This blog is my opinion and I don’t know the future. I have to say that upfront because of internet trolls. I believe that online sellers will recover the fastest in this new economy and that most sellers will have a “normal” Q4 for the most part.
I base my beliefs on these indicators:
- Amazon, eBay, and Walmart are weathering the storm and will be stronger with more buyers than ever when the worst is over.
- Amazon is getting a grip on its grocery and “essentials” delivery system. It seems endless for those of us at home waiting, but it’s happening.
- Amazon is moving ahead with expansions, new platforms (the Netherlands is the most recent), new warehouses and new programs (It’s poorly named SBA is confusing, but it is launched).
- Americans are turning to Amazon and other platforms for home deliveries of essentials, and many will continue to do so after the pandemic subsides…as well as everything else.
- The unprecedented financial injections into our economy by Congress.
- An emergence of leaders (including Jeff Bezos). Confidence is being restored to consumers by the actions they see being taken by rising leaders in politics, healthcare, medicine, pharmaceutical, and business. The news is still bad, but people are rising to meet the challenge. It helps.
- Bursts of creativity all over. Under pressure, our true selves emerge. Thank god most of us are decent people. As our collective minds focus on this crisis, outside-the-box solutions and products are being created to meet the needs of the new normal. Crisis does bring opportunity and online sellers will be among the first to capitalize on these opportunities.
- Amazon is still preparing for Prime Day.
Many of these initiatives are already underway. We have potential treatment regimes. Vaccines are in the works and production of ventilators and PPE is beginning to be ramped up. Amazon has already started to expand the types of inventory it will accept at the warehouses. These are positive steps I see that inform my overall optimism. The day-to-day is still a hassle for Amazon sellers, but it will get better:
New Policy Favors Sellers
In the past few weeks, we’ve seen Amazon waive payments and fees for Amazon loans. Long-term storage fees were waived. In addition, Amazon is expanding the inventory it will accept in the warehouse. This is great news for sellers and bodes well for Prime Day and Q4.
Second Seller Accounts Without Permission Allowed
This one really shocked me when I read it last night. Linked accounts and accounts set up without permission have caused a lot of pain in the seller community over the years. There’s a lot Amazon didn’t say in its emails to sellers, but first, here’s what they said (my emphasis):
Amazon is no longer requiring sellers obtain (sic) approval for multiple selling accounts. However, Amazon recommends that you only open a second selling account if you have a legitimate business need and all your current accounts are in good standing.
Amazon cannot make this determination for a seller, but examples of a legitimate business need are:
– You own multiple brands and maintain separate businesses for each. Example: Parent company has multiple brands and wants to have separate storefront names for each.
– You manufacture products for two distinct and separate companies.
– You are recruited for an Amazon program that requires separate accounts.
In order to successfully register as an Amazon Seller, you will need the following information:
1. Your business name, address and contact information
2. Your tax identity information
3. An internationally chargeable credit card with a valid billing address
4. A phone number where you can be reached during this registration process
There’s a lot to unpack here and a lot of unanswered questions:
- Will Amazon still take down sellers for linked accounts? They are not requiring pre-approval but if they disagree with your decision, will they suspend? Yes. The question is why would they disagree? That’s not clear yet. Additionally, “linked accounts” include linkage to other accounts that have been shut down in the past for bad behavior. I don’t see that changing.
- Is the algorithm still on for “linked accounts?” I assume yes. The real question is “Is Amazon differentiating between accounts closed by the seller vs accounts closed by Amazon for bad behavior?” I hope the answer is yes or else this is going to be a real mess for sellers.
- What is “good standing” with Amazon? They don’t share the internal system they use to rank sellers. Is it OK to have a couple of IP complaints on your account, for example? Is “good standing” about performance? Policy? Product Quality? All the above? When we assess a seller’s account, we have a general idea of where our client falls on the
spectrum of “goodness,” but we don’t know for sure.
- Will new accounts need to be verified? I can answer that one with a confident “yes.” Verification is Amazon’s first defense against bad actors, and they are now going back to established sellers for verification, so I don’t see that
going away. Get set up properly and have all your paperwork in order BEFORE you open your second account.
- If I was rejected for a second account in the past, can I try again? Maybe. I think it depends on why you were
rejected. If your second account follows the guidelines above, it should be OK…if you are not linked to a failed account
from the past, and there’s the rub my friends.
