E185: Amazon News, Updated Review Policy, Minimum Wage Hike, Increase in Storage Fees, etc.October 4, 2018 in Ecom-Crew-Podcast
It’s been a hot minute since Dave and I sat down and did a podcast focused solely on discussing news and updates from Amazon. And so that’s what we did for this particular episode.
Here’s what we covered.
Amazon Raises Employee’s Minimum Wage to $15 (for US and UK)
The company’s move to raise the minimum wage was lauded by critics but there’s a fear that the cost will trickle down to third-party sellers at the beginning of next year.
Increase in long-term and Q4 storage fees
Amazon storage fees appear deceptively cheap but if you do the math, they could potentially cost 10 times the amount of what a 3PL would normally charge. You’ll find a table comparing the old and new storage fees here.
If possible, we recommend using a 3PL for storage and Amazon for fulfillment.
Update to reviews policy
The latest announcement basically clarifies on the sanctions a seller can receive for violating the updated review policy. Log in to your Seller Central account and read the verbiage.
States collecting Sales Tax
A couple more states have joined South Dakota in pursuing sales tax collection for online sellers. We are actively fighting this via the Online Merchants Guild and have plans to take the fight for this “undue burden” to federal court.
A hope in the horizon comes in the form of a Congress bill specifying that compliance should be restricted to $10 million dollar sellers and more.
We have recently been receiving emails from Amazon about this and have taken steps to clean up our listings and improve our images. Otherwise, they’ll suppress ASINs that don’t meet their guidelines.
This is a new FBA feature that essentially gives manufacturers some level of access to a seller’s account on Amazon. With this, there’s a real danger that Chinese suppliers themselves will start selling on the marketplace.
European Union takes legal action Amazon over antitrust issues
According to Margrethe Vestager, the European Union’s competition commissioner, concerns had been raised over how Amazon was using data from third-party sellers and whether it was helping the company predict the ‘new big thing.’
That’s our roundup for the month. We’ll hopefully do another one in November or December. You can check out our previous podcast about Amazon updates on the link below.
Registration to EcomCrew Premium is closed indefinitely. But, you can still learn from us through our suite of free courses. There’s a total of 20 videos covering ecommerce topics like Importing from China and Building a 7-Figure Business. More information here.
As always, thanks for listening to this episode! If you enjoyed listening and think this episode has been useful to you, please take a moment to leave us a review on iTunes.
If you have any questions or comments, feel free to leave them below. Happy selling!
Full Audio Transcript
Intro: This is Mike and welcome to episode number 185 of the EcomCrew Podcast. You can go to EcomCrew.com/185 to get to the show notes for this episode. And today, I have my trusty partner in crime back with me Dave Bryant in the house. We’re going to be talking about Amazon news and updates. This is something that we’ve been trying to do every month. Some months we miss it. I realize that not everyone here sells on Amazon. So if you’re not an Amazon seller, you’re probably not going to find this particular episode to be that interesting. But if you do or you’re thinking about selling on Amazon, I think you’ll find it helpful.
Basically we’re going over five or six things that are kind of happening with Amazon right now from sales tax collection to new review policies to a new system that they have for sending an inventory from your wholesalers or your suppliers and a few other things. So, right on the other side of this break we’re going to jump right into that. But before we do, I want to mention just real quick; again, if you haven’t had a chance to go to EcomCrew.com/free, I encourage you to do that.
It’s a bunch of free training that Dave and I have put together. We worked really hard on this. It’s not just one video, it’s something like 20 total videos on different subjects like selling on Amazon as we’re talking about here but also importing from China and building a seven figure brand. So go over to EcomCrew.com/free. There’s no credit card or any other gimmicks or tricks, just a bunch of free content over at EcomCrew.com/free. All right guys, now on with the show.
Mike: This is Mike.
Dave: This is Dave.
Mike: And welcome to this edition of the EcomCrew Podcast. How’s it going my friend going?
Dave: Going well, how about you.
Mike: Don’t lie. You told me you had a problem with your eye or something this morning.
Dave: I know I got stuck in my eye. So I’m joking that podcast is so easy that I can do with my eyes closed.
Mike: Well, I hope that it’s nothing serious. But I’ve had stuff — I had a huge sty once when I was traveling. And I had to like stop at some random doctor in the middle of like the backwoods of Virginia. It was a pain in the ass.
Dave: Yeah, weird. Other thing is we have a friend who’s an ophthalmologist. So I’m I think one podcast away from giving him a shout and saying, hey, what can I do to get this thing out of my eye?
Mike: Nice. Well, I think that you probably want to have your eyes shut these days. Amazon updates. That’s the topic of today’s conversation.
