EA34 Amazon UK Bombshell, FBA Limits, Amazon Brands Suck, Amazon Seller News

Will Brexit affect your business overseas? Is Amazon limiting FBA quantities? Do Amazon’s brands suck? Believe it or not, the fourth quarter is soon upon us so it’s more important than ever to have your ducks in a row and fingers on the pulse of all things e-commerce. Stay tuned as we deep-dive into today’s top headlines.

Listen

Watch

FBA Quantity Limits

According to a recent article, Amazon is imposing quantity limits beginning August and lasting through 2020. Amazon’s warehouses have been hit hard with everything from outbreaks, shutdowns, and unmanageable demand. To offset this high demand, Amazon is limiting the amount of products sellers can send into Amazon.

So what can we do? First, head to Amazon Seller Central and check what your limits are.

Also consider alternate, third-party routes such as ShipMonk and ShipBob. They allow you to register as a seller-fulfilled prime so you can have one fulfillment in a third-party route and one in FBA. As we move into the fourth quarter, you’ll want to make sure your inventory is fully stocked to keep up with high demand.

Brexit Bombshell

As we’ve long anticipated, Amazon’s UK FBA will split from the EU. So will the Pan Euro FBA inventory transfers between Europe and the UK. Previously sellers could store all inventory in one warehouse in Europe and most chose the UK. But because there’s no Brexit contract in place, EFN is coming to an end.

Ultimately you’ll have to move inventory that you’re selling in Europe out of the UK and into multiple other countries throughout Europe. Todd recommends sending products to Germany as it’s a larger country with a strong economy This new ruling may help pressure the UK and the EU to finalize some sort of agreement.

Move Over Amazon

According to Marketplace Pulse research, Amazon-owned private label brands aren’t as successful as you may think, especially brands without “Amazon” in their name. This is great for us sellers as it means there’s an opportunity for our brands to be successful.

There are also more reports on Amazon’s antitrust violations. With talks of Amazon potentially breaking up, it will be interesting to see how this all plays out.

High Sales Volume For Longtime Sellers

A recent report says longtime Amazon sellers drive the majority of sales. Some may view this as discouraging for sellers just breaking in. But Todd sees this as a win for sellers striving to build a sustainable business on Amazon. Overall, this article just solidifies Amazon sellers’ status as legitimate business owners.

Overall

While no news is good news, some of these Amazon headlines are great news for third-party sellers. The biggest takeaway? If you work hard, Amazon can be a fruitful, long-term business for wholesalers and those in private label. When it comes to e-commerce, it’s all up from here.

Do you have thoughts on our headlines? Comment on Facebook! Also check out the site for an upcoming webinar on Keepa. And if you know other eager entrepreneurs, be sure to share this podcast.

Happy selling everybody.

Resources From This Episode

Outline of This Episode

[00:43] Todd’s introduction to this episode

[01:33] All about Amazon FBA quantity limits

[09:09] Amazon’s Brexit bombshell

[14:00] Move over Amazon

[24:05] Why third-party sellers are here to stay

[26:58] Todd’s closing thoughts on this episode

Transcript

Todd (00:00):
Brexit bombshell? FBA quantity limits? Captive support team? Amazon’s brands suck? Breaking up Amazon perhaps? Long time sellers driving sales. This is Amazon news.

Announcer (00:16):
Welcome fellow entrepreneurs to the entrepreneur adventure podcast, where we talk about Amazon wholesale and how you can use it to build an eCommerce empire, a side hustle or anything in between. And now your host, Todd Welch.

Todd (00:43):
What’s up everybody. Todd Welch here and welcome to episode number 34 of the Entrepreneur Adventure Podcast. And today we have another episode with some awesome Amazon news that I really think you will enjoy out there. A lot of good information for sellers and understanding what we need to do going into the fourth quarter here. It’s crazy to think about the fourth quarter already, but it is almost here October, November, and December. We are only a couple months away and Amazon is already talking about it and starting to deal with it now. So you need to be doing the same as well. And there’s some big bombshells in Europe, as well as a lot of other great news. So if you want any of the links that we talk about, head on over to the show notes, entrepreneuradventure.com/ 34. And without further ado, let’s go ahead and dive into the first article.

