Thousands of Chinese sellers may be affected! Amazon is going to stop the authorized brand project...

Amazon is mired in controversy!

The traditional peak sales season of 2022 has arrived. As usual, a large number of Amazon sellers have prepared large inventories and are working hard to ship goods in order to seize the most profitable moment at the end of the year!

Xiao Zhang (pseudonym) is no exception. As early as 2018, he joined the Amazon Authorized Brand Program and used Amazon-authorized brands to sell products. This is a project that the platform has been actively promoting.

The investment manager said that now there are more than 1,000 Chinese sellers joining.

In the early morning of November 17, sellers who joined Amazon's authorized brand program suddenly received a notification from the platform stating that Amazon will stop the authorized brand program for Amazon's third-party sales partners. After March 31, 2023, sellers will not be able to sell any products. This affects all the sellers' authorized brand project product selections that are currently on sale and under development.

As soon as the news came out, the sellers affected were immediately stunned! Voices such as "Amazon unilaterally announced the cancellation of this project without any communication, which is a bit ill-considered" gradually became louder.

According to sellers’ feedback, joining this project requires strict review and a relatively long submission cycle. The initial time cost and various certifications alone have consumed a lot of manpower and material resources. Amazon suddenly cut off this project and only gave less than 4 months to clear inventory. This is undoubtedly a bolt from the blue for those sellers who have prepared a large amount of goods.

It is understood that many sellers have inventory ranging from hundreds of thousands to millions. Conservative estimates put the total inventory at hundreds of millions. Some people also speculate that the inventory of all sellers may eventually reach billions or tens of billions. How to clean up these "hot potatoes" within a limited time is a hassle. What's worse is that since Amazon sent out a mass notification, many sellers have clearly felt that their product rankings and traffic have dropped significantly. "According to the current trend, my inventory may not be cleared in 40 months." Xiao Zhang said helplessly.

Now, sellers are communicating closely with Amazon investment managers and collectively putting forward various demands. Among them, "extending sales time, retaining sales links, and opening advertising permissions" have become the three most popular demands.

In response, Amazon's investment manager said that the sellers' opinions have been fed back to the headquarters and there may be a reply next week.

Many Amazon sellers have already reported the specific situation to the Commerce Bureau and relevant associations while waiting for the platform's response. One Amazon seller said that he no longer cares about who is right or wrong, but only hopes that Amazon can actively and properly handle the subsequent matters of canceling the project to reduce the negative impact on sellers.

A large number of Chinese sellers suddenly suffered bad news, Amazon cut off the authorized brand project!

The Amazon Authorized Brand Program refers to Amazon's authorization of its four major brands - Umi, Eono, Hikaro and Find - to sellers for sale. Amazon provides support such as brand promotion and advertising traffic, and sellers are responsible for a series of operations such as production and stocking, after-sales, etc., and give the platform a certain commission. In addition to the sales commission charged by the platform itself, sellers also need to pay an additional 10% of sales as project commission.

Xiao Zhang is an old seller on the Amazon platform. In 2018, he came into contact with the Amazon Authorized Brand Program through his investment manager. After in-depth understanding, he believed that since this is an Amazon brand with platform support and protection, the security of the project is naturally high, and Amazon also has a series of advertising support. So the company gave up the original link and project and instead invested a lot of manpower, money and time in the project.

It is understood that Amazon's authorized brand program has been launched in many countries/markets around the world, including Europe, Japan, the United States, and India. By the end of 2019, more than 3,500 products had been launched, covering popular categories such as 3C electronics, home furnishings, sports and outdoor activities, clothing, and pet supplies. With Amazon's vigorous promotion, many Chinese sellers have joined the program until this year, which also means that the types and quantities of products sold today may be more than in 2019.

Amazon said that the purpose of launching this project is to help sellers with deep foreign trade supply chain experience and manufacturing companies use Amazon authorized brands to sell goods, enjoy the Amazon brand effect, give full play to their manufacturing nature, expand business development and achieve business growth. To a certain extent, the sellers who can get the admission ticket can almost be described as "the best of the best".

In the early morning of November 17, 2022, sellers who joined this project suddenly received a notice that Amazon was going to cancel the authorized brand project!

Email content displayed ↓↓↓

In order to better meet the needs of consumers and third-party selling partners, at Amazon, we are constantly evaluating programs, products and services. After careful evaluation, Amazon will stop the authorized brand program for Amazon's third-party selling partners, which involves all sellers' authorized brand program selections that are being sold and under development.

We understand that this decision will have an impact on your business and you may have questions. Please be aware that :

From now on, please stop the development and production of all third-party authorized brand products.

For existing inventory of third-party authorized brand products, sellers can continue to sell them normally until March 31, 2023. And Amazon FBA warehouses will continue to receive inbound shipments created before December 1, 2022 .