- Is there a difference between a previously closed account and an account shut down by Amazon? I don’t know. We’ll find out soon I’m sure. Will you still be linked if you sold video games and textbooks in college and then closed that account, for example? Today the answer is yes, and it’s a headache to unwind.
- Does the “no category overlap” rule still apply? Possibly. They still don’t want sellers setting up “Plan B” accounts in case one goes down. In fact, the implication (my interpretation) is that if one account goes down for poor performance, the other account could also be shut down. That’s how it works now. It is not automatic, and it depends on the reason for the takedown – today – but we don’t know if they will continue to operate that way.
- If I have two separate brands with some category overlap am I at risk? I don’t know. If one brand sells toothpaste and another sells beard supplies, can I have two accounts? Logically, yes. Think about the big manufacturers that have multiple brands for dental care, skin cream, etc. No one would expect Proctor & Gamble to only have one account, for example. However, if a seller is using multiple accounts to game the system (having all their toothpaste show up at the top of the search, crowding out other offers) and there is no difference among the products besides minor cosmetic changes? Amazon would frown on that. That still violates the Seller Code of Conduct. What if I have two automotive accounts for different audiences (convenience store vs. parts suppliers) that have some overlap like windshield wipers. Is that a violation? If they are the same windshield wiper, yes. Choose an account and sell Brand X windshield wiper under that one account. What if the beard supplies and toothpaste are the same brands? They should be sold under one account.
- Can I open a new Amazon account if I have a previously closed account? Let’s go back to that account you opened in college. It is now closed. Should you open a new account for your Company Y or go back to the previous account and re-activate it? Previously Amazon said you needed to go back to the previous account, re-open it and update the information to reflect Company Y. I still recommend that course of action because it is the simplest and least likely to cause problems. What if you don’t have access to that email/password anymore? Get help from customer service.
- Should I still inform Amazon that I’m setting up a second account? No. They said no. Besides, they already know it once you’ve done it. It won’t insulate you from problems anymore as it did before when you got permission first.
- Why is Amazon doing this? My first cynical thought was it would give them greater latitude on enforcement. We’ve been able to get our clients back from takedowns by showing Amazon it approved the account in the first place or the second account was opened by an Amazon employee. Now if they don’t like what you are doing, they are absolved of any responsibility for the problem. They didn’t approve of you. You took your chances. My second less cynical thought was this was what they were doing anyway and the requests for approval were clogging up the case logs and the takedowns that they ultimately reversed were cumbersome. The truth is probably some of both.
- What if I’m a wholesaler, can I have multiple accounts? You would need a compelling reason for why you couldn’t have all your brands under one account. Some exceptions we have seen in the past include where a seller separated his fine jewelry from normal inventory or hazmat from normal inventory. These were approved because those categories are highly specialized with different rules and standards from normal inventory. The seller wanted to create a jewelry storefront. Jewelry listings are more like eBay than Amazon in that multiple sellers of the same brand has their own listings. This does not mean Amazon will always allow these exceptions. Additionally, Amazon required them to have a separate business for these categories.
B2B sellers do it all under one account because B2B is a separate platform just like Merch by Amazon. It already IS a second account, in other words, that is accessible through your wholesale account.
Another approach that has worked in the past (please note caveat) is a seller creates separate businesses for his different categories. Maybe it’s Eddie’s Toys, John’s Bandanas and Cynthia’s Candy Shoppe. Why would a seller do this? Risk mitigation and they are building up the business entity to sell it one day. That way if Cynthia’s Candy Shoppe is suspended, the other wholesale items are most likely still selling (caveat). For my clients who take this path, I tell them not to be half-assed about it. Incorporate, have a separate bank account, create a business brand and get it trademarked, set up a website, get a sales tax certificate. In short, it better damn well be a separate business.
- What about retail arbitrage? Can I have separate accounts? Unlikely. What is the compelling reason?
- What about drop-shippers? I’ve seen this done successfully, but you must have a separate business to do it. One seller might sell medical supplies to hospitals and doctor’s offices and have a general office supply business. There is obviously some crossover (everyone needs pens) but the specialization was compelling enough to allow for separate business and separate accounts. You want to sell different brands of crossover items. This client mostly sold B2B but had some general office supply inventory on the main Amazon platform as well.