Dave: Oh, I’m sure it’s all nice and positive news that we’re going to share.
Mike: Yeah, we’ve been doing these Amazon updates for — it was actually a great suggestion you came up with even though we’re not an Amazon centric podcast. I mean, obviously Amazon is still a big part of what we do. So like once a month, we try to dedicate one episode to updates, and now that you said that I don’t know that there was ever anything like, oh, this is great for sellers.
Dave: Well, that’s kind of the nature of Amazon though. I mean, Amazon overall is great, but it does seem every time they make any change, it’s normally to the detriment of sellers. But hey, that’s the world that we live in.
Mike: Yeah, so let’s start with something that’s probably not a direct thing to sellers but probably the biggest news this week at least which is Amazon raised their minimum wage to $15 an hour.
Dave: See, that doesn’t help me when I was working for them. I was only making 13.75.
Mike: Well, it’s only in the United States and I believe also the UK. I’m not sure what they’re doing about Canada.
Dave: Got $15 US, I could retire on that.
Mike: It’s actually, I mean it’s — I don’t want to get into like a big one political debate, but it’s interesting how it seemed like politically they got pressured into doing this. And I think it’s a good thing personally, I mean I’m for a higher minimum wage even though as a business owner we have a lot of employees like salaries are definitely a huge part of it. But I want my employees to be able to only have to work one job and be able to come in here and do a good job of that. And so that’s the minimum wage that we’ve insisted to in our company and it’s been that way for a while, at least in the United States here.
Dave: Yeah, I do think with Amazon, it’s I think they’ve had outside pressure; they’ve also had a lot of problems recruiting warehouse staff. And I don’t know how much of this was Amazon doing it out of the goodness of their heart, how much of it was them doing because of bad PR, and simply how much of it was because they cannot get enough warehouse stuff. And when you can’t get enough stuff what do you do, you raise wages, and that gets more applicants.
Mike: Yeah, I definitely don’t think that they did it out of the kindness of their heart. Like I think of a lot of big corporations these days is like the company on The Simpsons, the evil company right? So I don’t know, I mean, I agree it’s probably self centered that way or something. But the reason I wanted to bring it up on this podcast, I think that there’s going to be some trickle down effects on us as sellers. I do think that storage fees or pick pack fees or something, I mean Amazon is going to take all that out of their pocket. And that was kind of the main thing for their stuff.
There hasn’t been any effect yet, but I think probably sometime next year, early next year, we’re going to see probably even something specifically addressing that like a cause and effect of we had to raise our labor rates last year and as such we’re having to raise our pick fee from $1 to $1 and 50 cents or something along those lines that kind of foreshadowing or guessing what’s going to happen there.
Dave: Yeah, Amazon does seem to raise all their FBA fees about 10 to 20% every year. Normally in the beginning of the year, they’ll send a letter either December or January, saying hey, we’re going to give you 60 days notice, but we’re jacking up our fees a lot. So I don’t think it’s going to be any different this year, perhaps it’ll mean a bigger increase this year, aside from that 10 to 20% that we talked about. Maybe it’s even more significant this year, maybe it’s 30%.
Mike: Exactly. Yeah, so speaking of fees changing and going up, long term storage fees, and now fourth quarter storage fees. So storage fees this time of year are significantly more expensive than the other three quarters a year that used to only be November and December. Now, Amazon has increased to October. I think that change took effect last year. But the change that they have now is on long term storage fees, where they used to have this magical line in the sand that was twice a year. And if you had stuff in their warehouse on that day that had been in their warehouses for more than six months basically, then you are charged a long term storage fee.
Now they’re changing this to a monthly test and they actually just increased that fee as well. So that’s going into effect starting on the 15th of every month, and we’re going to get hit with that October 15. So the penalty if you will, if you want to use that word for leaving stuff in an Amazon warehouse for more than 181 days, is getting significantly more expensive.
Dave: Yeah, and that’s the problem is previously it used to be that same 181 day rule. But because there is only two lines of the sad each year, you could basically stretch that out to 300 days plus if you’re careful about it. Now, there’s no hope, it’s simply 181 days. If it’s over that limit, then you’re getting hit. And if it’s under well you’re okay. But there’s no kind of Mickey Mouse doing with that number anymore.
Dave: And six months for a lot of products is not necessarily a lot of time, especially for somebody in my boat, where I’m launching a bunch of new products. And you have MOQs that you have to stick to, and you don’t have traction in the beginning, it takes two, three, sometimes two, three months, sometimes longer to get that initial sales velocity going. Six months, it chips away pretty fast when you’re launching a new product.