Todd (01:33):
All right, this first article is from Tamebay.com and the headline is Amazon FBA quantity limits warning to us sellers for Peak and the first paragraph here, Amazon FBA quantity limits will be imposed from August through the end of the year in the U S as Amazon starts to rebuild their business during what is still an accelerating Corona Virus pandemic in the U S and indeed around the world, far from being subdued in the U S testing is realizing tens of thousands of new infections on daily basis in the U S. And so Amazon is taking what can only be viewed as a prudent step to ensure they don’t have to shut down FBA again to incoming goods.

Todd (02:17):
So the basics here is that you’re only going to be able to send in a specific amount of items to Amazon from August through the end of the year. So Amazon has been struggling to keep up with demand and its warehouses from a shortage of employees, they’ve hired like 150,000 to 200,000 new employees. At this point, they’ve had warehouses shut down due to the Corona virus. Long receiving times. And if you sell on Amazon, you’ve probably felt the struggles just yesterday, trying to send in some new products, a really popular product. I was limited to be able to sending in, I think it was like 240 units of this product when I wanted to send in close to 400.

Todd (03:08):
So I’m running into it. A lot of their people are running into it. This has kind of been an ongoing thing in Amazon is confirming that it’s going to continue through the end of the year. So what does this mean for Amazon sellers? First off, you’re going to want to check in, see what your limits are. So you can do that in your seller central, if you go under inventory and then inventory planning, once you’re in the inventory plan and you can click on restock inventory and there is a column called days of supply. And if you click on the little down arrow there, it actually tells you now really plain as day, the maximum inventory level allowed. So for this one, for example, that I’m looking at maximum shipment quantity is 187 units maximum inventory is 200 units and I’m currently utilizing 13 units.

Todd (04:02):
So Amazon has really improved that part to let us know exactly how much we can send in, which is really good in the past. You kind of had to do some calculations, but now for every single product that you have in here, you can go to your days of supply and look at the maximum shipment quantity to see how many you’re going to be able to send in. You’re going to want to start looking at this now in preparing for fourth quarter, because it’s only going to get longer the time that it takes for Amazon to receive in your products. And so that timeframe is going to get longer. Your sales velocity is going to increase. It’s already increased due to the pandemic and more people shopping online. So you’re going to be selling through your inventory faster. There’s going to be products that you’re probably not going to be able to keep in stock because of the long lead times and not being able to send in enough inventory, you’re going to run out of stock.

Todd (04:55):
So now maybe the time to start looking at alternate routes of storing that inventory. So there’s a few that I’ve looked at in the past Ship Monk and Ship Bob. They are both 3PLs. They’re called,uso third party logistics. And they have warehouses throughout the country, kind of like Amazon. You can send your inventory into them and they will store it and grab it and ship it just like Amazon does. So you’re going to want to check their pricing and compare it to Amazon and see if your products will be profitable using those services. But if you have products that sell really quickly and the quantity limits and Amazon are not going to work, you’re going to be running out of stock. It might be a good idea to utilize these services, especially during the holidays as almost a backup, right? So you can have multiple listings, one that is using your seller fulfilled prime.

