Today, I’m going to show you ten of the most recent, most critical Amazon FBA changes you need to know in order to sell in 2022.
I have been selling on Amazon since 2014. And the one thing that never changes is Amazon changes every single year.
1. Do you realize what’s happening in the ecommerce space?
Ecommerce has taken over global trade. It’s not a trend or a fad. It’s reality. And it’s the future.
It’s easy to tell if the latest hot business venture will ultimately rise or collapse into a fiery crash by examining its core infrastructure. A lot of would-be business success stories turned into failures—sometimes overnight—all thanks to an unstable base (we’re looking at you, real estate boom of the late 90s and early 2000s).
But ecommerce is different. That’s because its infrastructure is the internet, which is not going away anytime soon.
Moreover, today’s ecommerce market doesn’t depend on the hopes of an inflated future market. Ecommerce growth is steady and slower than most people realize. Which is good since rapid economic growth is a red flag.
In 2021, ecommerce sales grew by 14%. That’s after a modest 32% boom in 2020 thanks to the pandemic. Here’s another angle: of all 2021 retail sales, only 13.2% were online. If you’re worried that you missed the ecommerce train, it’s just warming up.
Today, more than 20 million websites sell products. But almost half of all online sales go to just one store (which you can probably guess), and that’s Amazon.
For the last 15 years, Amazon’s revenue has grown by 20+% each year. And they’ve proven their resilience. Amazon has survived, and even flourished, during the:
- Dot com boom and bust of 1995 - 2001
- Housing crash of 2006 - 2008
- Pandemic of 2020 and onward
Actually, Amazon grew by 37% between 2019 and 2020. While companies around the world (temporarily) shut down and/or furloughed thousands of employees, Amazon did $386 billion in revenue.
All of which is to say it’s time to jump on the Amazon FBA train if you haven’t already. In fact, Amazon is now making it even easier for new sellers to break into the dozens of markets on their platform.
2. No more Amazon FBA?!
You read that right. It’s not clickbait. Nor is it a plea to redirect all of your inventory to other marketplaces.
Amazon did threaten to end its third party seller platform, even though third party sales constitute the bulk of their retail revenue.
Here’s what happened:
Amazon began as a bookseller. Then Amazon became the online store that sold everything when it allowed third party sellers to hop on board. And then it became the massive company we know and love that sells everything you could ever dream of.
Today, Amazon—far from its days as a bookseller—offers fulfillment services, AWS web hosting services, Prime streaming, Whole Foods, and it owns huge brands like Alexa, Kindle, etc.
Naturally, with so much expansion, Amazon gathered a small army of critics, who then accused them of using their massive scope to launch copycat products and abuse their power to prevent smaller businesses from finding customers. To be fair, per Amazon’s Terms of Service (TOS), sellers aren’t allowed to refer shoppers to their independent websites.
In response, a group of lawmakers wrote a set of bills to contain Amazon and block their so-called “anti-competitive” practices.
If these bills pass, they could lead to the breakdown of Amazon. This would mean that Whole Foods would once again be its own company. AWS would also become its own company. As would Prime streaming. You get the picture 🖼.
Amazon responded by threatening to prohibit third-party sellers from selling on their platform. And they can get away with this because they know lawmakers enjoy having third-party sellers on Amazon. It supports small businesses and the economy.
And if by the smallest, tiniest chance, these bills do pass, and we witness the break up of Amazon, and Amazon does eliminate third party sellers, it would take years to go into full effect.
I’m not worried. You shouldn’t be either.
And if this all does ever become reality, there are plenty of other ecommerce marketplaces—Shopify, Walmart, Target, etc.—for you to sell on. And shoppers are gradually making their way to those platforms, as well.
3. Amazon requires you to serve customers who abuse the system.
The not-so-fun part of ecommerce is there will always be customers who take advantage.
Back in the day, if you sold products FBM—fulfilled by merchant—you got to write your own return policy. You could even reject customer refund requests.
For example, let’s say a customer, Bobby McGee, bought a pet sling that you sell FBA.
If Bobby McGee tried to return his dirty, slightly worn and torn pet sling, you previously had the option to say “I’m incredibly sorry, Bobby, but I cannot issue a refund due to the product’s condition.”
That is no longer the case.
For the most part, you now have to give Bobby—and any other customer who uses, abuses, and returns—a refund.
Amazon is all about putting the customer first. Which means that if the customer wants to spill wine on and tear up your products for a full refund, they get to do that.
You must learn to put your ego aside, process the refund, and hope that your excellent customer service results in a five star review.
If you can focus on keeping your customers happy—yes, all of them—your business will be better off. So if appeasing a cranky (and clumsy) Bobby McGee is what it takes, that’s what you do. So that you can ultimately do the things you love with the people you love.
And if you’re too worried about starting on Amazon—namely finding a strong first product to launch—to even think about processing refunds, visit JOD.com/find. I’ve got a free training video on how to find products that sell, just for you.
Now, let’s say you did process Bobby’s refund and he still leaves a negative review. You have more options than before.
4. You can now contact customers who leave negative reviews.
Amazon recently launched a new feature for brand registered sellers called Contact Customer. This means that you can now message customers who leave a one, two, or three star review on your listing as long as they have not opted out of being contacted by Amazon sellers.
This serves two purposes:
- You can learn of any issues with your product that you might need to correct.
- You have the opportunity to improve your average star rating.