Mike: Yeah, no doubt about it. So I mean, we’re in a position where we have kind of a cross dock. We’re using a third party, which is just a company to hold our inventory, kind of in the meantime, before we send it in the Amazon to try to make that really efficient. And we put together a spreadsheet that we actually just shared with all of our premium members this last week that where we’re trying to delicately balance the amount of inventory we have in the 3PL versus Amazon. And we want to get it as lean as possible without running out. And we’ve had to keep a buffer in there.
This is the frustrating thing about Amazon in this case. We’ve had to keep a buffer just for the unknown of how long it’s going to take them to check things in as just when you think it’s only nine days, every time they check things in, then all of a sudden, it’s 21 days for some strange reason. And that’s happened quite a bit with us. So we have a buffer just for that. And then we have basically the least amount of inventory we want to have in there. This time of year, it’s a big deal.
And we also want to reduce our risk of ever having stuff in there for six months because to go over the prices right now it’s $3 and 45 cents a cubic foot every month if you’ve had stuff in there for 181 to 365 days. And then if you are in the unfortunate position of having stuff in there, 365 days, it’s $6 and 90 cents per cubic foot every month. And the minimum charge if you have small items is 50 cents. And that started August 15 because they figured, well, if you have small items you think you can get away with this. We’re going to charge a minimum of 50 cents per unit. And that started August 15, which is also something good to know.
Dave: Yeah, and I think that’s something that a lot of people overlook is how expensive Amazon is for storage. It’s deceivingly cheap when you look at it, oh, $3 per cubic foot, a cubic foot must be huge. We’ve done the math before. I think we have a blog post about it. What does it work out? I think over 10 times more expensive than kind of your average price for 3PL.
Mike: Yeah, and then that’s per month on top of the other storage fees because like this does not preclude you from paying the standard storage fee that month as well, so I think it works out to even more than that.
Dave: Yeah. And I think Amazon is ridiculously cheap for fulfillment in terms of warehousing, if you can kind of do that nice, happy medium of using a 3PL for storage and using Amazon for fulfillment, you got a nice little system there. And that’s obviously the most optimal way to save money.
Mike: Yeah. So I just want to go over a table here real quick because it’s actually — in some ways the worst thing here I think, because of this new 50 cents per item thing, because they have a table here of a toy that’s 11 inches by eight inches by two inches, if you can kind of envision that. And this toy is 35 cents a long term storage fees. So this actually raises it significantly more to 50 cents now. And they’re using an example here of if you have one unit, it’s 35 cents. If you have 10 units, obviously, it’s 10 times more $3 and 50 cents, but really, it’s going to be five bucks. So you’re paying 50 cents per month every month that you’re in there for those six months.
And if you have a toy that’s the size, you’re probably selling for let’s say $20 or $25 or something, and your cost might be $7 or just something, throw out a random thing. That 50 cents increases your cost of goods by like 8% per month, start thinking about in these terms. So I mean it can be pretty devastating if you aren’t planning this out right.
Dave: Yeah, it’s crazy. I mean, that’s one of the positives that I have normally dealing a little bit pricier goods $50 cost of goods price point, also dealing with bulkier items. That 50 cents doesn’t hit us as hard. But definitely yeah, on the smaller items and the cheaper items it’s — yeah, it doesn’t sound like much but 50 cents, it’s a lot of money.
Mike: Yeah, all right, so another thing that came out here just well yesterday as recording this podcast, but when it goes out, it’ll be a little bit longer. But they made another big announcement about reviews. And so everyone’s — the chatter is like going crazy talking about this again. But basically, they’re clarifying what will happen if you go up against these review policies. It clearly says here that if you do any of these things below, I’m going to kind of go over them quickly.
I don’t want to make the whole podcast about this, but immediate and permanent withdrawal of the sellers privileges selling on Amazon and withholding of funds, the removal of product reviews and preventing the product from receiving future reviews or ratings, permanent delisting of the product from Amazon, legal action against the seller, including lawsuits and referral to civil and criminal enforcement authorities and disclosing the seller’s name and other related public or information publicly. So basically, they’re like saying, if you do any of this stuff that I’m about to go over, it’s going to be more than just a slap on the wrist. We’re going to make your life a living hell.
Dave: They’re going to sue you, throw you in jail, publicly shame you, right?
Mike: I had this vision of Game of Thrones of walking down the street, and people just yelling shame, shame.
Dave: Disclosing the seller’s name and other related information publicly. That’s funny. I’ve never — I don’t think I’ve ever seen that threat from them.
