Amazon is making third-party sellers more responsible about meeting package safety standards when they send inventory to be stored and shipped by Amazon. They recently rolled out new rules letting sellers know that they will charge penalty fees for packages that fail to comply with its safety requirements. This new move is expected to improve warehouse efficiency while reducing hazardous safety violations.
Hazardous issues arise mainly because third-party sellers are simply not aware of federal regulations when they ship their products to Amazon's warehouse. That makes it that much more difficult for Amazon to stay compliant, Killingsworth said.
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Unlike a traditional retailer, Amazon isn't competing on the brands and sellers it can court; they dictate a seller's strategy. No matter how much Amazon makes sellers squirm, they’re not taking their business elsewhere, at least not as long as they’re still profiting through the marketplace. Amazon takes 15 percent commission for third-party sales, but that climbs to 30 percent if orders are shipped through the Fulfilled by Amazon program. The best bet, in fact, is to take a leap of faith and invest more.
“Every year, Amazon introduces changes that shift work onto the sellers’ shoulders. As a third-party seller, you always have to be thinking one step ahead: What do these changes mean to me? How do I compete?”…
Amazon’s consolidated selling system, One Vendor, is expected to combine Amazon’s two marketplaces — one for first-party sellers, which it calls Vendor Central, and Seller Central, for third-party sellers — into one. One Vendor would put Amazon in control of what brands sell where. For customers trying to find legit products on the site, that’s a good thing. Though this poses a great opportunity for brands selling big ticket products, smaller, more niche brands aren't as excited for the deal.
“Given the vast issues with brand authority and control of unauthorized sellers, unifying it on one platform would make it easier to manage and mitigate the brand challenges to eliminate knockoff product,” said Killingsworth.
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Already, Amazon is a certified seller of refurbished Apple products. But Amazon shoppers up until now had to wade through a sea of third-party sellers in the hopes of finding authentic, new Apple products. Now, Apple will get in front of Amazon’s loyal customer base — including its more than 100 million Prime members — while Amazon gets first-party access to Apple’s high-end, covetable electronics. This could be a sign of Amazon turning a new leaf when it comes to brand partnerships.
“This sends a message to premium brands that are holding out: Be smart; meet your customer where they are. Don’t presume you will be able to keep them coming back in your retail door,” said Fred Killingsworth, CEO of Hinge…
If you can't beat them, join them. That's the drum that Fred Killingsworth is beating as he weighs in how retailers can counter the Amazon threat. Killingsworth is the CEO of Hinge, an agency that helps companies manage and grow their brand on Amazon.
"Going on Amazon generates a broader audience and increases your revenue with that," he told Markets Insider. "You can reach a whole other consumer set and deliver that same message of expertise with great content."
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Fred Killingsworth is the Co-Founder and CEO of Hinge Consulting. A true master connector, former Amazonian and top producing sales pro throughout the years within the Telecom industry – Fred has created a company that helps businesses maximizes their potential within the Amazon-sphere.
Hinge was born from the belief that everything is possible. You simply set an objective and don’t worry about what’s in between. You make a commitment and that’s your mission, your purpose, and you pursue it tenaciously and relentlessly, regardless of the obstacles that pop up.
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