Big change! Amazon page updated again

Amazon has made another change: store pages have begun to display country locations, with the locations of Chinese sellers being exposed, causing concern among a group of peers.

In order to avoid being affected, some sellers will consider registering a local US account. It is worth noting that many local US stores have been scanned recently, and the US Corporate Transparency Act, which has officially come into effect this month, has once again sounded the alarm for compliant operations.

Amazon store page showing country location

Recently, Amazon's pages have clearly shown the country where the seller's store is located, which has caused a group of sellers to panic.

If the seller is from China, "China" will be displayed directly on the store page . A large number of Chinese sellers' companies are located in China, so the store's location label is displayed directly, which was not displayed before.

However, some domestic big sellers have registered companies in the United States, and the location of their stores will be displayed as "United States". For example, the company that opened the store of the top seller Anker Innovations is in Seattle, USA, so its store is displayed in the United States. Other big sellers operating like Anker Innovations also display their store locations in "United States".

Amazon’s sudden change will definitely have an impact on Chinese sellers. As for the extent of the impact, sellers have different perceptions.

Seller Summer believes that displaying the store location may affect sales , mainly involving some specific categories. For example, the impact on some daily products is relatively small.

First, although Chinese brands have a certain degree of popularity, some American consumers' awareness and acceptance of Chinese brands and products is still relatively limited; second, some consumers even have some prejudice against Chinese products, so they will avoid products from Chinese sellers; finally, some identified products will become sensitive areas for consumers, such as some Chinese-made battery products that have caused fires reported by the media before, or some electrical products. In addition, there are some baby products, because European and American consumers have relatively high safety requirements for such products, so these products may also be affected.

In general, compared with domestic stores in the United States, Americans are more accepting of domestic products, especially those consumers who care about brand and quality. After displaying the Chinese address, the impact on domestic sellers still exists.

On Amazon, there are a relatively large number of Chinese sellers. Sebastian Gunningham, senior vice president of Amazon Mall, also mentioned that within a few years, Amazon has become the main e-commerce channel for Chinese exports. Today, nearly half of the top third-party sellers on Amazon are located in China.

For decades, goods produced in Chinese factories have filled the shelves of American retailers and brands, and Amazon has acted as a middleman, with Chinese sellers selling through Amazon and taking market share from domestic sellers in the United States. Previously, the business locations of Chinese sellers were invisible to shoppers, who only knew that they were shopping on Amazon. Now Amazon is blatantly displaying the nationality of sellers on store pages.

Currently, Amazon has just displayed the country location of the store and has not yet received any feedback that domestic sellers have been significantly impacted. The specific impact needs to be further observed.

However, industry insider Tim believes that the change in Amazon's platform may have a deeper meaning and a far-reaching impact on Chinese sellers. For Chinese sellers, it is still necessary to do a good job of localization. It is forward-looking for leading companies like Anker to register companies in the United States. Next, a group of domestic sellers may choose to register American companies.

Hidden dangers of US domestic accounts

It is worth mentioning that sellers who have registered companies in the United States or have previously registered companies in the United States should be aware that the US Corporate Transparency Act, which has come into effect this year, may have a certain impact on these sellers.

The U.S. Corporate Transparency Act will officially come into effect on January 1, 2024.

In mid-January, multiple U.S. accounts were scanned and required to undergo fraudulent video verification. The platform determined that the accounts were used for deceptive, fraudulent or illegal activities, and required a video interview to verify the seller's identity. The seller was also informed that the relevant account would be deactivated on January 27. The accounts that triggered the verification were basically those of domestic main companies, and purchased accounts became the hardest hit.

In the past few days, another batch of US domestic accounts were swept by Amazon. Some companies’ domestic accounts were all shut down. There was also a company that bought 8 domestic accounts and all of them were swept. It seems that Amazon’s sweep of domestic accounts is still continuing.

A large number of domestic companies' U.S. domestic accounts have been swept, and some industry insiders have analyzed that this is related to the newly effective U.S. Corporate Transparency Act. Now these swept accounts are in danger, especially those purchased accounts. Under this circumstance, the price of U.S. corporate domestic accounts has been rising all the way, and some people have revealed that it has risen to around 200,000.

In fact, the US Corporate Transparency Act was passed as early as 2021, but it did not come into effect until this month. The purpose of the Act is to combat financial crimes such as money laundering, tax evasion and tax fraud through transparent methods. The US Financial Crimes Enforcement Network has implemented new regulatory measures on companies in and outside the United States in accordance with the Corporate Transparency Act, requiring relevant companies to report beneficial ownership information.

The US Financial Crimes Enforcement Network has set different reporting deadlines for entities established or registered at different times. Specifically:

Companies incorporated before January 1, 2024 must submit reports by January 1, 2025;

Companies created or registered to do business in the United States after January 1, 2024 and before January 1, 2025 must submit the application within 90 calendar days after receiving the confirmation of incorporation.

For companies created or registered to do business in the United States after January 1, 2025, they must submit the application within 30 calendar days.

The new rules require disclosure of information about all U.S.-formed corporations, limited liability companies and limited partnerships, as well as personal information about their beneficial owners and the individuals who make up those entities.

For sellers who register their companies in the United States, if they fail to submit the beneficial owner information in time or are not within the scope of exemption, they will face a considerable penalty. The penalty for overdue is US$500 per day, which is quite heavy!

So what are the companies exempted? It is understood that there are 23 types of companies, including listed companies, which have disclosed the ultimate beneficiary information as required, as well as banks and financial institutions, investment companies, insurance companies, government entities and public utility entities, non-profit organizations and other tax-exempt organizations.

If the above conditions are not met, large companies that meet the following conditions can also be exempted: 1. Annual revenue exceeds US$5 million; 2. Have more than 20 employees in the United States; 3. Have an office in the United States.

Perhaps many cross-border sellers are not within the scope of the exemption. They have already registered their companies in the United States, or are about to register their companies in the United States due to pressure from Amazon to display their country location.

For these sellers, it is imperative to determine the beneficial ownership information of the relevant entities as soon as possible to comply with the requirements of the Corporate Transparency Law and the upcoming implementing regulations, and to prepare relevant materials and submit beneficiary declarations in a timely manner to meet local policy and regulatory requirements.

The alarm bell for Amazon sellers to operate in compliance has sounded again, and the resulting operating costs may rise further.

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