This includes offering incentives to customers for their reviews or ratings, posting feedback to your own account, etc. You are allowed to ask for reviews in a neutral manner, but you are not allowed to ask for positive reviews. Sellers must also comply with Amazon’s Community Guidelines when dealing with customer reviews.

8. Misuse of sales rank

Sellers are prohibited from engaging in actions that manipulate sales rank. This includes soliciting or knowingly accepting fake orders, placing orders for your own products or providing compensation to shoppers for buying your products. Sellers are also not allowed to make claims about their sales rank in their product information.

9. Misuse of search and browse

Any attempt to manipulate the Search and Browse experience of shoppers is prohibited. This includes artificially stimulating customer traffic through internet bots, etc., providing misleading catalog information about your product, or adding product identifiers to hidden keyword attributes. Follow Amazon’s guide to properly optimize listings in order to write your listing in compliance with Amazon’s rules.

10. Misuse of product customization

Those products that are listed as being customizable must be able to deliver on this claim. Any attempt to manipulate custom functionality in a manner which bypasses existing Amazon policies or misrepresents customized products is prohibited.

Know the Rules, Follow the Rules

Amazon does not take violations of their terms of service lightly. At best, you may get flagged and temporarily suspended. At worst, you could be banned completely by the online retailer, stopping your cash flow and dashing all hopes of future sales.

Though it may be tempting at times to try questionable tactics to boost sales, it is not worth the risk. You may see some of your competitors breaking the rules to get ahead, and while they may not get caught immediately, Amazon almost always catches up to sellers who are abusing their terms of service.

We at Viral Launch are here to provide TOS compliant solutions to help your listing pick up speed and generate sales. From professional photography to optimized listings, we have a team of experts ready to get to work for you. Get in touch with us today to learn more about how we can help you!

Amazon Sales Tax: Everything You NEED To Know | Avalara

Amazon Sales Tax: Everything You NEED To Know | Avalara

Amazon Sales Tax has always created a HUGE debate among Amazon Sellers. Who’s responsible for collecting? Where should you collect? What’s happening now? What’s happening in the future?

This is one HUGE aspect of your business that you need to get right. Today, we’re bringing Scott Peterson onto the show. Scott has an incredibly impressive involvement with Sales Tax, and is also a part of Avalara. He’s here to break down what Sellers need to know now, and what Sellers need to know for the future. 

Take notes. You don’t want to miss what Scott has to say. 

Check out Avalara: Avalara.com

Listen on iTunes   Listen on Stitcher

The Ultimate Amazon Q4 Strategy for Third Party Sellers

It’s the most wonderful time of the year! Almost 50% of online holiday shoppers bought from Amazon in 2017, and we’re expecting to see that number increase in 2018. So, to help sellers ensure they have a lucrative Q4 this year, we’re going to walk through how to best prepare for Amazon Q4 traffic, what dates you need to remember, and how to get in front of as many buyers as possible to drive your sales through the roof.

Are you ready?

Let’s dive in.

Crucial Q4 Dates

One of the most common mistakes sellers make during Q4 is missing or forgetting important dates. Amazon events tend to happen on similar dates, so you can safely assume that the timeframe for these events will be nearly the same in 2018 as in 2017. Also, be aware that Amazon just enacted a new shipping policy in late August that will cause shipments with irregularities in quantity or delivery address to be delayed. Keep that in mind as we go over important dates during Q4.

Reduced Fulfillment Fee – Runs October through December

Last year, reduced fulfillment fees started on October 1 and continued through November and December. If FBA sellers reduce their storage space during these months, they could drastically reduce their total amount of FBA fees.

Increased Inventory Storage Fee – Runs October through December

During this timeframe, Amazon increases storage fees by 200-300% for standard and oversized items. This can really affect your profit margin, even with holiday sales, so make sure that you have room in your budget for higher fees.

Cutoff for New FBA Seller Accounts and Shipments – After Mid-October (Possibly)

Last year, new sellers weren’t allowed to sign up for FBA or send FBA shipments in after mid-October. This has been account based rather than ASIN based, so in the past sellers have sold retail arbitrage using FBA to get around the cutoff. But as long as you create a shipping order before the cutoff, you should be okay.

