Updated 9/6/16 - It appears Amazon has changed its stance on restricting brands for existing sellers. Thus, from what I know to date: It seems sellers who had been selling newly restricted brands in the past may be able to sell them as usual. If they are able to sell them as usual, the dreaded fees of
up to $1500 per brand won't apply. (What remains to be seen is if those existing sellers still need to get ungated to sell the brand.) However if you have not previously sold a newly restricted brand, you will still need to apply for brand ungating. CNBC quote: "[Amazon is telling] existing sellers that they're being grandfathered into the system and that the charges, which typically range from $1,000 to $1,500 per brand, only apply to new merchants. In other words, if you've been selling Nike shoes or Hasbro toys for several years, it's business as usual. " Remember, even if you're a new Amazon seller (and thus restricted from selling various brands' products), there is still plenty of opportunity for you. If you're an existing Amazon seller, it's still wise to expand your sourcing to methods in addition to retail arbitrage and online arbitrage. Read on and also see this 9/6/16 'Do's and Don't's' article
Unless you've been living under a rock, you know that Amazon recently emailed individual sellers telling them they couldn't sell certain brands any more. If you want to be approved you have to provide real invoices from manufacturers - not retail receipts, and (in some instances) pay a $1500+ application fee just to be considered. The rumor is that Amazon did this because there were too many counterfeit products and/or sloppy sellers packaging (passing used off as new, etc.). But all (or most) sellers like you and me were affected anyway.
You probably got the "restriction" email from Amazon if you had in stock a product from a brand you were restricted from. Some sellers (like me) got no email, which (likely) means either a.) I didn't have any restricted brands in stock, or I was 'grandfathered' in to be allowed to sell it. (However, I tried listing a Lego product and Adidas product - I was restricted.) Thus, in short:
Many 3rd party sellers like you and me are restricted from selling products from a couple hundred brands on Amazon. Thousands of brands are not restricted.
Let me get the "What you should do from now on?" stuff out of the way, then further down I'll share some recommendations.
1.) What you should do from now on - Part I: Click through and bookmark these 3 pages (3 selling experts are continuously these lists of 'known' restricted brands. This information comes from the blog owner's information, not Amazon. Instead of favoring one over the other, I'm referencing all 3 below. Note: 'Not all restrictions are created equal'. For some of the brands (e.g., Hasbro and Disney), it appears some sellers like myself were not restricted):
2.) What you should do from now on - Part II: When in doubt, use the (free) Amazon Seller App for iPhone or Android. This will instantly tell you if you are restricted from selling a product (Note: non-Amazon scouting apps like Scoutify and/or Profit Bandit don't give you these alerts!). If you're already using a scanning app like Scoutify or Profit Bandit, keep using them - they're a lot faster. Use the Amazon app if you're in doubt or you want to double-check the item:
- Install the Amazon Seller App on your phone/device
- Ensure you're logged into the App using your Amazon seller credentials
- Open the App, select 'product search' and touch the 'camera' icon. Then scan the barcode any item (or enter the item name/UPC, or hover the camera over the face of the item as Amazon can 'recognize' what you're scanning). Hint: if you're on (say) Walmart.com and you want to scan an item, pressing the camera icon will work in most cases if you hover your camera lens over the picture of the Walmart item as it appears on your screen.
For instance, I randomly looked up four items (those I had a hunch I'd be restricted from), using my Amazon Seller App, and yep, I was restricted. Screen shot is on the upper right of this page (click to enlarge). Not all restrictions are created equal'. For some of the brands (e.g., Hasbro and Disney), it appears some sellers like myself were not restricted.
Also, now you can get on-screen notification (PC/MAC only) when you are looking at products on Amazon with CheckPermission (software for Chrome browsers). CheckPermission will tell you whether or not you're approved to sell them. It's a guaranteed time saver:
Now for some recommendations:
First, sourcing via retail arbitrage or online arbitrage is NOT dead. It's just changing. There will always be opportunities sourcing thousands of other (non-restricted) brands from stores (physical or online). You just have to be more selective and strategic. Let's take heed from some trusted experts:
"Retail arbitrage is still a resounding 'yes' for us right now. Time will tell whether these latest changes will wind up being something whose effect was exaggerated or whether we’ll have a whole new set of guidelines from Amazon. The point is, stay agile! Those of you who are willing to take the news and roll with it are the ones who will rock your businesses in the end!" - Jessica Larrew, The Selling Family
"Retail arbitrage is not dead. It’s just different than it was a few days ago. And in a year or two, it’ll be totally different again. But with any challenge, comes opportunity. It’s what we do as entrepreneurs – Re-frame situations to create profitable businesses"- Duncan McPherson of SmartFBAIncome
"Don’t dwell in the negativity. It can be so easy to get sucked into the negativity online when difficult situations arise in the FBA selling world, especially on Facebook. You could easily spend (waste?) hours reading and participating in the comments on Facebook posts about how fill-in-the-blank change is going to ruin our existence as third party sellers on Amazon. Don’t fall victim to that temptation!" - Stephen Smotherman of Full-Time FBA.
[Move according to your tolerance for risk.] Risk Profiles: Extremely Risk Averse: Immediately remove all inventory that has been sourced via retail and online arbitrage, and stop sourcing any new products via Retail Arbitrage (RA)or Online Arbitrage (OA). Risk Averse: Stop sourcing all new RA / OA and begin to shift to purchasing inventory via other sourcing methods such as wholesale. Calculated Risk: Keep sourcing RA / OA, while monitoring Amazon’s changes. Keep 2 to 3 months inventory in stock at a given point in time to be able to adjust if a change comes through the pipeline. Don’t make any drastic changes to your business at this point in time. Ignore Risk: Keep sourcing RA /OA as you do today, and plan to continue these methods until retirement or you are suspended. Essentially, you’ve picked your path and will not deviate no matter what changes are made by Amazon." - Ryan Grant, Online Selling Experiment
Second: It's time for you to consider diversifying into one or more of: used books, wholesale and private label (it's never been less expensive/less risky to do so) to sell on Amazon. You have to do it the right way though. Learn the basics and more for free (or inexpensively) from my trusted partners:
(FREE) Online Book Arbitrage (you pay $6 S&H) by Peter Valley (one of the foremost experts on the topic)
(FREE) Private Label: Scott Voelker's workshops
($) Wholesale: Robyn Johnson's Wholesale Workshop (pre-recorded)
($) Wholesale: Skip McGrath's Wholesale Buying System for Amazon or eBay
Third - It still is possible for you to be ungated from selling otherwise restricted brands BUT you have to prove to Amazon that you're approved by the manufacturer/brand owner, NOT a 'wholesaler' or middle man. The wholesale training resources listed above has tutorials on how to do just that. But don't expect approval from some/all of the biggest brands out there until you can demonstrate you can be an asset to those brands (=sell a LOT of their product).
Fourth - Ensure you have an eBay account up and running (free tutorials here and here) This is especially true since Christmas is coming (hey let's face it you need a backup). If you're a new eBay seller, start selling random stuff around your house (unwanted DVDs, CDs, t-shirts, broken electronics) now as you may have a 'probationary' period. The service Joelister (I can't vouch for how well it works) will copy your Amazon inventory to eBay, and when an eBay buyer buys your item on eBay, it's automatically removed from your Amazon account. This isn't to panic you into selling on eBay (Don't panic), this is a smart thing for any Amazon seller to have.
That's it for now. I'll have more info coming in an upcoming AskJordan podcast.
Stay well, stay focused!
(Your feedback is welcome - comment below)