Todd (05:55):
If you’re able to get registered for that. And these services, I do believe are able to get you registered for that and one with FBA. And so they can both be in stock. So when one, right, turns out the other ones start selling and that way you’ll never be out of stocks, it definitely might be worth looking into them. I’ve never used them myself. I’ve researched these services in the past. And these are a couple that I found that were rated highly and could definitely do the job, but it’s something to start thinking about and something that I am looking into as well. So definitely keep that in mind that your quantity and stock quantity are going to be limited here going into fourth quarter. So you’re going to want to start planning. Now, if you need to have storage for those products, or maybe have your own warehouse where you’re storing products, you can do FBM if necessary and also have products sitting there ready to constantly be streaming into Amazon to keep your FBA in stock so that you’re not waiting for your supplier to ship the products to you and then you to Amazon. So that is something to think about as well. Definitely going to want to extend your inventory times that you’re keeping in stock as you’re heading into fourth quarter so that you’re not running out of stock. So definitely some big news there.

Todd (07:02):
This next one here is just a little bit of a tip from the ASGTG.com community. And this one, it says easily speak to captive team. So the captive team is the higher level of support on Amazon. They have a little more access to tools and can do more than the first line of support on Amazon. So if you go into seller central, go to your help and then get support like normal click selling on Amazon, your account, other account issues, describe your issue and say, need to speak to captive team select the phone marked this issue is urgent. So select this issue is urgent and Amazon will call you, and it will be the captive support team that you’re talking to right away.

Todd (08:13):
Now, I did something similar to this recently in that I did not select exactly what they say there, but I did put in the comments, I need to talk to the captive team, or actually I think I put escalate to the captive support team. And as soon as they finally answered, it took about 10, 15, maybe even 20 minutes for them to finally answer. But it was someone from the captive team. Dont take advantage of this only use this as a second or third resort. If the first line of defense cannot answer your questions, because if everybody is doing this, then it’s just going to overload the system and they’re going to take it away. Again So don’t overload it, but utilize this. If the first line of support is just given you stupid copy and paste stuff that has nothing to do or is not solving your solution, then this is the next step to escalate to the captive support team. So definitely a good tip there to keep in mind if you’re having issues that the first line of defense is not able to solve.

Todd (09:09):
All right. So this next article again from Tamebay.com, and this is the bombshell. Amazon FBA Brexit, bombshell EFN, and pan European FBA ends for UK. The Amazon FBA Brexit bombshell has dropped, which will significantly impact your Amazon business from the 1st of January, 2021, Amazon’s UK FBA operations will be split from the EU and no more EFN European Fulfillment network and an end to pan European FBA inventory transfers between the UK and EU. So basically if you’re not familiar with selling in Europe, what the EFN is or the European fulfillment network was, you can have your inventory in one warehouse in Europe. And a majority of people pick the UK because that’s one of the largest marketplaces in Europe for Amazon. And what Amazon would do is if you made a sale, let’s say in Italy or Germany or some other place, they would be able to grab your inventory from the UK and ship it to those other countries.

Todd (10:32):
Well, that due to Brexit, which Brexit, if you’re not familiar, was Britain leaving the European union, which personally I thought was a good thing for them, but that’s a whole nother story. Since they’re leaving the European union and currently they don’t have a contract in place to do imports and exports like they did before Amazon is going to be ending the European Fulfillment Network, unless perhaps some kind of contract and be put in place or Amazon can figure something else out. If you want to utilize that, you’re going to have to move your inventory out of the UK and into one of the other countries, perhaps Germany, Germany is one of the largest ones out there. And you’re also going to have to have inventory in the UK if you want to sell on UK. So you’re going to have to, for sure have your inventory in multiple places in Europe.

Todd (11:23):
Now, if you want to sell throughout Europe, as well as the UK. So the UK is basically going to be its own country at this point. I mean, it was its own country, but now it’s separated from the European union and is going to be, everything’s going to be separate, just like selling in the us versus Canada. The other big thing here is the pan European FBA inventory transfer. So basically what that was is you could ship all of your inventory into the UK, for example, and then Amazon would distribute it throughout Europe, just like they do in the U S you send all your inventory into warehouse and Amazon ships that out to whatever warehouses they think it’s going to sell from so that they have inventory closest to customers. That’s what the pan EU program was. And so that is going away as well.

