July 22, 2014

Is Price Parity Still on Your Radar? Because It’s on Amazon’s!

Life is a lot about cycles. Ebbs and flows. Action and reaction. It looks like Amazon’s price parity is in one of these cycles that’s approaching a “high visibility” era again. So let’s talk about it and make sure you’re ready for the increased attention it seems to be getting.

First, what is price parity? According to Amazon’s General Pricing rule, the company requires that the total price offered on Amazon  (which includes item price, shipping and discounts) must be at or below the lowest total price offered on any other online sales channel. At ChannelAdvisor, we refer to this rule as the price parity clause.

Additionally, some sellers who are on a Professional selling plan with Amazon (or other similar programs) will sign special revised agreements with Amazon. Such agreements could give the seller benefits like reduced selling fees, more frequent payments from Amazon and more. It’s common for these individual agreements to have a parity clause as well, which varies in scope and requirements from the General Pricing rule.

The implications of price parity are huge.

Amazon is guaranteeing that its sellers are going to present their best offer to Amazon shoppers, which in turn gives buyers a very compelling reason to make Amazon their purchasing destination. Cause and effect. (Could this be one reason for the decline in comparison shopping site traffic, as Amazon has become the comparison shopping destination?)

Essentially, Amazon has guaranteed that it will have (or match) the lowest price for a huge percentage of its catalog. Well played, Amazon.

Before we go any further, let’s be clear that a) not all sellers have parity requirements, and b) these requirements might vary by seller. For example, the Amazon parity policy varies around the globe, with UK and European sellers being completely exempt after Amazon withdrew the requirement in 2013. (Note to readers: This post applies only to Amazon sellers in the US.)

Price Parity and You

In recent months, we’ve seen an uptick in the number of sellers reporting listing violations caused by price disparity. In a good number of those cases, sellers’ accounts were suspended. If you fall in that bucket, check out our recent post on how to recover from an Amazon account suspension. If you haven’t run into violations for price disparity, then take that as a sobering reminder to audit your pricing strategy for anything that might get you in trouble with your Amazon terms agreement.

Surprising Parity Conditions for Revised Seller Agreements

If you have a revised Amazon agreement (and you’re not in the UK or Europe), take some time to pull out the document and locate the section related to parity. Be aware of what your specific agreement requires so you can ensure your compliance. If you’re like most, you may have overlooked (or forgotten about) some surprising conditions that many parity clauses require. Here are some powerful requirements we’ve heard of from customers:

  • Price parity extends to products purchased offline

  • Price parity extends to variations (like color, size, etc.) — meaning that if you offer a blue version on Amazon, your red version can’t have a lower price elsewhere.

  • Price parity refers to the “all in” price, so any rebates, product-specific discounts and shipping charges/discounts must have “all in” comparable price parity on Amazon as well.

  • Parity extends to customer service, returns and refund policies.

  • Parity extends to data completeness and quality — meaning you should be sending Amazon your best and most comprehensive product data.

  • Price parity requires sellers to make refunds to customers when disparity is discovered.

As we said, pull out your agreements and see what terms you’re being held to. All of the conditions above could have far-reaching effects on your cross-channel strategies, so you’ll want to give them serious thought.

Where Do Sellers Go Wrong?

We wish we could say that we don’t see price parity resulting in account suspension, but that’s unfortunately not the case. To keep your business protected, here are the ways we’ve seen retailers end up with price disparity that got them kicked off Amazon:

  1. The “Black/Gray Hats”: Check out our recent blog post on this topic here, but these are the sellers that are deliberately skirting the rules. Amazon uses automation and algorithms to detect price gaps, so don’t be surprised when it catches disparities.

  1. Employees Uneducated about the Policy: Anyone on your team involved with pricing needs to be briefed about the parity clause. Everyone should be clear on how to stay compliant and what your cross-channel pricing strategy is.

  2. Managing Marketplaces in Silos: Sometimes retailers manage Amazon separately from their other marketplaces, which opens the door to gaps and inconsistencies in data and pricing. This could lead to your Amazon price being inadvertently higher than your eBay, webstore or other price. Systems like ChannelAdvisor can help you consolidate your multichannel efforts and avoid these situations.

  1. Isolated Repricing Automation: Some sellers use repricing systems that hum along happily, optimizing Amazon prices — without a care in the world about other e-commerce channels. This is a dangerous scenario, and any price determined by a repricing solution should have checks built in so that prices aren’t raised above other sites and channels. ChannelAdvisor can keep this in check for you with our Repricer with Pricewatch, so reach out to our Sales or Support teams if you’d like more information.

Next Steps

Lately, we’ve given you a lot to think about in terms of your compliance with your Amazon agreements. I know there are many more things you need to fit in your day than making sure you’re following rules. But just as I’m sure you want to avoid an IRS audit after tax season, I hope that a suspension notice from Amazon is something you also want to avoid — especially as Amazon goes through a season of house cleaning, which it appears to be doing now.

 

Blog post by Rachel Miller, product marketing manager, ChannelAdvisor


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Read up on other tips to avoid being suspended on Amazon in our white paper, “13 Ways to Get Kicked Off Amazon: Are You Guilty?” with 14 ways to stay in good standing.

 

 

July 18, 2014

What to Do When You’re Suspended from Amazon

Lately, we’ve been focusing on ways that sellers put their Amazon selling privileges at risk. It’s not because we’re pessimistic about being in an epidemic or because we’re sensationalizing to get attention. It’s because when we see suspensions happen, it strikes us with a cold, sinking feeling in the pit of our stomachs. We understand the implications for you as a retailer — your reputation, your livelihood, your employees’ job security are all at risk when your Amazon account is suspended.

So that’s why we’re shouting from our podium to the balcony with warnings and advice to keep your seller standing in top condition. We want to see you thrive, and Amazon is often a significant contributor to your success. We also don’t want to lose sleep at night worrying about you.

