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It is learned that according to recent foreign media reports, Amazon may automatically label products with a high return rate as "high return rate" and display it on the listing details page.
As soon as the news came out, it sparked heated discussions in the industry. Once a product is labeled as having a "high return rate", it is likely to affect consumers' purchasing behavior, further leading to a decline in product conversion rate and sales. Currently, this policy has not been officially confirmed by Amazon, but it is foreseeable that if it is fully implemented, a large number of sellers will face the risk of a sharp drop in sales.
However, apart from this, another new policy of Amazon has officially come into effect recently. Sellers may bid farewell to the history of "limited inventory capacity" and usher in a new era of unlimited delivery? Amazon’s new storage capacity policy has officially come into effect. Will it affect operational performance evaluation? Starting March 1, 2023, the original replenishment limits and quarterly storage limits will be replaced by a unified Amazon Logistics storage capacity, which determines the seller's shipping limits and storage limits and can help Amazon manage unexpected surges in storage demand.
▲ The picture comes from Amazon Global Store
According to Amazon's official announcement, the main changes in the new storage capacity policy include: 1. Remove additional replenishment restrictions Merge replenishment limits and storage limits into a single FBA storage quota, with a single limit for each storage type determining the amount of inventory you can send and store in an Amazon fulfillment center.
2.IPI assessment is conducted once a month The IPI assessment has been changed from a quarterly system to a monthly system, and the corresponding restrictions have also been changed to be updated once a month, with each quota being valid for one month.
3. Three-month storage limit forecast
In addition to the confirmed storage capacity for the next month, Amazon will provide an estimated storage limit for the next two months. Sellers can break down storage capacity types by inventory status and source (initial capacity or requested additional capacity).
4. Apply for additional storage capacity When the storage capacity limit is not enough, sellers can apply for additional storage capacity through the Storage Limit Manager, with a maximum of 5 applications submitted each month. After the policy was updated, many sellers checked the maximum inventory level and delivery quantity in the backend and found that they were unlimited. However, although the quantity is no longer limited, the volume is still controlled as can be seen from the capacity monitor. Sellers are also mixed about this:
“When delivery is restricted, we should ship more, and when delivery is not restricted, we should ship less.” "I can only see the capacity monitor now, but I can't see the shipping limit. It seems that it indicates the number of shipments that can be made when the storage capacity is full based on the size of the current product." "The April estimate is half the March estimate."
But at the same time, some sellers reported that the phenomenon of warehouse division is becoming more and more serious. "I just created a shipment to send 29 boxes, and Amazon divided it into six warehouses. I really need to thank you. " From the interpretation of the new storage capacity policy, it can be found that for new professional sales accounts, that is, sellers who have been active in Amazon Logistics for less than 39 weeks, they will not be subject to Amazon Logistics storage restrictions and can refresh FBA sales records without limit. If the active time is more than 39 weeks, they will receive storage capacity quotas based on their IPI scores and sales performance. The higher the IPI score, the more storage capacity quotas they will get.
In this regard, a senior seller in the industry said that the new storage capacity policy has raised the importance of IPI scores to a new level. Considering the new storage fee policy, more and more cross-border e-commerce companies will strengthen the assessment of inventory turnover rate in the future.
"If we want to control the operation's grasp of IPI scores through monthly performance appraisals, we can develop an inventory turnover rate indicator based on this score and link it with commissions. I believe that in 2023, the proportion of inventory turnover rate assessment in monthly commissions should be greatly increased. Profits, turnover rate and sales are the trinity." The seller further stated.
A hot-selling product with a sales volume of 2.27 million units was sold out, and it once dominated the Amazon Best Seller list. In addition to storage capacity, quality control is also an issue that cross-border sellers need to be more careful about in their daily sales. Recently, a Shenzhen seller was not very successful and had to recall more than 2 million products.
Recently, Vesync, a big seller in Shenzhen, issued an announcement that its air fryer brand "Cosori" sold in the United States, Canada and Mexico had quality problems. The wire connectors of some models sold had the risk of overheating, which could cause fires, burns and other accidents.
▲ The picture comes from Vesync announcement
According to official disclosures, the affected models include: CP158-AF, CP158-AF-R19, CP158-AF-RXW, CP158-AF-RXR, CAF-P581-BUSR, CAF-P581-AUSR, CAF-P581-RUSR, CP137-AF, CP137-AF-RXB, CP137-AF- RXR, CP137-AF-RXW, CS158-AF, CS158-AF-RXB, CS158-AF-R19, CAF-P581S-BUSR, CAF-P581S-RUSR, CAF-P581S-AUSR, CO137-AF, CO158-AF, CO158-AF-RXB and CP258-AF.
Vesync has chosen to cooperate with the U.S. Consumer Product Safety Commission, the Canadian Ministry of Health and the Mexican Federal Consumer Attorney General to voluntarily recall the above-mentioned air fryers. The total number of units involved in this recall is approximately 2 million (U.S.), approximately 250,000 (Canada) and approximately 21,000 (Mexico).
Vesync is rooted in the Amazon platform, mainly engaged in small household appliances and smart home devices designed and developed independently, and owns three major brands: Levoit, Cosori and Etekcity. Among them , many product links of the Cosori brand have topped the Amazon Best Seller list.
According to Vesync's interim report data, in the first half of 2022, it achieved revenue of US$223 million and gross profit of approximately US$88 million. Its overall conversion rate on Amazon's US site increased by 19% year-on-year.
▲ The picture comes from Vesync announcement
In recent years, the demand for small household appliances in Europe and the United States has grown steadily, and it has shown strong resilience despite the epidemic. Vesync, backed by Amazon, a powerful sales channel , has gradually formed a brand effect in categories such as air purifiers and air fryers with its boutique strategy and independent research and development design route, and has continuously occupied market share.
However, due to the certain risk factor of use, the quality supervision of small household appliances is also more stringent. It is reported that these recalled air fryers have been sold in retail channels such as Amazon, Best Buy, Home Depot and Target from June 2018 to December 2022, with prices ranging from 70 yuan to 130 yuan. Now that they have been recalled on a large scale, not only has it caused huge losses, but it has also dealt a heavy blow to Cosori's brand image.
For cross-border sellers, air fryers have always been a best-selling category on Amazon, creating many hot links. However, in addition to the challenges of quality control, they also need to guard against various trademark and patent infringement risks.
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