Amazon has always connected selling on their marketplace to their FBA fulfillment service. But now, the chokehold is getting tighter. Sellers are continuously faced with inventory storage restrictions and fee increases, as originally reported in this Marketplace Pulse article.
Limited storage space is a big problem for sellers, especially during the holiday season when sales are expected to double or even triple for some. Of course, it doesn't help that many avoid using 3PL warehouses since Amazon ranks FBA sellers higher.
The FBA structure has always worked for sellers. However, it does come with its drawbacks:
And as if it's not enough, Amazon recently announced a new FBA fee structure for 2023, increasing by over 30% since 2020.
It's a domino effect from this point. Amazon increases its fees, and sellers increase theirs to maintain a good profit margin; FBA storage space is limited, so they can't send inventory as needed. However, they can't sell their products cheaper on a different ecommerce platform since Amazon penalizes sellers who offer their products lower on other channels. So ultimately, prices will increase across all marketplaces.
🙅♂️ FBA an option or a necessity?
At this point, FBA is turning out to be a requirement rather than an option. Over 90% of top sellers on Amazon use it. It's almost impossible to succeed in selling on this platform otherwise.
In time for the holiday season, Amazon-owned streaming platform Twitch is reviving its live shopping show Pog Picks, according to Marketing Dive. The event will happen separately in the U.S., Canada, U.K., and Germany.
📺 Pog Picks is produced by Twitch's Brand Partnership Studio and hosted by Twitch streamers. It promotes products from editorial picks to brand sponsorships and invites viewers to join in gaming challenges and polls to win featured items.
Things you should know:
Twitch announced this event even after YouTube and Facebook shifted their focus to shorter formats than long-form videos, which was heavily influenced by TikTok's success.
On November 17, Amazon CEO Andy Jassy said the mass layoffs that began in the corporate ranks this week will continue until next year, as reported by ABC News.
Amazon sellers are expected to maintain a 2.5% weekly cancellation rate or else risk getting their seller account deactivated. So if you're getting 50 orders, you should only have 1 (1.25 to be exact) canceled order - a pretty tight number to work with!
So, how does one achieve a healthy seller account?
Amazon Seller University shares tips on maintaining a healthy account even through order cancellations.
Remember to take proactive steps to maintain a healthy Amazon Account and stay up to date with Amazon news and policies.