If you’re reading this post because you subscribe and you’re in good standing with Amazon — well done. Perhaps take a few minutes to think about weak areas in your listing-to-warehouse-to-customer process that might put you at risk, then see if you could make any corrections.

If you’re reading this because you just got suspended from Amazon and Google brought you to our blog — deep breath, we’ll do our best to guide you through your next steps.

Your Roadmap During Suspension

Step 1: Understand the rules you broke

Read over your Amazon suspension notice with a fine-tooth comb. Go to Policies and Agreements to understand the letter of the law as it relates to your violation(s). If you still have access to Support, open a ticket to get more details on your suspension.

Step 2: Determine how your business broke the rules

Once you know which rule you broke, it’s important to find out exactly why. Check Seller Central performance and metrics. Evaluate your customer service and processes to identify issues that buyers experienced. Check your inventory for items that violate Amazon’s terms.

Step 3: Address the issues in a plan of action

In our experience, this is the most important part of the process. Now that you’ve a) identified why Amazon is taking action and b) what you did to invite that action, you’re ready to show how you c) avoid these issues in the future. This is your plan of action. Since this is such an important element of your appeal, we’ll elaborate below.

Step 4: Request an appeal from Amazon

Once you finish your plan of action, you’re ready to submit your appeal to the Seller Performance team. You can do so within Seller Central > Performance > Performance Notifications. Find the suspension notice you’re appealing and click the Appeal button for a vehicle to submit your plan of action. Then, wait for a decision to come from the Amazon team, which they state should occur within 48 hours. They’ll typically contact you at your email of record with a decision to either reinstate you or uphold your suspension.

Note: For more details, see Amazon’s page on how to appeal the removal of selling privileges.

Create an Effective Plan of Action

We hope this goes without saying, but you need to give your plan of action some serious thought. Just saying you’re sorry and that you’ll try to do better in the future won’t take you far with Amazon. You need to own your mistakes and develop a plan to avoid them in the future. Our suggestions:

  • Stay professional: Your plan of action isn’t the right forum to express your frustrations or complaints. Real people at Amazon are reading and evaluating your appeal, so keep your request professional — don’t take a sarcastic or confrontational tone.

  • Be specific: What specifically are you changing in your business to prevent the issue from happening again? Detail everything. Then ask yourself if there’s anything else you could possibly communicate, then include that also. Vague statements make it look like you’re hiding something.

  • Address how the fault occurred in the first place: Your violation might have some extenuating circumstances that shed light on why it happened. Detail this for Amazon, but don’t stop there. Show how you’ll prevent the same or similar circumstances in the future.

  • Look for other issues: Even though your suspension was likely tied to one event or series of events, other issues in your seller history could also have contributed to a degraded seller standing. Review feedback from the past 12 months (a report is available in Seller Central), read all A-to-z claims and download all Order Defect Rate component issues (found under Seller Central > Performance > Customer Satisfaction > Performance Over Time > Show order defect rate components > Download). Address these issues in your plan of action as well.

  • Quantify everything possible: Use numbers and exact time frames, including dates where possible. Avoid “many,” “a few,” “sometimes,” “several,” “occasionally” and other vague references that could indicate that you don’t have a handle on the details.

  • Show an investment: If you’ve failed to comply with Amazon policy in the past, your existing staff and processes most likely need an upgrade. Show Amazon you’ve made an investment and how that will pay off with more compliance in the future.

  • Create redundancy: Even within a well-meaning plan, there could still be single points of failure. Show that you’ve thought through your plan of action and identify areas where you have redundancy and checks and balances. Use different solutions to ensure maximum coverage: technologies like ChannelAdvisor, process improvements and manual reviews, like a schedule showing when and how often your team will review the steps of your new plan.

  • Consider Fulfillment by Amazon (FBA): For sellers with suspensions that resulted from shipping issues, using FBA is a great future strategy and one that Amazon looks at favorably.

Make sure to share your plan of action with your team. See if those in other areas of your organization (customer service, shipping, listing) can find fault — and get their buy-in for next steps. If you’re reinstated, your team will be delivering on the expectations you’ve set with Amazon, so everyone needs to be on board.

Although you can submit multiple appeals, your best chance of success is addressing all concerns Amazon might have in your first appeal and plan. Take the time to get it right initially and you should have the best chance of reinstatement.

Prepare for Reinstatement

Get your team prepped and ready for reinstatement. If Amazon reinstates you, this will be your last chance — you don’t want to fumble the ball. Also, make sure all your listings are deactivated when you submit your appeal. If you’re reinstated, inventory must be up to date, so you can turn on your listings after you’re sure your stock levels are accurate. Solutions like ChannelAdvisor can help ensure this automatically.

When Things Don’t Go Your Way

Once you’ve submitted your appeal, you’ll be on pins and needles waiting for a response. Sadly, we’ve seen some appeals that haven’t led to reinstatement, even when following these best practices and recommendations. This is especially true for sellers who open a new Amazon account after their original account was suspended, or sellers who repeatedly sell restricted products.

If you’ve appealed once and been rejected, you can submit additional appeals, but as mentioned above, they’re less likely to be successful.  You might find that it’s best to complete your cycle of grief, find new motivation and look to the broader e-commerce landscape for other opportunities, which are abundant. You may want to read our “Broadening Your Horizons: Expanding on Marketplaces Beyond Amazon and eBay” eBook for some ideas on next steps. Our Sales staff is also happy to talk to you about which additional marketplaces might work for your product lines.

 

Blog post by Rachel Miller, product marketing manager, ChannelAdvisor


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Read up on other tips to avoid being suspended on Amazon in our white paper, “13 Ways to Get Kicked Off Amazon: Are You Guilty?” with 14 ways to stay in good standing.

