Tagged in: Amazon

What the South Dakota v. Wayfair Case Means for your Amazon E-Commerce Business

One of my good friends Tyler Jefcoat runs an accounting business for Amazon sellers. He’s been following the supreme court case that will impact all online sellers in a big way. With his permission here is his take on the court case in an article he published today, which can be found originally published here at SellerAccountant.

What the South Dakota v. Wayfair Case Means for your E-Commerce Business

The Supreme Court issued a landmark decision on 6/21/18 in South Dakota v. Wayfair, INC siding with the State and overruling two prior Court decisions (Quill & Hess) to redefine what constitutes “nexus” in a given state.  This has huge future implications for e-commerce sellers and we want to unpack this landmark decision for you.

So What Is South Dakota v. Wayfair, INC?

Let’s start with a summary of the case and its core arguments. When consumers make purchases, the consumer’s states often impose a sales tax. This case requires the Court to determine when an out-of-state seller can be required to collect and remit that tax. All justices agree that taxing e-commerce sales is lawful and constitutional. The question is whether a previously held rule called the physical presence rule is a valid test for either including or excluding sellers from a given state’s tax law.

What is The Physical Presence Rule?

According to the old Quill ruling, a state only had the right to require sales tax compliance IF a company had a “significant physical presence” in the state. The court had defined “significant” as a company having a location, employees or inventory housed in that state. For e-commerce sellers, this was great news and created an advantage. It meant we only had to worry about collecting and remitting sales tax in states where we literally had a physical location.

Amazon FBA complicated things since Amazon moves inventory to any of its fulfillment centers across a growing number of states, therefore, giving a seller nexus in those states. Amazon’s extra confusion meant that sellers were at most on the hook for the 26 states where Amazon had an FC. Sellers had a hard time determining whether to file in a particular state and recent MA, PA and WA rulings have made this risk management decision even harder.

South Dakota’s Response to Not Collecting Enough Revenue

Back to South Dakota v. Wayfair, INC: It is impractical to collect a use tax from each citizen and the result of non-compliance is estimated to cost the states between $8-33 Billion a year(the Court opinion cited multiple studies). In response, South Dakota enacted a law in 2016 to try to correct this issue by asserting authority to require all sellers who sell into their state above a minimum line to collect and remit sales tax regardless of whether they have a physical presence in SD.

When Wayfair and other large sellers Overstock and Newegg decided not to comply with the new law South Dakota filed suit. The defendants asked for a summary judgment thus combining their cases into this one case, South Dakota v. Wayfair, INC. The lower courts sided with the companies against the state because of the precedent established by Quill and Hess (the 2 prior landmark Supreme court cases).

The Supreme Court decided to weigh in on the case and heard arguments in April of 2018 and have now issued an opinion on 6/21/18.

What Was The Supreme Court Opinion?

The Justices ruled 5 to 4 in favor of the states. In Kennedy’s words: “Held: Because the physical presence rule of Quill is unsound and incorrect, Quill Corp. v. North Dakota & National Bellas Hess v. Dept of Revenue of Illinois ARE OVERRULED.” Check out the actual 40 page Supreme Court Opinion here.

What Does This Mean?

The South Dakota v. Wayfair, INC opinion means that the physical presence rule no longer applies and that the states have the right to enforce sales tax laws on any seller above a “reasonable” minimum regardless of whether that seller has any physical presence.

How Does South Dakota’s Law Protect Small Sellers?

In an effort to protect small sellers and startups, South Dakota established minimums of $100,000 per year in revenue OR 200 distinct transactions. This means any seller who doesn’t sell at least these minimums into South Dakota in a year is exempt from collecting sales tax. Since the population of South Dakota is very small these minimums will likely exempt almost all out-of-state sellers who sell less than $10,000,000 per year unless their products are particularly popular in SD.

Is This Good News or Bad News?

We aren’t 100% sure yet if this is good news or bad news for 3rd party sellers because this ruling doesn’t at all address whether marketplaces like Amazon should have to collect taxes for its 3rd party sellers.

Will Amazon Take the Compliance Burden Finally?

This is a major question that South Dakota v. Wayfair, INC doesn’t settle. Will Amazon respond by using its existing sales tax infrastructure to make this compliance headache disappear from the plates of millions of 3rd party sellers? Although this ruling doesn’t address platforms like Amazon it does appear to be one more logical step down the path toward Amazon owning the sales tax problem for its sellers.

Since this ruling most directly gives states the right to create and enforce sales tax legislation against sellers without addressing Amazon things may get more complicated before they get a lot easier. In other words, unless Amazon voluntarily steps up to the plate many sellers who have ONLY had to file in the fulfillment center states may now have to file in additional states since physical presence isn’t required any longer.