Cutoff for Black Friday / Cyber Monday Inventory – November 5

Last year Amazon also instituted a deadline for sending inventory for Black Friday and Cyber Monday. Black Friday (November 23) marks the official start of the holiday shopping season, and Cyber Monday (November 26) is a huge day for online retailers, especially Amazon sellers. Make sure you have enough inventory in your Amazon warehouse to cover your Black Friday and Cyber Monday orders by November 5, or mid- to late October, just to be safe.

Cutoff for Inventory to be Delivered by Christmas – December 1 (Probably)

The craziness doesn’t stop after Cyber Monday! All of your inventory that you plan to deliver by December 25 must be in the warehouse by early December.

Don’t forget these dates. FBA sellers have to be on top of their game from now until Christmas in order to capitalize off of massive Q4 revenue opportunities.

Planning A Launch

Your next challenge is to determine the best timeline for getting your inventory into the warehouse and for starting a launch so you can get onto Page 1 at just the right time.

First, look at market data from previous years to determine when sales have historically started to increase (not sure where to find data for your product? Our Market Research Chrome extension can help with that). You can expect that sales will follow the same pattern for 2018. Make sure your inventory is in stock before the sales spike.

Looking at past data for travel sets, you can clearly see when sales begin to spike during Q4. If you are selling travel sets, you can use this data to estimate when you need to get inventory in, and to determine the best time to start a launch.

Then plan to start a product launch at least a week before the sales spike. A launch typically takes 7-10 days and will help increase sales and drive ranking so you can ride the wave of Q4 sales all the way through the holidays.

Timing is crucial. If you launch too early, you’ll have to maintain your ranking all throughout the holiday season. Launch too late, you’ll have to give away too much inventory and run out before the sales wave ends – or even worse, you’ll miss the wave completely. If you are unsure about when exactly you need to start your launch, our coaches can help you research past trends to determine the best launch strategy for your product market.

Preparing Your Listing

Before you launch your product, you need to make sure that your listing copy and photography are both fully optimized and follow Amazon style guidelines. A well-written listing and high-quality photo set work together with product launches to increase organic sales and drive ranking for a successful final quarter.

Listing

Make sure that you’re using high volume and high opportunity keywords in your product listing. You have to plug in the best Amazon keywords in the best order in a way that reads well and follows Amazon style guidelines. Piece of cake, right?

Ranking is largely determined by your title, followed by your bullet points and backend search term keywords. Our Keyword Research and Listing Builder tools allow you to discover which keywords have the highest search volume in your market, which high opportunity keywords you might be missing out on, and how many potential searches your current listing could rank for.

Your listing also needs to be written well enough that buyers are convinced your product is worth buying, but without using restricted phrases or claims that could get you flagged by Amazon. If you don’t have the time or skillset to create an optimized listing, our team of copywriting professionals can do it for you.

Photography

Product photography is crucial for converting clicks into purchases. Because they can’t see the product for themselves before buying, online shoppers heavily rely on photos for information. To convince shoppers to add your product to their cart, your photos need to look professional, display important details of your product, follow Amazon guidelines (or risk being flagged), and establish an emotional connection with buyers.

If you’re a new seller or have little to no photography experience, hiring a professional photographer might be the best choice for you. Your photo set has to convince buyers that your product is better than your competitor’s product, but it’s only one of the many moving parts of a successful Q4 strategy.

Crafting Your Amazon Q4 Strategy

A successful Amazon Q4 strategy depends on planning, preparedness, and deliberate action. Now is the time to do your research and start prepping your listing and inventory for the busy holiday season. For more tips and tricks, be sure to check out our recent video on Q4 sales strategy.

At Viral Launch, we want to provide you with all the information you need to become successful on Amazon. For more Amazon selling strategies during every quarter, we encourage you to subscribe to our blog, check out our Youtube channel, and listen to our Follow the Data podcast.

And best of luck!

(Part 2): Shipping & Freight Forwarding: Tariffs, Policy Changes & Q4 / Q1 Strategy With Flexport

(Part 2): Shipping & Freight Forwarding: Tariffs, Policy Changes & Q4 / Q1 Strategy With Flexport

Shipping, Importing and Freight Forwarding is perhaps one of THE most confusing, yet essential, aspects to selling on Amazon. There are a LOT of changes happening in the Amazon space right now. Policy changes, Tariffs, Q4, Q1… and we’re breaking it ALL down in this two-part series.