July 16, 2014

3 Amazon Categories Under Scrutiny

Have you heard the term “gray hat” before? If so, it was likely in reference to hackers and speaking to someone in the gray zone between a “white hat” hacker (a security hacker who hacks for testing purposes) and a “black hat” hacker (who hacks with malicious intent or for personal gain). Sometimes you’ll hear these terms applied to SEO, where a “gray hat” might comply with the rules but not the spirit of SEO policies. (Until the game changes, like with Google Panda.)

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I think it’s a good time to start applying this hat concept to Amazon as well. You’ve got a group of sellers, the “black hats,” who are out for their own gain, selling counterfeit products with unscrupulous selling techniques and causing Amazon to have to take a closer look at some categories and products. Then you’ve got the law-abiding retailers on Amazon — the “white hats” — who are trying to follow the rules to the best of their knowledge and make a living in this great big world. (I’m a sucker for a good guy winning.)

Then there are the “gray hats.” I would argue that some retailers fall into this category for two reasons:

1. They’re inadvertently breaking the rules. After all, there’s a lot to learn about e-commerce, and being successful on Amazon isn’t as easy as throwing your hat in the ring. (I’ve got the perfect white paper for you — see below); or

2. They saw that a policy on Amazon wasn’t being enforced or they found a loophole in the system, so they decided to exploit it to their benefit.  

3 Categories and 2 Trends

As a mother of two young children, I’ve always taken the phrase, “What you allow will continue” to heart as I consider the line between freedom and correction in my house. It seems that Amazon is taking this phrase to heart now also, and the marketplace is making an effort to audit some black and gray hat practices of retailers in their network.  

I recently blogged about restricted products, where I mentioned that the worst-case scenario is a seller suspension. We’re seeing increased reports from sellers in some categories that the published restricted product lists are being scrutinized by Amazon, and sellers not complying with policies are being dealt with severely. As in immediate, permanent account suspension. Amazon is very protective of its customer base, and if sellers are putting out products that Amazon sees as detrimental to customer satisfaction and safety, the consequences could be severe.  

Within our customer base, Beauty and Health & Personal Care categories appear to be top of mind with Amazon at this time. If you’re a seller in these (and other categories), take time NOW to review the prohibited items list and any notices or warnings that Amazon has posted in your Seller Central account, then immediately remove any offending items from your stock. Even if you’ve gotten away with listing prohibited items in the past, don’t assume that you’ll be able to do so in the future. Suspension could come at the drop of a hat.

There’s also some controversy lately that’s centered on the interpretation of some of the restricted goods policies. A fellow blogger reported on it recently, so you may want to read over the scenarios that some sellers are experiencing and determine your comfort level with items that may fall into the gray area within Amazon’s compliance teams.

Another “gray hat trend” that has surfaced takes place when a seller takes a product that is similar to another product and uses ASIN to match the products together, even though they’re not the same. To help prevent this, later this summer Amazon will start suppressing listings in the Consumer Electronics category where the product UPC doesn’t match the brand’s UPC. This should weed out some force-matched products that aren’t actually the same. You may have experienced this in other categories, such as Clothing & Accessories and Shoes, in the past. If you’re guilty of this, take time now to correct it. If you’re genuinely selling the same product but are using a different UPC, you could get caught in the cleanup — so make an effort to obtain a consistent UPC.

Bottom Line

The bottom line here is that you should take a good look at your Amazon selling philosophy and make sure you’re clearly wearing your white hat. Amazon has millions of SKUs on its marketplace, so take the ones that are questionable or risky at this point and put them on the shelf (or better yet, try them on another marketplace). Keeping your Amazon partnership in good standing is a lucrative decision and one that’s worth your scrutiny.

 

Blog post by Rachel Miller, product marketing manager, ChannelAdvisor


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Read up on other tips to avoid being suspended on Amazon in our white paper, “13 Ways to Get Kicked Off Amazon: Are You Guilty?” with 14 ways to stay in good standing.

To speak with a ChannelAdvisor expert, please contact us at info@channeladvisor.com or call 866-264-8594.

July 15, 2014

Ask a Retailer: Aaron Leon, LD Products

With more consumers, competition and channels, e-commerce is only growing more complicated and overwhelming. Sometimes, all you want is a frank conversation with someone in a similar position to ask them for advice.

Welcome to that conversation.

Our ongoing blog series, Ask a Retailer, will seek to share insights from e-commerce retailers across various verticals.

This installment features Aaron Leon, CEO of LD Products, a successful retailer of inkjet cartridges and office supply products. Having founded the company and shepherded its growth for the past 15 years, Aaron brings a unique perspective to building and maintaining online sales for an expanding business.

 

Hi, Aaron. Thanks for joining us today. Before we dive into LD Products’ e-commerce strategies, tell us a little about yourself and the company.

Hello, thanks for having me. I founded LD Products while attending the University of Southern California in 1999. LD Products owns and operates a few different websites, with 4inkjets.com and 4inkjetsLDProducts.com being the largest. We’re an online retailer of primarily aftermarket printer supplies. We have 165 employees in our Long Beach, California, headquarters and fulfillment center, and we process around 120,000 customer orders each month.

 

LD Products has experienced some significant growth and several iterations since its founding. Can you walk us through this process?

We had very humble beginnings back in 1999. But time has flown by, and we’ve consistently reinvested profits into the business. We’ve made several competitor acquisitions over the last six years, including a major one in 2008 that nearly doubled our volume. We’ve also embraced growth across all the major marketplaces, including Amazon, eBay, Rakuten.com Shopping and Newegg.

LD
Earlier this year, we expanded our inventory to include office supplies, which brought our SKU count from around 9,000 to more than 50,000.

Since our inception, we’ve been a niche printer supply retailer, and the shift into full-line office supply has allowed us to increase our average order volume (AOV), as well as provide something to our business customers in between their usual ink and toner purchase cycle.

