Veteran 3rd party Amazon sellers are familiar with Amazon's unpredictable changes in seller policies. From fee increases to LTSF and changing seller metrics and more. Last week's expanded brand gating policy is the latest change on the Amazon marketplace that has sellers talking. While certain brands have been gated for some time, this update has applied restrictions to a longer list of brands and has impacted more resellers. In addition to requiring copies of invoices and written authorization, for some brands, Amazon is requiring a non-refundable fee between $1,000 to $1,500 to have the brand ungated.
This appears to be Amazon's latest move to prevent counterfeiters from selling goods on Amazon's marketplace. Counterfeiting has grown to be such a problem that earlier this year Birkenstock announced it will no longer allow it's products to be sold on Amazon.com. Not wanting to see more notable brands leave the marketplace, Amazon will only allow certain brands to be sold by sellers who can prove they are selling the real deal.
Amazon is also trying to protect the customer and their shopping experience. If customers continue to be shipped cheap knock offs and cannot be sure they are purchasing the real brand when shopping on Amazon.com, they will start looking elsewhere.
If you are an authorized reseller of a larger brand like Adidas or Samsung, and you've kept records of your invoices, there should be no problem. Submit the documentation that Amazon is asking for and it's business as usual. As for the fees, Amazon has stated that the ungating fees will not apply to existing sellers. Only sellers new to the brand will be required to pay the fees to begin selling.
If you are buying from a liquidator or practicing retail arbitrage, Amazon may or may not accept invoices from non-authorized distributors or receipts from Target or Walmart. There are rumors that Amazon will actually stop accepting receipts all together as proof that you are selling the authentic product. If liquidation sales or retail arbitrage are your main sourcing method, know the restrictions before you buy. Use the Amazon seller app to check if a product is restricted or not before loading up your shopping cart. More importantly, start diversifying your product sourcing should the rumors be true and Amazon will no longer accept receipts as proof of authenticity. If you are currently only selling on Amazon, start diversifying your sales channels and include other marketplaces like Ebay so you have a place to sell your existing inventory should Amazon block your listing.
Amazon is a quickly changing marketplace and third party sellers who cannot adapt will struggle to maintain a profitable Amazon business. Strategies and tactics that have worked well in years past will meet new threats and challenges. Sellers should always be aware of the factors that could disrupt your business and should have plans to adapt. Be proactive and work on strengthening the weaknesses in your strategies and operations. A business who is constantly evolving their strategy will be positioned to ride out the inevitable storms and enjoy long term success.
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