On Monday 4th March 2019, thousands of vendors logged in to their Amazon Vendor Central account to find no new purchase orders direct from Amazon. Amazon then released a statement saying “We regularly review our selling partner relationships and may make changes when we see an opportunity to provide customers with improved selection, value and convenience.”
Many brands will now be wondering what is going on and how this will affect their sales on Amazon. While it may seem like a problem at first, it might actually be a blessing in disguise.
What are your options if Amazon stop buying from you directly?
There are two options : sell on Amazon yourselves or work with a third party seller.
Amazon are encouraging brands to open up their own seller account and sell directly to customers on Amazon. On the surface, it may seem like that this is a good option but there are some realities to running a business on Amazon that may not make it worth your time.
You will need to learn the intricacies of Seller Central (how to create listings, send products, deal with Amazon Seller Support, customer queries).
You need to label EVERY SINGLE PRODUCT with a different, dedicated barcode (not just the standard barcode already on the box) if you want your items to be fulfilled by Amazon and be Prime eligible. These then need to be re-boxed and be ready for collection.
You need to invest in expensive software to ensure you are maximising sales and inventory management
Staff will be required just to run the Amazon operation and keep it ticking over.
The other, and more viable option, is to sell to a credible third party seller like ourselves. You can continue selling your products at wholesale to us and we sell them on Amazon. You will receive a ton of benefits that you do not receive from selling to Amazon by selling to us. These benefits include:
Product listing optimisation (to help make more sales)
Dealing with customer service
Responding to negative reviews and removing those that violate TOS
Help increase the number of reviews for a product
Insight into the page views and conversions for your product listings
Monthly sales and review reports
Reseller identification - find out who is selling your product on Amazon
Continued Prime next-day delivery for customers
Why would Amazon stop buying your products?
Amazon are known to operate on razor thin margins and they are looking to increase the profitability of its retail business. Buying the amount of products that they do also involves huge cash outlays and some stock may not even sell.
Over half of all sales on Amazon last year came from third party sellers (like ourselves) and this number has been steadily increasing over the years. It makes much more sense for Amazon to let third party sellers sell a product instead of themselves as they receive 7%-15% (depending on the category) of the sale as a fee as soon as the product sells for no work and no cash outlay for the product.
When will this happen to you (if it hasn't already)?
Truthfully, the answer to this is ‘how long is a piece of string?!’. While this situation predominantly happened in the US, Amazon have a tendency to start things in the US and then filter it down to other marketplaces, such as the UK. It could be next week, it could be next year.
The best thing to do is to make these changes yourself and cease supply to Amazon before Amazon forces your hand. This will allow you to be on the front foot and ensure that most importantly, customers are not affected by any shortages in stock availability.
If you would like to know more about working with us and how we can help, please contact us below.
About ThrivePlaces
ThrivePlaces are Amazon Marketplace Specialists who help brands grow their sales through the platform. Unlike typical marketing agencies and consulting firms who can charge thousands for their work, we simply earn our income through reselling your products - this ensures that our interests are 100% aligned with yours.
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