The Growing Appetite for Amazon
We’re talking recent Amazon updates and the current e-commerce opportunity as we witness the growing appetite for Amazon. All coming up in this episode of the Amazon Seller podcasts.
We’re talking recent Amazon updates and the current e-commerce opportunity all coming up in this episode of the Amazon Seller podcasts.
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Welcome back to the Amazon Seller Podcast. My name is Nathan Slamans, joined today by Andy Slamans and we’re going to be covering some of the recent news, topics and things coming out from Amazon that really just point to the continual growing appetite for Amazon and e commerce.
And as we get into that, we also want to just cover a couple of news articles and recent updates from Amazon and some of their policies, things that are important for all sellers, anyone who’s using Amazon and, and especially FBA to be aware of some of these things that just are continually changing with Amazon. And we’ve seen this for a while, right Andy, since we started selling back in you know, you 2013 or so, me 2014, we’ve seen a lot of changes to Amazon. Amazon, we talk about this a lot is really still a young company for their fourth or market cap, right?
I know they’re a tech company in some ways, retail, tech and, and so in some ways they, you know, a lot of those companies grow so fast. But they’re really pretty young and Amazon’s constantly changing. We see that all the time. Anyone who’s been selling since early 2000, I know we have a couple of our seller friends who have been on since the early 2000s and they can definitely attest to the changes, but it’s important to stay on top of it. And so as always, we want to bring you the most relevant data, and information and all that’s going on with Amazon.
So one of the first things that we’re seeing just recently come out from Amazon is they’ve kind of sneakily come on to the seller central and in one of their news updates they’ve said that reimbursement policy, for dimensional, related issues or Cuba scan issues are going to be changing, from the standard amount of time available for reimbursement down to 90 days. Do you want to break that down for us? Andy, what do you think kind of your opinion on this change coming from Amazon, what does that mean for sellers and why do you think Amazon’s doing this?
Yeah, so smart, on Amazon, to come up with a policy like this, I believe previously, correct me if I’m wrong, they, you could go back 18 months and request reimbursement if you, notice that Amazon was overcharging a four-dimensional way. Which then would go into storage fees, as well as fulfillment fees. And now they’re saying that you can only go back 90 days. So you know, if they’ve taken your money and it’s past 90 days, you are not going to get that back. That’s correct. Right?
Correct. And I mean, this one kind of angers me a lot. So anyone that listens to the show a lot knows that we have a service called AMZProfessional, that helps people get back reimbursements. I work pretty closely with that service and you know, and I’m helping to run that. And so we’re constantly trying to help sellers get money back that Amazon basically has taken. I don’t even know a better word to explain it cause it’s basically money that Amazon, that is owed to the sellers that Amazon’s made some kind of mistake with.
And we have people that used www.AMZProfessional, that literally yourself, included who has gotten back tens of thousands of dollars. That is not just like a seller mistake, but this is literally Amazon, through the FBA system has misplaced, lost, damaged. The customer is refunded but never actually returned. And Amazon in their language always says, “hey, don’t worry, we’ll automatically cover you on this. Right? Don’t, don’t worry about it. We got you covered”. And for the average seller, I think they just trust Amazon, they’re this big company, right? You’re like, okay, yeah, they’ll do it. But then AMZProfessional comes through, you know, and helps people recover all this money that was supposed to get reimbursed. But isn’t. And what I think is happening here with this whole 90-day deal, and again, this is for items that maybe you have an item that’s a 10 by 10 by 10 inches, right?
But for some reason when I went into Amazon, it got marked as 10 by 11 by 10. Right? And you’ve got this extra inch there that’s charging you fulfillment fees and storage fees will before as Andy said, you could go on and request to keep a scan, get that fixed up. Well, now you only have 90 days. I mean, to me what happened is some analyst or mathematician at Amazon went through their numbers and said, look, by, by putting this into place, we can save x millions of dollars, basically from people that will no longer be able to claim all this money that’s sitting out there. I mean, I don’t know what else.
Basically, Amazon is trying to limit its liability, for these outstanding, issues. And it’s probably simpler for them just to know on their books. They don’t have these kinds of outstanding potential money that could be sent back to the seller. So it’s kind of frustrating.
So our advice would be to anybody listening to this, make sure, especially for private label products that you go through, look at your account, make sure your dimensions are correct if they’re not. and I’m not sure if this is in place already. I forget whether it’s already the 90 days, but you know, be on top of this and looking as much as you can, at your dimensions. And then that goes for all of your reimbursement stuff, right?
So FBA shipments have six months. I believe now to get reimbursed for incorrect FBA shipments, amzprofessional can help with that. And then regular types of reimbursements lost, damaged, refunded, but not returned. You have 18 months right now.
