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Last updated on January 9th, 2023
Written by Mark Salvania
It seems that the world is getting smaller for Amazon FBA sellers. Before the second quarter of 2020, everything looked fine when Amazon announced that the U.S. marketplace sold 3.4 billion products from May 2019 to May 2020. However, it took a 180-degree turn due to health protocols in response to the COVID-19 outbreak, and preparations for the upcoming holiday shopping rush. The largest online marketplace notified its third-party sellers that it would issue an Amazon FBA suspension on the grounds of late shipments.
If that is not enough to rattle Amazon sellers worldwide, FBA warehouses also issued quantity limits across all product categories to accommodate holiday-related inventories. Apparently, you have a lot on their plate this 2020 besides worrying about how to improve your Amazon SEO strategies.
Fulfillment by Amazon or FBA is widely known for its fast delivery services. It takes care of the order fulfillment side of the online shopping business that helps sellers like you to focus on more critical tasks such as selling and marketing your products in the marketplace.
When Amazon declared a new policy regarding late FBA shipments, it confused many sellers who used the said program. Initially, the late shipment rule only applied to seller-fulfilled orders where sellers should maintain an LSR (Late Shipment Rate) under 4% to continue selling on Amazon. Otherwise, it could result in Seller account deactivation. But in an announcement on September 2, 2020, Amazon said that it won't be lenient with late carrier deliveries to a fulfillment center. Here is the complete statement:
Policy change for missed FBA shipping appointments
We are continuously working to make FBA products available to customers faster. When carriers missed delivery appointments at our fulfillment centers, the processing time for all FBA shipments can increase.
As of August 25, 2020, consistent failure to meet appointments may result in a suspension of FBA shipping privileges. If your carrier cannot make the FBA shipment delivery appointment, we request that you notify us at least 24 hours in advance.
Unfortunately, this was posted on the Seller Central forums and not on the Carrier Central, which has left many scratching their heads.
On July 13, 2020, Amazon placed warehouse storage limits for those sellers that use its U.S. fulfillment centers. All product categories are affected to give enough space for the upcoming holiday shopping rush. Here is the announcement:
FBA Changes as we prepare for a successful peak (U.S.)
Given the unprecedented challenges the COVID-19 pandemic has placed on all of us, we are preparing early to deliver a great holiday season for our customers and selling partners—building out capacity as quickly as we can so we can deliver products customers need and want directly to their doorsteps and help you continue to grow your business.
Quantity limits
To maximize selection for customers during peak, we are introducing ASIN-level quantity limits on products in FBA. Most products will have enough space available for over three months of sales.
You can view quantity limits for your products on the Restock Inventory page and the Restock report. We will continually review this and, when possible, make adjustments to allow for more of your products.
Amazon had already made adjustments when they announced that they're only accepting essential items only to their fulfillment centers because of the pandemic last March 2020. At the same time, they had temporarily canceled inbound FBA shipments for non-essential products.
So far, the policy changes we've mentioned above pertain to shipments and inventories. Can it affect your product rankings or not? Unfortunately, it can,, based on an article from CNBC. In their interview with an Amazon seller, Amazon's A9 algorithm may demote product listing's search rankings and lessen the chance of winning the Buy Box if product inventory runs out. Both policies are related to replenishing stock in Amazon's fulfillment centers.
Moreover, it could hurt your ratings and reviews because of customer complaints due to late deliveries. Amazon may also remove your listing once they detect that you have zero stock.
This is the domino effect of Amazon's new policies on FBA sellers. But is there any way to avoid an Amazon FBA suspension?
Many shipping companies are struggling due to the effects of COVID-19. Based on health reports, COVID-19 is a contagious virus, that is why couriers are implementing guidelines on how to prevent it from spreading in its facilities. On top of that, there is also an influx of online orders because of stay-at-home policies.
As a result, the job of delivery companies is now more challenging, and an example of this is what is happening to FedEx. According to Reuters, service disruptions were experienced at its California and Michigan sites in connection with FedEx's rigid business structure. USPS (U.S. Postal Service) is also suffering from delays, based on The Wall Street Journal article.
For these reasons, late carrier deliveries might be inevitable as the supply chain experiences significant disruptions due to coronavirus-related challenges and the Q4.
In Amazon Service Seller Forums, sellers expressed their outrage about how impossible it is to follow the new late shipment rule for inbound FBA deliveries. "Carriers do not notify us of upcoming appointments or missed appointments. Tracking doesn't even update for days most of the time. I'm very confused," one seller said. Another seller gave a detailed comment about this who pointed out the problems regarding this policy change, as enumerated below:
Plus, Amazon gave late notice to sellers. The policy change was effective on August 15, 2020. But it was announced to third-party sellers on September 3, 2020.
"Prevention is better than cure." This is the approach Amazon took when they put a limit on inbound FBA shipments. It already anticipated the so-called holiday rush which Amazon experienced last year. According to a CNN report, the 2019 holiday season for Amazon was a record-setter.
The sales for Echo Dot, Fire TV Stick, and Echo Show 5 surge in tens of millions. Even non-Amazon products reached a record high where over one billion items were sold. Moreover, customers who frequent department stores for their last-minute shopping switched to Amazon to avoid the crowd.
What more if the pandemic amplifies it? People are still hesitant to shop outside that even their necessities are bought online. Based on a Coresight Research survey in February 2020, 58% of respondents would avoid public places like malls or shopping centers if the situation worsens. An IBM study had proven the growth of online shopping. The projected growth of e-commerce this 2020 is only 20% this year. However, during the pandemic, it went up to 44.5% in the second quarter of 2020.
Amazon anticipates this scenario, that is why they have implemented a warehouse inventory limit rule that will pose problems to e-commerce merchants selling on Amazon.com. Fortunately, there are price changes regarding Amazon FBA fees.
No doubt that only the most aggressive and most cunning businesses can survive this pandemic. These are Amazon sellers who are not afraid to lessen or pause their PPC campaign spending temporarily. They will bravely consider switching to Fulfillment by Merchant (FBM) to continue selling.
If these interim solutions don't work out, they are willing to learn how to write an Amazon suspension appeal letter in advance. Whether you like it or not, Amazon seller suspension is unavoidable, given the scenarios and data above. Unless you have an established FBM strategy even before the pandemic or shipped your products before the holidays, you need to worry about account suspension.
In your Amazon suspension appeal letter, you must write a detailed Plan of Action (POA) stating how you can improve customer experience by preventing late shipments from happening in the future. If you are not confident about your writing skills, there are Amazon suspension attorneys that can help you reinstate your account.
Online shopping is thriving during the pandemic. This fact should be your silver lining despite the threat of an Amazon FBA suspension. In the meantime, keep optimizing your listings and PPC campaigns to avoid being left behind once everything returns to normal. More importantly, always stay informed and updated about the latest news and policy changes on and off Amazon, so you can act accordingly and take proactive measures.
Get the best Amazon FBA suspension appeal here! Let Seller Interactive help you write an Amazon suspension appeal letter that will get your account reinstated. Please email us at [email protected] or [email protected] today.
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