I’m bringing Michael from Flexport onto the show – you’ll learn what Flexport’s all about in the intro of the topic discussion, just know that Flexport is on TOP of the Freight Forwarding and Shipping Logistics game, AND is focused on innovating in the Amazon space. They’re incredible at what they do, and have incredible perspective for what’s going on right now.

This week, which is part 2, we’ll be touching on general best practices and some solid Q4 / Q1 strategy. Pay attention here everyone, there’s a LOT to digest, but this information is ESSENTIAL.

The 3 lists for products affected by Tariffs:
List 1: http://bit.ly/VL-List1
List 2: http://bit.ly/VL-List2
List 3: http://bit.ly/VL-List3

Here the link to file for an exemption:
http://bit.ly/Tariff-Exemption

Listen on iTunes   Listen on Stitcher

Amazon Advertising: Tools for Increasing Product Visibility

As an Amazon seller, your main goal is to get your product in front of as many buyers as possible. But with competition high, where do you even start? Thankfully, there are several Amazon advertising tools designed to help sellers promote their products.

From sponsored ads and video ads to storefronts and more, sellers have plenty of options for how to advertise their Amazon products and brands. In this guide, we’ll cover what each of these advertising options are and how you can use them for your business. But first, let’s discuss a big change Amazon recently made to its advertising platform.

What’s in a Name? Amazon Advertising Rebrand

Come with me on a journey through time and space to August 2018. It was a different, more confusing time in the Amazon ecosystem. Back then, Amazon sellers looking to advertise their products had to wade through three different marketing channels and decide which one was best for their business. Amazon offered AMG (Amazon Media Group), AMS (Amazon Marketing Services) and AAP (Amazon Advertising Platform) as their three marketing pillars.

However, the disjointed nature of having multiple advertising platforms was seen as unnecessarily confusing to a lot of sellers. Many people found it hard to decipher where you needed to go to run the types of ads you wanted with so many different acronyms and platforms.

In September 2018, Amazon began phasing out the three-headed monster of AMG, AMS and AAP, opting rather to combine them all into one advertising platform. Now anything that has to do with advertising on Amazon falls under the umbrella of Amazon Advertising.

Head over to Amazon Advertising if you’re looking for any of these services or features:

To make sure you understand all the options at your fingertips, let’s dive into each one.

Sponsored Product Ads

In short, Sponsored Ads are pay-per-click advertisements that allow brands to promote their products with keyword-targeted ads. As you’ve shopped on Amazon before, you’ve likely seen these ads. These appear with a small “Sponsored” tag after you’ve typed in a related keyword. Sponsored Product ads can show up at the top or within search results and on product detail pages. They will also appear on mobile and tablet browsers, as well as apps. As an example, when searching “garlic press,” I was given these Sponsored Ads:

How Much do Sponsored Product Ads Cost?

As previously mentioned, these types of ads use a cost-per-click, auction-based pricing model. This means you are bidding against other sellers to get that spot within search results. You set the maximum amount you are willing to pay when a shopper clicks on your ad. The more competitive your bid is, the better chance it has to be displayed.

As you can see in the image below, this is what the Sponsored Ads user interface looks like. In the first column, you can enter your bid for the ad. To help sellers choose the right bid, Amazon will provide you with a suggested price range. As you’re getting started, bid within or just slightly over the suggested amount. You can always adjust from there if you are not getting desired results from your campaign.

Once you’ve got campaigns ready to go, you can also set your budget: the maximum daily amount you’re willing to spend over a calendar month.

 

Ready to Start Building Your First Campaign?

Check out this webinar from Amazon:

Now that you have a basic understanding of what Sponsored Products are, let’s move onto the next advertising option.

Sponsored Brands

Formerly known as Headline Search Ads, Sponsored Brands are keyword-targeted ads that allow brands to have a custom headline and logo within their ad. Brands use these advertisements to drive shoppers to a custom landing page or their Amazon Store. These ads show up on the left side of search results and at the top and bottom of the page. They can also appear on both desktop and mobile browsers, as well as the Amazon app.