 

The process of building a successful business varies widely among different product verticals. How have you approached the process of customer acquisition? Do you focus on repeat customers?

We’ve been selling online for more than 15 years, so we have a sizable repeat business segment. That being said, customer acquisition is extremely important to us. The largest line item on our P&L — other than the cost of goods sold — is customer acquisition costs. If you aren’t investing in new customer acquisition, you’d better be getting ready to retire.

We spend heavily to acquire new customers online and also invest in keeping those customers happy and returning back to our sites to shop. We have our own call center that’s open seven days a week and is staffed by 65 happy, caring customer service reps. We also have lenient return policies that give the customer a full year. Basically, we do whatever it takes to keep our customers happy. We often don’t make any money on a new customer’s first order due to the acquisition costs, so we have to ensure our customers stay satisfied and are primed to return for additional orders. We sell consumables, so we know that if we treat customers right, they’ll keep coming back for more cartridges and office supplies.

 

What about marketplaces?

We started selling on the first marketplace, eBay, back in 1999. After a year or two, we decided to focus on selling direct through our own websites. In 2007, we circled the wagons and tried to figure out how we could be competitive on eBay again. We built a team that just focused on marketplaces sales. It’s been a great success and, over the years, we’ve added our largest marketplace channel (Amazon), as well as Rakuten.com Shopping and Newegg.

 

Do you devote more energy to one of these marketplaces over the others, or do you just distribute your inventory to as many as possible?

We’re completely agnostic as to where we sell our LD-branded ink and toner cartridges. If a tech buyer loves buying through Newegg, they’ll find our cartridges there. If they’re an Amazon Prime member and want their LD toner in two days with free shipping, they can find our products on Amazon. We feel customers know what’s best for them, and we try to be wherever they want us to be.


Considering the nature of your products, how much do you worry about diluting your brand? Is that a concern?

We own the LD brand and procure the products from our own factory as well as international contract manufacturers and suppliers. We aren’t worried about being on too many marketplaces because we’re the sole retailer of our products. We’re a little unique in that regard. We’re the manufacturer, as well as the retailer, so we set pricing across our own websites and marketplaces. We feel that whatever marketplace or channel people prefer to buy from is a customer’s choice to make, and we’ll be wherever they want us to be.

That being said, it’s a huge undertaking, and we have a large staff dedicated to managing marketplaces. Adding over 40,000 SKUs of office supplies brings on a whole new set of challenges from a marketplaces standpoint, and we’re in the midst of getting a grip on it. ChannelAdvisor certainly helps keep everything manageable by having it all in one portal and providing tools to make the workload scalable.

 

How did your expansion into office supplies come about? How has that inventory shift affected your e-commerce strategies?

We’ve been selling ink and toner for 15 years and have a large returning customer base that we remarket to via email. One day I had to buy vacuum bags online, and several weeks later received a newsletter about vacuum bags. I thought to myself, “Why in the world do I want this newsletter about vacuum bags? How do I unsubscribe?” It hit me that to other people, I sell a mundane product like vacuum bags that most people don’t need to reorder until six to twelve months later. No matter how great we made our newsletter by adding relevant content, our customers just don’t need ink until they need ink. It didn’t matter how big of a discount I could offer. They’re not coming back for more until that little “Ink Low” message pops up.  

By adding a full line of office supplies, we can keep our customers engaged and purchasing other items from us. While not as profitable as our LD brand of ink and toner cartridges, it keeps LD top of mind when they do run out of ink. It increases our AOV and allows us to start competing with the big boys like Staples, OfficeMax and Office Depot. We’ll always be focused on ink and toner, but instead of just being an ink and toner niche player, we want to be a full-line office supply webstore that specializes in — and is the expert in — ink and toner.

 

What have you learned from the expansion process?

We quickly learned how complicated it is to go from one product line with all similar attributes to 40,000+ SKUs with thousands of different attributes across hundreds of categories. The office supply umbrella encompasses a lot more than pens and pencils! We have a robust catalog team that has been busy selecting appropriate attributes for each category and has been writing fresh descriptions and product titles.

We also learned that you have to really do your homework when pricing new SKUs. If you just mark things up over cost or down from the MSRP, someone out there will find the ones that you’ve priced wrong and take advantage of it. We have a lot of automated reporting that looks for those types of issues now, and we run a full-profit analysis on each order that shows our true, fully burdened shipping costs. This way, we can see which items aren’t priced appropriately.

 

What do you foresee on the horizon for LD Products from an e-commerce perspective? Does newer technology — like, say, mobile devices — affect your strategy?

We’re focused on our office supply rollout right now while in conjunction trying to build a better mobile experience for our customers. We were late to the game with mobile but are investing heavily in it. It helps that our marketplaces side of the business benefits from the great mobile websites and apps that Amazon, eBay and others have.  

 

How does social media affect you?

We sell unsexy products. So no, social isn’t a big vehicle for us in terms of driving direct sales. We use it primarily to reinforce that LD Products is a great company to buy from, gives back to our local community, and is a fun place to work. Our customers seem to enjoy seeing what’s going on at LD, and it garners a very loyal customer base.  

 

Do you have any additional e-commerce best practices that you think might benefit a mid-market retailer trying to grow their online business?

We always try to look at things as a novice customer would look at them. When you do something day in and day out, the reasons for them seem obvious, but a customer who has never ordered ink cartridges online might find them confusing. So we look at our website designs, product packaging, instruction sheets, videos, product titles, descriptions and even product images and make sure a customer who’s never ordered from us before can understand all the industry jargon that we might use.

It’s great to go into depth about product specs for the person who wants to know them, but the average consumer just wants to know, “Is this the right cartridge for my printer?” And we try to make that as clear as possible in all things that touch our customers. Our e-commerce catalog team writes great product content for our own websites, as well as all the marketplaces we sell on. We try to have as much content as possible but make it simple and understandable to the average consumer who isn’t an ink and toner expert.

