Reviewing 2016 and Looking Ahead for Amazon Sellers
by Liz Adamson
With 2016 under wraps and the biggest holiday season ever for Amazon coming to a close, it’s a great time to review the year and identify what went right within your business and what can be improved. It’s also important to take a step back and understand how outside influences may offer new opportunities or threats to your business model. Amazon sellers especially have to be constantly on their toes to stay competitive in the marketplace.
In this article, I offer a quick review of how the marketplace changed for sellers in 2016 and make a few suggestions for 2017.
Looking Back at 2016
This year was a turbulent one for Amazon sellers, with many changes to the platform and its terms of service. Here are five highlights:
1. Incentivized Review Ban
For most of the year, Amazon.com, Inc. ("Amazon") clearly stated in its terms of service that incentivized reviews were allowed as long as the seller was definitely asking for an unbiased review. After several websites published articles showing that incentivized reviews were clearly biased, Amazon quickly changed its policy to ban all incentivized reviews. Amazon also began removing any existing incentivized reviews from product pages. This left third-party sellers scrambling to figure out how to replace their deleted reviews and adapt their product launch strategies. You can read more about the review policy changes here.
2. Enhanced Brand Content
Long offered to Amazon vendors as A+ content, Amazon finally rolled out a version to sellers called Enhanced Brand Content. This new feature allows sellers to create image-rich product descriptions for their product pages. Simply choose your template and upload your images and copy for review by Amazon. This is a great win for sellers and will help their products stand out from the crowd. Learn more about Enhanced Brand Content here.
3. Gated Brands
In late August, sellers suddenly found that popular brands were gated from resellers. Ungating required invoices, letters and sometimes a $1,500 fee. This was a response to the growing counterfeiting problem which received an unwelcome spotlight over the summer when Birkenstock announced it was pulling its products from Amazon. While this may be one more piece of red tape resellers now have to go through, it is a good step in protecting brand owners and customers from unauthorized sellers and counterfeit products. Read more in Amazon Fights Counterfeiters with New Brand Policies.
4. Increased Search Term Limits
Early this year sellers cheered when Amazon increased the character limits for the backend search terms from 50 characters to 1,000 per line. Instead of being forced to make the sometimes hard decision regarding what keywords to include, sellers now have plenty of room to describe their listings. This was a great change to help avoid keyword stuffing the front end which can have a negative impact on the customer experience. Early testing showed that Amazon was only indexing the first 2,000 or so characters, or the first two lines. However, this should still be plenty of room for most products.
This update doesn’t mean that sellers should have a free-for-all with keywords. Sellers should only use keywords relevant to their product that adhere to Amazon’s guidelines. A recent notice from Amazon posted by Ed Rosenberg in the Amazon Seller Performance Facebook group states that selling privileges may be revoked for not complying with the Search and Browse policy found on the Prohibited Seller Activities and Actions page, and cited the following examples:
- Keywords that duplicate information in the product name
- Inaccurate keywords
- Irrelevant or unrelated keywords
- Word or punctuation variants that our search program automatically accounts for
5. Updated Account Health Dashboard
A recent update to the Account Health dashboard left some sellers feeling a little confused and panicked. Especially since it showed warnings for safety or inauthentic complaints that had previously been resolved. Amazon seems to have cleaned it up a bit since the initial launch. Going forward, we hope this will be useful in tracking and resolving problems that could lead to an account suspension. Account suspensions were a hot topic this year and sellers will need to continue to be vigilant in keeping their account in good standing.
What to Expect in 2017
After an eventful year, many are asking what’s next for Amazon. Specifically, how can sellers continue to best utilize the marketplace? Here are some of my thoughts.
Amazon will continue to crack down on counterfeiters. We may continue to see more policies surrounding this issue, so protect yourself by sourcing products from reputable suppliers and hang on to those invoices. If you are a brand owner, make sure you are on Amazon’s brand registry. This is the first step to getting your own brand gated.
Merchants will be competing in an increasingly crowded marketplace. The competition will only continue to increase in 2017, and sellers need to be prepared. Merchants will need to create and sell more innovative and unique products and will need to be more creative in driving new traffic to their product pages. You should be identifying and implementing a total brand marketing strategy using influencers, social media and other platforms besides Amazon. Before you send traffic to your pages, be sure your page clearly communicates your product’s features, benefits and why it’s unique. Use tools like Enhanced Brand Content for product descriptions and FeedbackFive for product reviews to help build a product page with a strong conversion rate.
Play By the Rules
Avoid black hat practices. Amazon’s rules change often around the black hat practices that sellers use to get ahead. Protect yourself by understanding the terms of service and do not attempt to game the system. Doing so will not only prompt Amazon to make more policy changes but can also endanger your Amazon business.
Diversify Your Sales Channels
Even if you stick by the rules, you can get caught in the net. Be sure to diversify your sales channels so that you have more than one income stream. Also be prepared to respond quickly and with documentation should Amazon incorrectly penalize your account.
Watch Your Margins
Amazon is once again increasing FBA fees in February 2017. It’s a good time to review your costs and profits and ensure you are in a financial position to continue to grow your business. There are some products that may not make sense with the new fee schedule, so understand what those may be and how your business can adapt and stay profitable. Don’t be tempted to cut prices to increase or maintain sales. Instead, look for new opportunities that will grow your bottom line and not just the top line.
Amazon can be a wonderfully profitable and challenging place to sell. The marketplace will continue to keep sellers on their toes this year as well as provide new opportunities. With another big sales season behind us, the new year is a great time to pause and take stock of where you are as a business, identify the good and the bad and implement a strategy that will create another great year for selling.
Originally published on January 18, 2017, updated August 28, 2019
This post is accurate as of the date of publication. Some features and information may have changed due to product updates or Amazon policy changes.