Although the fate of Amazon and its sellers is somewhat up in the air this is definitely bad news for Wayfair, eBay, Newegg and other large sellers and marketplaces who aren’t already collecting and remitting sales tax. These companies took pretty strong stock price hits when this ruling came out on Thursday as you can see on the following chart via Bloomberg:

Thursday’s Blood Bath For E-Comm:

  • Wayfair: -9.5%
  • eBay: -12.1%
  • Amazon: -1.9%
  • Etsy: -5.7%
  • Overstock.com: -7.8%
  • and more

Amazon suffered the least because the effect on Amazon and its 3rd party sellers remains to be seen. Just as importantly Amazon is already collecting sales tax in all required states on products that Amazon directly sells and Amazon already collects and pays sales tax on behalf of 3rd party sellers in two states (Washington and Pennsylvania). This means that Amazon has the infrastructure to make a move and has already proven in WA and PA that sales won’t be radically harmed by adding sales tax.

The Bottom Line:

Each state is now going to present and pass a new sales tax law (at least 16 are already in process or completed) and will follow South Dakota’s law as a template in an effort to collect those billions of dollars that have been slipping through the cracks. We hope states set volume minimums that are higher than South Dakota’s and therefore proportionate with their population sizes (i.e. South Dakota makes up a quarter of a percent [.27%] of the US population while California makes up 12.14%). So if California’s minimums were to be 45 times more than South Dakota’s since the population is 45 times more then California’s minimums would look like this:

If this trend held true for all states then only sellers selling more than $25,000,000 a year would even need to worry about sales tax in most states. Our suspicion is that states like California that have a much stronger appetite for regulation won’t be nearly as generous as South Dakota has been. So don’t expect the final outcome to be this rosy but our guess is that states will compromise depending on the political climates and that most of the newly taxed sellers will be 8-figure sellers. If we are correct then this is great news for 95% of all e-commerce sellers. Oddly enough this is also great news for large traditional retailers like Target, Walmart, Best Buy, etc… who already had to pay sales tax in all states that have one.

So… In Summary:

  • Bad news: all 50 states can now create new laws enforcing sales tax compliance on all sellers regardless of location as long as the minimums are “reasonable”. The ruling doesn’t clearly define “reasonable.”
  • Good News: South Dakota chose to define “reasonable” pretty generously given their population. If this trend were to continue among all of the states then only 8-figure sellers would need to worry about sales tax. This would be unbelievable news for 95% of all sellers.
  • Unknown: Will Amazon respond in the next few months by biting the bullet and just collecting and remitting sales tax for all 3rd party sellers? Maybe they will but this ruling doesn’t require them to at all. In fact, if anything this ruling provides a cleaner path to enforcement for states against individual sellers. Now we just have to hope that most sellers are too small to be considered targets by the new sales tax laws in each state which leads to the next point.
  • Unknown: What will each state decide is a “reasonable” minimum in order to protect the smaller sellers? Some states will be more aggressive than others and the most aggressive states will be challenged in court until “reasonable” is more clearly defined either via federal legislation or by future Court rulings.
  • Timeline: Our guess is that this is the very beginning of a long trajectory and that nothing dramatic will happen until each state has had time to create and pass its own laws.

What Should I Do Now?

South Dakota v. Wayfair, INC should immediately make sellers do at least two things:

First, you don’t need to use the physical presence rule to determine if you should file, collect and remit sales tax in states since this new ruling has eliminated the physical presence rule.

Second, It is critical to stay on top of where you sell your products to and to stay up to date as states enact new sales tax laws over the next 12-18 months. Make sure your accounting and compliance partners really understand the ins and outs of this evolving landscape. Our accounting clients have had a good experience with TaxJar as a sales tax filing software. If you don’t have a good software partner check them out.

We’ll Keep You Posted

Seller Accountant will keep you updated as we see things unfold. Feel free to reach out to Seller Accountant if you have questions about your specific situation.

This post was co-written by Seller Accountant CEO, Tyler Jefcoat, and Accounting Intern, Christian Joseph.

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Enhanced Content – How to Build Content on Amazon?

Enhanced content is the “From the Manufacturer” section on Amazon. It displays toward the bottom of the detail page of an ASIN. Enhanced content can help improve conversion rates, and branding.

My favorite examples of enhanced content are Qwest Chips and Crafthouse. Qwest Chips uses one of the templates Amazon provides, and they go well in depth. Crafthouse used a custom template and just loaded 3 banners. You can do anything you want with enhanced content, images and descriptions.

How to build enhanced content:

    1. You need the brand registry for your brand. If you don’t have this, you file for it at brandregistry.amazon.com – which requires a trademark that matches your brand letter for letter.
    2. To start enhanced content, it’s built product by product (sku by sku) at https://sellercentral.amazon.com/enhanced-content/ When you go there type in the sku you want to do and it will load these templates to choose from:

Design tip: You can copy enhanced content from another sku.

3. Plug and play your assets, similar to how I explain in the storefront article and video.

4. Publish. It takes Amazon 3-4 days or so to accept your enhanced content.

There are many things to be aware of when making enhanced content. Do not include trademark symbols, your website information, or violate any typical Amazon T&C.