Hopefully, Amazon doesn’t ever come back and say, hey, for all types of reimbursements you have 90 days. now that that could be an issue for, for some people. So for now, those are the dates. So yeah, definitely the staying on top of that.
Another thing related to kind of dimensions, and I can’t, you know, we might’ve discussed this a couple of weeks ago, but we’re seeing this kind of be implemented now, is that more and more sellers seem to be forced into providing dimensions for their FBA shipments. So, Andy, you’ve been selling for years and I know this is kind of been like a hidden tip in most of our Facebook communities and everything that usually, you know, you don’t have to provide dimensions for your shipments. Maybe just walk us through what you’ve always done in those cases,
Yeah, so typically in a made it and on how old your account is. I’ve always just been a loud to enter in the weight of my boxes and then it would just automatically put the dimensions in but shippers are, are getting smarter, UPS in the last few years they’ve made some updates to how they charge as well. again, I think probably previously they would always just charge by weight, but now they’re seeing, you know, boxes that are maybe oddly shaped our longer on one side. So, now there, you know, maybe your item only weighs nine pounds, but it’s the dimensions are passed a certain number, then they’re going to charge you like it weighs 70 pounds. and so, you know, Amazon, we’ve always just been able to send those shipments in FBA, and not have to worry about the dimensions, but it looks like that window is closing, which is actually against more on them that they’ll be adding, you’ll be forced to add those dimensions in.
Yeah. I don’t know if this might be like you said, UPS or you know, coming to them and saying that this needs to happen, we’ve also noticed too, anyone who does merchant fulfilled shipments, which I know is, you know, less of our audience. But it seems like in the past UPS would try to come at you if you would put, provide the wrong dimensions through like the UPS website or some kind of, you know, third party shipping platform, but they would kind of just correct it, right and charge you. Well, I believe, and maybe this wasn’t this and again, we don’t, I don’t do personally as much merchant fulfilled you using UPS, but it seems like just within the last six months or so, UPS has come out and not only corrected those, miss- inputted dimensions or weight but is also tacking on an extra fee basically for them having to make this adjustment. And I think that’s like a dollar fee.
So if you put the wrong dimensions in for a merchant fulfilled, shipped, to your UPS account, they’ll not only charge you the correct amount, but they’ll charge you an extra dollar for having to make that. And that can really add up. If you’re sending, you know, a hundred, 200,000 packages a month, obviously you will want to make sure your dimensions are right. And the thing that I noticed, and you know when I was doing this for some orders, is that they won’t even send you like an email. A lot of times telling you they’re done doing this. It’ll just show up in your invoice. So you kind of have to stay on top of your invoices in your accounting.
All right. So, that’s some of the recent stuff we’re seeing, and housekeeping for everybody in their Amazon accounts. And then we also wanted to talk about this growing appetite for e-commerce and Amazon, I think kind of encourage everybody who’s currently selling, thinking about selling or getting into it, that really we’re in the right place at the right time and you were just in China, you know, a few weeks ago as we’ve talked about for a while and you kind of, you know, saw the culture and saw a lot of things that are happening in e-commerce in China and you feel like, you know, for the last couple of years at least Asia and China has been a year or two ahead of Amazon in some of these trends that are happening. And so maybe you can give your projection what’s going to happen over the next, you know, a year or two with Amazon, with e-commerce and some of them, you know, statistics are out there now about what’s happening with Amazon in the numbers.
And so it’s interesting being in Asia, e-commerce is just continuing to grow there at a rapid clip. I believe it’s 40% now, year over year. And, usually, America now is about two to three years behind what’s happening in Asia. And so as their appetite is increasing for e-commerce and all different areas of one of the great fastest growing area in Asia, and we saw them where there is actually food delivery, restaurant delivery. And so here in the US, we have grub hub, we have door dash. Those services are growing and over there actually the younger generation, a lot of them will order three meals a day from a delivery service like that and their mind, you know, they can get it within 20 to 25 minutes, delivered right to their door. Whether they’re at work or your, you know, are at home. And in the US I think that we’re going to be there in a similar way in two to three years, especially in the urban area.
Well, it’s such as fast, but you said you talked to some people who said it was actually cheaper to order it online too, right?
Yes, absolutely. So some of these services, like a lot of businesses that are subsidizing basically trying to get their consumers hooked, you know, an Amazon does this to a certain extent, you know, they almost break even, to really get Amazon shoppers hooked to order them through prime.
Well, the recent one-day delivery announcement with Amazon and then Walmart to follow basically is the same deal, right? Amazon on a lot of packages is losing money with this one-day shipping, but they’re hooking you on your Amazon prime membership and basically not ordering from any other online retailer that can’t compete with one-day delivery costs.
