You’ve probably heard by now about the changes that took place this past week, when Amazon sent notices letting some sellers know that certain brands were restricted from their accounts.
As Amazon often does, the change was not officially announced across the board and most of us learned about it from other sellers in Facebook communities, like The Selling Family Community.
The news created panic for some because the list was pretty long - more than 45 brands became newly restricted, all at once. We’ve been updating our list of restricted brands and you can see the newest restrictions notated specifically. One of the things with restricted brands is they may not be across the board, so some are only affecting certain ASINS at this time.
We conducted a Facebook Live chat on Saturday to discuss the news and our reaction to it as well as strategies you can use going forward. This post is a recap of a lot of what we discussed; you can find the video in The Selling Family Community group here.
Why is Amazon Restricting Brands?
Brand restrictions are nothing new and have been around a long time. Norelco has been restricted for years. Frozen products and Star Wars toys have both been restricted causing lots of frustration for legit sellers. So although we’ve seen more over the last few days, it’s not a radically new concept.
There are a couple of things going on from our perspective: Amazon is setting itself up for a successful Fourth Quarter, and it is combating counterfeiters.
Experienced sellers will tell you that every August and September, Amazon makes a bunch of changes in order to have things running smoothly by Q4. Usually freaking us all out, because that means we also have to make a bunch of changes in our busiest season as well.
The Fourth Quarter officially starts Oct. 1 and is the time of year Amazon makes the most sales. It’s also when Amazon draws the most new buyers, and the company needs to make sure those buyers have the best experience possible on its platform.
Amazon has been flooded with a ton of counterfeits and is trying out new ways to combat it. Counterfeiting isn’t the only trouble area either, there are also sellers who will pass off product that’s not in the kind of condition Amazon would like. Like we always say “New is NEW” and “If you wouldn’t give it as a gift, it isn’t NEW”. But sellers still like to bend the rules and it makes us all look bad, unfortunately.
Situations like this mean that consumer confidence is down and people start to question whether they can should even buy on Amazon. There have been news stories reporting that buyers aren’t feeling as confident as when Amazon first started because of counterfeit product and sellers who are bringing in products from China.
Amazon has long had a brand registry, where brand owners could go through a process to register a product as theirs and say they didn’t want others to sell it. However, the brand wasn’t actually restricted, which is why we saw so many Cease and Desist letters being sent to sellers.
What Amazon has done now is allowing brands to register AND restrict sales on the Amazon platform. So in situations where brands had said they didn’t want other sellers to sell on their brand, you saw a flood of restrictions this week. They definitely seemed to have a backlog of brands requesting this to happen.
Some sellers were told they have until a certain date to sell off their product, while others were notified that their listing was inactive and they would have to pay to remove the products by a certain date.
We believe that, while more brands will likely be added to the list, it won’t be so many all at once going forward. Of course, that’s just our opinion and not official from Amazon (because, it’s all speculation it seems at this point).
What Brands Are On The List
There are a lot of really popular brands and some lesser known ones on the newest list.
They include names like Nike and adidas, Asics, Crabtree & Evelyn, Cuisinart, Disney, Lego, Funko, Hasbro, Hot Wheels, Paw Patrol, Pokemon, Sony, Under Armour, Victoria’s Secret and more.
A lot of the brands are outright restricted, while for some others you can apply to sell them (and some come with a hefty fee once approved). In order to apply, you need to provide invoices from the manufacturer, and a letter stating that you are an authorized reseller.
It’s certainly frustrating for anyone who had those items in stock to suddenly learn they can’t sell them and will have to have the inventory pulled and returned. One area of sellers hit hard are those selling shoes. This was a hard hit niche it seems.
Keep in mind, though, that Amazon has MILLIONS of brands on its website and there is still plenty of product to source! Even though a couple hundred brands (overall) are restricted, there will be opportunity for those sellers who persevere and stick with it.
We’ve gone through a bunch of changes in the seven years we’ve sold on Amazon, and we’re the first to admit that it’s not as easy today as it was five years ago … or in this case, five days ago!
But the opportunity is still there. We believe it would be overreacting for anyone to declare themselves done with Amazon just because of these changes.
We are keeping our list of restricted brands up to date, and you can see the latest additions notated in orange and marked with an *.
What You Can Do
There are a lot of newly restricted items, so until you have them somewhat memorized (which seems impossible since they change a lot), it’s a good idea to use the Amazon Seller app to double-check items before making any purchases.
The Amazon Seller App is the only app that’s directly connected to your Amazon seller account. Unlike other third-party apps like Scoutify (which we also use). So you might scan using your third-party app, but when you find something that looks good, give it a second look on the Amazon Seller app before making the final decision to purchase.
We will also look into eBay - where we’ve had some success before - and Jet as options to flip some products. This does NOT mean we’re leaving Amazon, just that we’re being smart as sellers and exploring all options!
Amazon is still our focus and it has much more traffic and more advantages over eBay and Jet, but those other places are certainly options.
Consider this: with all of the new restrictions, Amazon might just sell out of a lot of products and not have items in its inventory without third-party sellers. So buyers will look around to find where they can find those items, and they’ll wind up on these other platforms. So this could be a smart way for you to make more money as a seller.
Less sellers on these brands = Less quantity available for buyers!
It’s always a good idea to have a secondary platform, and we’ve long recommended using a site like eBay to sell returned inventory and products that you couldn’t send to Amazon for one reason or another. Products where they are really good sellers, but the box is dented. Or a discontinued Health & Beauty product that is too close to the expiration date for selling on Amazon.
Also keep in mind that there are a lot of new lines, just launched, that show up in the Fourth Quarter and that are not restricted. This is how we’ve made a lot of our profit in the past, finding items that unexpectedly become really popular. Those items are not only hard to find, but they aren’t being counterfeited because they hadn’t shown up on counterfeiters’ radar.
And finally, for the brands you REALLY want to sell. You can go through a process to buy direct from the manufacturer. This is a good time to make some wholesale relationships. A lot of sellers find that they get to a certain point where it’s harder to scale up, and they start to work with wholesalers.
Those sellers who have authorization to work with these restricted brands are not going to have a lot of competition! Think of the opportunity.
Stay the Course, Play By the Rules
The bottom line is, the sellers who are willing to adapt and clear those hurdles Amazon placed in front of us are the ones who will succeed. Amazon changes constantly, and we need to change along with them.
It’s been said that third party sellers make up to 50% of all of Amazon’s sales. So although they may not communicate well with us, we ARE important to them! And they’ve been doing things like designing tools and updating the Seller App to help us. They definitely seem to want and need us!
Retail arbitrage is still a resounding yes for us right now. Time will tell whether these latest changes will wind up being something whose effect was exaggerated or whether we’ll have a whole new set of guidelines from Amazon.
The point is, stay agile! Those of you who are willing to take the news and roll with it are the ones who will rock your businesses in the end!
For those of you who may not have even started selling yet, these are just things that will be in place from the beginning for you. It makes it easier for you since you don’t have to “relearn” anything. If you want to get started, and stay up to date with the current market for Amazon sellers, jump into our Amazon Boot Camp and we will help you stay the course in your new business!