Hire a consultant today to help you get your brand registry and enhanced content live.

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Logistics Expert Interview – What Amazon Sellers Need to Know About Importing?

Questions discussed in this video:

  • What does every Amazon seller need to know about importing?
  • How long does it take?
  • What problems come up?
  • Quality control issues
  • Private labelers selling on Amazon, should you hire a logistics expert?

My guest Ruby can be reached at mayford2@gmail.com. Ruby has been doing logistics and importing for 20 years.

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State of Amazon – Selling Tips in 2018

Selling Tips Amazon 2018 State of Amazon

I’m in Las Vegas this week attending the Prosper Show, an Amazon conference, where I’m enjoying a lot of great speakers and topics.

While sifting through a lot of new information here at the conference, I found myself thinking that many Amazon sellers just need some practical down-to-earth advice on ways to improve. This article focuses on that, as well as some general big Amazon news pieces. And, as always, if you need help with your Amazon account you can reach me by email.

Top 3 hacks at Prosper Show:

  1. http://www.pickfu.com  to quickly AB test for anything like what main photo to use
  2. File tickets through Seller Central using tax question in drop down when you have a case you can’t get resolved properly, it routes to USA based support. Even if not a tax question. Also an easy dial in way to get to USA catalog team. Ask for a transfer.
  3. Find anonymous customers name on Amazon when they show up as “Amazon customer” on a review by clicking their name and check their wish list. Their name will show there. (Bet this gets patched soon)

These hacks received 3/4 the vote of 500 attendees at Prosper Show. Out of 12 hacks.

First a brief mention of the potential ways to sell on Amazon. This continues to be important because your sales outcome is impacted by other platforms.

Vendor Central vs Vendor Express vs Seller Central

Most sellers should be on Seller Central. Big brands who focus on manufacturing or wholesale should be on Vendor Central, most likely. Sold by Amazon is the #1 threat to Seller Central businesses due to logistics control. Resellers are getting hurt big time. I’ve seen a ton of new intermediate parties who sell direct to Amazon on behalf of wholesalers. If you sell on Seller Central, and you are a retailer who shares the selling rights of goods, you have a huge business threat. Try to work with wholesalers or manufacturers for exclusive rights to sell on Amazon.

Increased Selling Costs

Seller Central accounts are getting hit hard with increased costs, warehousing fees and 6-month overstock fees now hitting monthly. See latest Amazon announcement here.

What’s the Target Price Point to Sell at?

Seller Central accounts should target items $20 and above, if you sell items at retail for less than that, you should be vendor central due to fulfillment fees.

Best Amazon Tools:

  1. #1 best Amazon tool right now is Jungle Scout
  2. I learned about an up-and-coming tool at Prosper called Viral Launch.

I use both Jungle Scout tools, the onetime fee paid app, and the monthly subscription to gain access to sales data, product tracking, keyword data and more.

Brand Registry

Brand registry is more important than ever for the following reasons:

  1. Controlling data
  2. Headline Ads
  3. Brand pages
  4. Enhanced Content (From the manufacturer section)

Brand pages should be the #1 takeaway that can have immediate positive impact on your sales. Push this hard. I recently sent a physical mailer, yes, you heard that right, an eCommerce guy is talking about snail mail. And I’m pushing traffic to brand pages. Brand pages are basically a customizable landing page on Amazon. You hold all the links, you can send your headline ads here, you can send external traffic here, and conversion rates sky rocket compared to typical search results on Amazon. It’s basically a landing page for Amazon. Dedicated URL to drive traffic to only your products. It replaced Store pages.

Ultimately you need a trademark on your brand to get into the brand registry. Learn how to setup brand registry here: https://brandservices.amazon.com/

Video Shorts

Sellers can easily upload videos in shorts now. I use Snagshout, which is a deals-based website but has some great seller tools to drive external traffic. These tools include purchases, ranking improvements, and, as of last month, their newly launched product will help you upload video shorts onto Amazon.

Vendor Central users can upload videos to photo location. Seller Central accounts can only load to the video shorts section. Rumor is that this is coming to Seller Central via Brand registry soon.

Examples of video shorts can be found here.

Here’s a live listing for Savoy House on Amazon, scroll to the bottom and you can see where a video short appears.

Amazon keeps taking away seller tools, and customer touch points

Feedback Genius and other email programs have lost a lot of value recently. Almost a year ago Amazon started allowing customers to opt out of seller emails altogether. As recently as two weeks ago rumors swirled that Amazon had a new policy to limit to a single email per buyer. However, Seller Labs came out rather strongly saying this rumor was false.

In either case, it now feels like 60% of customers have completely opted out of seller emails all together. I am only citing that based on my current rejection notices.