Todd (12:14):
Now, you know, in the past, I’ve recommended not doing that. It’s a lot more difficult until you’re at large scale, because now you’re having to do taxes in all of these different countries. So that was the benefit of the European fulfillment network that we just talked about. You own have to pay taxes in the UK, but you’re not going to be able to send your products into the UK anymore and have them distributed out. Now you’re going to have to send it to Germany or Italy or some other place, and have it distributed out from there. If you’re going to utilize the pan European system process that they have over there. So definitely some big news, we all kind of understood and knew this was probably coming, unless Britain could work out something with the European Union in terms of import and export, and maybe they still will.

Todd (13:04):
This might be a way for Amazon to kind of put some pressure the UK and the European Union to make some kind of agreement, but we’ll see, you know, like I said, I think Brexit was a good idea for the UK. They’re one of the strongest countries in the UK. And so they were kind of propping everyone else up. Germany is in a very similar circumstance. They have a large population or really good economy. And so they’re kind of propping up almost subsidizing a lot of the other countries that are struggling. So I could potentially see something similar with Germany, but I have no idea what the German people think on that. And in my opinion, I thought Brexit was a pretty good idea, but this is going to hurt in terms of Amazon sellers. So we’ll see what happens, but really big news on that front, for sure.

Todd (14:00):
So the next article is from marketplace pulse.And if the headline is Amazon Private label brands, and it says, according to marketplace pulse research, Amazon owned private label brands are not nearly as successful as many paint them to be. Amazon has been successful in creating generic items at low prices, but only when using the Amazon brand name, Amazon basics or Amazon essentials, and otherwise the hundreds of brands and tens of thousands of products launched are not resonating with customers.

Todd (14:30):
This is really big news. In a previous episode of Amazon news, we talked about how people were outraged about Amazon using their data to compete against sellers, which my reply to that was well, yeah, that’s been going on in retail forever, but according to this article, their own brands, if they don’t include the Amazon name are not doing very good. Here’s a list of Amazon own top 10 Amazon collection for jewelry, Amazon essentials for clothing, and then Pines on for bedding and towels, Solomon for household goods, Amazon elements for vitamins and supplements, simple joys by Carter’s for children’s clothing, good threads, daily ritual, both clothing, Lark, and row for clothing as well.

Todd (15:18):
And I have not heard of any of those brands outside of the Amazon basics and Amazon essentials. I had not heard of the Amazon collection really, or really seen it or Amazon elements or any of those other ones. So it’s really interesting that those other brands they don’t include the Amazon brand name are not doing so well. This part here is really interesting. According to our research, the Amazon owned top 10 most successful private label brands, including the likes of Amazon basics and Pines on contribute estimated 81% of the total sales. Amazon added more than 100 brands in 2018, but none of the recent launches are category leaders. Amazon has attracted much attention with every new brand they launched. However, the assumption that every new brand will be as impactful as Amazon basics is unfounded. It is quantity versus quality. Amazon basics represents less than 5% of products launched, but more than 57% of sales.

Todd (16:21):
So really good information in that Amazon is not nearly as successful in building out its own brands. As a lot of people like to think they’ve got a couple hits like Amazon basics and Amazon essentials, but a majority of them are not doing very good competing against other brands in those areas. And I think it makes total sense, right? Something like Amazon basics, which are very generic products that a lot of us don’t pay attention to brand names Anyways. It’s very easy to compete in those categories. If you go into Walmart, you have the same thing with whatever their private label brand is. I’m drawing a blank with it right now. But they are a lot of times generic stuff that people do not necessarily pay attention to brand names very much. But once you get into a category and a brand names are more important and your company is building out that brand, it’s a lot easier to compete with Amazon.

