Hey Fellow Amazon Sellers,
Welcome to another edition of the Amazon Seller School Weekly Newsletter! This week, we’re diving into the biggest headlines affecting your business—from return policy chaos and Walmart’s Prime Day counterattack to AI’s expanding role at Amazon. Let’s get into it.
News
Easy Returns, Big Costs: How Amazon’s Return System Is Hurting Sellers
Amazon’s “free and easy” returns may benefit shoppers, but they’re crushing small businesses with return fraud, used product reshipments, and rising fees. Sellers report returns with soiled baby products, skyrocketing refund abuse, and net profits dropping below 1% due to fraud.
Amazon has introduced return rate fees and labels for frequently returned items, which have helped reduce return rates slightly—but some sellers have had to raise prices or leave FBA altogether. Programs like “Grade and Resell,” FBA Liquidations, and Donations offer partial solutions, but sellers still face major risks unless Amazon strengthens buyer accountability.
U.S. Amazon Shoppers Deliver Nearly Double the Value
According to Scott Needham, U.S. Amazon customers generate nearly twice the revenue per visit compared to international shoppers, driven by high purchase intent and Amazon’s strong brand trust. The platform’s exceptional conversion rates make it a goldmine for sellers who drive traffic from sources like social media or email.
Needham emphasizes that the U.S. remains the most valuable market, despite its competitiveness, with the EU following as the next best opportunity. For Amazon sellers, combining external traffic with Amazon’s low-friction checkout process leads to unmatched results.
Walmart Takes on Prime Day with Overlapping 6-Day Sale
Walmart’s July “Walmart Deals” event will overlap with Amazon Prime Day, running from July 8–13—two days longer than Amazon’s 4-day Prime event. Unlike Prime Day, Walmart’s sale is open to all shoppers, though Walmart+ members get early access starting July 7.
Walmart’s sale also spans both online and in-store channels, broadening its reach beyond Amazon’s digital-only model. For Amazon sellers, this growing competition underscores the importance of strong Prime Day strategies to stand out during a week flooded with discount events.
Etsy’s 3D Print Policy Shift Threatens Seller Income and Licensing Models
Etsy has updated its handmade policy, now requiring 3D-printed and laser-cut products to be based on a seller’s original design—excluding items made from licensed digital files. This change has caused confusion and concern across the maker community, as many sellers rely on commercial licenses from 3D modelers to legally produce and sell physical products.
The policy could reduce income for both sellers and designers like CraftyKid3D, while enforcement remains vague and inconsistently communicated by Etsy support. For Amazon sellers offering 3D-printed or customized goods across marketplaces, this is a reminder to diversify and clarify platform-specific compliance standards.
Amazon Bend the Curve Cuts Listings: Is Your ASIN at Risk?
Amazon’s “Bend the Curve” initiative is eliminating billions of low-performing or inactive ASINs to streamline its catalog and reduce backend costs. This affects many small sellers, especially those with fewer than 10 products, as listings with no inventory, poor sales, or outdated content are primary targets.
Amazon has also introduced “creation throttling” to prevent new listings from low-performing accounts, further tightening catalog quality. Sellers must actively manage inventory, update listings, and monitor sales performance to avoid removal and maintain visibility.
How Shopify and Amazon Are Redefining Fulfillment
Shopify and Amazon are transforming e-commerce fulfillment through AI-driven inventory management, real-time syncing, and predictive analytics. Sellers benefit from faster delivery options, streamlined operations, and tools that scale with business growth.
Amazon’s autonomous vehicles and Shopify’s smart shipping tools give sellers an edge in customer satisfaction and last-mile efficiency. By integrating both platforms, sellers can expand reach while cutting fulfillment costs and improving inventory accuracy.
AI Will Shrink Amazon’s Workforce in the Coming Years, CEO Jassy Says
Amazon CEO Andy Jassy announced that generative AI will reduce the company’s corporate workforce in the coming years. He emphasized that teams should become more efficient and “scrappier,” learning to leverage AI tools to get more done with fewer people.
For Amazon sellers, this signals how AI is rapidly reshaping operations, including fulfillment, forecasting, and inventory placement. Staying competitive may require adopting similar automation and data-driven tools in your own business.
New Battery Compliance Rules Coming for FBM Listings
Starting July 28, 2025, Amazon will require sellers to complete battery safety questions for all Fulfilled by Merchant listings that include batteries or battery-powered items. These questions will cover whether batteries are required or included, and the type of battery cell composition.