How to grow Amazon sales

Growing Amazon from product perspective

  1. Build a product that is already in demand but improve upon it, read the reviews and figure out what is lackluster, sometimes simply duplicating a product and shooting better photos is still enough. Duplicate what’s working, and improve upon it. Fixing issues flagged in user feedback can be really helpful.
  2. Kitting – Adding two products (or more) and selling them together. This can lower fulfillment costs and make your product more price competitive.

Growing Amazon from marketing perspective

  1. Amazon is aggressively reaching out to brands to pitch $35,000 advertising programs for external traffic, which they pitch as HIGH funnel, while maintaining sponsored ad program which is LOW funnel.
  2. Internal traffic more competitive than ever.
  3. Sponsored Ads – everybody been doing this for 10 years. But a lot has changed (besides a new UI rolled out last week).
  4. Auto campaigns for first time are surpassing manual campaigns. Making manual marketers like us less valuable.
  5. PPC competition varies widely between industries.
  6. Avg PPC cost in Home goods still low, 50-80 bids still work in many home sub categories. Low bids still also work in grocery.
  7. Whereas PPC costs in beauty are averaging 1.5-2.5. Most competitive category on Amazon seemingly.

SEO

SEO tricks still exist, better to have lengthy titles. Big brands still haven’t optimized titles, private label brands are all over this.

Seeing tons of SEO black hat firms pop up who can successfully push to page 1. I see Facebook ads target to me as a marketer for these constantly.

Optimize your listings. Ton of guides on this so I’ll link to one instead.

Nexus

Nexus and tax issues were the #1 hot topic at Prosper. There were handfuls of tax vendors with booths at Prosper. Expect big changes in the next 1-2 years from Amazon on tax issues. Even as of last week Massachusetts is now requiring taxes to be collected on Amazon sales. Washington already collects it.

Honorable Mentions

Stockouts should be avoided at all costs. Use software to keep in stock if necessary.

Seller Central accounts can now participate in the Early Review Program.

If you need help with any of the above on your own seller central, vendor express, or vendor central account, reach out to me here.

Best slide from Prosper Show, on Amazon selling framework

Slide available for PDF download at productlabs.net/prospershow

 

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Feed Me – A Guide to Feeds for Shopping Engines, Market Places, & PLAs

The conundrum of digital marketing is you need several departments to work harmoniously toward the same goal. And in the case of eCommerce feeds, you need the marrying of entrepreneurship, online sales, and technical aptitude. A feed is information that it sent from one point to another, translated carefully to be understandable at the end point. The consequence of which if not done right is the like of playing the children’s game of telephone.

Building a feed for Amazon, eBay, shopping engines, marketplaces, and more

So do you sell frozen peas or do you sell flea repellent? Well that depends on what your feed told the third party where your information is being seen. A feed should be refreshed on a request basis. Especially if you have price changes, limited inventory, or new products coming in.

eCommerce Requires MANY Feeds

The reason eCommerce requires multiple feeds is in this day and age you aren’t just selling products at one storefront. You’re selling on 11 types of channels. Most people would get 2 of these right off the bat, websites and marketplaces. But there’s many more to consider such as shopping engines, product listing ads, and even display banner advertising.

Optional Fields Are Mandatory

If you’ve ever built a feed, you’ve probably seen that only a few fields are mandatory. And many more are optional. The thing is, if all you do is send a PDF of the feed requirements to your IT team, all they are going to do is fill in mandatory fields and call it a day. I’ve seen this at several companies. It really isn’t their fault because they have piles and piles of requests on their desks and as long as the feed goes live they can move onto the next project.

Examples of Mandatory Fields:

  • Product Title
  • Product Description
  • Inventory (Stock)

Examples of Optional Fields:

  • Color
  • Material
  • Manufacturer

Findability is Key to Accessibility

The reason optional fields matter? In an information age, the more you inform the consumer, the more transparency you use, the more likely they will be able to…

  1. Find your product
  2. Understand your product
  3. Buy your product

Example: Let’s say your company sells clothing. Well if you don’t list color in the attribute field, and the consumer is looking for a black dress, and not just a dress, then they’re going to find your competitor’s item and buy it, not yours. Simply putting “black” in the title of the product, or the description is insufficient. Take a look at this screen shot where it shows how on Amazon you can filter for color:

Optional field attributes make a big difference in feeds for marketplaces

None of these products in this screen shot have black in the title, but they all probably uploaded black in the field for color. On the bottom left you can see where black has a check mark, indicating this particular search is for only items that are black.

One of the Fastest Ways to Grow eCommerce is Feeds

I’ve talked about how there’s a lot of money to be made selling in marketplaces in two other articles.  How to Launch Marketplaces like Amazon/eBay/Sears and If you’re not on Amazon, you’re irrelevant.

But you can build feeds for many other channels. I’ll briefly touch base on shopping engines and product listing ads. Both are basically the same thing. PLAs are just Google’s shoping engine.  Shopping engines include websites like Shopzilla, Pricegrabber, Become.com, and hundreds of others. A user interacts with these shopping engines by searching for a product they want, they find multiple companies to compare from, and then go to the company’s website to finish the purchase.

