2020 Q1 Planning for Amazon Sellers

I know, I know, it’s Q4 Cynthia!  No one is thinking about Q1 right now!  But you should be.  From an Amazon compliance perspective, I expect 2020 to be even worse than this year particularly in these areas:

  • There will be more intellectual property violations and takedowns
  • Verification will be harder and grandfathered accounts may not be immune
  • Greater emphasis will be placed on enforcement of laws and regulations in the US and EU
  •  Amazon will crack down on policies that it previously did not enforce very strongly
  • More items will be restricted
  • Safety will be more proactive and less reactive

As you know, Amazon did not stop with new enforcements during Q4, and there is no reason to believe things will slow down afterwards.  So, what’s going on?  Amazon is under increasing pressure from the media and politicians to clean up its platform.  The bad actor behavior is being widely reported and Amazon is acting.  It’s best lines of defense against bad actors currently are:

  1. Verification
  2. IP registration, takedowns and mediation
  3. Greater enforcement of regulations worldwide
  4. Stronger, less forgiving enforcement of policies relating to listings, product quality and reviews
  5. Restriction of widely counterfeited products
  6. Amazon’s Project Zero/transparency/exclusives programs
  7. Zero tolerance for product quality and safety issues
  8. GS1 UPC codes
  9. Buying direct from brands – this is already in the works with the merging of Vendor Central and Brand Registry
  10. Lawsuits and working with law enforcement

While I can’t tell you which of these is most important to Amazon, I can tell you that Verification is their first line of defense against bad actors.  They’ve stated in Germany, for example, that they stopped nearly 300,000 bad actors from signing up in Germany in 2018 because they failed verification.

This is why so many bad actors are buying established accounts from sellers. On the black market they are offering $25,000 for any account that has Vendor Central access, for example, because they know how they can use it to take out competitors.  But they are snapping up all kinds of accounts as a backup.  The logical next step is for Amazon to demand verification of older accounts.  If they actually do this or when, I have no idea, but I’ve been encouraging sellers to be ready for verification for more than a year because I believe it will happen.  This is a gaping hole in their defense system – all the bad actors that were grandfathered.  They will close it at some point.

When I talk to my clients about verification, they are not ready. I have one, just one, grandfathered client that got prepared for verification in advance.  This seller knew they needed the time because their documents didn’t all match.  Some had my client’s married name; some had her maiden name.  The driver’s license didn’t match up with a known address for the seller.  There was no business utility bill or business credit card.  Some invoices were going to another business owned by the seller and not the company name Amazon had on file.  The information in Amazon for the business was outdated. The business bank account was a personal account and not in the name of the business. Over time, my client has made these changes necessary to pass verification, if necessary, and she is ready.  Another seller was planning to change the business name of the account due to an internal reorganization. If any of these scenarios ring an “uh-oh” bell in your head, put verification on your Q1 list of to-do’s.  It may take time to get ready, especially if you need new accounts, new documents.  You do NOT want to be doing this after you’ve been suspended for verification.  Amazon wants to see a bank account with 30 days’ transactions on it, for example.  Thirty days.

Intellectual Property enforcement on the platform is a hot mess, and you can’t fully stop bad actors from coming after you.  You can, however, be buttoned up and ready to fight back.  You will note that these actions take time to get into place, and some require acceptance by Amazon so…Q1:

  • Amazon Transparency program – it stops people from even listing on your listings unless they can prove they have valid codes.  This includes MF and FBA sellers.  It helps a lot against counterfeiters and MF hijackers.
  • Brand Registry – if you are a brand or represent brands that are not registered, get them registered! If you don’t, the bad actor WILL register your intellectual property and that’s a huge problem to fix after the fact.
  • Register your designs, utility patents, images and packaging/marketing text.  There’s a whole host of bad actors that go and get trademarks, design patents and copyrights for other brands’ products and then use them to kick the brand off its own product.
  • Exclusives.  If your product is unique and only offered on Amazon and your own website, Exclusives will keep others off your listings and make it impossible for bad actors to change your listings as well as provide marketing benefits.  I recommend this for my clients with a unique product with all their IP registrations locked down.

We’ve had a burst of sellers taken down for restricted products or failing regulations in the EU lately.  Everything from VAT registration to recycling programs (particularly Germany which requires its own) to products with ingredients disallowed in the EU to improper labeling and packaging.  The days where you could buy something from Alibaba, stick a label on it and sell it are GONE.  Your products must comply with the regulations of every country in which you sell.

In addition, a recent EU opinion determined that while Amazon is not liable for unwittingly stocking trademark infringing goods for third-party sellers, they should be more diligent in checking whether the products are legal.  I feel confident in saying we can expect more heat coming from Amazon in 2020 regarding trademarks.  Really.  No crystal ball is necessary. 