And you couple that with the fact that the death of retail is happening as we are talking, as we’re recording this podcast, 3,800 stores were closed across the United States in 2018. Now think about that for a second. Why are those stores closing is because there’s a growing appetite for e-commerce? Now here’s, I have a list of some of these stores, toys r us, 735 stores closed. Best Buy 250 stores, Gap, 200 stores, shuttered Kmart, a 109 Sam’s club’s 63 SEARS, 57 stores shut down. So retail is dying and the growing appetite for e-commerce just continues to increase.
So tell me this, and I know some of these other statistics you were just talking about. You know, Amazon expects to grab 47% of all online US sales in 2019. They’ve just reached over a hundred million us prime subscribers, which is, over half of the American households now are Amazon prime members in 2019. Crazy numbers.
And so in your mind, are you, do you feel like we’re at the right place when it comes to Amazon and with Amazon kind of getting all this power and market share? Does it make you a little bit worried just, you know, from this, from the fact where Amazon can start making all the demands be, you know, from a marketplace standpoint, since they hold all the power? And so, are you looking to kind of diversify off Amazon?
You’ll kind of hear this chatter a lot like you shouldn’t put all your eggs in one basket. What do you think? Like, do you still just go all in on Amazon because that’s what’s hot right now. Do you look for other opportunities? What do you think’s the best play for, for people who are newer to the game or who have been selling and people who have been selling a while and do get 90% plus of their sales on the Amazon marketplace?
Yeah, so I mean, you said at the beginning of the podcast, it really is still on his infancy. Third-Party sellers like us have been allowed on the platform for like 15 years now, I guess. So think about that. It’s really only a company that’s been, you know in existence for 15 years. and so while it is gaining a lot of the market share, it’s still young. It’s still going to continue to evolve. but I think you go with, you know, with where your winning. and so, you know, how long the window will remain open. I don’t know. But if you look, you know, I don’t think it’s going to be quick, you know, drop off of a cliff. If it does decline or things do change, it’ll be a slower change. but you know, when we think about Amazon gaining market share, they’re doing it because they’re building out an amazing fulfillment network.
you know, think about, and this is a, a lot of folks don’t even realize what’s happening, but what their new program prime now, where you have two-hour delivery. and so a lot of folks, if you ask them what’s prime now, they don’t know because it’s kind of crept up without anybody noticing. We’re prime now. It’s two hour delivery to customers. Think about the increased shift that’s going to happen as millions of people switch from buying in store to buying online with same day shipping and only a two-hour wait. So why am I going to get in my car, drive somewhere to stand and wait in a line ever again?
That’s when it’s going to be a rocket ship to the moon for your products and for my products. On the Amazon marketplace and it’s happening right now. Most people are completely unaware of it. Look, one year ago you didn’t see a lot of Amazon prime vans delivering products. I didn’t either. But now you look around and they’re everywhere. And that happens super fast. The infrastructure I personally think for something amazing is being built right before our eyes. And you know, my question always is, are we going to be a part of it?
Yeah, I like that answer because I think there’s a lot of fear-based mentalities almost out there and chatter that it’s almost like abandon ship because there is increased competition because changing policies. But I think when you take a step back, I think people in five years from now we’ll still say, wow, I wish I would have gone a lot harder at Amazon five years ago when it was easier. You know, you, you say often in our group, you know, the best time to start selling on Amazon was 15 years ago. The second best time is now. Right. So I, I do believe, and I, like what you said there about just the opportunity that we have now is still so strong. you know, we try to sell our products on our own website as well and we get some sales there.
But yeah, I mean most sales come to Amazon because it’s just where the, you know, the search volumes at, it’s where the customer demand is at. It’s where people are shopping and most of outside websites sales that we even have now, are just from people who go to Amazon and then kind of check around and see if they can, you know, find better pricing elsewhere or something. But most of it’s still generated from Amazon and you know, you just aren’t able to build the business as fast and scale up as quickly if you aren’t utilizing the power of Amazon.
And so, I know we’re going to be riding it as long as we can. and as you things change, that’s why we have this podcast. That’s why we, are constantly, you know, talking to our members in our course members and everything. Updating on the latest strategies and techniques and things like prime now are going to make certain areas of Amazon still just continue to be the, you know, the place for sellers to be able to market and sell their goods better than anywhere else. So. All right. Awesome.
So that’s some of the recent changes, some of the continued appetites for e-commerce and Amazon as we see it in the news and by the numbers. And as more numbers come in, we’ll keep you updated and we’ll catch you on the next episode of the Amazon Seller Podcast.