The distinction here, between a marketplace and a shopping engine, is where the consumer makes the purchase. With a marketplace, they buy directly from the marketplace. A user shops directly on Amazon/eBay/Sears etc. But with a shopping engine, you control the transaction. And generally, you are paying these shopping engines by CPC (Cost Per Click). Then there’s also affiliates, which you pay a cut of the actual transaction. Feeds aren’t as necessary in an affiliate model, but could also be valuable depending on the partnership.

The reason feeds help you grow eCommerce is you’re going directly to where the user is already comfortable shopping, and presenting the information they are looking for. They’re already in the buying pattern, and they’re likely going to buy regardless – the question is, did you build your feed so they can find your product – instead of your competitors?

Okay, Feeds are Important, What Now?

If you already have a feed in place, audit it. Map every attribute, and read the documentation for that feed’s setup. If you need to set a feed up, it’s probably easier to just hire a consultant to do the work for you. A person outside of your company can also audit your feed to make sure it’s accurate and getting you as many sales as possible. I’ve setup feeds for practically every type of product-based industry and can help you out.

To Get Help With Feeds, Email eCommerce Expert Steven Pope

Ecommerce Consultant Steven Pope can help you build feeds to Amazon, eBay, Rakuten, Shopping Engines, to help you sell products

You may also like:

How to Launch Marketplaces like Amazon/eBay/Sears
If you’re not on Amazon, you’re irrelevant.

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10 Reasons to NOT Launch Amazon & 10 Reasons to Launch

Sometimes I take a consulting opportunity where the company just wants my expert opinion. And even though I’m an avid fan of using marketplaces, in fact I literally said, “If you’re not on Amazon you’re irrelevant…” there are some risks and challenges to know about before launching. So I present to you, 10 Reasons to NOT Launch Amazon.

#1 Execution

  1. Every eCommerce opportunity has an opportunity cost. The biggest one for marketplaces comes from execution. It takes a lot of time dedicated to an idea to see it to fruition, and this non-unique argument can be largely applied to the unknowns. For most companies who are deciding to launch marketplaces for the first time, that’s an unknown.
  2. Requires multiple departments to be successful.
  3. Requires feeds.
  4. Requires time investment.

#2 Nexus

  1. This is not an actual risk… yet. However, Amazon is self policing themselves at this time. This will become a risk when it becomes a risk for everyone. That is, when the internet becomes taxed by the state or federal government in all 50 states.
  2. There is conflicting “grey” information on the interwebs. Your accountant may Google something and claim that nexus will exist if you sell on Amazon. Or if you sell on Amazon Prime. So while there isn’t a risk, there’s a perception of a risk. And it may require internal education to pass through this challenge.

#3 Branding

  1. If you could buy Victoria’s Secret at Walmart, would it be sexy? Probably not. Some brands may not want to be associated to the ongoing brand found on the marketplace. This might seem obvious, but you don’t sell clothing on Newegg. Similarly, technology pieces like a video card, aren’t the best sellers on Sears. And demographically, maybe you have a luxury brand, and part of the lure to your brand is the sales process. On a marketplace, you lose some control. This could impact your brand.
  2. For most companies, there’s no brand impact. But it could DEFINE your brand. It could force your company to become more efficient with cost and shipping times. It could require you to improve your quality control, and improve your customer service response rates.
  1. Competition
  2. Margin / Fees
  3. Data Management (Building the Feed)
  4. Warehousing & Inventory Management
  5. Ops – Order Management
  6. Customer Service Impacts
  7. Shipping
  8. Amazon’s SEO on Google
  9. Amazon’s PLA version of your product
  10. Prime Risks
  11. Wholesale Prevention (Future Risk)
  12. Time Involved – Opportunity Cost
We can have the January 8th call focus on benefits/opportunities.
  1. Your SEO on Amazon
  2. Brand Exposure
  3. Unique products thrive on Amazon
  4. Revenue
  5. New Customers
  6. Additional Transactions / Growth
  7. Prime Benefits Including Faster Shipping
  8. Free Shipping Benefits
  9. Benefits From Building Feed Improve Database
  10. Other Marketplaces such as eBay/Sears/Rakuten
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How to get your Amazon account unsuspended

I’ve seen a huge spike of suspended Amazon accounts in 2016. Amazon is getting more serious about performance, likely due to the fact that everyone is now selling on Amazon so they can be more picky in who they want to work with. And if you sell on Amazon, chances are you will at some point deal with warnings or notifications that can or have led to a formal suspension from Amazon. This article is meant to simplify the steps to help you get back reinstated. It is highly recommended you hire a consultant who has dealt with Amazon suspensions before because you’ll get your account back live faster and that’s likely going to save you more money than the cost of hiring the consultant.

