At roughly 25%, the Amazon Marketplace is considered the largest online retailer. A recent article reports Amazon accounted for 41.4% of all e-commerce sales in the US in 2021. But since the Marketplace accounts for at least 60% of Amazon's total gross merchandise volume (GMV), its net share is 25% of US e-commerce sales. As a result, Amazon Retail leads a far gap with Walmart, which takes the third spot, followed by eBay and Apple.
To think that Amazon makes 25 cents for every dollar earned on every sale is incredible. At this rate, it only solidifies that Amazon Marketplace is consistently in an excellent position in this industry.
Managing inventory has consistently been a challenge for many sellers on Amazon, especially in the last couple of years. The pandemic remains a pivotal reality for the e-commerce industry, prompting the increase of consumers ordering online, leading to sellers requesting more from their suppliers or manufacturers. Paired with other supply chain disruptions, the high demand in an unpredictable environment has affected many Amazon sellers.
Common Inventory Challenges in 2022
Shipping Delays: Delays in shipping are due to the varying restrictions worldwide. Since each place (state and/or country) have different regulations, shipping routes are a lot harder to plan, which eventually leads to delays in shipment.
Supplier Issues: In some instances, sellers found it difficult to get in touch with their suppliers and order new inventory. The pandemic significantly impacted some suppliers, which led to them going out of business.
Dealing with existing inventory: Sellers in specific categories have found it challenging to sell their products on Amazon, primarily through the pandemic. In addition, sellers in these categories faced accumulating storage fees due to the stagnant movement of their products.
Increased shipping costs: Over the past two years, shipping costs have increased tremendously. Sellers who source their products from China were significantly affected by this increase compared to those sellers whose manufacturers are from the US, Mexico, and Central America.
Amazon informed sellers ahead of time that they were going to make some changes in the FBA fulfillment fees, however, the actual value of the increase still caught some sellers off-guard.
A seller shared their experience on Reddit, claiming that their FBA fees increased by 67%. The total fee, including FBA and referral fees, increased to $10.03 from $6.37. They called seller support and cited a disclaimer on the announcement, located at the "VERY bottom footer in tiny italics," declaring, "the greater of unit weight or dimensional weight will apply to all large standard-size units."
The new rule was deemed a significant disadvantage to this user selling pillows. Under these premises, the pillows were measured for their dimensional weight, basing the product's weight by its size, not on its actual weight, which was highly unfavorable as they weighed way less than their computed dimensional weight.
The seller expressed in the comments that they understood the warning from the bulletin, however, they still felt cheated from these practices:
"The warning shows only a 3-5% increase. It should have been highlighted more or explained more and not just thrown into the footer; it seems very sneaky. I [have] increased prices already, but it really makes me think, if Amazon continues increasing fees like this, causing sellers to increase prices, how long until consumers stop buying on Amazon due to the prices being too high?"
If you're selling a product you developed, it's highly beneficial that you register your brand under this program. Once enrolled, customers can easily identify you as a trustworthy brand while you gain access to brand registered seller features, providing you with leverage against your competitors.
Here's how you can apply for Brand Registry:
Create a Brand Registry Account: You can access the Brand Registry Portal from Seller Central or Vendor Central. Fill in the required information followed by verification, finally allowing you to enroll your brand.
Enroll your brand: After creating an account, submit the details of your products. You'll need to provide the country of origin, manufacturing details, and other product identifiers such as GTINs or UPCs. Then, click on "Submit Application."
As they say, with great power comes great responsibility. The same goes for having your brand registered on Amazon. Unfortunately, not everyone who applies will be approved.
You have to supply an active registered trademark, the brand's logo and images, packaging, and a list of product categories.
Wait for Amazon to verify your application: It will take around 2 to 10 days before Amazon verifies your application to validate and activate your account on the brand registry. Amazon will then send a code to the registered trademark office, which will be forwarded to you. You'll use this code and activate your Brand Registry account within 1 to 2 working days.