 

Aaron, thanks for sharing some of LD Products’ successes and struggles as you continue to scale your product line and e-commerce efforts. We wish you and LD Products all the best.

 

Be sure to check out the first installment in the Ask a Retailer series.


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For more information and best practices for selling on marketplaces, download our FREE eBook “A Retailers Guide to Selling on Online Marketplaces.”

 

July 11, 2014

The Climb of The Prime: What Does Amazon Prime Mean for Retailers?

 

Amazon Prime

Amazon Prime (n): The elite Amazon service for the utmost savvy online shopper. Members are granted free, two-day shipping on all products, a multitude of films to stream whenever one desires, thousands of songs to be serenaded by and complimentary eBooks at hand.

So how will that $99 annual membership fee affect you retailers? Let us help explain. Here, we’ll analyze industry trends and drill down into consumers’ thought processes for throwing their dollars into cyberspace instead of brick-and-mortar stores.

E-Commerce Growth Spurt

Recent research from comScore shows that e-commerce purchases have grown 12% year over year, continuing to outpace offline retail growth, which only shot up a mere 1% year over year.

This past holiday season, Amazon.com shipped enough items with Prime to deliver at least one gift to every household in America. In fact, Prime was so popular that Amazon limited new membership signups during peak periods to ensure that current members’ service wasn’t affected by the flood of new memberships, reports an Amazon press release.

The Power of Free Shipping

Free shipping seems to be the secret ingredient to winning a consumer’s dollar. In the same comScore research, 49% of respondents selected free shipping as the “most important” factor in their online shopping process. Free shipping even beat out “no sales tax” and “in store pickup” for the MVP factor.

Among the shoppers comScore surveyed, free shipping was the go-to reason that “Primers” signed up for the service — taking the cake as the top reason at 63%. Unlimited movie and TV show streaming wasn’t even a close runner-up at 15%.

It appears that speedy and free shipping logistics is Prime’s philosophical magnet. A retailer that uses Fulfillment by Amazon (FBA) is eligible for Prime’s free shipping option, but a retailer won’t receive the Prime label if they fulfill orders independently.

Showrooming

Showrooming — the act visiting a store to examine merchandise with intentions of purchasing online for a cheaper price — is on the rise. The comScore research shows that nearly a third of online consumers have showroomed. Price is the primary motivator in swaying shoppers to the internet to make transactions. Most consumers (73%) said that prices were better online.

Online retailers, it should be comforting knowing that brick-and-mortar stores are helping your sales. Half of consumers in the comScore study planned to buy online but wanted to see items in person before ordering. For those that have a physical store and a corresponding website for purchasing, it may be time to consider making those online images as vivid as possible.

Polling 500 consumers who bought items on Amazon last quarter, Consumer Intelligence Research Partners found that those with Prime subscriptions spent twice as much money as non-Prime shoppers. Even the smallest price variation makes a big splash in the e-commerce sea.

The Bottom Line

“Amazon Prime membership continues to grow, and we now have tens of millions of members worldwide. They benefit from all-you-can-eat free two-day shipping on millions of eligible items, and our members have a voracious appetite,” said Jeff Bezos, founder and CEO of Amazon.com.

Amazon is doing something right. Prime members (who account for approximately 50% of Amazon sales) showed significantly higher dollars per transaction and per buyer, according to comScore.

Amazon Prime and Non-Prime Members Average Spend

Even the $20 price increase to $99 per year didn’t seem to deter prospective users from considering the membership program.

E-commerce activity isn’t going anywhere anytime soon. Amazon is riding the wave, and the waves are only going to get more ferocious — especially with the complimentary Prime membership that comes with the purchase of Amazon’s new smartphone, Fire

 

Blog post by Jordan Nowlin, social media & blog manager, ChannelAdvisor


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Want to get your products in front of Prime consumers? Check out our eBook Fulfillment by Amazon: A Deep Dive into Amazon’s Global Shipping Network.

July 08, 2014

Will You Be Allowed to Sell Your Next New Product Line on Amazon? (Part II of II)

Amazon
Last week we talked about restrictions that could prevent sellers from selling certain items on Amazon
. Not being able to push specific products through this marketplace could really hinder a retailer’s online sales revenue. So, how you can protect yourself from these scenarios when you’re a growing e-commerce retailer on Amazon? Here are a few suggestions:

  • Research, research, research! Check to make sure a product isn’t restricted by searching for the ASIN within Seller Central before ordering it from your supplier. You can also check the live listing to see if multiple sellers are selling a product, or if it’s just the brand owner. If several sellers are listing the item and it’s restricted for sale, you can request to be added to the approved seller list by contacting Amazon Support, but we don’t have details on the success rate of this approach. We would love to hear your experience with it if you do try, so please let us know.

  • Get familiar with the category: In Seller Central, Amazon clearly lists the types of products that are restricted for many of their categories. Search for "restricted products" to see the list. For example, in Consumer Electronics, "Products where the serial number has been removed or altered" are restricted, and in Jewelry, "Gold or silver products that are not stamped in compliance with applicable laws" are restricted.

  • Play nice with MAP: If manufacturers are happy with the pricing that you offer, they won’t be inclined to press Amazon to police the SKU or brand. You don’t want to risk a supplier partnership by not abiding by MAP rules. So, price with flexibility if you have it, but don’t go below floors set by the manufacturer. Use a repricing engine that includes a floor in its calculation so you can automate and regulate at the same time.

  • Be aware of distribution T’s and C’s: As a retailer, you may have Terms and Conditions agreements with some manufacturers, wholesalers or distributors that restrict where and how you can sell their products. Read these over. Be aware of the restrictions. Then make sure you abide by your T’s and C’s.