Amazon Suspension Consultant

Steps to get your Amazon account reinstated from a suspension:

  1. Read the suspension notice. Attempt to understand it.
  2. Diagnose the reason suspended, and identify how to adhere the policy Amazon claims you violated.
  3. Fix the problem.
  4. THEN – Write an appeal response to the suspension.
  5. Wait 7 days. Yes 7 days.
  6. Appeal reviewer will respond – if you submitted a plan and excuted the fix, you get back live.
  7. IF NOT – they will give you followup requests.
  8. Address followup requests. Likely in relationship to the execution of your plan, or they want a more detailed plan.
  9. Wait 3 days.
  10. If no response after 3 additional days (total 10 days) – write seller-evaluation@amazon.com to get expedited review.

Alternatively you can:

  1. Hire a consultant who will do these steps for you, and will lead to faster appeal responses.

How to best take care of your Amazon suspension

Granted, the best way to take care of a suspension is to never get suspended. This means checking the performance notices Amazon sends you. If you check your account health once a week you will see the problems coming from a distance. Amazon is actually pretty lenient and gives you a month notice on possible suspension before actually suspending you. They do this through multiple notices to make a change on your account. If you take no action, you will get suspended.

It is critical that when in writing the appeal, you address the appeal directly in the special notice area and not through a standard Amazon ticket.

Amazon Suspens

Click view appeal. Read it there. (See reasons why your account be suspended.)

Once you understand the appeal, write a response, and fix the problem. You should write 3-5 bullet points. Admit the problem, be concise, and don’t make excuses.

Remember – Amazon’s perspective is the onus is on you as the seller. The onus is on you to have accurate ASINs product listings. The onus is on you to have good metrics like shipping time. The onus is on you to keep your customers happy. Any extenuating circumstances are moot. If you can’t give a world class ecommerce experience to the customer, Amazon is okay with losing your business. With this in mind, follow these best practices.

Best Practices:

  1. Less is more. Write concise bullet points in all communication. This review department doesn’t take direct phone calls. They have tons of paperwork. If you can make it so they can get that you understand the problem and have fixed it in less than 30 seconds, this is ideal. Attaching documents is discouraged – only do if specifically requested.
  2. Write in bullet points.
  3. Admit the problem. Admit that you violated the policy. This is the first step. Admitting the problem tells Amazon you get it and can fix it.
  4. Be patient

Reasons your account could be suspended:

  1. Poor metrics: Shipping times, customer satisfaction.
  2. Policy violation: Selling products against Amazon policies such as guns, expired product, or against USA government regulations.
  3. Product mismatch: If you sell a product that is similar to someone else’s but they aren’t the exact same, make sure you have a unique ASIN. If you sell a 2008 version of a product that has a 2016 version – this is a poor customer experience and Amazon puts the onus on you to separate the ASINs.
  4. Multiple accounts. You are only allowed one account per IP address/billing address.
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Amazon – Launching a product targeting Conversion & Traffic

When you first launch a product on Amazon, whether you’re a private labeler, or a multi-million dollar corporation, there’s two things you should be focused on. Get traffic to Amazon, and convert that traffic. Getting traffic is harder, so I’m going to start with conversion first. I’ve launched thousands of skus over the past few years on Amazon, and each category is different. But the basic marketing 101 concepts of traffic and conversion are universal. This is a short straight to the point read, as you dive in and work on specific areas you will want to do further research. This is meant as a starting point overview.

Conversion:

Photos: 6+ photos of product. Most brick and mortar focused companies, or catalog companies, tend to provide a single photo of the product. This simply is not enough in today’s world. If you don’t have 6+ photos you are behind the curve. You should have a photo of the front, back, side, lifestyle, group photo of all products for potential upsell if you sell variations or similar products, close up of product in action (like an apple cutter cutting an apple close up shot of just the apple and cutter), label/ingredients if not easily seen on back.

Sometimes you don’t have the ability to get all these kinds of shots. Perhaps you only have access to a single photo and there’s nothing you can do about it. In these instances you can hire an affordable overseas graphic designer to make the image look different with liquids or effects. Such as this Fine Occasion Monogram Wine Glass. Here you’ll notice 5 photo options, all similar in shape and size but the image has different “wines” or aesthetics used on the glassware.

Reviews: Recommend getting 3-5 reviews on each product asap. Once you have that, future reviews will come organically. In a pinch, get some friends and family to buy your product on Amazon from their personal accounts and leave you a review.

 

Content: Spending time on bullet points is a must. Fleshing this out and the product description to really talk up the product, why it’s special, why people should buy it. This copy has to balance having a conversation with the consumer (most important) and putting in keywords to generate traffic (see below keywords section).

 

Traffic:

Amazon ads – Categories like beauty and technology have abnormally high PPC bids. Other categories will be more fortunate like home and goods. Depending on the competitve nature of your category I would recommend a strategy of break even on ads. Factor in all your costs and max your ad spend to break even on your products. That means your ACOS could be as high as 50% on many products. Typically more healthy at 25% but on launch especially you should be spending a lot on ads. If you have 1000 of something in stock at $25 a piece you should be spending at least $5,000 in the first month to launch this product. Every product will be different, but if you are weak in other areas this is the easiest one to do, it just requires you opening your wallet/budget.

