The internet has exploded lately with the “new” development of Amazon not allowing the listing of items under certain ASINs. People seem to be running around like the sky is falling, leaving me wondering why. You may say, “Don’t you get it, I have inventory piling up in my RV that I now can’t sell!” Oh, I understand exactly what the consequences of this policy will be, I just don’t think it’s a bad thing. In fact, I believe it can be a very good thing. Shocked? Let me explain why.
Natural Evolution of Amazon FBA Policy
First, we must remember that Amazon FBA is still a new concept. Even though the fact that it has been around several years may seem like it has been here a long time, it is still quite young in the grand scheme of things. This is really still a “grand experiment” that Amazon has been operating. They are still trying to figure it out.
When a company opens up its warehouse to the public and allows them to store inventory cheaply, merchandise tends to pile up. I don’t think Amazon was quite expecting that, at least not to the extent it has happened. It has brought them a ton of money. They have been able to spend that money expanding warehouse space and locations at an almost unimaginable rate. All of that expansion has not solved the problem of warehouse overcrowding.
All of this was caused by extremely low storage fees that Amazon charges on a monthly basis. Third party sellers were able to take advantage of cheap warehousing to house products that were slow sellers. Once so many sellers do this, it creates quite a pile of slow-moving inventory.
Amazon has always made their best attempt at solving this problem without raising monthly storage fees for sellers who have fast-moving inventory. A few years back, Amazon came up with Long-Term Storage Fees. This is a fee on products that a seller has had in inventory for over a year, charging extra to sell more than one of any item in any one condition. In other words, the first item didn’t get the long term storage fee. This allowed for sellers to store one item of any given ASIN just in case that slow-moving item finally makes a sale.
While this did help some, it still didn’t fully solve the problem. So, a little while later, Amazon raised the yearly long term storage fee and implemented a new, six month long term storage fee. This basically worked the same way, but added the additional fee for inventory that has sat for over six months.
Amazon assesses these fees on February 15th and August 15th every year. They are really nice about it, too. They send you warnings before they assess the fees. They tell you what products you have that will be assessed the fee so that you can pull them out of inventory before the fee is assessed. This created the opportunity for some less-than-honest sellers to pull out their inventory the day before the fee was assessed, only to send it right back the day after the fee. Amazon eventually implemented some additional rules around this regarding when you are able to pull out inventory and send it back in order to avoid the fee.
In addition to these fees, Amazon has had quantity limits on slow-moving ASINs for quite some time. Many small-time sellers never realized this because the limits were so high. Private label sellers have had to deal with messages that they couldn’t send in all the inventory they had just ordered almost since day one.
So the reality is that this “new” quantity limiting policy is simply an extension of what they’ve been trying to do for years. They took the quantity policy that was already in place for single-seller, single-ASIN situations such as the private label mentioned above and modified it. They made it cover the totality of sellers on a certain ASIN. So now, Amazon analyzes a certain ASIN to see how well it sells and how many items they currently have in stock from every seller that is currently selling that item. If the sales velocity does not justify the amount of inventory they have, you’ll get a message similar to the one the private label guys have been getting for years.
OK, Everybody Panic!
Just kidding. This is no big deal. In fact, it’s a good thing. Think of it this way- Amazon is telling you that you have made a bad purchasing decision. You now have a business partner with enough insight on all the statistical data that they are able to tell you for sure that was a bad purchase. They are saving you money in FBA fees, no doubt.
But what do you do with all that inventory you just bought? Well, the good thing about being such a small business is that you can pivot your strategies on a dime. Like turning a boat, the smaller the business, the easier it is to change directions. It’s something you’re going to need to learn to do if you plan on making it in this business. The good news is, you have options.
Bundle Your Items
Go to the listing for your item that you weren’t allowed to ship in. Believe it or not, all of the information you need to be able to sell this item FBA is on this page. Scroll down the page. See that section titled “Customers who bought this also bought…”? This section is a treasure trove of information. It’s your own insider information on how Amazon customers operate.
The solution from here is simple. Scroll through this list of products. Some won’t make sense, but others will. Find something that goes well with this item and would make sense that someone that bought this item would also need. Now find some of that product, combine it with your product to make a bundle, and sell it as a brand new ASIN via Amazon FBA.
If you’re lucky enough,your products would make a nice “gift bundle”. The keyword “gift” is trending on Amazon at a surprising rate. If your product bundle fits into a niche that may be appropriate for a gift, use the keyword “Gift Bundle” in your title. You may just sell more than the original ASIN you were trying to sell on!
Another benefit of bundling is that it raises your average sale price, or ASP. If you are still in the beginning stages of starting up your business, this may not be of concern to you right now, but it’s something to be aware of. I would recommend everyone strive to reach an ASP of $25. Once you do this, you will see huge growth in your business. With a higher ASP, you are actually making more money with less work. I don’t have to tell you how good that is. Bundles will allow you to bump that price up and hopefully get that ASP over $25!
You no doubt have already heard me preach time and time again about the value of the Amazon Prime customer. As you know, that’s our primary customer with FBA. However, it’s not the only customer we need to think about. Did you know that non-Prime customers get free shipping over a certain total bill threshold? For years, it was $35, but rising shipping costs caused Amazon to recently raise this threshold. The threshold is now $25 for books and media, $49 for everything else. So creating that bundle and aiming for the “Free Super Saver Shipping” threshold could actually net you even more sales, because nobody wants to pay shipping!
All is Not Lost
I think we can all agree that Amazon needs to come up with a way to alert us of these special circumstances. Third party sellers make up 40% of Amazon sales. They listen to us. There was once a time when they didn’t notify you within the app if you were restricted from selling the item, or if it was hazmat. They listened to the third party sellers who told them this is what we needed, and they added it as soon as they could. I’m sure the same will be the case in this situation.
Until then, you can figure out if the ASIN is restricted for quantity in the store, before you buy right now. Once you scan the item, simply click “list”. Go through the process of listing this product in your inventory. If the product is quantity restricted, you will get a notification.
What if all this fails? Amazon doesn’t have an automatic notification, and going through the listing process in the store is a pain. You’ve bought all this inventory, it’s sitting in your house/RV, and you need to get rid of it. You can still merchant fulfill if you have the room for inventory storage.
If all the options I have outlined in this article fail and you’re doing RA, there’s still an option. I hate to recommend this, because I don’t believe it’s the right thing to do. But if all else fails, returning the product back to the store you bought it from is still an option. As a retailer myself, I like to see it as a last-ditch option, but it is there.
In short, don’t be stressed out at these new developments. Let the other sellers do that. Use this to your advantage. There are so many sellers that will throw up their hands and quit when a new policy like this comes out. Be the person who understands how to use the policy to your advantage. Do you have any other ideas on how you could use the policy to rise above your competition? If you do, let us know in the comments section.