  • Diversify channels: If you’re caught with stock of a product or brand that you’re not allowed to sell on Amazon, you need other channels and marketplaces where you can move the product. Diversify on multiple channels and marketplaces to give yourself more options to reach buyers if one route becomes closed for a product.

  • Diversify products: In a similar vein, diversify your product breadth and depth, so that if one brand gets put on the restricted list, you’re left with other products to keep sales up.

  • Be aware of themes: We’ve observed a few trends about items that appear on seller-generated lists of restricted products. Here are a few to take note of and give extra caution to:

    • Top sellers in a category

    • Manufacturers that do direct-to-customer selling, like Rosetta Stone

    • Brands that have first-party (1P) agreements with Amazon

    • Beauty and Health & Personal Care categories, which Amazon has stated it’s expanding with prestigious brands

    • DVDs, particularly DVDs in high demand and those from Disney, Showtime and HBO

Take these strategies back to your team to reduce the impact that restricted products and brands on Amazon will have on your business.

 

Blog post by Rachel Miller, product marketing manager, ChannelAdvisor 


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Read up on other tips to avoid being suspended on Amazon in our white paper, “13 Ways to Get Kicked Off Amazon: Are You Guilty” with new ways to avoid suspension.

To speak with a ChannelAdvisor expert, please contact us at info@channeladvisor.com or call 866-264-8594.

 

July 02, 2014

Will You Be Allowed to Sell Your Next New Product Line on Amazon? (Part I of II)

I’ve said before that selling on Amazon requires you to learn a new language, but it’s also true that it requires learning a new playbook. And unfortunately, some of the Amazon rules in the playbook aren’t published, leaving sellers to learn as they go, or worse — learn the hard way. We’ve been hearing from a lot of sellers recently that have been caught by surprise in one area: brands and products that they’re not permitted to sell. A list that, to our knowledge, is not publicly published by Amazon in its entirety. (In Amazon's defense, if such a list did exist it would require constant updates as category managers remove products/brands.)

This situation has been particularly frustrating for some sellers who have invested money in a product only to discover that they can’t move it on Amazon — a main sales channel for them.  As many sellers are ramping up their SKU breadth and depth for the holiday selling season, this topic requires immediate attention in order to avoid sunk costs, unmovable products and worst-case scenario: suspension. Amazon

In researching this topic and trying to compile a definitive list of brands to avoid, we found an example of one of the things that we love about our community of sellers and e-commerce retailers in general — their camaraderie and willingness to share knowledge for everyone’s benefit. Here you’ll find a seller-maintained list of brands that other retailers have reported as restricted or “problematic.”  

 There are a few restrictions that can put the brakes on your ability to list products on Amazon. Here’s a summary of those blockers: 

  1. Published Restricted Products: First, there’s the published list of restricted products on Amazon. Some types of products are banned outright, like items falling under the Weapons category: guns, ammunition, explosives, etc. Other categories, though, just denote attributes of prohibited items, like items that are not deemed safe by the FDA or those not sealed in the original manufacturer’s packaging within Cosmetics & Skin/Hair Care. Very few categories explicitly list brands that are banned or not allowed. When they do, it’s as an example, like with Latisse, which is used as an example of a product that requires a prescription by a medical professional.
  2. Gated Categories: Next there are categories needing pre-approval (a.k.a. “gated” categories), which require sellers to complete an application process to be able to sell in them. Clothing & Accessories and Shoes, Handbags & Sunglasses are two of the most popular gated categories. If you’re not approved in these categories, then you won’t be able to list products within them.
  3. Closed Categories: Then there are closed categories, which aren’t open to new third-party sellers. Jewelry and Textbook Rentals are the main categories here. Toys & Games also falls under this category during the holiday season. Again, unless approved in a closed category, you won’t be able to sell products within them.
  4. Exclusive Amazon Authorized Dealer(s): This is the most ambiguous umbrella of restricted products and the focus of this article. For some individual brands and products, Amazon has a closed list of sellers that can list items for sale. Many times you’ll see a single seller — often the brand owner — who owns the listing, like this Beachbody workout kit. Other times you’ll see a group of sellers authorized to list products, but no new sellers can join the ranks, like this Wedderspoon honey, which displays the message “Sorry, the ability to create a listing for this item is restricted.” when trying to list the product. The bottom line with these restricted products is that if you aren’t on Amazon’s authorized dealer list, then you won’t be able to sell these items.
  5. Manufacturer Authorized Dealer(s): Once you’ve gotten through all the restrictions above, you can sometimes face listing issues from the manufacturer themselves, as is the case with many electronics brands. Some manufacturers prohibit the sale of their items on Amazon and/or the internet. Others will allow internet sales, but only for select sellers who comply with Minimum Advertised Pricing (MAP). On the other hand, some manufacturers will allow open sales to anyone as long as they are abiding by MAP. Amazon provides the Brand Registry program to allow brand owners some control over their listings, but often manufacturers lean on their distribution chain to control who sells their products. Some even resort to legal action to control the distribution of their products.

There are generally two ways that restricted and problematic brands and products (due to an Amazon authorized dealer list — fourth in the list above) are discovered. The first — and preferred — is that when completing the listing for your product, you receive a message that says, “Sorry, the ability to create a listing for this item is restricted.” It’s even better when you’re researching SKUs to sell and discover that a product is restricted before it’s in the receiving bay of your warehouse.

The second way that restricted SKUs can be discovered is when Amazon changes a product to an “Inactive” status within Seller Central. Unfortunately, this status change doesn’t trigger a notification and is often discovered when a seller does research into why a previously top-selling item has suddenly dropped off to no sales. Items stocked through Fulfillment by Amazon (FBA) that go to an Inactive status are especially challenging since you’ll incur fees to get your items removed from FBA and returned to you, unless you sell them on another channel outside Amazon and still use FBA for fulfillment.