Offsite traffic into Amazon – This is probably the hardest thing to do. But any off site traffic you can drive into Amazon will pay dividends. Recommend 2-3 month campaign to push people to Amazon through any means. Could be store traffic, emails to customer base you have (if applicable), sites like www.snagshout.com.

Keywords (SEO) –  The title of your product is the most important thing you do. Be sure to be as descriptive as possible, but do not go too long or the Amazon brand guideline team will truncate your title without consulting you. When I first launched the Fine Occasion monogram wine glass I had about 20 words in the title. Amazon cut me down to 4 words and I had to fight to get it back to the 8 words it’s at today. Second fill in your bullet points. These should be super fleshed out. One technique I employ is to use caps on an important phrase at the beginning of the bullet point and then regular non caps copy that follows. This allows you to convert two different types of people. Someone who is making a decision to buy in under 30 seconds will only read the caps. Someone who spends 10 minutes will read all the copy. Third  fill in keywords in the search terms field of the item editing. If you have a list of commonly used industry terms for each product, it is valuable to have. For instance, one person might call a product shaving cream, and another might call it shaving soap. Need your product knowledge to take advantage of things like that. Third writing rich copy with keywords in product description.

Any friends, family, or business connections you have that can make a purchase on your products will help lift the products off initial ground. Buying a product from your personal account, and getting others to do the same, will start your BSR sales velocity. I’d call this a guerrilla marketing tactic and it’s only good at the launch. Some sales are better than no sales for ranking consideration. In most categories there are just simply thousands of product alternatives and Amazon has no incentive to show your product without prior sales history in their organic rankings.

 

Distribution Control:

For the non-private labelers out there, ie people who sell at trade shows, wholesale, brick and mortar etc. You need to focus on more than traffic and conversion. Distribution control. Right now with the product fresh it could be tempting to allow other Amazon players. Especially since you may be slow to get your product into FBA and launch. I would recommend not allowing additional players to enter Amazon on your behalf however, as IMAP concerns, data issues, and other problems can surface.  Having future partners sign an agreement that says they won’t sell on Amazon is advised. It will save you a headache down the road!

 

 I’ll be making an appearance on Stephen Peterson’s www.ecommercemomentum.com podcast in August, 2017. Be on the lookout. One of the topics I cover is why you should acquire a business when entering a new market instead of doing it from scratch.
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If you’re not on Amazon, you’re irrelevant

(Originally published by me in 2015 at http://ecommerceconsulting.com/2015/05/youre-not-amazon-youre-irrelevant.html)

There are thousands of major brands who aren’t on Amazon and it baffles me. I’ve worked for companies who thought Amazon was evil. I’ve spoken to handfuls of companies who think being on Amazon would damage their brand, or even that there is other low hanging fruit available. They are all wrong. Because if you sell products and aren’t on Amazon, you’re irrelevant. Amazon is the mecca of selling. The brand has been fine-tuned and is growing. The website has literally every Holy Grail of eCommerce 101 practices. And its scale is incomparable. It’s always EASY to sell on Amazon. It’s also EASY to buy on Amazon.

If I asked you to name a website that you could do the following things, what website would pop into your head?

  1. Find a product in 30 seconds.
  2. Buy that product within 60 seconds.
  3. Have the product arrive to you within 48 hours.

That’s what your company is competing against. That’s Amazon. Single page checkout, single click checkout, high level of SKUs, immense amount of traffic, hundreds of millions of customers and repeat ones at that. All of that.

Meanwhile your website may not even have a page load time shorter than 5 seconds. You require people to register accounts, add payment and shipping options, and the whole sale process takes a first time customer a minimum of 10 minutes, and repeat customers still 4-5 minutes. It would cost millions of dollars to get your website to compete on even a fraction of Amazon’s agile ability to sell stuff. But it would require you just a matter of hours to get on Amazon and optimize it.

How do I get on Amazon?

It’s actually quite easy. Go here. For a company with a handful of SKUs you can do all the work manually by hand, and artistically create your listings from scratch. For a company with hundreds if not thousands of SKUs you already have a database of information to work with and it’s just a matter of converting it into the proper format for an excel upload.

I’ve worked at companies that between 40-50% of gross sales come from Amazon. Amazon does take a cut, a 15% cut at that. But in my mind, that’s the cheapest 15% in advertising ever spent, adding dividends beyond count. And yet selling on Amazon is often seen as one duty of many for one person on an eCommerce team. Honestly, if you’re company is doing a million dollars on Amazon you should have a dedicated person to it so they can optimize it, and grow it. A company will have an entire staff to run a website, but barely put any effort into growing a channel that does half their business. Why is that? I think it’s because people don’t realize how much more they can do to sell more stuff to more people more often on Amazon. (Sadly you can’t sell for more money on Amazon.)