Todd (17:22):
That’s why a lot of people have gone away from just launching private label products, to what things used to be. And that’s building out an entire brand. And Amazon is one of those platforms. One of those channels, maybe one of your leading channels, but you have channels outside of Amazon. You have your website, you’re building your brand, you’re building a brand following fan. So this is just kind of proof that Amazon has not gotten to the level. A lot of people think they do in that world. Yeah, they’re competing, but they’re not leading in a lot of those areas, which I think is really good for us Wholesale sellers. It’s really good because that means there’s going to be a lot of brands out there that are going to be successful for a long time. Amazon’s not just going to take over everything and we can help those brands beat Amazon.

Todd (18:10):
Like I’ve talked about optimizing listings in the past with listings that are collecting dust and you can take them, resurrect them, build them out and get them selling really well. I’ve doing a lot of that yesterday. I was taking a ton of pictures in the back here, and I’m going to be optimizing a bunch of new listings that I found that I know will do good because I did a small test worked really good. So now I’m expanding and taking on their whole product line. And so there’s a lot of opportunity for third party sellers out there. Amazon is not taking over anytime soon. And this research here from market pulse definitely plays that out for us. Okay. This next article from the Motley fool calls to break up, Amazon could hit a fever pitch next week. Ahead of Bezos testimony on Capitol Hill, a new report details further elevated antitrust abuses by the tech giant.

Todd (19:07):
The coronavirus pandemic has made it clear that we’re living in a unique era of market concentration, Amazon, Apple, alphabet, Microsoft, and Facebook have a combined market value of about 6 trillion making up approximately a quarter of the SMP 500 it’s value readers from Apple, Amazon alphabet and Facebook have been asked to testify before Congress over monopolistic concerns. And the CEOs of all four companies are set to address nation’s lawmakers on Monday. So we talked about this a little bit before a while back when this was announced that they were going to be talking before Congress. Now the time has come on Monday, people are always talking about breaking up big tech companies, right? It happened to Microsoft Back in the day.

Todd (19:55):
And the talk now on Amazon, Apple and Google and things like that, that they’re too big of companies and they need to be broken up and Amazon, a lot of people when they think of Amazon, I think of amazon.com and selling products. But Amazon has a whole big other industry where they’re selling data, they’re selling storage and hundreds of different areas that they operate in. So they are literally like hundreds of companies rolled in the one. They’re requiring different companies, ring cameras, for example, those little doorbell cameras and lots of other security cameras, they purchase that. They’ve got the Amazon echo and things like that as well. So they’re going to be addressing this on Capitol Hill. So of course people are going to be talking about them up. Are they too big? You know, I go back and forth on this as to whether they’re too big, if they should be broken up, I’m not a big fan, as I’ve said in the past of government getting involved in private industry, but we have not had a capitalist system for a long time in the U S we have like a socialist capitalist or crony capitalist market, right?

Todd (21:11):
America has been more socialist than capitalist in my opinion for quite a long time. And that means that government is in bed with business and they create rules and regulations that support and prop up these big businesses. Of course they say it, it is for helping the people, but the end result actually turns out to be that it props up these big companies that makes it harder for competition to compete. Amazon, Apple, alphabet, Microsoft, Facebook, Google, all of them take advantage of that. You’d be stupid as a business not to, because that is the system that we’re playing. Right? For example, Walmart gets picked on for having low wages and that a high amount of their employees are on welfare. Well, we live in a country that has a high level of welfare, food stamps and things like that. Walmart plays in that world. Walmart pays taxes to prop that system up.

Todd (22:10):
So of course, they’re going to have lower wages because they’re just taking advantage of that system that we’ve built, right? There’s always unintended consequences to anything that anyone does. If we do stuff in the private world, there’s unintended consequences. If the government does stuff, there’s unintended consequences. I was just reading an article on Fannie Mae and Freddie Mac. If you’re familiar with real estate at all, if you buy a house and that loan is transferred to quasi government organizations, Fannie Mae, Freddie Mac, really low interest rates. And so what does that do? That crops up the housing market, encourages more people to buy houses because the loans are cheap. And that for the unintended consequences is the housing prices rise, right? So that’s just an example of unintended consequences and that’s throughout everything. But most people don’t think that deep, they think at surface level.