Hopefully by now you have a clearer image painted of what you can and cannot sell on Amazon as well as the associated risks involved. Be sure to stay tuned for part II of this blog post that will detail how to protect your growing e-commerce business. As always, if you have remaining questions please feel free to email us at marketing@channeladvisor.com.

 

Blog post by Rachel Miller, product marketing manager, ChannelAdvisor

June 25, 2014

Amazon Lights Up M-Commerce with Fire


Amazon FireAmazon recently unleashed a beast that stands a solid chance of competing with Apple and Samsung in a “who has the loudest roar?” contest. The latest addition to the Amazon family was dubbed the Fire Phone: a 5.64-ounce beauty of a smartphone with a 4.7-inch display. The Amazon Fire comes equipped with all the industry standards — slim, Gorilla Glass touchscreen and forward-facing camera — but there are a few features that set it apart and could make it a big player in the e-commerce world (from Amazon’s viewpoint at least).

Firefly

Firefly

Think of Firefly as Siri’s cousin. It’s your personal assistant for identifying objects, audio, art and films, then providing you with the option of purchasing via Amazon. Firefly can identify movies and TV shows by scanning the audio, much like the popular music app Shazam. This feature is powered by Amazon-owned IMDb. Unlike Shazam, when Fire detects a song, it will allow you to purchase upcoming concert tickets through StubHub.

The smartphone’s database contains roughly 70 million objects. With the phone’s camera, the object recognition feature can scan almost any item and provide you with instant pricing and availability info. Amazon CEO and Founder Jeff Bezos even showed off the phone’s ability to identify food and spit out (no pun intended) nutrition information. It’s still unclear how the phone will handle multiple objects in the same image capture — for example, a basketball, jersey and pair of Nikes. Is Amazon’s next step pointing you toward merchandise bundles of compatible products?

The bottom line: Firefly encourages shopping on Amazon. It reduces the number of steps it takes to buy items via your phone, taking the act of showrooming up to another level. Why log into Amazon’s website or a third-party app when you have one magic button at your fingertips? Further simplifying mobile commerce seems like the underlying approach Amazon’s taking with its breakthrough to the cellular world.

Dynamic Perspective

3D

The day has come: A 3D smartphone display has been unveiled. Amazon is a first adopter in this type of image formatting. Fire’s display screen will not only satisfy the gamers out there, but may just be a cherry on top of shopaholics’ sundaes. Imagine being able to have a 360-degree view of clothing, shoes or other products.

Maneuvering the phone to various positions allows users to see 3D product images from a variety of angles — revealing perspectives that a 2D frame wouldn’t show. Also, by tilting the phone a certain way, a user can fluently move from one item to the next. In the product debut, Bezos demonstrated looking at products online by tilting the phone side to side to scroll. The same feature can enable you to scroll through webpages, articles or books without touching the display. Seems like a pretty smooth online shopping experience.

Furthermore, the phone’s 3D effects apply across Amazon’s shopping network, including its bookstore, music store and primary digital market.

Customer Service

Customer Service

Mayday, Fire’s cleverly named customer service feature, makes waiting in the Apple Store seem unrefined. The ultra-simple and user-friendly service is readily available 24 hours a day, 365 days a year. The customer service tool lets you quickly receive answers to any questions or issues you may come across with your Fire.

As we know, today’s smartphones can store a user’s location along with other personal data. Amazon could eventually latch onto this data and hone in on personal habits and spending patterns — enabling better tailored product recommendations and even a way to manage warehouse inventory.

Customer service is king in the retail industry. Is it a coincidence that this service parallels the Fire’s market approach? Only time will tell. Maybe one day Mayday will be able to address your shopping or logistics inquiry.

The Perks

Let’s not forget that all purchasers of the phone are granted a 12-month Prime membership — Amazon’s elite $99/year, two-day-shipping club. Existing Prime subscribers will receive an extra 12 months’ membership.

It’s clear that this phone is designed for the savvy shopper and is fuel to the fire for the Amazon enthusiast. Fire encourages existing customers to shop and reels new customers into the mix. Creating the most friction-free purchasing experience not only aligns with Amazon’s core business goal, but may just set the phone apart from Apple, Samsung or any other big market player.

Fire ships on July 25, so we’ll be keeping a close eye on reactions to the phone and its m-commerce features. How do you think Fire will impact your Amazon sales? Sound off in the comments below.

 

Blog post by Jordan Nowlin, social media & blog manager, ChannelAdvisor


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Interested in digging deeper into the mobile side of e-commerce? Check out our eBook Building a Mobile App for Your Brand? STOP. There are (Already) Apps for That!

 

 

June 16, 2014

Trade Me Webinar Follow-Up: Your Questions Answered

Our Australia team recently joined forces with Power Retail to host a webinar on the Trade Me marketplace and the e-commerce opportunities to be found in the New Zealand market. Trade Me’s Georgina McGowan and Hamish Macdonald, as well as ChannelAdvisor’s Mark Gray, offered insights and best practices for retailers looking to get started on Trade Me.  Didn’t make the webinar? Here are five takeaways you’ll want to know:

Webinar - Trade Me

1. Why sell on Trade Me?

With 3.4 million members and approximately 700,000 visitors each day,1 Trade Me boasts the largest online buying channel in New Zealand.  While eBay and Amazon are behemoths on the world’s stage, neither has a large presence in New Zealand. In fact, 46% of New Zealand buyers who were asked ‘What website do you think of when you go to buy online?’ answered ‘Trade Me’.2 The country itself is experiencing huge e-commerce growth, with 54% of New Zealanders having shopped online within the last 12 months3 — and April spending up 11% on the previous year.

