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Issue 118: A 90-Day Product Launch + Market Research Plan

By Rachel Go

Hello, MyFBAPrep Sellers!

In this newsletter, we share everything sellers must know about the new Amazon ISO-Compliant Seal program. Then learn how to start selling 3P on Amazon plus a 90-day product launch plan. Read to the end to learn how to research local markets, and get a recap of the latest Amazon fee updates.

Announcing: Amazon ISO-Compliant Seal Requirement for FTL and Intermodal Shipments

As of September 12, 2024, Amazon now requires full truckload (FTL) and intermodal shipments to be sealed with an ISO-17712-compliant, Amazon-approved RFID seal at pickup.

To remain compliant with Amazon regulations and ensure your products aren’t turned away at FBA facilities, you must:

  1. Seal FTL and intermodal shipment truck doors with an ISO 17712-compliant Amazon-approved RFID seal applied before the shipment leaves your facility.
  2. Print or note the seal number on the bill of lading (BOL) next to the Standard Carrier Alpha Code (SCAC) and Progressive Number (PRO#) or under the Ship To section of the bill of lading.

Key Details of the Amazon ISO-Compliant Seal Program

How to Become an Amazon 3P Seller

While most Amazon 3p sellers prefer to start small on Amazon and work out the kinks as they go, the marketplace is geared towards those who want to scale up rapidly. For instance, your performance in the first 39 weeks of having a professional seller account will determine your restock limits in Amazon warehouses for FBA.

Having infrastructure in place to support sales along with an aggressive growth strategy will allow you to take advantage of Amazon’s expansion offerings so you can more easily scale and maintain it. In that regard, Amazon 3P sellers need to keep in mind important aspects like:

  • Fulfillment: You’ll have to choose either FBA (Fulfilled by Amazon) or FBM (Fulfilled by Merchant, that is, yourself). For most sellers with small, fast-moving products, FBA is the way to go. However, you’ll still want to invest in inventory management and FBA prep to ensure you save costs and don’t run into problems with Amazon.
  • Product prep: Products must be packaged, labeled, and shipped in accordance with Amazon’s policies, even if you use FBA and programs like Ships in Product Packaging. Given its specificity and hands-on nature, it’s often best to hand off product prep to a 3PL that can manage outbound shipments and ensure boxes meet Amazon’s standards. Failure to comply will result in higher fees and return costs.
  • Customer service: With FBA, Amazon handles customer service and returns logistics for you. Otherwise, you’ll need a system in place to manage customer service. In that case, you’ll have 24 hours to respond to shopper inquiries and 48 hours for a return request. That means you’ll need dedicated people and software to ensure you stay on top of incoming tickets (especially if you scale to multiple platforms).
  • Inventory management solutions: Even if you only sell on Amazon, you need an inventory management solution in place that understands throughput; tracks inventory in your warehouse, Amazon warehouses, and as it ships; and keeps up with stock. That normally requires inventory management software, setting up a SKU (stock keeping unit) system, and ensuring you understand lead times and replenishment times for each SKU at every warehouse/location where you hold stock.
  • Marketing: Early advertising and marketing efforts can be risky because you won’t know the total expenses. However, estimating amounts based on fees, product costs, fulfillment, etc., and then adding a buffer or safety margin will give you a good idea of what you can spend on advertising and marketing. For example, if you know the expected profit margin of a product is $4 per item, you’ll have an idea of your maximum advertising spend for Amazon Sponsored Products.
  • Merchandising: Merchandising should be done and out of the way before you set up your Amazon account. That means creating an Excel file of product copy, photos, and details that meet Amazon standards.

Learn the steps to setting up on Amazon and tips for selling 3P.

A 90-Day Amazon Product Launch Plan to Maximize Amazon Revenue

Successful selling on Amazon is the culmination of meticulous planning, marketing, and setting up your business to gain momentum and continue making sales after launch. It requires a strong sales strategy that carefully curates every aspect of your go-to-market strategy to ensure your promotion, product, and infrastructure build a brand that customers know and want to buy from.

