Private Label and Amazon Policy Compliance
by Rachel Greer
"The product tasted fake. I could tell it wasn't natural. It was delivered on time though!" - Actual customer feedback
When a seller starts their own label, there is a sense that the control of the product is finally in the hands of the brand owner. That somehow those pesky intellectual property issues, authenticity complaints, used-sold-as-new, item-not-as-described issues will just go away. As can be seen in the above example, however, that’s not the case. This was the most recent customer complaint on the product. Based on this complaint, my client was asked for proof of authenticity. Of Pumpkin Pie Protein Powder.
Private Label and Risks of Suspension
Private label is a term for a generic version of a product, typically used to refer to the no-name or white-label, non-branded items traditionally found in department stores or drugstores. It has also been used in recent years to refer to the practice of establishing one’s own brand as an Amazon seller and selling an independent version of a popular branded item.
Private label sellers, however, face several types of risk. Failing in the following areas could lead to negative feedback, litigation, or suspended listings or accounts:
Retail-ready packaging. Complaints from customers about authenticity can result in suspension actions at the listing or account level due to non retail-ready packaging. Because of expectations of customers in the marketplace, products not labeled appropriately with title, barcode, net weight, quantity, brand, and country of origin will look inauthentic to customers. When this happens, Amazon asks for an invoice, which is difficult when it’s the seller's own label, unless you’ve signed up for the Brand Registry.
eCommerce-ready packaging. A package that travels via parcel through the Amazon fulfillment centers (FCs) undergoes significant abuse. Once the item arrives at the FC, it is stowed into a bin, and sometimes moved multiple times before picking and packing. Once in the package, it gets put onto a truck, then put through the sorting center with the carrier. Then, typically a last-mile carrier loads it up and delivers it to the customer. Packaging must be robust enough to endure the trip while the product remains in pristine and new-looking condition.
Unsafe or improperly labeled items. Selling unsafe or improperly labeled items can result in warnings or takedown by Amazon, or litigation by private parties. From Amazon’s perspective, customers should not be complaining about the product unexpectedly overheating or causing rashes, or any number of other things that can happen if private-label product is sourced from a disreputable source. Improperly labeled items and items containing toxic chemicals can result in civil litigation under the rules of Proposition 65 in California. Most products have been litigated against, and standard levels of lead, cadmium, phthalates and others defined through legal settlements. Not meeting these requirements (e.g. 200 ppm lead) can result in lawsuits of $10,000 to $20,000, which can seriously disrupt your business.
Insufficient quality planning. Brand goals and quality standards should be an intentional process: You intend to sell either a 4-star or 5-star product, or a lifestyle or commodity product. You must intentionally develop a coherent brand identity. Successful labels don't happen by accident. Once this is decided, your product should be tested to ensure it complies. Even products from successful manufacturers can fail to meet your brand goals if a consistent strategy isn’t followed. This can result in lower-than-desired star ratings or sales velocity.
Seller Performance Metrics and Brand Protection
For the most part, these issues do not show up in seller performance metrics. The evaluation criteria are in the returns, feedback, and claims data, which do not show up in your on-time metrics, order-defect rate metrics, and so on. Daily checks of these reports and evaluation of frequency of issues are essential to protecting your account from action by Amazon. Sometimes, it may be unclear where to look or which trends to follow without help, as these trends are not explicitly published into any reports at this time.
But you can protect your private-label brand on Amazon. Concrete steps include the following:
- ) Set your brand up with the Brand Registry and actively protect it from encroachers
- ) Trademark/copyright your logo and brand name or any distinguishing taglines
- ) Develop safety, regulatory, and quality protocols for testing your products to ensure they meet your brand strategy standards
- ) Rigorously evaluate customer complaints and feedback and convert these into improvements to your detail pages and products
- ) Spend the time to develop good packaging that can withstand Amazon’s high-touch FCs
So What About the Pumpkin Pie Protein Powder?
Amazon is focused on automated methods of enforcing quality on the site. Preventative approaches to protecting your brand will help sellers achieve lasting success with their private-label programs on Amazon and avoid automated and manual enforcement action by quality teams. Previously, it was found in a deep dive that customers had complained about the slightly chemical taste of the pumpkin pie powder. That information could have been used to improve the detail page and set customer expectations regarding the taste of the product.
While it can be risky to launch your own private brand on Amazon, the compliance, packaging and labeling requirements are met by many companies in every industry in the US every day. They make a profit and stay in business; you, too, can meet these safety, regulatory and quality requirements and succeed.
Originally published on November 25, 2015, updated February 27, 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.