2. Can international sellers list on Trade Me?

Yes! ChannelAdvisor has been integrated with Trade Me since 2012 and currently supports retailers from across Australia, the US, Europe and Asia. Overseas sellers will need to go through an application and vetting process before listing on the marketplace. This is to ensure commercial selling viability and to weed out any safety concerns.

Encouragingly, offshore purchases made from New Zealand are growing at almost three times the rate of local e-commerce buying.

3. Does Trade Me partner with a fulfilment service?

No, Trade Me doesn’t partner with fulfilment companies, but can offer advice to retailers based on individual requirements and types of items.

Retailers in the US or UK who already have a Fulfilment by Amazon (FBA) agreement can use FBA to ship items to New Zealand locales. Given New Zealand’s small geographical mass, the shipping logistics can be easily navigated. 

4. How can retailers increase their visibility?

Trade Me's search is largely driven by product titles. By comparison, eBay's search algorithm utilises a larger amount of product data alongside account ratings and performance. To this extent, optimising your data for the specificities of a marketplace is paramount. With the help of ChannelAdvisor's business rules, titles can be tailored for each marketplace, ensuring that the most relevant information is included in your listings and increasing the chance of items being displayed within search results.

5. What products will perform well on Trade Me?

Branded goods are undersupplied in New Zealand, and buyers are looking for products that don’t currently exist on Trade Me. Retailers that are able to fill these supply gaps stand to win a large portion of the market. Top-performing categories include fashion and accessories, health and beauty, sports, and home and living.

For retailers with sizable inventory, Trade Me and ChannelAdvisor can advise you on which of your products are likely to sell best on the marketplace.

 

Blog post by Shani Flynn, ChannelAdvisor marketing copywriter, APAC

1 Trade Me monthly stats

2 Perceptive Research

3 New Zealand Retail Association


  TradeMe-ShouldYouBeSelling-Image

 

Want to learn more about Trade Me and find out whether it's the right fit for your business? Check out our Trade Me tip sheet for all the important information.

 

June 12, 2014

How to Capture Attention on Amazon: Part 2

Welcome back to Part 2 of our installment on how to capture the Amazon shopper. In the first post, we examined how to grab buyers’ attention and direct them to your product page listing. Here, we’ll take it a step further by exploring how you can take that attention and turn it into conversions. 

Amazon Buy BoxBuy Box

The Buy Box is the golden ticket for Amazon sellers. Assigned to one retailer per page, the Amazon Buy Box appears at the top of the product listing page. Sellers competitively seek this prize, and for good reason, but winning it is no easy task. Only Featured Merchants are eligible — these are Amazon sellers who have met performance-based requirements and accordingly have placement advantages for their listings. Your Perfect Order Percentage, Order Defect Rate, Cancellation and Refund Rate, and Late Dispatch Rate all factor into Featured Merchant status. You also need to offer competitive pricing and shipping, along with continuous product availability.

Product Images

Say you’re a consumer (well, you probably are). Let’s say you find a product listing for item you’ve been searching for —  the price is right, there’s a reasonable shipping time and a detailed description. You’re feeling good. But there’s something missing. Images. What are the chances that you’re going to go through with the purchase? If you’re like us, the chances are pretty slim.

Now, put your retailer hat back on. Make sure to include a main photo, along with a number of additional images of the product. Use high quality images, show the entire product (multiple views are ideal) and aim for a size of at least 500 x 500 pixels. If consumers like what they see, there’s a greater chance that they’ll add your item to their basket.  

Product Description

Though a product title and image can offer shoppers a solid amount of information, the product description is where you detail the ins and outs of the item, fully selling it to the consumer. Further down on the product page, an effective description could be the final selling point that leads the consumer to conversion. As with the product title, include what you believe is important information and what the shopper wants to see. We recommend using no more than 200 words in your description so as not to burden the consumer with an overflow of information.  

And brush up on your writing skills. Poorly constructed descriptions can cause a buyer to make wrong assumptions, which either sends them away from a product that was a good fit for them, or leads to an increase in returns because an ill-informed purchase was made. So say what needs to be said and don’t be too wordy. And last but not least: Consider bullet points, which can make your text stand out more than a string of bulky sentences. 

Amazon Listing

Seller Standing

Many times, the items you’re offering are also available from other sellers. This is where you can pull out the boxing gloves and really compete. Total Landed Price (item price + delivery costs) is one of the primary ways to gain a win. Don’t rely on manual price changes or assume your initial price analysis when you listed your item is still the best one. Use a repricing engine, like ChannelAdvisor’s Repricer with Pricewatch, to make sure your price is the most competitive. 

The final punch required to gain the sale? A proven track record of good customer service.  Customer satisfaction yields good ratings and feedback for your seller account.  When your prices are just slightly lower than a competitor’s with a great service history, you could still lose the sale.  Also, don’t forget the little things, like a professionally designed logo, that can help you stand out from the pack and display your professionalism. 

Analyse and Take Action

Whether you’re new to Amazon selling or a marketplace veteran, you should always find time to analyse your performance and find areas for improvement. Be sure to frequently analyse your pages’ performance, highlighting how effective your titles, search terms, descriptions and images are — and what needs work.

Monitor your performance through Amazon’s key metrics. If you spot any weak points, take action. And though you can’t please every single shopper on the marketplace, the more time and attention you give to your product listings, the higher the chance there is of both capturing that shopper’s attention and leading them to conversion.

Within the ChannelAdvisor platform, we collect all the Amazon analytics you need to know within the Actionable Retail Insights view. This feature recommends new products to source, highlights products that would see a sales boost with FBA, suggests product data improvements to increase conversions and more. Contact us today for a demo.

6a00d8341d136453ef01a73dd367ee970d-250wiStill looking for more Amazon tips? Find out if you’re making one of these common mistakes by taking a look at our How to Avoid or Fix 10 Costly Amazon Mistakes eBook.