Todd (23:05):
So what we’re going to do here back to the article, not to get sidetracked, Amazon is going to be looked at, into breaking up. See what happens. You know, it’s happened to big companies in the past, Apple as well. Alphabet alphabet is not just Amazon, but it’s going to be interesting to see what happens. Amazon is definitely the behemoth out there. They control e-commerce and they’re controlling a lot of other areas as well, advertising. They’re taking a lot of that away from Google and Facebook, and, you know, they’re competing with each other, but they’re also could be as monopolistic. So we’ll see what happens. I always lean on not having government involved, but at the same time, government is so involved everything. It’s ridiculous. So going to be interesting to watch that for sure.

Todd (24:05):
And last but not least here, another one from marketplace pulse. And it says a long time Amazon sellers drive most sales. The majority of sales volume on the Amazon marketplace comes from sellers that have been on it for years that signals the controlled churn and high longevity of those businesses is at the same time, new sellers are bringing incremental growth. Amazon is adding thousands of new sellers daily growing by more than a million every year by acquiring new sellers, often passively, most sellers joined the marketplace on their own or pushed by the partner ecosystem. Amazon is layering, incremental volume on the existing base. So it’s interesting. The stats here, it says more than half of sales come from sellers that have been active for years. Roughly 2% of volume is by sellers that joined the Amazon marketplace over 10 years ago. And 30% of the top sellers on Amazon in the U S four years ago are still at the top.

Todd (25:03):
The number of sellers that have been able to build a business that lasted years given how much has changed in increasing competition is crucial in a signal of retention. So this is good news. In my opinion, some people might look at this as well. It’s hard to get started as a new seller then because all the old sellers are taking all the sales, but that’s not really what I take from this. What I see more here is that selling on Amazon is becoming more of a legitimate business, a long-term business. It’s not just a get rich, quick scheme. Like some people like to make it out to be, and that the longer you’re in this business, you can continue to be successful and build your business. So it’s not just a flash in the pan. These sellers that continue to sell and keep growing their business are continuing to have a successful business.

Todd (25:59):
So this is good because if you’re looking to build a real business, you can look at this and say, you know, if I work my butt off and build a real business, I can sustain that real business longterm. I’m not going to fall off a cliff because I’m getting eaten up by new sellers or whatever the case may be. It’s just showing that businesses are growing on the Amazon platform, becoming real businesses and have staying power. So really good news in my mind, Amazon is a marketplace that is building real businesses and you have the opportunity to still get in on an early level. In my opinion, Amazon is just going to get bigger. E-Commerce is going to get bigger. Maybe the platform might shift a little bit as competition from Walmart and alphabet and other places rise up, but Amazon is a platform that you can build your business for years to come. So really good news and a positive signal towards the future of selling on Amazon.

Todd (26:58):
Alright, so that wraps up the news. I really hope you guys enjoyed that. Let me know your thoughts in the comments. If you’re watching on YouTube about this news, if you’re watching on the podcast, head on over to entrepreneur adventure.com/ Facebook, and you can leave your comments there on this news story. And let me know what you think would really be appreciated and share this with at least two or three people out there that you think would be interested in hearing this. So it really helped me grow the show and help me make more episodes for you guys in the future and make sure you’re checking out entrepreneur adventure.com. I’ve got some upcoming really good stuff. For example, I’m going to be doing a webinar coming up here soon on how to deep dive into the keepa graph and finding profitable listings and profitable products to sell on Amazon. So definitely stay tuned for that as well. Entrepreneuradventure.Com really appreciate you listening out there. The show notes are at entrepreneurventure.Com/ 33. And with that, this is Todd Wells with the entrepreneur adventure signing off happy selling everybody.

Announcer (28:20):
This has been another episode of the entrepreneur adventure podcast. Thanks for listening fellow entrepreneur and always remember success is yours. If you take it.