 

Who is Eligible for Sponsored Brands?

Only third party products that are enrolled in Brand Registry are eligible to utilize Sponsored Brands. The products must also be new and fall into one of the categories below.

Note: Adult products, used products, and refurbished products are not eligible for the Sponsored Brands program.

How Much Do Sponsored Brands Cost?

Similar to Sponsored Product Ads, Sponsored Brands use a cost-per-click, auction-based pricing model. You set the maximum amount you’re willing to pay when a shopper clicks your ad. The more competitive your bid is, the more likely it is that your ad will be displayed.

While there are a lot of similarities with Sponsored Product Ads, the daily budget works a little bit different for Sponsored Brands. You set the maximum daily amount you’re willing to spend on ads, but it does not roll over to the next day. This is unlike Sponsored Product Ads, which uses an average for the month.

Display Ads

Like sponsored ads, Display Ads also use a pay-per-click model. However, there are some differences. While sponsored ads are keyword targeted, Display Ads allow you to target your ad based on shopper interest or a specific product. Display Ads can appear in a number of places for both desktop and mobile users, including:

  • Detail pages
  • Below search results
  • Customer review pages
  • Top of the offer listing page

This image shows a Display Ad appearing directly under the checkout options on the right side of the page.

In addition to the areas listed above, these ads may also appear in Amazon merchandising emails.

Want some more information about Display Ads?

Check out this video from Amazon:

 

Video Ads

Video Ads are a great way for advertisers to really tell their brand story and engage customers in a unique way. These ads show up in brand-safe environments via trusted channels like Amazon, IMDb or on exclusive Amazon devices like Fire TV or Fire tablet, as well as across many third-party sites and apps. As you can see below, videos are showing up on the bottom of a webpage as well as on a smartphone.

One major point to remember about video ads is they require a budget of $35,000 or more in the United States. These are typically going to be utilized by sellers or brands that have bigger advertising budgets.

Stores

Stores allow sellers to create their own website within Amazon with its own branded URL. This is a great way to showcase your brand story and product portfolio in a curated customer destination while providing a place to drive advertisements to. They don’t require any coding skills to set up and, as you can see below, provide a multi-page shopping experience.

Amazon DSP

Known formerly as Amazon Advertising Platform (AAP), Amazon DSP is a demand-side platform. This allows sellers to programmatically reach audiences on Amazon sites as well as through publishing partners and third-party exchanges. Unlike other advertising options where the main goal is to have a direct impact on sales, the main goal of DSP campaigns are to build brand and product awareness. This is more for companies that understand the nature of brand advertising and are already running display ads on other platforms.

Measurement

The Measurement tools of Amazon Advertising allow sellers to see how their campaigns are performing. Here are some of the most important terms to understand:

  • Impression: An impression is generated every time your ad is displayed.
  • Click: A click is generated when a user clicks or taps your ad.
  • Click-through rate: Click-through rate is the number of clicks your ad generates divided by the number of times your ad is displayed (impressions).
  • Detail page view: A detail page view, or DPV, occurs when a customer visits one of your brand’s product detail pages after clicking your ad.
  • Total sales: Sum of sales attributed to your campaign. A sale is attributed to your campaign each time a customer clicks your ad and purchases your products within 14 days. It takes 3 days after your first click for this data to begin showing in your report.
  • ACOS: The average advertising cost of sales (ACOS) is the amount you’ve spent on a campaign divided by the total sales attributed to your ad.

In this section of Amazon Advertising, sellers are able to run many different reports to check how their campaigns are performing.

Advertising on Amazon: Find What Works for You

While standing out on Amazon can be difficult, these days sellers have plenty of tools to advertise their products. However, running Sponsored or Display Ads or utilizing any of the other marketing strategies won’t automatically ensure success.

A lot of the Amazon game (advertising included), comes down to good old fashioned research along with trial and error.

If you’re going to jump into running Sponsored Ad campaigns for your product, you need to be fully aware of what you’re willing to spend on your advertising campaign as a whole so you can properly set bids and your budget. It also might behoove you to start with a wider net of keywords, let the campaign run, and then pick out a few of the keywords that perform the best.