If your answers are incorrect or incomplete, your listings risk deactivation. Amazon sellers should prepare by checking product packaging or manufacturer labels now to ensure compliance.
What Amazon Sellers Need to Know About Account Health Rating (AHR)
Amazon clarified that an Account Health Rating (AHR) above 200 is considered healthy—even if it’s not a perfect 1,000. Sellers should focus on addressing policy violations promptly, regardless of their score, to avoid account deactivation.
Deleting a listing with a violation won’t fix your AHR; violations must be resolved through the Account Health page. Also, fewer orders won’t drop your AHR below 200 unless you have unresolved policy issues.
Amazon Tightens Rules on Product Testing Labs
Starting July 13, Amazon will only accept compliance documentation from labs that meet its internal safety standards. Sellers must avoid using labs on Amazon’s unapproved list, or their test results will be rejected.
To stay compliant, check both the unapproved and approved lab lists before ordering new tests or submitting documentation. This update directly impacts sellers in regulated categories like toys, electronics, and supplements.
Seller Tips & Tricks
What Amazon’s Detergent Sales Reveal About Modern Branding
Amazon’s detergent category is a masterclass in modern branding, where legacy giants like Tide dominate in revenue but face rising threats from niche brands with sharper stories. Challenger brands like Tyler Candle Company and Molly’s Suds are thriving by leaning into unique identities, transparency, and DTC-style marketing.
The data shows that simply being “natural” or “established” isn’t enough—customers respond to brands that offer meaning, not just function. For Amazon sellers, this is a reminder that performance alone won’t win; your product needs a compelling story and cultural relevance to grow market share.
Why High ACOS Isn’t Always Your Real Problem
Amazon sellers often fixate on lowering ACOS, but the real leak in your budget may be non-converting spend — keywords that get clicks but no sales. Mike from the PPC Den Podcast recommends shifting budget from these underperformers into even moderately converting keywords to improve ROI without increasing total ad spend.
Using tactics like Ngram analysis and multi-window search term reviews, sellers can uncover hidden patterns and drastically clean up wasted spend. The key takeaway: work smarter with the budget you have, and track progress to gradually lower waste while increasing revenue.
Increase Amazon FBA Storage Capacity
With FBA storage limits tightening, Amazon sellers must get smarter about inventory efficiency to avoid blocked shipments and stockouts. Removing old shipment drafts, promoting sell-through with ads and discounts, and prioritizing smaller, high-turn SKUs are key tactics to free up space.
When more storage is needed, sellers can use Capacity Manager to request increases — bidding a max fee that can be fully offset through performance credits from resulting sales. If additional space isn’t granted, AWD and 3PLs are viable alternatives to maintain inventory flow and product availability.
Top 10 Amazon Return Reasons and How to Avoid Them as a Seller
Amazon sellers lose thousands each month from avoidable returns — most commonly due to misleading listings, poor sizing info, or damaged products. Each return not only costs you shipping and restocking fees, but also impacts your seller metrics under Amazon’s updated return fee structure.
This guide breaks down the top 10 return reasons and provides actionable fixes like better photography, custom size charts, and quality packaging to lower return rates. By tracking your return data and addressing issues systematically, you can reduce preventable losses and protect your margins long-term.
Video of the Week
How to Remove Negative Feedback on Amazon as a Seller
Strong Opinions
Amazon Understates the Value of Handmade Goods
Amazon handmade sellers using FBA are facing major reimbursement issues when their items go missing, with Amazon offering payouts far below the product’s retail or even material cost. Since these are self-manufactured items, sellers often can’t provide invoices—something Amazon now requires to contest low reimbursements.
Although a moderator acknowledged the issue and directed handmade sellers to contact Seller Support, there’s still no clear resolution or policy tailored to handmade inventory. For Amazon sellers, especially those offering custom or self-made products, this highlights a serious gap in FBA’s reimbursement system and raises broader concerns about inventory accountability.
Top Upcoming Amazon Events
- BILLION DOLLAR SELLER SUMMIT ONLINE 2025 – August 19-21, 2025, Online Event
- AMAZON ACCELERATE 2025 – September 16-18, 2025, Seattle, WA, USA
- SELLERS UNITED 2025 – October 16, 2025, Newark, NJ, USA
Stay sharp out there, and stay tuned for more updates next week!
God Bless,
Todd Welch
Amazon Seller School