Mike: Yeah, I mean, it’s pretty brutal. And I mean, I don’t know, obviously, the thing that gets talked about more than anything else from the black hat standpoint and in the circles that we’re in kind of listening with the ear to the ground, reviews seem to be the number one thing people are still trying to game. And we don’t even — we did this like six months ago, we don’t even send a follow up email anymore to customers through any of the various programs that do that, just because we’ve been just on the edge of our seat to see what might happen.
So let me go through the bullet points they have here real quick and then we’ll move on to the next thing. Maybe we will do a full podcast about this at some point. But the things you are prohibited from doing is posting a review of your own product or a competitor’s product, offering a third party financial reward, discount free products, or other compensation in exchange for a review on their product or their competitors’ product. This includes using services that sell customer reviews, websites, or social media groups. So I’ve stayed away from and have for a while now, like all these sites that do this. I think, I don’t know, I’ve been worried for a while that this could get caught up in a bunch of this. So we’ve been not doing that as well.
So our office provides a refund and reimbursement after the buyer writes a review including reimbursement via non Amazon payment method. This can be done via buyer seller messaging on Amazon, or directly contacting customers using third party services, websites, or social media groups. So, all those buyer clubs and things of that nature kind of get wrapped up into this, seller uses a third party service that offers a free or discounted product to hide the review. For example, a review club that requires customers to register for their Amazon public profiles so that sellers can monitor the reviews, a family member or employee of sellers will post a review of the seller’s product or a competitor’s product, a seller asks for review to change — I’m sorry, a seller asks a reviewer to change or remove their review.
And this is something else that we’ve been very delicate about, we’ve contacted people who left us a negative review, but we never asked them to change it. But be careful here because just using Amazon’s internal messaging system like flags your account for that. So if you communicate with somebody through their system, which is the only way to reach out to them, and then the customer does change their review, if they’re using just an algorithm to do this, that could cause problems. So it says, ask a seller to change the review or remove their review. They might also offer a refund or other compensation to the reviewer in exchange for doing so, seller diverts negative reviews to be sent to them, or to a different feedback mechanism or the positive reviews are sent to Amazon.
Dave: I’ve never heard of that. That’s interesting. So I imagine people consider like, oh, leave your negative feedback on our website and the positive feedback on Amazon.
Mike: Exactly yeah. A seller creates a variation relationship between products with the aim of manipulating reviews, and boosting a product star rating via the review aggregation. I mean, this is a pretty relevant thing right now, because a lot of sellers are doing this. This is — everyone’s like oh, this is a cool way to game the system. And it’s interesting, this is the first time I’ve ever seen Amazon specifically call this out. So it’s on their radar.
Dave: This would kind of be the big one and my big takeaway from this list actually, because I’ve never seen this mentioned either. And like you mentioned, it seems to be the hot new trend right now is that you’re selling a garlic press, then you piggyback that on your pair of running shoes, which has great reviews. And so your garlic press gets the reviews from the running shoes, even though they’re completely unrelated products.
Mike: Yeah, and there’s also, I mean I think the real trick people have been using is what’s called a zombie listing. So, you take an old listing that no longer has anybody selling on it, and hasn’t for many, many months, but has a lot of reviews. You just basically take someone else’s listing and merge it in, and get all those extra reviews, and I’ve seen that happen. I was wondering for the longest time, like how the hell a brand new competitor will pop up with like a couple hundred reviews. And now I know that they’re — kind of hearing about this over the last couple months, but definitely something that’s on their radar.
Dave: Yeah, and I think there’s ways for them to stop that a lot more effectively than just simply writing on a bullet point, don’t do this. I mean, they can simply just make it more restrictive for managing that parent child relationship.
Mike: Yeah, I agree. So this one I think is really important, this is something that comes up all the time. People are asking us about this especially in premium all the time like what are we doing with inserts. So a seller inserts a request for a positive review or incentive for exchange for a review into the product packaging or shipping box. So that’s a big no, no. Now, the way that I read this, a request for positive reviews, so I think if you agnostically ask for a review just like, please leave us a review and don’t say like leave us a positive review or contact us here if you had a bad experience, do this if you’ve had a good experience, I think you’ll be fine. But definitely don’t want to put something in the box that says, leave us a five star review on Amazon. That would get you in trouble.
Dave: Yeah so inserts are always that very gray area number one is because Amazon aside from kind of threatening with doing something against inserts, they don’t really have a way to police it. The other thing is too, I mean where do you draw the line between simply offering good customer service and, hey, contact us if you have any negative experience with this and being a little bit more firm about, hey, if you have a negative experience with this, don’t leave us a review. I don’t know, it’s always a fine line with inserts and I think people aren’t quite sure what Amazon’s policy is. I guess this clarifies that a little bit, but I don’t know, reviews are always a little bit of a tricky one when I’m developing products.