Starting December 1, 2022, Amazon will stop charging program fees for third-party authorized brand programs.

From now until March 31, 2023, sellers can continue to enjoy the existing project rights of third-party authorized brand projects and sell existing inventory of selected products.

After March 31, 2023, Amazon will terminate the third-party authorized brand program, including its operations and program rights.

This email, like a "depth bomb", caused countless waves in the seller circle, and complaints from sellers continued to be heard.

According to feedback from sellers, a lot of manpower and resources were spent in order to join this project.

Xiao Zhang said in detail that to launch a product in the Amazon Authorized Brand Project, they need to undergo very strict audits by the project team, with factory qualification audits and product qualification audits being the top priorities. After going through the above process, the product launch cycle is greatly extended.

In terms of factory qualification review ( seller launch), sellers must first pass social responsibility factory inspections, such as BSCI, SMETA, etc., and then pass project factory inspections (FQA). The Amazon team will score the factory from procurement, production, and quality inspection. Only when the comprehensive score exceeds 70 points will it be considered passed.

In terms of product qualification review ( ASIN launch), the time cost of product compliance review is 2 months, and the time cost of product patent review is 2 months. If it is a high-risk product, the seller also needs to provide a high-risk product test report (LFGB, CE, etc.). The product must not only meet local requirements, but also meet the special requirements of the European Union. The time cost ranges from 2 to 10 months, and the cost ranges from tens of thousands to hundreds of thousands.

After completing all the above processes, it will take about 6-15 months before Amazon will allow ASIN to be listed.

In 2020, Amazon seller Xiao Wang (pseudonym) planned to join the project. As the process was not smooth, it took them more than a year to successfully pass the review. "When we were preparing to join the project two years ago, we didn't expect it to be so troublesome. Both the social responsibility report and the internal approval were very time-consuming. It was not until around June this year that we officially started selling on the Amazon platform."

However, less than half a year after it went on sale, the project was suddenly stopped.

At least hundreds of millions of stocks are waiting to be sold, and thousands of Chinese sellers are in a dilemma

“It’s so sudden!”

There was no sign before this project was cancelled. Even in October of this year, Amazon's investment managers were still actively recruiting investors. After the incident, many investment managers knew the news even later than the sellers.

A person familiar with the matter revealed that the investment manager said that this project involves more than 1,000 Chinese sellers in total, and the more than 100 investment managers in charge of this project may resign on December 1, and only a few may stay and transfer to other positions .

After the project was cancelled, sellers fell into a series of troubles such as inventory crisis and decreased traffic and order volume.

Xiao Wang , who joined the project with great difficulty , calculated that he had not even made back his investment. " During the early preparations, not counting the input of relevant personnel, the hard costs such as negotiating with the factory alone cost more than 100,000 yuan. Our situation is still good. Some sellers need to go through more processes and spend more money to sell their products. " Xiao Wang said that on the one hand, it took a lot of manpower and financial resources to join the project, and on the other hand, the large amount of accumulated inventory has become a key problem. Now, Xiao Wang not only has the inventory that has been placed in the Amazon warehouse, the inventory that the factory has already made and is about to ship, and a large amount of inventory that has been prepared for production. However, Amazon only gave about 4 months to clear the inventory, and such a short time could not solve the problem at all.

Xiao Zhang also believes that Amazon's sudden decision to cancel the authorized brand project has caused them great inventory pressure, and the large amount of Amazon products in stock cannot be sold out in a short period of time.

"Maybe some small sellers can clear their inventory quickly, but for those sellers with large investment projects, it may take 6 to 8 months, or even longer. What should they do if they cannot clear their inventory by then?" Xiao Zhang said that many of the products he sells, including the packaging boxes, have the Amazon brand logo printed on them. After March 31 next year, if these products that cannot be cleared are sold through other channels such as Pinduoduo, they may face certain infringement risks because Amazon will have taken back the brand usage rights by then.

Xiao Wang also said that each of his products has a brand logo printed on it, so these products cannot be sold with other brands like other ordinary products. This means that if the products themselves are not sold within the limited time, they may end up as a pile of dead stock.

As a top priority, sellers are working to sell off inventory as quickly as possible.

The method of "selling products at a great discount" has become their first choice. " The investment manager is helping us to apply for the next promotional activities to clear the inventory, " said a seller.

What is certain is that with such low prices, sellers’ profits will be greatly reduced, and some products may even lose money.

An Amazon seller said that his new product had just been delivered to the Amazon warehouse. When he was about to promote the product, he received a notification from Amazon. He was suddenly caught in a dilemma. If he promoted the product, he would not know how effective the promotion was later, but the operating costs would definitely increase; if he did not promote the product, the new product would have no reviews and the possibility of selling it would be even lower. After much deliberation, he finally had to abandon the product .