- What’s the good news in this announcement again? It takes a step out of the process of opening a new account. Furthermore, sellers can open new accounts and be honest about who they are instead of hiding behind relatives, college roommates, etc. The need for “stealth accounts” drops significantly. It is a boon for brands, and they will no longer get in trouble for doing what Brand Registry tells them when they register a brand (open a new seller account – this got so many of our clients in trouble). Investors and those who buy companies regularly do not have to do a delicate dance with Amazon to avoid being taken down for linked accounts.
I’ve told my team to prepare for a cluster, especially in the first few months of this new policy. Why? Because there are a lot of ways that honest sellers are linked to closed accounts and not all closed accounts were closed for bad behavior. If you want to try to re-open a closed account or open a new account but are afraid it might be linked, contact us. We’ll try to help. Because this is brand new, we don’t have all the answers right now, and clients need to know we cannot guarantee success. I take hope with this announcement. I think it is overall good news for sellers, but who knows if Seller Performance even got the memo? Sigh.
*This is for a new account only, not a suspended account.
What if My Account is Not in Good Shape?
Some sellers are looking to a second account to flee the problems they are having with the first one. I’m confident Amazon will not allow that. However, if you are concerned that your account isn’t “clean enough” to open a second account, and you have a compelling reason to have a second account, we can help with that. We offer Account Maintenance and Assessment services. The assessment (included with Account Maintenance retainer or standalone service) helps us look at your account the way Amazon does and pinpoint potential problems. For the majority of our clients, it is either IP or product quality that is dragging down their metrics. We can help them get cleaned up and improve these metrics.
Our account maintenance services are retainer-based and allow us to fix a wide range of problems over time from variations to GS1. They include consulting time as well as analyst time (these are the guys who actually fix the problems) and an assessment at the start of the relationship. We do other things like reimbursements, ASIN monitoring/alerts and monitoring of product quality issues and “voice of the customer” so you don’t get caught by surprise. Our service also includes ASIN reinstatements and discounts on account suspensions. Many of our clients find this alone pays for the cost of the retainer.
Predicted Upcoming Changes
Please remember, these are MY predictions, but they seem logical to me:
- Adjustments for rank and inventory metrics – Right now our metrics for just about everything are in toilet (where’s the paper!?) because we’re not selling. Amazon will have to make concessions or adjustments for sellers such that these poor metrics don’t affect our accounts or ability to sell. It will literally have to jump-start the platform again and figure out how to fairly rank offers to buyers. It will have to forgive us for not keeping inventory in stock.
- Incentives for MF sellers. Amazon’s warehouse shortage problem isn’t going away any time soon. I believe they will roll out incentives for MF sellers that last through Q4 at a minimum. This might take the form of relaxed performance standards and lower fees. They might offer incentives to use their delivery services (they bought all those planes for a reason – delivery is obviously going to be a higher growth opportunity for them than storage and fulfillment)
- Increased crackdowns on bad actors. Profiteering was just one volley in what I see as a protracted war. I think we will see Amazon more vigorously prosecute bad actors and work actively with law enforcement to take out counterfeiters, money launderers and sellers of stolen goods. They have a fleet of lawyers with time on their hands right now, and you know what they say about idle hands being the devil’s work… While this is not exactly happy news, it is good news for honest sellers on the platform.
- It will be a long time, if ever before Amazon goes back to phone support for sellers. Right now, this is because their operations in other countries are on lockdown. They are woefully understaffed. My prediction is they’ll make this change permanent. We’ll see.
- Rumor mill: I’ve heard that Amazon will open the platform for normal business by the end of April, perhaps as soon as April 22. I have not been able to confirm this myself, but I’m greatly encouraged by the fact that Amazon is adding new products it will fulfill daily. Check your “restock inventory” reports daily!
Questions about this blog?
Join us in next week’s Facebook Live discussion (Monday, April 6, 1:00 PM Central) in our “Amazon Seller Advocates” group. It’s a private group so head over now to get approved. Cynthia will be answering questions about this blog and anything else that has happened in the world of Amazon since this was published.
In addition, we are doing a special Facebook Live session with Mark Levine of Bubblefast on Friday, April 3 at 1:00 PM Central to talk about switching to Merchant Fulfilled shipping. Even with Amazon opening the platform back up, many sellers are considering MF options. Mark knows every in and out of what makes MF different from FBA, and the common mistakes FBA sellers make when switching to MF.