Mike: Yeah. All right and the last one on this list as a seller uses a customer account to write or change a review on his competitor’s product.
Dave: Yeah, that I think that we are all kind of aware of that’s a no, no. Don’t write negative things about Mike’s coloring books if I’m selling coloring books myself.
Mike: Yeah, okay so that’s the review thing. We have another 12 minutes or so and still a pretty long list here, so I’m going to hop right into the next stuff. The next one on the list is sales tax, a fun topic as always. There’s another — there is a two states that just updated to start collecting or one state for…
Dave: Well, I know Minnesota is now collecting and I think Oklahoma got stuck into the list at some point and that’s in addition to what is it, Washington and Pennsylvania. I feel like there’s a fifth.
Mike: I believe that another state on the east coast is in talks about this, I think it’s Massachusetts. But the one that is definitive is Minnesota which is the same processes as Washington. There’s been some clarification that came out this week about — because it’s interesting like Amazon is collecting on Washington’s behalf but Washington — I don’t agree with this but their stance is that you also have to register with them. So Amazon is collection the sales tax for you, Washington then says you have to also register with us. We get a tax ID number from Washington, file a return still, you exempt out the taxes that you had collected on behalf through Amazon but you’ll still always B&O tax which is really annoying.
And again, I don’t agree with it. I think it’s Amazon’s sale. I mean this is what we’ve been talking about in the very beginning. This is what we’ve talked about the Online Merchants Guild on this podcast before. I encourage you guys to go check that out as well onlinemerchantsguild.org where we’re trying to fight this at a federal level little [inaudible 00:21:08]. We’re actually also trying to file some lawsuits about this at the state level in federal court because we think that this stuff is completely incorrect. But anyway just being the messenger of what’s out there. You can make up your own mind what you want to do or what you don’t want to do. But like it or not, Amazon is going to start collecting tax from Minnesota sales starting October 1st.
Dave: Yeah. And I think it’s a step in the right direction like you mentioned with Washington trying to collect B&O tax, basically you just pay I think with Washington because we’re actually registered there, it’s less than a percent of your gross sales in Washington State that you’re supposed to submit. So even though Amazon is levying tax against do, you’d stopped it, theoretically pay a percentage of your overall sales to Washington State residents. But in addition to little loopholes like this, we had a Premium member mentioned that he did the right thing, he registered in basically every state they needed to in the US and now he has all these individual counties in Arizona, coming after him to get a business license.
And you can imagine how many counties are there in Arizona, and they all want their 100 bucks, hey, you sold an item here, give us our 100 bucks or whatever it is, $1,000 for a business license. And that basically makes it non profitable to ever sell any products in Arizona. You had to pay a business licensing fee for all these individual counties. So where does it end? I mean, it really bothers me that the states have not caught up in terms of 2018 commerce, and I don’t know Amazon, this is a step in the right direction. But still, it’s completely flawed.
Mike: Yeah, I agree completely ridiculous, again, Onlinemerchantsguild.org. If you want to pick this battle with us, we’ve been raising money and for that organization and trying to get that right, get it right for sellers. And I definitely think that it’s an undue burden, which is what we’re going to be fighting under the undue burden clause of the constitution. This is the very definition of an undue burden, it’s impossible, the cost of compliance is impossible. And to actually be able to — not only the cost of compliance, but the chances of actually getting it right are damn near impossible.
Mike: It’s like, how the hell do you get it all right, for all those counties in Washington State and other one of those states that I’ve been registered in the past with my buddy Grant who used to do the podcast with me. He still lives there, so he’s still facing this. We were just talking about this. I mean, there’s — I forgot the number of counties. I don’t want to misquote it, but I…
Dave: It’s definitely over 100, because we’re registered there, too.
Mike: I think it’s definitely over 100. I know it’s under 1,000. My recollection was, it was like in the 250 range or something in that range. But every one of these municipalities has a different collection rates. I believe to be a no rates different as well between those different jurisdictions. And it’s just like, how the heck do you even get it right? Even with one of these tax services, they don’t tell you, it’s is like they don’t handle those parts, they handle the sales tax part, but not the – and every state clause is something different, there’s a B&O tax or a franchise tax or all these different things. And it’s just an extra burden for sellers.
If you’re a seller of our size, and we’re doing five, $6 million on Amazon, probably everyone listening to this podcast would think that’s a pretty successful company. But the reality is, is that it’s a low margin business. So we’re not making a ton of money on that $5 million. I mean, like, comparatively to other businesses, like a service business or something, or if EcomCrew was bringing in 5 million bucks, it would be like a lot more exciting, right? And it’s only $5 million worth of e-commerce products.