The point here is, you need to figure out what strategy and advertising options work for you and your goals. If something isn’t working, take note and adjust accordingly before moving forward.

Here at Viral Launch, we want to provide you with all the information you need to become a successful Amazon seller. For more on Amazon selling strategies, we encourage you to subscribe to our blog, check out our Youtube channel, and listen to our Follow the Data podcast.

Amazon Gated Categories: What You Need to Know

If you’re looking to become an Amazon seller, you’ll quickly learn that research plays a huge part in your success. From product viability to profit margins and keyword research, you’ve got a lot to do. One aspect a lot of first time sellers don’t think (or know) to research is Amazon gated categories.

Millions of products spread out over hundreds of categories are available to buy and sell right now on Amazon. From electronics to baby products and supplements to snacks, the possibilities are endless.

But not all categories and products are created equal. Some fall under gated or restricted categories. And before you source your Amazon FBA product, you need to be aware of what these categories are because they require special approval to sell.

If you don’t do your due diligence and source a product in a gated category you could be stuck with a ton of inventory and no way to move it.

To make sure you avoid this mistake, let’s dive into gated categories.

What Are the Amazon Restricted Categories?

The Amazon ecosystem is constantly in flux, but right now there are around 20 Amazon restricted categories and subcategories. The list of categories/subcategories that have some sort of restriction or approval/ungating process includes:

  • Automotive and Powersports
  • Beauty
  • Clothing, Accessories, Shoes and Luggage
  • Collectibles (Books and Coins)
  • Entertainment Collectibles
  • Fine Art
  • Fine Jewelry
  • Gift Cards
  • Grocery and Gourmet Foods
  • Kindle Accessories
  • Sexual Wellness
  • Sports Collectibles
  • Textbook Rentals
  • Toys and Games (during the holidays)
  • Video Media (DVDs, Blu-ray)
  • Watches
  • Wine
  • Supplements

Have you committed those to memory? There will be quiz later. Just kidding, but it would be a good idea to keep this list in mind when you’re perusing potential product ideas.

The next question we should probably answer is:

Why Does Amazon Put Restrictions on Certain Categories?

It’s pretty simple really. Amazon’s main goals, as is the case with any business (or it should be at least), is customer satisfaction and brand perception. Now with almost half of all sales on Amazon coming from third party sellers, the company has to have a way to protect its reputation. That’s why Amazon adds restrictions to categories which are susceptible to issues with safety, quality or counterfeiting.

While these restrictions are great for Amazon and in turn the shopper, it can make life difficult for sellers. That’s why you have to make sure you’ve done your research to figure out if that goldmine product you’re about to source would fall in a restricted category.

If it does and you’re fine with a few extra steps, these next parts may be for you.

How Do you Start the Approval Process?

Ok, so let’s say you’ve decided to sell in a category that requires an approval process. How do you get started down the path to getting approved to sell? Fortunately, this part is pretty straightforward. Typically, to get the ball rolling on the approval process you will follow these steps:

  1. Head to Seller Central, then click the inventory link and select “Add a Product.”
  2. Perform a search and look for any product you know that is listed in the specific category.
  3. Once you’re in the search results, click the link that says “Listing Limitations Apply.”
  4. Choose “Request Approval” and begin the application.

While some sellers get approved automatically or within a few hours, don’t worry if it take a little extra time for you. For some, getting approval can take up to a week. To check the status of your application all you have to do is go back to the Add a Product section of Seller Central and look for the “Selling Application Status” on the page.

What Does the Approval Process Entail?

