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Amazon to Delay New Controversial Seller Fees Until May

Hey, fellow Amazon Sellers!

Welcome back to another exciting edition of our weekly newsletter, where we bring you the hottest updates from the world of Amazon selling!

Here’s what’s been buzzing this week:

1. Amazon to Delay New Controversial Seller Fees Until May

Amazon has decided to postpone its newly introduced “low-inventory-level” fee until May after receiving backlash from third-party sellers utilizing its Fulfillment by Amazon (FBA) service. Initially set to charge sellers for low inventory levels relative to sales, Amazon will now credit sellers for any fees incurred during April, allowing them to assess the fee’s impact on their operations without immediate financial strain. The fee aims to ensure adequate inventory levels for efficient distribution and faster shipping but has faced criticism for potentially penalizing sellers also charged for excess inventory. Despite generating significant revenue through seller fees, Amazon’s recent policy changes have sparked seller concerns and attention from the Federal Trade Commission.

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2. Major Loophole Lets Online Sellers Skirt US Import Duties

An investigative report by The Information highlights a loophole exploited by online marketplaces like Shein and Temu, which store products meant for US consumers in Mexican warehouses to avoid US import duties by keeping shipments under the “de minimis” threshold. This strategy, which benefits from the raised threshold of $800 allowing duty-free imports per shipment, has been adopted by other sellers to minimize costs and bypass customs duties. While platforms like eBay and Etsy support higher de minimis thresholds for facilitating international trade, the practice raises concerns about its impact on American manufacturing and the fairness of trade policies that favor foreign over domestic products. The loophole’s exposure prompts a debate on whether current US trade policies serve or harm local businesses.

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3. Amazon FBA Box Size Limit: What Seller Needs to Know

Navigating Amazon FBA’s box size limits is crucial for sellers aiming to streamline fulfillment and avoid additional fees. Amazon mandates specific dimensions for shipments, capping standard box sizes at 25 inches on any side, with a weight limit of 50 lbs. Oversized items have distinct criteria. Adhering to these guidelines ensures operational efficiency and cost savings. This comprehensive guide helps sellers understand how to select suitable packaging, adhere to Amazon’s requirements, and utilize space effectively. Failure to comply can lead to increased costs, delays, or listing visibility issues, emphasizing the importance of proper packaging and adherence to Amazon’s standards for successful FBA fulfillment.

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4. TikTok Shop’s Era of Super Subsidies Is Ending

TikTok Shop is adjusting its business model by increasing the fees it charges sellers, starting from a bump to 6 percent and planning to reach 8 percent by July. This strategic shift is anticipated to challenge the low-price allure that has defined TikTok Shop’s ecommerce success. Initially attracting a vast number of sellers with its subsidies, allowing for significantly low prices, TikTok now seems to be steering towards a more sustainable ecommerce environment. Despite the fee hike, TikTok’s rates remain comparatively low against giants like Amazon. However, the increase may pressure sellers, particularly small businesses, to adjust their pricing strategies, potentially impacting their competitiveness and TikTok Shop’s distinctive appeal of discovering unique, affordable products through the platform’s social media integration.

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5. Sellers Run into Problems after Amazon Adds Brazil to Seller Accounts

Amazon sellers in the US have encountered significant issues after the platform automatically added Amazon Brazil to their seller accounts. This unexpected addition, occurring overnight, prevented sellers from accessing Seller Central due to invalid credit card/payment method errors. Efforts to delete the Brazilian account were thwarted by a system that required deleting the US account as well. An Amazon moderator advised against attempting to close the Brazilian account, instead suggesting to put it on vacation and ensure no listings or synchronization were added. Sellers expressed frustration over Amazon’s decision to automatically enroll them in international marketplaces, highlighting the complexities and obligations involved in selling across countries.

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6. A hijacked Amazon product page highlights a major third-party seller pain point

An Amazon product listing was hijacked and changed to an offensive title, shedding light on a recurring issue for third-party sellers on the platform. The vulgar product title, which lingered for over 12 hours before Amazon took action, underscores the ease with which listings can be altered by bad actors, potentially through Vendor Central access. This loophole allows even those not owning the brand to modify product listings if they have a higher contribution score or claim to sell the same product. Such incidents highlight the larger problem within Amazon’s ecosystem, where black hat listings hackers exploit vulnerabilities, and legitimate sellers struggle with lengthy and opaque processes to rectify listing issues. Despite seller frustrations, recent changes seem to further empower those with Vendor Central access rather than addressing these longstanding vulnerabilities.

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7. Amazon, Walmart, Temu, and Shein Overlap

Marketplace Pulse research reveals a significant overlap in sellers among Amazon, Walmart, Temu, and Shein, suggesting that these platforms often feature the same goods, many sold by the same third-party sellers. Over 50% of Walmart’s sellers also market their products on Amazon, and at least 20% of Shein and Temu’s marketplace sellers do the same, with a considerable portion being Chinese sellers with U.S. inventory. This overlap in seller base is undercounted due to variations in business name registrations, implying the actual overlap could be closer to 80-90% for Walmart and potentially higher for Shein and Temu. The overlap extends to the catalog of goods offered across these platforms, with Amazon and Walmart presenting a wider selection due to direct retail relationships with brands, a domain where Temu and Shein, despite their growing marketplaces and lower prices, still lag behind, especially in non-clothing categories.

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8. Changes to Dietary Supplements Policy on Amazon

Amazon has updated its dietary supplements policy to enhance safety standards, requiring all dietary supplement products to be verified by a third-party Testing, Inspection, and Certification (TIC) organization effective April 2, 2024. Sellers must initiate testing through the Manage Your Compliance dashboard and work directly with the third-party TIC to ensure their products meet Amazon’s compliance standards. Products that pass the test will be eligible for sale. Additionally, Amazon will host a webinar on April 17, 2024, to discuss these policy changes and address seller queries. Failure to comply by the due date may result in listing removals.

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9. Amazon Badges: Increase Traffic & Conversions on Your Product Listings

Amazon Badges serve as visual cues on product listings to highlight various benefits, enhancing customer trust and distinguishing products in search results. These badges, like Amazon’s Choice, Best Seller, and Climate Pledge Friendly, not only indicate product quality and alignment with customer values but also impact seller success by increasing product visibility and sales conversions. Achieving these badges involves meeting specific criteria, such as matching keyword queries, having positive reviews, or aligning with environmental standards. For sellers, understanding and acquiring these badges can lead to increased traffic, better conversion rates, and overall improved performance on Amazon.

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10. Siteground – Your One-Stop Solution for Reliable Website Hosting and Professional Emails

If you want suppliers to take you seriously, having a business website and a professional email address is essential. SiteGround offers top-notch and affordable hosting solutions for your website and email needs, backed by excellent customer service. This is the platform I rely on for my own business website and Amazon Seller School.

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Happy Selling!

Todd Welch
Amazon Seller School