But, the cost of compliance, it could be an end of the hundreds of thousands of dollars for a seller of our size or a seller that’s a $500 million company. It’s pretty close to the same and that’s the problem. It’s an undue burden for the smaller businesses. And if we were like, probably the majority of our listeners, if we were a half a million dollar seller, which is you’re doing great, you’ve been able to build a great business for yourself and sell to the point where you’re doing a half a million dollars to a million dollars a year that the burden for you is even more amplified. And it just again, there’s a clause in the constitution that helps with this. And that’s what we’re trying to work on.
Dave: Yeah, if there is one positive about the sales tax atmosphere right now, I believe somebody in Congress right now has a bill basically saying that the whole sales tax Nexus rules which the Supreme Court ruled on, I think, when was it, May or whenever it was earlier this year, somebody in Congress has a bill basically saying that any business under $10 million in revenue would be exempt from the sales tax Nexus rules that the Supreme Court ruled on. Again, it’s Congress so who knows if and when that will ever be passed. But I think a $10 million kind of [line and sand] [ph], that’s still a pretty small number, but it’s definitely again, a step in the right direction. I think if you’re a business with $10 million in revenue, yeah, compliance is a little bit more reasonable at that point.
Mike: So as you were saying that, I typed in the Google Congress approval rating, because I was curious what the current rating percent, it’s 16%.
Dave: One up, so it went up.
Mike: Yeah, it went from 13%. I’m pretty jaded and pessimistic when it comes to having Congress do anything that makes sense at this point. And, again, I try to stay out of politics on this podcast. But this is not a red or blue thing. This is just like, nothing can get done. Like, I mean, nothing gets done, and even if the will of the people is for something to happen one way or the other, it’s still can’t get done. Because, what really ends up happening in American politics these days is the big money like really controls where things are going to get done.
And I’m not sure where they stand on this. If they’re in the same bucket as we are and want this done, maybe it’ll get done. But even still I’m like, very little legislation gets passed anymore. They’re just too busy fighting. And I mean, it’s a shame what’s kind of happened there, but I don’t know. Like, I love to see a bill like that go through. I think that it’s the right thing to happen. I think it makes sense which is why it probably won’t happen.
Dave: Yeah, that’s what scares me.
Mike: The thing that makes sense is probably what won’t happen.
Dave: I’m not holding my breath either.
Mike: Yeah. So, all right, a couple more things on the list here. I have been getting an email, I would say at least two or three times a week from Amazon right now about image noncompliance that this is coming up. So I assume that we’re in a category that that matters. But basically, what they’re saying is that if your images don’t comply with our guidelines, starting sometime in October, we’re going to start taking action. And the thing that scares the crap out of me, which is ridiculous, it makes me want to, like, reach through the microphone and just slap Amazon silly. The title of these emails is policy enforcement for items having prohibited main images.
So you see that title and you’re like, oh my God, like, they just shut down one of our listings and it’s like a panic every time I see it. But and I’m looking through my email, it looks like it’s been more like once a week that they’ve been sending this. It feels like more, but we also get the email because we sell on all the different marketplaces, Canada, UK, Europe, etc. Each one of these jurisdictions is emailing us. But basically what’s coming and what it says here is by October 2018, you might see items suppressed due to the following defects in the main image, blurry or pixelated image or image with jagged edges, product occupies less than 85% of the frame or – I don’t know how to pronounce this word. I had to look it up. I never heard this word prurient, P-R-U-R-I-E-N-T.
I actually asked everyone the office, no one had heard of this word. But basically it’s like sexually suggestive or provocative I guess would be the way to put it. I’d never heard the word. It was pretty funny when I saw that. Of course I didn’t go to college like you Dave, so you obviously know what the word meant.
Dave: I’m like I can’t even get Google to auto correct me at this point.
Dave: There we go.
Mike: Having or encouraging an excessive interest in sexual matters.
Dave: Look at everything EcomCrew listeners; get to learn on the EcomCrew Podcast.
Mike: Yeah, you can get to learn new words. So hopefully this podcast won’t be deemed as adult now for talking about this.
Dave: I’m reading the definition as we speak. Not a word I will try to use in a sentence.
Mike: No, no, although I know it seems like it’s a topical these days. The sexually suggestive things are kind of in the news a lot. But yeah, I mean, it seems like they’re going to start cracking down on main images. And they’re specifically going after particular categories right now it looks like which is beauty, luxury, beauty, personal care, appliances, and drugstore, health and personal care category, which is why I think that we’re getting the emails. We have some health and personal care products. So just be aware of this. I think this is something that they’re going to continue to crack down on more and more. It seems like they’re going after the categories that are the biggest conspirators or problems to this.