Whether you’re new to the marketplace or already run a thriving Amazon store, our Amazon product launch 90-day plan will prepare you to launch new products and adopt a fresh approach to your account, fulfillment, infrastructure, and product strategy.

Read the full product launch plan, from research to optimization.

Enjoy Amazon 3P Selling With 1P Ease

Work with MyFBAPrep to streamline your Amazon logistics. We can handle everything from port to porch, including receiving, QA, kitting and bundling, FBA prep, shipping to Amazon, restocking for FBM, and much more.

Access Our Robust Suite of Amazon Services

Local Market Research: Unveiling Insights for Business Development

With thorough local market research, you can gain valuable insights into its current status and even predict its future behavior. In more actionable terms, local market research brings a number of benefits:

  • Definition of the local market size and potential: Learn how many potential customers you can actually attract.
  • Evaluation of the competition: Determine if any competitors already operate in the market, as well as what niches you can fill.
  • Adjustment of your business plan: Research figures can help you refine the estimates in your business plan and prepare a better presentation for your investors.
  • Validation of a new product development strategy: Local market research is essential for planning a new product launch, showcasing opportunities, and pinpointing challenges. A product development plan supported by market data has a higher chance of success.
  • Marketing strategy creation: By outlining your buyer personas, you learn how best to set up your marketing activities to achieve the most precise targeting, what content to create (such as knowledge base articles), and how to configure SEO tools for the most website traffic.

Learn how to uncover local insights before you launch in other markets.

Updates to Amazon’s FBA Return Policy and Fees for 2024

Amazon altered their FBA returns processing fee structure in June of 2024. This includes adjustments to existing fees as well as an additional charge for returns that exceed the normal returns threshold for that category. Other changes are:

  • Fees only apply to FBA orders and not to Seller Fulfilled orders.
  • Fees will be billed three months following charges incurred.
  • Product return rate is visible on the FBA returns page, which is updated three times per week.
  • Products that ship fewer than 25 units per month are exempt from additional fees.
  • Apparel and shoes are exempt from the threshold limit; instead, you pay for each returned item regardless of the volume of returns.

To calculate return fees, Amazon uses product category, product tier size, shipping weight, and return rate plus return rate threshold.

  • Product size tier: Small standard, large standard, large bulky, etc.
  • Shipping weight: Shipping weight registered with Amazon
  • Category: Return rate for that category
  • Return rate: Return rate for a given item

Important note: Seller Central forums are full of Amazon sellers concerned about paying fees for returns due to Amazon’s mistakes. However, the company has made it clear they won’t charge for returns that are “Damaged by Amazon” or “Delivered late by Amazon.” In addition, Amazon-related returns do not apply to your return threshold. Fees only apply to items that are physically returned.

Brush up on Amazon’s latest return policy and fees.

Top Industry News

Amazon Cancels Many Vendor Central Agreements: What 1P Sellers Need to Know (Channel Key)
If you sell on Vendor Central, you might have received an alarming message that Amazon is canceling your vendor relationship and inviting you to join Seller Central.

Headless Commerce Will Power the Heart of Future Online Experiences (PYMNTS)
As Andrew Gordon, eCommerce payments strategist at Discover® Global Network, explained to PYMNTS, headless commerce empowers merchants to adopt a more agile and innovative approach to eCommerce, leading to better customer experiences across all channels. Headless commerce is an architectural approach in eCommerce where the front-end (customer-facing) and back-end (business logic and operations) parts of a platform are decoupled.

Temu Parent PDD’s Stock Falls as Biden Administration Goes After Trade Loophole (MarketWatch)
The Biden-Harris administration announced it’s proposing to take regulatory actions to cut down on what it describes as “overuse and abuse” of a trade loophole. Senior administration officials said they’re concerned about how e-commerce giant Temu and rival Shein have relied on the loophole. The so-called de minimis exemption makes it possible for shipments worth $800 or less to avoid tariffs and U.S. Customs and Border Patrol scrutiny.