Like a lot of things on Amazon, the answer is – it depends. While the approval and “ungating” process can vary from category to category, there are still a few blanket things you want to do to make sure you stay in Amazon’s good graces and increase the chances of getting approved. Some actions that can influence the approval process include:

    • Pro Selling Account: For nearly all restricted categories you must have a Professional Selling plan or agree to upgrade to a Professional Selling plan within a certain amount of time, typically 30 days after your application is approved.
    • Good Standing: In addition to having a Professional Selling account, Amazon also wants to see that your account is in good health. So keep your late shipment rates, defect rates and pre fulfillment cancel rates and returns as low as possible to increase your chances of getting approved. Unless there are quality issues with your other product(s), this aspect mainly applies to FBM, because if you’re selling FBA you should be hitting these metrics easily.
    • Invoices: In some categories, like Grocery and Gourmet food, Amazon requires that you provide them with acceptable documentation like product invoices and any other information they request about your products.
    • Images: For the Automotive and Powersports category, Amazon requires sellers to have compliant product images that can either be reviewed on an independent website or image hosting site.
    • Questionnaire: Some categories, like Sexual Wellness and Jewelry also require you to fill out a questionnaire in addition to providing images.
    • FDA Review: Some products are subject to FDA approval and may have additional requirements, like listing guidelines that you must adhere to.

 Want Some More Information about FDA Regulated Products?

Check out our recent podcast on the topic:

As you move through the approval process Amazon will indicate what of the above aspects it needs from you as the seller. Because this is done online with areas to upload or enter information, having all pertinent documents and info ready to go will help speed up this process.

Keep in mind, all categories will be different when it comes to what it takes to get approval to sell. For instance, sellers wanting to break into the Grocery and Gourmet Foods category have to follow specific guidelines.

Here are some of the guidelines straight from Amazon for the Grocery and Gourmet Foods category. As you can see from the image below, there are requirements for a number of aspects including packaging, labelling, shipment dates and much more.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Then, as you might imagine for food products, Amazon also requires sellers to maintain proper temperature control, as you can see below.

Final Thoughts: Should I Avoid Selling in Restricted Categories?

Hopefully after reading this blog post, you have a little better idea of why restricted categories exist and what the process for getting “ungated” entails. Now, if you think the process for getting approval to sell in one of the gated categories is too complex and time-consuming, (especially if you’re a new seller) that’s perfectly fine. However, if you’re willing to go the extra mile, this could be a good strategy for you.

Think about it this way: There is a ton of competition across all categories on Amazon, right? But wouldn’t it make some sense to think that categories that require these extra steps and work, might be a little less crowded for the reasons I mentioned above?

What I’m saying isn’t necessarily profound, nor is it sure to make you instantly rich. That said, you don’t have to avoid restricted categories like the plague just because you can’t open an account and immediately start selling.

These are the types of decisions that you’ll have to make throughout your selling journey. To set yourself up for success, you’ll need to make sure you’ve done plenty of research and have gathered the right data.

Here at Viral Launch, we want to provide you with all the information you’ll need to become a successful Amazon seller. For more on Amazon selling strategies, we encourage you to subscribe to our blog, check out our Youtube channel, and listen to our Follow the Data podcast.

(Part 1): Shipping & Freight Forwarding: Tariffs, Policy Changes & Q4 / Q1 Strategy With Flexport

(Part 1): Shipping & Freight Forwarding: Tariffs, Policy Changes & Q4 / Q1 Strategy With Flexport

Shipping, Importing and Freight Forwarding is perhaps one of THE most confusing, yet essential, aspects to selling on Amazon. There are a LOT of changes happening in the Amazon space right now. Policy changes, Tariffs, Q4, Q1… and we’re breaking it ALL down in this two-part series.

I’m bringing Michael from Flexport onto the show – you’ll learn what Flexport’s all about in the intro of the topic discussion, just know that Flexport is on TOP of the Freight Forwarding and Shipping Logistics game, AND is focused on innovating in the Amazon space. They’re incredible at what they do, and have incredible perspective for what’s going on right now.

This week, which is part 1, we’ll be talking a LOT about Amazon’s Policy change and what’s happening with Tariffs. Next week, in part 2, we’ll be touching on General best practices and some solid Q4 / Q1 strategy. Pay attention here everyone, there’s a LOT to digest, but this information is ESSENTIAL.

The 3 lists for products affected by Tariffs:
List 1: http://bit.ly/VL-List1
List 2: http://bit.ly/VL-List2
List 3: http://bit.ly/VL-List3

Here the link to file for an exemption:
http://bit.ly/Tariff-Exemption

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Selling FDA Regulated Products on Amazon: Tips, Tricks and Warnings

The U.S. Food and Drug Administration (FDA) oversees the regulation of products, medicines, and foods that affect public health – and that includes products sold on Amazon. Even though a product may check all of the boxes – low competition, affordable manufacturing costs, high demand – the risks of running afoul of a federal agency may cancel out the rewards of selling FDA regulated products on Amazon.