This is far from a guarantee, but sometimes, if you handle the situation with tact and compassion (like we teach), the customer will change their review.
Just don’t explicitly ask the customer to change their review or else Amazon will ding you.
Now, if you wanted to instead replace the damaged version for them, that option also just got easier.
5. Amazon will help you replace duds.
We used to recommend that if a shopper claims they received a defective product that you simply replace it free of charge. Now, Amazon is automating that process for you with its Free Replacements Program.
Before we get into the how of this program, note that you don’t have to take part if you don’t want to. So, if for any reason you don’t want the customer to receive a replacement, you can cancel it. But it will affect your cancellation rate, and thus your account health. So we don’t recommend it.
Regardless, a buyer who receives a damaged, defective, or different-than-ordered product may request either a refund or a replacement. And if they request a replacement, Amazon will now issue that order on your behalf (if you don’t opt out), provided you have the item in stock.
6. New flexibility on your storage limits.
Back in 2020, too many sellers had mountains of products sitting in Amazon fulfillment centers and not going anywhere. In response, Amazon instituted a rule that prevented sellers from sending more than 200 units of a new product’s first shipment to a fulfillment center. They later removed that rule.
But they also announced a new metric to measure your inventory performance called the Inventory Performance Index (IPI). And it rates how well you manage your inventory.
Your IPI score can currently be as low as 400 before you face inventory restrictions.
Additionally, inventory limits no longer apply at the individual product level. They apply to your total storage level, which is beneficial if you sell multiple products or the same product in multiple variations.
For example, say your standard-sized product limit is 3,000 units.
You sell two pet sling carriers: a black one and a pink one. The black one sells twice as quickly as the pink.
Instead of splitting your inventory evenly across the two colors, you store 2,000 units of the black and 1,000 units of the pink.
This is the most inventory flexibility Amazon has offered since they introduced inventory limits.
Of course, this is only for FBA products. However there are some new FBM benefits, as well.
7. Amazon will handle all of your FBM customer service.
One of the perks of selling FBA is that Amazon handles all of your customer service. Up until recently, this has been a major drawback to selling FBM. I am happy to report that is no longer the case!
Amazon recently introduced a new service called Customer Service by Amazon (CSBA). Creative name, right?
And it’s pretty straightforward: FBM sellers can now pay Amazon to handle their customer service.
8. It’s easier to sell from anywhere in the world.
In our Amazon FBA membership, we teach you how to sell to Amazon marketplaces outside of where you currently reside. So selling from anywhere in the world isn’t exactly new.
However, Amazon is making it easier to have your payments transferred to your bank account located anywhere in the world with the Payment Service Provider (PSP).
Let’s say that you live in Iceland where your bank account is also set up. Except you sell in the US because Iceland isn’t an Amazon-approved marketplace. When you make sales, Amazon cannot transfer the money to your Icelandic bank account for the same reason you don’t sell there.
PSPs (for example Payoneer or World First Bank) act as intermediaries between Amazon and your bank. Amazon transfers money into your PSP and from there you can transfer funds to your bank account.
In 2021, Amazon made the process even smoother. You still have to use a PSP. But now your PSP must be Amazon-approved. But by using an Amazon-approved PSP, the coordination between all three parties has become much safer and more official. Which is a win for you.
9. Dropshipping just got harder.
This is another win for you!
Dropshipping is another type of ecommerce store. Here’s how it works:
- Bobby McGee sells pet slings for $30 (he decided to sell his own after he returned yours). He doesn’t own any inventory, though.
- Shopper Lucy Pickleberry buys one of his slings for $30.
- Bobby purchases the product from Walmart.com for $15.
- When Bobby checks out at Walmart.com, he enters Lucy’s name and address.
- Lucy receives her pet sling.
- Lucy is out $30. Bobby profited $15 minus fees.
Now imagine that when Lucy receives her pet sling there is a receipt from Walmart.com showing that the product only cost $15. Lucy is understandably upset that she paid double.
And that’s bad press for Amazon. So, they found a way to eliminate the issue.
Now, if you are a dropshipper, it is your responsibility to ensure that there are no traces of the dropship—or the associated upcharge to your customer—in the actual product your customers receive. This means no receipts, no price tags, no credit card numbers, no documentation whatsoever that would indicate that you, the seller, were the “customer” the product was sold to.
If you sell dropship, it is up to you on how you will take care of this. You are the owner of your store so its success is your responsibility.
10. Counterfeiters are getting destroyed.
If you can hear “Hallelujah” playing as you read that, join the club.
In 2019, Amazon launched their own Counterfeit Crimes Unit stacked with former federal investigators.
Combat illegal hijacking of third-party listings on Amazon.
And let me tell you they are kicking counterfeit booty and taking names. I mean, they are dealing serious blows to hijackers!
So far, Amazon has:
- Referred over 250 cases to US officials for criminal investigation
- Enacted 64 civil litigations
- Disrupted counterfeit supply chains
- Continuously pressed Congress for stronger anti-counterfeit laws
Way to end on a high note!
But that’s not all that’s new with Amazon this year. Check out this post to see the top ten features Amazon has added to make it even easier for new third party sellers to succeed on their platform.
If you have found these updates helpful, check out JOD.com/freedom. Our Amazon FBA membership is constantly updated with the latest in Amazon features and news so that our members can have everything they need to succeed. And you can too.
Which update surprised you the most? Let me know in the comments.