Selling skincare in France? The label better be in French at a minimum – no US imports in English only.  Don’t know what ingredients and foods are restricted in the EU? You better find out.  There are over 1,300 restricted additives and ingredients in the EU.  Your appliance doesn’t have its UL certification and recycling registration on the box and product? It’s a takedown waiting to happen.

Amazon’s war on fake reviews is ongoing and they keep upping their game.  I recently wrote a blog post about the latest with emails and inserts, but what everyone needs to know is that Amazon is coming down like a hammer.  Get your act together.  Decide what level of risk you can live with.  Don’t rely on your tools to keep you compliant.  It is your responsibility.

They are sharpening the scythe for variation issues because they see so much bad actor behavior with these from “review aggregation” to “brushing.”  Many honest sellers are getting taken down for their own parent/child relationships, not just the ones introduced by bad actors because the algorithm can’t tell the difference.  As I wrote a while ago, if you’re not selling a t-shirt, variations can be complicated.  Not everything fits in the Amazon variation box.  Most sellers failed my “pop quiz” blog on variations.

Amazon is holding sellers accountable for variations they did not create so look at everything.  If you are adding to someone else’s listing and they set it up wrong?  You could be held responsible.

GS1 is the worldwide standard for UPC codes and Amazon relies on it to confirm that the products on its platform are being sold by the brand. It is another brick in your fortification against bad actors if you can prove that you are GS1 registered as well as brand registered.  We are helping brands change out inauthentic UPC codes for GS1 like crazy right now.  Maybe you weren’t worried during Q4 because you weren’t adding new products; but put it on your Q1 list because it generally takes a few days depending on Amazon’s backlog.

If you are selling bundles or multipacks on Amazon with inauthentic UPC codes, you need to know that Amazon is already enforcing.  They’ll eventually get to you, so you want to be ready.

eGP’s Suggested Q1 Checklist:

  1. Make sure you can pass verification if it comes up
  2. Apply to one of Amazon’s programs if you are having bad actor problems related to intellectual property.  It will take a while to get set up and implemented.
  3. Audit your listings for forbidden ingredients, improper packaging, variations, IP infringement
  4. Audit your marketing campaigns for compliance if you are asking for reviews (of any kind – seller feedback or product reviews)
  5. Clean up your supply chain. If you are buying from the gray market, it’s a huge risk.  I strongly urge sellers to find authorized sources for their goods.
  6. Evaluate your suppliers.  If you are a drop-shipper with poor performing suppliers, you’ll get taken down for performance issues.  If you are selling products that aren’t properly labeled or certified…stop!
  7. Get GS1 Codes for all your products.While Amazon is only restricting new listings without GS1 codes, it is just a matter of time.  They plan to clean up the whole platform.
  8. Account compliance and maintenance strategy*.  Most sellers deal with Amazon issues on an ad hoc basis.  This will not serve you in 2020 and beyond.  You need to be proactive and strategic, not reactive and suspended.  It is no longer realistic for most sellers to be their own experts on compliance.  It’s a full-time job for my team and me.

*This is self-serving, admittedly, but still true. Whether you work with us or hire an internal person, the reality is that every growing seller needs a compliance expert to keep them clean and current with Amazon policy and crackdowns.

How eGrowth Partners Can Help

We help sellers solve a wide range of Amazon challenges:

Our account management/maintenance and dedicated employee services are retainer-based and allow us to work on your account on an ongoing basis.  Some packages include consulting time.  Our High Touch Smiles team member is YOUR employee and provides the greatest flexibility and cost savings for our clients.  Many sellers also add a consulting retainer for complex issues and takedowns.

Our clients who have been with us for six months to a year or more have experienced much fewer issues with Amazon than before and are much more productive because they don’t have to spend a portion of their day dealing with Amazon’s various demands, stranded listings, reimbursements, etc.  They can focus on acquiring inventory and selling.  If a bad actor rears his ugly head or Amazon has a new enforcement that affects them, they can get the help they need right away from us.

The primary difference between our compliance/account management packages and a High Touch Smiles™ employee is the amount of time and the degree of flexibility of the team member.  Our account management packages start at $500 and High Touch Smiles is $1,500 for most team members.

All team members have gone through our intensive, proprietary compliance training which greatly reduces start-up time for our clients, and they are part of our ongoing training program for new issues.  They all work in one location and collaborate/support each other on client issues.  Sellers have the benefit of a large team even if they only hire one person.

Contact us if you’d like to learn more about these or any of our services.

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