As a general rule, anything that has not been cleared for over-the-counter use by the FDA or is considered dangerous by the FDA is barred from being sold on Amazon. But what about products that might or might not have FDA restrictions? Are derma rollers medical devices? Is hand soap a cosmetic? How can you be sure that your product fulfills both the legal requirements of the FDA and the selling policies of Amazon?

For private label sellers, understanding this information and integrating it into product research is crucial for avoiding disastrous financial consequences. Listen to our recent podcast for more details on selling in restricted and niche markets. 

Am I Selling FDA Regulated Products?

Generally speaking, the FDA is in charge of regulating foods, drugs and biologics, medical devices, electronic products that give off radiation, cosmetics, animal drugs, and tobacco products. Some of these products need FDA approval before being sold, and others do not. All of these FDA regulated products fall into Amazon restricted categories.

Categories that require the most regulation from the FDA – tobacco products, drugs, biologics, animal drugs and foods – are outright prohibited or require special permission to sell on Amazon. We will focus on products that do not need FDA approval and may be easier for private label sellers to market successfully.

Keep in mind that these products are restricted by Amazon and may have additional requirements other than those stated in this blog. Amazon takes restricted categories very seriously. If you list a restricted product without the proper FDA approval or complying to listing guidelines for that category, you could permanently lose your Amazon selling privileges.

Label Requirements

All Amazon products, even those that do not require FDA approval before being sold, must follow certain labelling guidelines:

  • Labels must not state that the products cure, mitigate, treat, or prevent a disease (this includes conditions like dandruff and acne) in humans unless that statement is approved by the FDA
  • Labels must not state that the product is “FDA Approved” if it is not FDA approved
  • Labels must not use the FDA logo

The FDA logo is for federal government use only. Displaying the logo on a product, a product’s label, or a listing detail page may violate federal law and will likely lead to the removal of the listing from Amazon as well as to possible legal consequences.

The FDA logo cannot be used to suggest the FDA endorses a product or service. We have seen Amazon remove many listings that do not follow guidelines.

Third party sellers must ensure that their manufacturer understands these Amazon labelling guidelines, especially since they often do not get a chance to see the finished product until it has already been manufactured. And though it may be tempting to use “FDA Approved” to advertise the safety and effectiveness of your product, misleading buyers can lead to negative reviews and returned orders, which in turn can cause your seller account to be suspended. It is always better to be open and honest about a product’s functionality and to rely on keyword optimization and advertising strategies, rather than false claims, to gather reviews and boost sales.

Medical Devices

All sellers are permitted to list medical devices that are authorized by the FDA for over-the-counter purchase that are not otherwise restricted and are appropriately described and labeled. All products that have not been cleared for over-the-counter use, are considered dangerous, or have been recalled by the FDA are barred from being sold on Amazon.

Medical devices that do not need approval and can be marketed by all sellers include:

  • Eyeglass frames
  • Tanning devices
  • Otoscopes
  • Ionized or ionic bracelets
  • Personal Sound Amplification Products (PSAPs)

For sellers in the Professional Health Care Program, the list of permitted products is more extensive and includes Class I, II, and Class III medical devices that have been cleared by the FDA, like tongue depressors, powered wheelchairs, and some pregnancy tests.

Some products ride a fine line between being considered a medical device or not. Derma rollers, for example, are commonly used to treat acne scars. But the FDA considers any device that treats a disease or condition, like acne, to be a medical device. In addition, features like the length of the needles and method of use could cause a derma roller to be classified as a medical device. To avoid breaking FDA regulations, both the seller and the manufacturer must be careful of how they make and describe the product.

Dietary Supplements

Dietary supplements do not require FDA approval before going on the market. The only exceptions are supplements that contain a new dietary ingredient, in which case the manufacturers are required to notify the FDA at least 75 days before selling.

Amazon requires that supplements be correctly described and labelled. Most importantly, supplements cannot make structure-function claims on their labeling or listing, unless the claim has been approved by the FDA. Structure-function phrases make claims that the product can affect the structure or function of the body. This includes phrases like “reduces pain” “anti-bacterial” and “fights Parkinson’s Disease.”