And so what they’re saying is that images that meet our guidelines, improve the customer experience to ensure the best possible customer experience, Amazon will hide, and then in parentheses, or in brackets here, it’s like suppress listings that do not meet our main image requirements. And further down the email somewhere, actually I just found it here. It says, know after you’ve uploaded the correct main image, expect the two day delay to reinstate any suppressed ASIN. So that’s the part that kind of got my attention.
So we’re going through and just cleaning up a few things as a proactive measure. Because I certainly don’t want a two day downtime for a product that is a good seller, especially this time of year. I can see like having a two day downtime, a competitor like beats us in the rankings and we can never get back up and during the coming up holiday season. So it’s something that we don’t really have a problem with this in general. But we were just making sure that we’ve crossed all of our T’s and dotting our I’s.
Dave: Yeah, interesting. I haven’t received any of these emails and that could be perhaps because our images are not very prurient. It does seem to be category specific. It’s interesting though Amazon is really not threatening all that hard. So basically, to say you’ll have your listing suppressed if you violate these guidelines, and then it may take two days to get back up. I don’t know, if I had a high performing main gallery image, that wouldn’t be necessarily a big mouth threat to get me to change it. I would wait for Amazon or do something against it, because as we all know, Amazon often talks, barks very loudly, but doesn’t bite very hard.
Dave: Again, I’m lucky I haven’t had any of those emails yet. So maybe when I get the emails, I’ll feel a little bit differently.
Mike: Yeah. Okay so moving on to the next topic, which was supply chain connect. I think we might have mentioned this before in the podcast. This is not necessarily new. Or maybe there was a beta program before because I had heard about this program before. They actually had invited me and tried to get me to use this. But basically what it is, is it allows you to open up your back end and shipment planner and shipments in general to your suppliers. So if you work with like wholesalers and stuff like that, you can give them access directly to your account if you so choose and streamline your inbound shipping process to Amazon.
Dave: This sounds like a fantastic idea. Give Amazon direct contact with all of our suppliers in China. Give our suppliers obviously limited access within your Amazon account, some access and hope for the best.
Mike: Yeah. I mean, I know you’re being sarcastic as you say that. But I mean, there was zero chance in hell that I would give the people, the suppliers that we work with access to this. I would not want them to know how to send stuff into Amazon. That’s one of the advantages that I think that we bring to the table is that we’ve figured this out and know how to do it. I mean, a lot of people that are listening to this podcast have been selling on Amazon. It isn’t rocket sciences or science but if you think back to when you first started doing this, you probably had a bunch of questions.
I mean, I know just from moderating EcomCrew Premium with you Dave that this comes up all the time for new sellers. Like there’s mass confusion on how do I send stuff into Amazon? Like, what label does what and how do I schedule UPS shipments and LDL shipments, and all these different things. And, I feel like that’s something that we know how to do now. And that’s one of the things I would not want our wholesaler to know how to necessarily directly do.
Dave: Yeah, absolutely. And the immediate impact on it might not be that severe. But what’s happening if Amazon does this in masses, and convinces people to basically train their suppliers how to use Amazon. The long term effect probably is that more and more Chinese suppliers will feel comfortable working with Amazon, will probably start dipping their toes into actually selling on Amazon themselves.
Mike: Mm-hmm. Yeah. And I mean, the other point you mentioned, like, I can’t wait to give all of our supplier information to Amazon directly have the Chinese directly from China. Don’t think for a second that Amazon is not above contacting your supplier and making the same damn thing that you do and then selling it under one of the Amazon brand names. And in fact, that kind of brings up to the next piece of news we have here is that the European Union is actually suing Amazon for doing exactly that. And that lawsuit just came like this week.
I applaud them for doing it. I wish that the same thing will happen in the US. I think as much as I like Amazon and was selling on Amazon, I think that Amazon has done good like that left on feathered or tethered, whatever that word is, I mean, any corporation just keeps on getting more and more greedy. And the fact that they’re using data from all the sales that we produce to know exactly what the best selling stuff is. And then being able to just go create that product with that data and then launch it and make it, and then give it an unfair advantage.
I mean, it’s ridiculous the stuff that we’ve seen and this gets talked a lot about in the Million Dollar Seller group. Amazon will do — they break their own review policies, they put up special advertising, you can see that the thing ranks like immediately. I think there’s other things that are happening behind the scenes there were like, once they kind of start selling one of those products against you, you stand no chance and it’s pretty unfair.