Amazon PPC is a thing.

First there’s Amazon PPC. Your company is already spending a gross amount on Adwords, but you aren’t paying for click ads on Amazon. Well you should be, here’s why. Amazon ads are displayed within Amazon, and they are seen within categories and keywords you choose when someone searches on Amazon.com. So if someone is searching for “rice cookers” and you’re the only one paying for ads on that keyword you’re going to be seen 100% of the time and pay per click.

Sponsored Listing on Amazon

  1. Amazon PPC cost per click is as low as 2 pennies in many categories.
  2. There’s no competition or very little.
  3. Extremely high conversion rates. People are already in the mood to buy and are comparing your product straight up. Compare this to Google PLAs.

Tip: clothing PPC is dirt cheap, there’s no competitors. Meanwhile technology products have super high costs.

Amazon SEO is a thing

Not only are Amazon products showing up in Google listings, they show up on Amazon.com. Since your products are competing against other products on Amazon you need to have superb SEO in your listings. Your excel file upload to Amazon should have the following:

  1. Automation (feed should upload it daily if not every few hours, so stock counts are accurate if nothing else)
  2. Full product descriptions
  3. HTML in your product descriptions
  4. Features filled out, the 5 bullet points, but also the additional features such as “made of”
  5. A list and sale price (So list price is crossed out)
  6. Multiple pictures. One picture isn’t sufficient.

It’s really easy to do 2-6. #1 requires an API and some help from your IT team. If you don’t have an IT team who knows how to build the automated API you should probably be working with a marketplace vendor to help you do all that such as Mercent.

For 2-6 you can do all of this one product/category at a time by typing into your product information management tool or the excel itself all of the proper attributes. If you go for the Holy Grail you’ll map it at the PIM level, then you can cross apply these attributes and map them properly for other marketplaces such as eBay/Sears/Rakuten etc.

By filling in massive amounts of information about your product, instead of a bare minimum title, price, and short description, your product is more likely to be seen. Bonus points if you ask customers to review your products which can also help your product conversion rates and ability to be seen in general.

Here’s a great example of a listing with tons of technical details filled in. Material types and even orientation have been established. This is for a stroller which can be found here.

SEO for Amazon

The Extra Mile: Parent/Child product relationships. So if you have one product with different colors you can set the parent as the product and the colors as the children. This props up the parent listing and creates more sales.

Amazon Gold Box Deals are a thing

Once you’re doing well on Amazon, you can back channel some help within Amazon to get an account rep to work with you. One of the special things they can do is get your product advertised in a Daily Deal. I once had a product that had sold less than 30 times on my website. A knife to be precise. I had well over 1,000 of this SKU in stock. So I sent a couple hundred to Amazon’s Prime warehouse, and asked a rep to host me as a daily deal. Almost every knife I sent in sold out, and all within 2-3 hours of the deal posting. There’s some serious leverage to getting your product into a daily deal. You do have to discount your product, but there’s some big advantages.

  1. Sell a lot of product in a short time
  2. Create buzz, which gets your original product listing higher due to sales, creating future sales
  3. Visibility, which can create brand awareness and sales on other SKUs

Amazon Gold Box Deals

Amazon Prime is a thing

Let’s say you have 2,000 SKUs, and almost all of your sales are coming from 50 of those SKUs. What else can you do to improve your sales? Well you could try to sell the other 1,950 products better with the above steps. But perhaps even easier than that is to sell more of your 50 products that are already on fire. You can do this by shipping your product to an Amazon Prime warehouse. This creates special listings for your product, so they appear to be sold by Amazon directly. Customers who have signed up for prime get free shipping. And they get your product guaranteed with delivery within 2 days. Most companies can’t ship stuff that fast. So not only will your product listing get seen more, you’ll get more sales, and ship stuff to customers faster.

I personally pay for Amazon Prime. I love the fringe benefits of a Netflix experience on Amazon, and I love free shipping. Most people do. Prime has a growing customer base. Even customers without Prime can still buy your Prime products.

The other really cool thing about selling on Prime is you get major discounts as a seller. I calculated major cost savings on selling a product on Prime vs from my own website. Most of the savings come from shipping. At one company I worked for we couldn’t ship something for less than $7. And for small products that was a major price hurdle. With Prime shipping costs were as low as $2 for those same products. Meaning we were either making more profit or selling at a more competitive price point. If you do 80% of your Amazon sales on a set amount of SKUs, and you do nearly half of your business as a company on Amazon, imagine improving your margin by 10% by selling through Prime. It can make superb business sense.

  1. Lower cost to sell
  2. Faster shipping
  3. More sales

Conclusion

No one company is able to herd all the cats necessary to improve how they sell on Amazon in a timely manner. But if you pick one of the things above to do this month, you’re going to see a lift. If you would like advice on selling on Amazon or other marketplaces, you can email me your questions here.

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