If the label includes structure-function claims, the manufacturer must submit a notification to the FDA and include a disclaimer on the label that states the product has not been reviewed by the FDA and is not intended to diagnose, cure, treat or prevent any disease. Any content on the listing that includes these claims must also have the disclaimer.

Cosmetics

The FDA does not approve perfumes, makeup, moisturizers, shampoos, hair dyes, hair relaxers, face and body cleansers, shaving preparations, or ingredients within those cosmetics. The only ingredient that has FDA oversight is color additives (an extensive list of additives can be found here). The FDA also monitors reports of adverse reactions to these products.

Some cosmetics may count as drugs, and would therefore require FDA approval. Products that intend to make people more attractive are generally classified as cosmetics, but if a product intends to affect the structure or function of the skin or body, it is classified as a drug or even a medical device. Soap has its own set of definitions and may be monitored by a separate regulatory committee.

For example, Face Cream A claims to make people more attractive by making wrinkles less noticeable: it would be classified as a cosmetic. Face Cream B claims to remove wrinkles or increase collagen: it would be classified as a drug or a medical device. Even if Face Cream B could not actually remove wrinkles or increase collagen, the claim alone is enough to cause the product to be reclassified and fall under FDA scrutiny (this is why avoiding structure-function claims in your product listing is so important!)

Amazon prohibits the sale of cosmetics that have been determined to present “an unreasonable risk of injury or illness” to users. If you are unsure as to whether your product falls under this category, a complete list of prohibited items can be found in Seller Central.

Medical Foods

Medical foods are used to manage a disease or health condition that requires special nutritional needs. This includes gluten-free foods, but does not include meal replacements, diet shakes, or products for the management of diabetes which can be managed by modifying a normal diet. Medical foods are intended to be used under the supervision of a technician. If your food product is gluten-free but is not intended for the management of Celiac disease, it cannot be marketed as such and does not fall under this category.

The FDA does not have to approve medical foods before they are marketed, but medical food manufacturers must comply with other requirements including good manufacturing practices (GMP). Medical foods do not have to include nutrition information on their labels, but the same substance-function claim restrictions apply.

Final Thoughts on Selling FDA Regulated Products

Because private label sellers do not manufacture their products themselves, it is more likely that they will be penalized for not complying with Amazon restricted category listing guidelines rather than for going against FDA violations. But the FDA can take regulatory action if safety issues arise with a product after it has been sold, which could be disastrous for a seller’s reputation. These requirements are as much for the seller’s safety as for buyers.

All of these regulations prove just how important product research is to becoming a successful seller on Amazon. Of course, the easiest way to stay out of trouble would be to choose an unrestricted product that does not need FDA approval in the first place. Luckily there are millions of profitable products just waiting to be discovered.

If you decide to move forward with selling FDA regulated products, do not hesitate to reach out to us for market research tools, listing optimization services, and more. At Viral Launch, we want to provide you with all the information you need to become successful on Amazon. For more on Amazon selling strategies, we encourage you to subscribe to our blog, check out our Youtube channel, and listen to our Follow the Data podcast.

Selling FDA Restricted Products: What You Need To Know

Selling FDA Restricted Products: What You Need To Know

Picture this with me. You’ve found an incredible product market – an incredible niche. Search volume measures out, sales volume is PERFECT, reviews are extremely low, and you have enough capital to jump in tomorrow… So you do. You order 5000 units, ready to jump in deep. You spend a LOT getting everything ready, send your products into Amazon AND

Find out that it’s and FDA regulated product that you actually CAN’T sell without approval.

The answer to that is what we’re talking through today – something that’s pretty niche, but that you should know moving ahead with product research – FDA regulations and everything surrounding restricted products or markets.

We’re walking you through EVERYTHING you need to know concerning FDA Restricted products & categories!

Links from today’s episode:
Things FDA considers ‘dangerous’: http://bit.ly/FDA_01
Professional HCP Permitted Products: http://bit.ly/FDA_02
FDA New Dietary Ingredient: http://bit.ly/FDA_03

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