Dave: Yeah, I’ve seen these stories; there’s been a couple of them. There’s a big one I think in the Wall Street Journal this week about Amazon now. You kind of alluded to promoting their own products on your product pages and using that data to figure out the best placements. My thought process was it kind of sucks but at the same time does this differ from imagine like a Wal-Mart who is selling Pampers one day and then all of a sudden decides hey, we’re going to sell our own Wal-Mart branded diapers.
Where is the line drawn? Is that different from what retailers have been doing forever basically using other brand’s data in their stores to private label their own goods? I’m not sure if it is different if the European Union or any other government agency will have stand or ground to stand on. That’s why I’m kind of I haven’t given it enough thought I guess to figure out if it’s just radically different than how retail has been done for centuries or at least decades.
Mike: I think it is. I think there’s a lot more data to be had here. You think about retail like Wal-Mart, I mean, they certainly do it, the Safeway does it. They’ll make their own in-house brand but I don’t know. I feel like that this is even more powerful. It’s similar I agree with you, but it seems even more powerful.
Dave: Yeah, I mean either way it’s not good for sellers. I mean again, one of those things we’re not going to hold our breath waiting for any government to take action. And so I think regardless yeah, it sucks for sellers that Amazon is picking off our brands and basically using all your sales history to your disadvantage.
Mike: Yeah. Well, then, on that lovely note…
Dave: Actually we should close this with something positive.
Mike: All right. Good, because we’re over time. So pick one positive one quickly and let’s end on that.
Dave: Let’s figure — well, we finally diagnosed our dog’s allergies. So we figured out what he was allergic to dust on the bed. And so we’re cleaning that up and now he stopped itching. So that’s a big win for our family.
Mike: Nice. So you were sleeping in a pile of dust.
Dave: Can you believe it Mike? As an inside little bit of an inside revelation into the psychology of Dave, Mike always ridicules me for basically being the — what is it, the messiest person in the universe that you’ve ever seen.
Dave: Yeah and the reason that it’s funny is because I’m no saint when it comes to this, like not even close, and we room together a lot on these trips. And there’s another guy that that rooms with us a lot [inaudible 00:38:56] and also Dave QA obviously has roomed with us before. And it’s just like this constant joke because wherever you happen to be at that exact moment is where whatever is in your hands like just ends up. That could be your mouse, your mouse pad, your toothbrush, or toothpaste, it crumbs, whatever it is it just, yeah, it’s like Dave’s right here.
Dave: I’ve been infected with the entrepreneurs’ disease ADHD Mike.
Mike: Yeah, I have that too. Like I said, I am no saint. But I don’t know, I think what ends up happening is when I travel when I’m with roommates, like I’m scared that people will know. And so I get on my best behavior for the few days I’m traveling with somebody and go back to my old habits when I get home. But you just go right on thrill.
Dave: Hey, you got to be yourself.
Mike: Awesome. Well, that’s good. I’m glad that the dog is doing better. And I’m sure that makes everyone happy. So there’s not a lot of scratching. Our dog had some skin irritation issues when he was still around. And it’s just like heartbreaking when you see them scratching nonstop like or chewing on themselves.
Dave: Yeah, it’s crazy. That’s hard for them, hard for us.
Mike: Cool. All right guys. So that is our Amazon update for the month of October. We’ll do another one in November, which will be close to Black Friday. So we’re getting close to the holidays part. But hopefully, if you do sell on Amazon, you guys found this helpful. And we’ll be back to do this again next month.
And that’s a wrap. I hope you guys enjoyed our Amazon news roundup for October 2018. We will be back with another one of these hopefully in November or December. It’s crazy. It’s getting close to holiday season. So, one last reminder to be thinking in advance for the holiday season with Amazon, what our experience has been is if you haven’t already sent your inventory in, it might be too late already. It’s taking a long time to get things picked up, a long time for things to get checked in. And you basically have seven weeks now or six weeks until Black Friday. And that’s going to be pushing it close.
So I know it doesn’t even seem remotely possible that that’s an important thing right now. But if you’re going to be selling on Amazon, this 2018 over the holidays, I encourage you to get the stuff in now. We’re obviously trying to spend as little money on storage fees as possible, but it’s even worse not having inventory to sell. So be keeping that in mind. And until the next episode everybody happy selling, and we’ll talk to you soon.
Michael started his first business when he was 18 and is a serial entrepreneur. He got his start in the online world way back in 2004 as an affiliate marketer. From there he grew as an SEO expert and has transitioned into ecommerce, running several sites that bring in a total of 7-figures of revenue each year.