Amazon Seller Common Misunderstandings
We’ve worked with thousands of Amazon sellers, and no matter the experience or level of success of those companies, we have seen the same types of opportunity for improvement.
We’d like to share with you a number of seemingly small but significant details that you may have been overlooking – details that can have a profound impact on the performance of your account.
Let’s run through these to make sure you aren’t cutting yourself short:
Two Offers On An ASIN
Amazon allows sellers to have two separate offers in the same condition on the same ASIN.
The seller can have an FBA offer and a non-FBA offer, both in the same condition.
And if the seller offers used products too, each condition of used product (such as “used – like new” or “used – very good” can also have an FBA offer and a non-FBA offer).
While the seller will need to develop a careful naming convention in order to keep track of the two offers both being listed on the same ASIN, this approach to double listing on the same ASIN allows a seller to capitalize on the benefits of FBA, but also have a backup merchant-fulfilled offer, should the FBA inventory not get replenished in time.
While an FBA offer has a better opportunity than a non-FBA offer of winning the buybox, an in-stock non-FBA offer has a much better opportunity of getting a sale than an out-of-stock FBA offer.
So if you’re in a position to offer merchant-fulfilled products, and you’re using FBA too, consider holding back some reserve inventory – at least on your better selling items – so you can fulfill orders yourself in situations where FBA inventory sells out faster than you are able to replenish it.
Amazon’s Brand Registry Tool
Ideal for locking down product feed content, even in situations where you aren’t the manufacturer.
If you get a signed letter from the brand owner (which is usually the manufacturer) allowing you to manage the content of their listings on Amazon, the Brand Registry team will usually grant you permission to manage and lock down that content.
This way, you won’t wake up to any nasty surprises of these listings being changed not to your liking. Several resellers have built successful Amazon businesses around convincing brand owners to provide them with these letters – now someone is proactively managing brand equity of the brands on Amazon, ensuring accurate, complete content is placed on Amazon listings.
These opportunities to help brands manage their brand equity on Amazon often turns into exclusive or semi-exclusive sourcing relationships for the Amazon channel.
Listing Quality And Suppressed Listing Report & Category Listing Reports
These two reports in the Inventory Reports section are extremely helpful for helping a seller to identify why its listings aren’t showing up in seemingly relevant search results or browse results.
By being able to identify what data is missing on a product listing, a seller can pinpoint where it needs to focus its time correcting and updating the listing in order to get the product proper visibility.
The Listing Quality report will identify listing issues shared across all sellers on that listing, while the Category Listing Report shows what data the seller has contributed on a listing.
We like the Category Listing Report because it shows generic keywords and the product tax code on each of a seller’s listing – if either is missing, this report is an easy way to identify the gaps that require the seller’s attention.
Avoid Long-Term FBA Storage Fees
If you’re using FBA today to hold your inventory until you sell it, you are subject to long-term storage fees once your inventory has been sitting in Amazon’s fulfilment centers for more than 6-12 months.
The long-term FBA storage fees can be more than ten times higher than the short-term FBA storage fees, so it’s important to keep an eye on how many units are about to incur long-term storage fees.
In the REPORTS section of Seller Central, there is a “Recommended Removal” report that will show you items that are currently incurring or soon to incur long-term storage fees.
If you don’t have storage alternatives to FBA, it is actually usually much more cost effective to pull the units out of FBA, have them sent back to you, and then immediately send them right back to FBA, where the clock resets for counting time towards another long-term storage fee.
As annoying as this ship-reship process can be, it can save you a lot of long-term storage fees. Alternatively, we also encourage you to evaluate the option of discounting the inventory to clear through it before it starts incurring long-term storage fees.
The Importance Of List Prices:
Often overlooked by sellers creating listings is the field of “list price”. Even if you are selling your offer at the list price, it’s important to understand that list price data is used in calculating the buybox winner.
If there is a list price, and every seller has a price more than 10-15% above the list price, then Amazon will likely not award the buybox to anyone, in an effort to prevent apparent price gauging behavior from being rewarded.
On the other hand, if you’re selling below list price, make sure customer can see the list price, as it helps to demonstrate that your price is a “good deal” for the customer.
All too often, customers don’t have strong reference points of what a fair price should be for an item, so the list price serves to provide a ceiling for customers. Some sellers will create artificially high list prices just to show that they are selling well below the list price.
A couple of key notes here: first, if you see incorrect list prices on your ASINs, you can file a ticket with Seller Support asking them to change them – provide manufacturer evidence of accurate list prices.
Second, if your product is no longer available from the manufacturer, you can file a different type of ticket with Seller Support, asking that the list price be removed – that way, if you are prepared to sell your product at a price well above the apparent list price (as in the case of collectible toy), your buybox eligibility won’t be challenged by the apparent higher-than-list price you are charging, as the concept of list price disappears when an item is no longer available for wholesale sourcing.
In either type of Seller Support ticket, you will need to provide manufacturer evidence of the list price or lack of current sourcing availability.