Amazon’s Antitrust Problem (Logistics Viewpoints)
Fulfillment by Amazon requires that sellers jump through numerous hoops to prepare their products for storage and shipment into Amazon’s fulfillment centers. This is called FBA Prep. One of the 3PLs that do take this work is MyFBAPrep. MyFBAPrep has over 100 warehouses and 85 million square feet of warehouse space, and they offer a range of services that help third-party sellers navigate the complexities of FBA requirements.

US Plans a Further Crack Down on eCommerce Imports (AirCargo News)
The Biden administration last week announced plans to implement stricter rules on e-commerce goods being imported into the country under the de minimis exemption. If implemented, the requirements would mean that any products that are part of the Section 301, Section 201, or Section 232 trade enforcement actions would no longer be covered by the de minimis exemption. The exemption allows goods with a of value of $800 or less to avoid paying duties and come under less customs scrutiny when being shipped directly to an individual.

Holiday eCommerce Sales Projected to Rise Despite Inflation (PYMNTS)
A new report suggests Americans will slow their holiday spending this year compared to 2023. The annual holiday retail forecast from consulting firm Deloitte, released Thursday (Sept. 12), projects that holiday retail sales for 2024 will increase between 2.3% and 3.3%, to $1.58 trillion to $1.59 trillion between November and January.

More Than Half of US Gen Zers Are Headed to TikTok Shop This Season (Retail Dive)
EMarketer released a report last month supporting the forecast of the younger generation making holiday purchases on social media. The company found that 42% of Gen Z shoppers are likely to buy gifts via social media this year, higher than any other generation. Across generations, shoppers buying gifts through social media planned to purchase gifts from Instagram (57%), Facebook (56%) and TikTok (43%).

Amazon Is Shipping 70% More Off-Amazon Orders (Marketplace Pulse)
Amazon’s 3PL business has shipped 70% more orders for sales channels like TikTok so far this year. Its business shipping goods for off-Amazon orders is growing faster than on-Amazon sales. Sellers who outsource fulfillment to Amazon using the FBA service can also use that inventory to fulfill orders in other sales channels, including marketplaces like Walmart, social commerce apps like TikTok, and direct-to-consumer websites. That’s called Multi-Channel Fulfillment (MCF).

E-Commerce and the Rise of the Sharing Economy in Logistics (Global Trade Mag)
The principles of the sharing economy have become prevalent in logistics, which implies the use of partnerships and numerous technologies combined with an effective management system for the most effective and cost-efficient delivery. This new approach is revolutionizing conventional logistics practices and is opening up prospects that can transform supply chains into more sustainable and flexible models through the sharing of fleets, storage units, and labor pools.

Seko Logistics Gets Capital Infusion (FreightWaves)
Global freight forwarder Seko Logistics said Thursday it has entered a recapitalization agreement with its financial partners to cure its balance sheet. Financial terms of the transaction were not disclosed, but the deal is a “landmark transaction” that will stabilize the company and allow it to focus on its “long-term growth trajectory,” a news release said.

Buy with Prime and Amazon Multi-Channel Fulfillment Expand with New Capabilities and More Brands (Seller Central)
So far this year, Buy with Prime orders through merchants’ websites are up more than 45% year-over-year; the service is also driving an average 16% increase in revenue per shopper for merchants offering Buy with Prime. Buy with Prime shoppers can now use PayPal to check out on participating merchants’ websites. Amazon Multi-Channel Fulfillment is also growing quickly, now serving over 200,000 U.S. merchants, with a 70% year-over-year increase in total orders fulfilled by the service so far this year

How Are Temu Prices So Much Lower (eComm Crew)
Ever since Temu’s viral marketing ad in the Superbowl, they’ve grown to become one of the biggest competitors to Amazon. But how is Temu able to offer lower prices compared to sites like Amazon and even eBay? It has something to do with its business model and the fact that it lacks a few key features of other e-commerce sites. In this episode, the eComm Crew will talk about how Temu has disrupted the e-commerce space, how Temu keeps its products cheap, and how they cut costs.

Until next time,
Rachel Andrea Go
Marketing Director, MyFBAPrep