It is understood that in addition to many small and medium-sized sellers, Hangzhou's well-known cross-border sellers with a turnover of over 100 million have also joined this project. An industry insider speculates that, overall, it is certain that the inventory affected by this incident will be at least hundreds of millions, and it is possible that it may even be as high as tens of billions or even higher.

Xiao Zhang believes that one of the important reasons for joining this project was that Amazon could help advertise and promote products. Now Amazon is going to cancel the project. On the surface, it said that the project will not be completely terminated until March next year. However, he is worried that with the loss of employees, Amazon's investment and promotion of this project will decrease in the next few months. "Personally, the traffic of my products has dropped significantly. I used to be able to place 100 orders a day, but now it has become a few orders a day. At this rate, my goods will not be sold out in 40 months, let alone 4 months."

This situation is not an isolated case. Many sellers have found that their product rankings and traffic have dropped significantly.

In the past two days, many sellers have reported that advertising space for brands such as Eono and Umi seems to have been sold out.

"Amazon's notice directly dealt a devastating blow to our company." Xiao Zhang said that other sellers may have many other businesses to offset the losses caused by the cancellation of the Amazon project, but he is different. In the past two years, he has devoted too much energy to this project. After the expired links were taken back, it was equivalent to that all the link weights and comments accumulated on the platform in the past few years in a diligent and legal manner were wasted ...

Sellers collectively raised their demands, and the investment manager said: There may be a reply next week

In Zhang's opinion, Amazon's unilateral announcement to cancel this project is unreasonable and disrespectful to Chinese sellers. " Unlike those sellers who engage in black hat operations, we are pure white hat operations, and the cost is much higher than that of ordinary accounts . If it is because of fake orders, I accept it. The key is that there is no violation of the law. Amazon unilaterally terminated the contract without any negotiation, which violates the spirit of the contract and is not Amazon's fault. "

Another seller also expressed anger, "For me, money is not the main reason. The main reason is that I can't swallow this breath. Amazon's behavior is really unfair to sellers."

Xiao Wang said that he understood Amazon's current practices, but he still hoped that Amazon could correct all its plans, live up to the trust of sellers when making a decision, and reasonably consider the actual situation for sellers, because behind every store there is a family, and many sellers were affected by this incident.

There are many people who hold similar views as the above three sellers.

The editor found that after summarizing the views of many sellers, they collectively stated that the reason they were willing to invest a lot of time and energy in various certifications to join this project was simply because they recognized the Amazon brand and believed in Amazon's credibility. They believed that this project was more secure and stable, so they paid for a large number of goods for the Amazon brand without any deposit. Now that this project is gone, it means that sellers will have to bear various pressures such as inventory and funds in the future. Amazon needs to give the majority of sellers a proper solution and not let the sellers down.

Based on the demands of sellers, "retain sales links, open advertising permissions, and extend sales time" have become the three most popular demands .

Xiao Wang said that according to Amazon 's current policy, sellers will not be allowed to sell links after March 31 next year , so all the sellers' previous accumulation will be gone. As we all know , the cultivation cycle of a link is not short. Many products are basically in a state of losing money in the early stage of promotion, and only start to make money slowly in the later stage. If Amazon takes back the link at that time, all the sellers' efforts will be in vain. Therefore, the most core demand of sellers now is that they hope the platform can finally leave the link to the seller.

At the same time, opening up advertising permissions and extending sales time have also become hot topics for sellers. They said that Amazon only gives less than 4 months of sales time, and it is impossible to sell out the existing products within this period of time. In addition, the traffic and exposure of the products have decreased, which means that it will be more difficult for them to sell all the products as soon as possible.

As soon as the incident happened, the sellers contacted the investment manager one after another. Some sellers said that the investment manager no longer responds to private messages, but there are also many sellers who have smooth communication with the investment manager.

One of the sellers received the following reply from the investment manager: the warehousing time and the stop sales time may be delayed, and the headquarters received feedback from the seller saying that they were considering delaying.

In addition, many investment managers took the initiative to communicate with the sellers, asked about their needs, and said that they would count the specific demands and try their best to help the sellers.

In response to the feedback from sellers, Amazon said that the cancellation of brand authorization is an adjustment made by Amazon in terms of business. Amazon is also discussing relevant measures internally to ensure the rights and interests of Chinese sellers.

In summary, from November 17th to now, nearly a week has passed, and Amazon's investment manager has only told sellers that their requests will be fed back to the United States. Until now, the sellers have not received any official feedback .

People familiar with the matter said sellers may not receive a response from Amazon until next week.

Now, while Amazon sellers are waiting for a response from the platform, they have also reported the specific situation to the Bureau of Commerce, relevant associations, etc. Some even claim that if things go badly in the future, the possibility of a lawsuit cannot be ruled out.

"Sellers and platforms can only develop together if they show mutual care and understanding." An Amazon seller said that he did not want things to get worse and hoped that Amazon would provide a reasonable solution next week.

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