1) Fulfillment Issues and Warehouse Space
A new issue for Amazon sellers is rearing its head: lack of inventory space. In the surge of ecommerce sales due to COVID-19, Amazon is struggling to find enough space in warehouses to stock inventory. To combat this issue, Amazon has set restrictions to determine how much inventory individual sellers are allowed to ship to warehouses.
According to Amazon, sellers with an Inventory Performance Index Score of 500 or higher will be given more privileges. As of right now, there isn’t much information on what impacts this number—and the score is largely up to Amazon’s discretion.
These new restrictions could put smaller Amazon retailers at risk of selling out on Amazon. If you only sell on Amazon, you might want to look at other warehousing options and shipping methods to ensure your sales aren’t limited by Amazon’s new rules.
2) Shipping Price Increases Outside of Amazon
The shipping war rages on as Amazon increases their own fleet of aircrafts, trucks, and drivers. In the wake of this shift, other shipping companies have responded by hiking up their prices—which not only hurts Amazon but retailers like you who have to take on these costs.
In January, UPS and FedEx both introduced a $24 fee for packages over 50lbs. In June, UPS announced additional peak surcharges and charges on domestic shipments. Keep in mind that UPS may continue to increase the price for peak seasons like the holidays, so factor in this additional cost. If you’re looking outside of Amazon in lieu of warehousing issues, also consider the added costs of shipping outside of Amazon.
3) 2020 Amazon Updates to Sponsored Ads
There have been many updates to Sponsored Brand and Product Ads throughout the year. Here are a few to look out for this holiday season:
Product Detail Pages: Sponsored Brand placements expanded to product detail pages (in the US, UK, Germany, and India) in April. This new placement highlights brands related to the product shoppers are viewing. Only ads that are linked to a Store will be eligible to show in this location. When the ad is clicked, the shopper will be taken to the brand’s store. Learn more.
Edit Creative: Sellers can now directly edit creative aspects for Sponsored Brands without creating entirely new campaigns. You can now change the products, headline, and logos.
Translation for Ads: Translation is also now available for Sponsored Ads (both Product and Brand). In the United States ads can be translated into Spanish. Learn more.
Sponsored Brand Videos (Beta): Starting in July, Sponsored Brand Videos are in beta. Video ads will appear in desktop and mobile shopping results. Amazon says these ads are, “keyword targeted, cost-per-click, and link customers directly to the product detail page.” Learn more here.
4) COVID-19 Impact on Amazon and Prime Day
At the height of COVID-19’s impact on businesses, Amazon ceased advertising on Google Shopping for some time—leading to a decline in impression share for Amazon. As more and more people shift to online shopping, Amazon has had a lot of orders to deal with.
Most likely due to these changes, Amazon has shifted Prime Day to later in the year. While the official date hasn’t been released, the longer Amazon waits to announce the date, the closer it gets to Black Friday and Cyber Monday. The change in date could impact sales for Prime and the holiday season in general, as consumers are looking to stretch their dollars during this uncertain economy. Check out our blog on preparing for uncertainty during COVID-19.
5) New Barriers to Fraud on Amazon
With the government investigation of major tech players underway, Amazon has made moves to increase security which may impact you.
- In May, Amazon started screening third-party sellers using video calls to reduce fraud.
- This June, a new team was created to find and penalize counterfeiters: The Counterfeit Crimes Unit.
- Starting on September 1st, Amazon will also start listing the names and addresses for third-party sellers on their seller profile page.
These changes should benefit retailers as fraudulent sellers will be removed from Amazon. Just be aware that there also might be extra hurdles to getting approved to sell in the coming months.
6) 2020 Amazon Updates to Metrics and Reporting
Amazon also expanded its metrics and reporting offerings over the course of 2019. One big update came to Sponsored Brand campaigns, which added metrics like “new to brand.” These metrics can be valuable not only in the holiday season but afterwards, to develop new strategies for the upcoming year.
Amazon also added native ROAS reporting to the interface. Previously, Amazon’s primary efficiency metric was ACOS (or A/S), which is the reciprocal of ROAS. Although we don’t recommend using either metric to drive your advertising strategy (profit creates much more growth) some advertisers will undoubtedly appreciate an easier comparison to other marketing channels that use ROAS as a primary metric.
We hope this helps you prepare for your holiday season! Our strategists and analysts are always up-to-date with the latest trends and changes across all platforms, to make sure we give you the most current options when it comes to your account management. For more of the latest Amazon updates, subscribe to our blog below.
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