In California, Amazon faces another hiccup in its operations that may affect third-party sellers in other states sooner than you think. In the last couple of years, the case Loomis vs. Amazon brought a lot of attention to the question, 'Who's fault is it anyway?'. Kisha Loomis purchased a hoverboard on Amazon in 2015, which, frighteningly enough, caught fire while charging. This resulted in injury, leading to a lawsuit against the 3P sellers who sold the hoverboard - she also sued Amazon. Initially, the court ruled in Amazon's favor, arguing that this event was outside "the chain of distribution for product liability purposes" however, the appellate court ruled in the plaintiff's favor. This case could determine whether Amazon will be held liable for product safety and opens up the question for similar issues to come.
Should Amazon be responsible for regulating the safety and legitimacy of all the products sold through its platform? Third-party sellers make up over 55% of sales ($386 billion) on its platform, and according to Finbold, Amazon is adding 3,700 new sellers every day. That's a lot of products to keep track of, but since it's on their platform, they should be liable, right? Well, according to Amazon, their marketplace was simply the middleman in this affair, and that they're pretty hands-off in the matter. Sellers could argue against this - that their ability to even communicate with customers is rather limited and that Amazon pretty much controls that space.
"Amazon invests heavily in the safety and authenticity of all products offered in our store including proactively vetting sellers and products before being listed, and continuously monitoring our store for signals of a concern" - Amazon Spokesperson
How this case is handled could mean the difference for the future of Amazon sellers and e-commerce as a whole. With this changing landscape and increase in sellers, how are products policed in such high quantities? This case brings several questions to light for the future of Amazon.
Cases like these could impact how the entire industry operates because consumer protection laws are currently out of date while e-commerce is rapidly changing. Regulations that determine who's liable at any point of the distribution process will affect Amazon and other e-commerce platforms like Shopify, eBay, and so on.
THIS WEEK'S BITES
May 24, 2021 - Amazon will automatically verify customer claims and offer refunds on your behalf, for specific scenarios where Amazon can verify package delivery using the tracking information provided during order confirmation.
May 26, 2021 - Change to Returnless Refunds for international seller-fulfilled orders: Effective May 25, 2021, if you fulfill customer orders in the US from a country outside of the US, you must provide a valid US return address (for items under $25).
May 31, 2021 - Extended disbursement reserve period: Sellers who continue to use a bank account from a non-participating PSP after this date will be subject to an extended disbursement reserve period of up to 21 days after the latest estimated delivery date.
June 21, 2021 - Update to Amazon US referral and FBA fees: Amazon is making modest increases (about 2-3% on average) to fulfillment fees, in line with or below industry averages. We will also reduce certain fees, like the returns processing fee.July 15, 2021 - Disbursements stop for non-approved PSP to sellers using non-participating PSPs until they switch to a participating PSP or use a bank account directly issued by a deposit-taking bank
NEW ON AMAZON
Want to protect your Order Defect Rate (ODR)? Amazon's new A-to-Z Guarantee policy update states that they will themselves automatically verify the customer claims and refunds on behalf of the seller, whenever possible. Amazon set this policy to simplify and manage the process between customers and sellers to resolve refunds or other issues swiftly and, by doing so, protect your ODR.
It's evident that Amazon goes above and beyond to deliver exceptional customer service and that their business revolves around their shopper's satisfaction. The A-to-Z Guarantee is Amazon's promise to customers that they'll be covered if anything goes wrong with their order, providing confidence to potential shoppers. They guarantee that their order will arrive on time and in good condition. If either of the conditions isn't met, then the customer has grounds to file a claim.
Typically, once customers made an A-to-Z claim, sellers were required to respond and resolve issues within 48 hours, but now, if verifiable tracking is available (which it should be), Amazon will take over from there. Automatic verification is meant to reduce the time and effort required to verify a claim and issue a refund. Before this, any delay or mishandling of the issue could result in an account debit that would negatively affect your ODR. This policy takes effect May 24, 2021, and if Amazon resolves a claim on your behalf, they will notify you of information regarding the case.
Some sellers are wary about this new policy, concerned that this will open up windows for people to take advantage of the process and, essentially, scam them. Amazon states, "We will carefully review all tracking information to protect you from unjustified claims," but some are doubtful. In any case, sellers aren't at a complete loss with this new policy update - in the event where sellers disagree with Amazon's decision, they have 30 calendar days to submit an appeal and make a case!
TRENDS TO FOLLOW
Ever looked at your shipping expenses and thought, "damn, I could probably do this myself and save tons on transportation costs" because that's what this Reddit user did, and it worked. After spending thousands and thousands of dollars sending their products to the Amazon warehouse via the standard courier service, user /u/onlineseller123, in a post, explains how they reevaluated their business and took shipping into their own hands.
A ton of amazing benefits become available to you as a seller on Amazon when you use FBA. You don't need to worry about shipping to customers, and Amazon handles delivery and status inquiries. All you need to do is get your product to the facility. The process is simple, but shipping costs (depending on weight, size, QTY) can add up incredibly fast when using your standard courier service. To avoid this expense, this seller used available resources (parent's van) to cut costs, and incredibly enough, it worked. The process resulted in lower shipping costs, quicker delivery to Amazon, and products becoming available for purchase faster. Eventually, they upgraded their material and included this as part of their regular operations.
"It cost me about $100 in gas and $100 to hire somebody to drive $150 insurance. We have about $18,000 in the vehicle so far including maintenance. We deliver up to 12 pallets a trip. Our products become available for customers to purchase within 12 hours of drop off. Shortest time I've seen is 30 minutes."
How did they do it?
(the simplified version)
According to the thread, they were even able to reach the same warehouse a majority of the time by consistently sending the same case-packed cartons. Obviously, there were some challenges to the process at first, like bringing a van to a warehouse. Still, eventually, they were able to resolve it and turn it into a money-saving operation. That's not to say that this is recommended; your mileage may vary, and you'd need to do extensive research to comply with any regulations, but this was one seller's success story that was highly intriguing.
After July 17, 2021, Amazon listings will no longer support HTML in product descriptions. Having HTML in this section of the listing has been standard practice in the past years to include additional messaging about your product and highlight valuable key information to shoppers. However, as per Amazon’s statement, this move provides security for customers and increases accessibility for non-HTML devices. If you have any written into your listing, you’ll need to make some changes to your description before the deadline or risk Amazon making the changes for you - act fast!