The Importance Of Proper Classification
If you are creating new ASINs on Amazon, it’s very important to spend the time classifying your items properly.
Amazon uses a browse tree structure, which allows you to load your item on the most specific product node, where it will also be discoverable on relevant high-level node searches.
Unfortunately, too many sellers shortchange themselves by spending not enough time classifying items into the right browse node, resulting in products not showing up in the search results of customers looking for such items.
Amazon offers a decent classification tool in the “Create A New Product” workflow, and we encourage you to take the time to classify all of your items that you create.
In the Category Listings Report, you can identify what Item Type Keyword you have used to tag each of your items – now while your Item Type Keyword contribution may not be what is being actively used today on the listing, this will serve as a starting point to see where you may make improvements to your product classification efforts.
State Sales Tax Registration
We have seen too many sellers not register for state tax collection and be stuck with a tax bill at the end of the year that has not been accounted for in the revenues.
Because Amazon will collect state tax for you if you provide you state tax ID numbers, it can be a lot easier to know what you owe in state tax based on the Amazon reporting it provides.
Furthermore, as the cost of state tax is not included in the calculation of the buybox, you can win the buybox and then have the appropriate sales tax added to the sale, if applicable.
We strongly encourage sellers to collect state tax through Amazon, as it makes it a lot easier to keep track of tax liabilities through the year. For more guidance on the topic of the states in which you would be required to collect state tax, we encourage you to talk with your tax attorney, especially one who is familiar with the dynamics of FBA, if that applies to your Amazon business.
One more cautionary note – when you create your offers on Amazon, be sure to put the appropriate tax code on each item (such as “A_GEN_TAX”) – in many situations, Amazon will default to making products tax-exempt, yet you are still on the hook for paying the state tax. Using the Category Listing report, you can check the tax status of each of your listings, hopefully finding that you are collecting taxes on products where you are liable for paying state tax.
We all like positive feedback, but it turns out Amazon also cares about how much feedback you get – negative, neutral or positive.
Amazon’s Seller Performance tracks the proportion of your total orders that are receiving any sort of feedback…and if that proportion falls out of line (outside of the range of 2-5% of orders getting feedback), that could cause you problems later on with delayed disbursements from Amazon.
We encourage all sellers to develop their own automated feedback request tools, or use one of the inexpensive external tools from feedbackfive.com, feedbackgenius.com or bqool.com – these are all robust tools that allow you to set up your preferences for how when customers of your Amazon products are asked to provide feedback.
While you aren’t likely to start seeing huge increases in feedback, you will have a stable flow of feedback, which will help your business metrics with Amazon. And if you receive negative feedback, make sure to check that the feedback is inside the rules of what is acceptable feedback for Amazon – check Sellercentral’s Help for more details under “What can I do about incorrect negative feedback?”.
And remember, never ever ever offer to pay a customer to provide positive feedback or to remove negative feedback, as that sort of behavior can easily get your account suspended on Amazon.
Deleting Old Listings
Just because you have run out of stock on an item doesn’t free you from possible complications should the regulations change on that item.
On the Amazon marketplace, you are responsible for all of your listings – active and inactive.
We encourage all sellers to set up a regular process to remove listings that they no longer carry and do not plan to carry again. That way, if Amazon rules change regarding those items, they will not impact your account. And remember, you can always add back these listings sometime in the future if you decide to start listing these items again.
Creating new listings with Item Package Quantity data
It is a little known fact that you can’t add Item Package Quantity data after a listing has been created.
By default, if this Item Package Quantity field is left blank when an item is first created in the Amazon catalog, Amazon leaves the field blank and treats the item as a single-pack.
However, if your product is not a single-pack, or other versions of this item are available in multi-packs, it won’t be long before you may run into problems with other package quantities of the same SKU getting mistakenly combined with different package quantities, or competitors making mistakes listing their multi-pack offers on your original listings.
When that happens, customers get confused or get mad when they receive a different package quantity from what they expected. Hence, it is our strong advice that when you create a new listing, make sure to fill in explicitly the item package quantity field, even if it’s just a 1-pack.
And a bonus eleventh point for US sellers also selling on international Amazon marketplaces:
The Cost Of Currency Exchange And Wiring
If you are selling in on an international Amazon marketplace, and Amazon arranges the processes of currency exchange and wiring back to your US bank account, we encourage you to consider getting yourself an in-country bank account so as to save you quite a bit of money.
As of March 2015, Amazon was charging between 3%-3.75% of revenues to handle this currency exchange and wiring.
But with the help of companies like Worldfirst.com, you get easily get an international bank account, allowing you to reduce your handling costs to under 2%, thereby allowing you to keep the extra 1-1.75% for your business.
And with that, we hope you’ve uncovered some low-hanging fruit to help you stay on-top of the processes needed to success on Amazon.
Finally, we want to make explicit that no one at Marketplace University has any financial interests in any of the companies outlined here.
However, as many of our Amazon clients have had positive experiences with these companies, we don’t mind mentioning the companies by name.