Peering inside Amazon’s black box algorithm is a Kabuki play – full of style, drama and mystery. This week I interpret several new moves in Amazon’s ponderous fan dance including enforcement of UPC codes, inauthentic claims for USED products and a new pricing tool from Amazon.
Amazon sellers who create bundles and multi-packs are worried. Amazon seems to be saying that they suddenly need a very expensive UPC code and that they have to have permission from the manufacturer/rights holder in order to do it.
People who are using their own UPC codes for multipacks and some bundles are losing their listing privileges. And to further make you unhappy, Amazon’s ability to check UPCs against the GS1 database has a huge impact on inauthentic claims – which are bringing down a lot of sellers of items that do not currently print UPCs on their items.
What Amazon is doing now is automatically checking Product IDs against the GS1 database. So if you are selling a product where you have added a UPC code that you purchased from eBay or some online dealer, basically, it won’t show up in the GS1 database as belonging to you or any other brand. IF this product is YOURS – a private label or manufacturer – you’re fine because you can register these with Amazon or even ask for an exception to have a barcode. In fact, they will give you a universal number for your unique products through the brand registry so you can sell them worldwide on Amazon’s platforms under that one number.
If the product is owned by someone else, then they have their own “product ID” [as Amazon calls the collection of UPC, ISBN, EANs (Europe) and JANs (Japan)] and you need to use that. Again, this is fine if you are selling solo items, but what if you have a multi-pack? You need a separate UPC code for that and if the manufacturer doesn’t have a multipack UPC code…then you can’t create one.
What Amazon says about Multi-Packs:
For most products listed on Amazon.com, a multi-pack listing is only allowed for a manufacturer-created pack with its own unique UPC. You must enter an Item Package Quantity (IPQ) for these products.
EXCEPTIONS: HEALTH & PERSONAL CARE MULTI-PACKS: One of the few cases where you can use 1 UPC code for all multi-packs.
Health and Personal Care Multi-packs — If you are selling more than one of the same product with the same UPC in “packs” (e. g. “Pack of 2”), enter the number of items in the pack into the “Count” field of the HPC template. Please note that you will need to upload your multi-packs in a flat-file.
Basic Bundling Rules:
There are a lot of rules about product bundling and you can read them in SellerCentral. I’m going to focus on the rules regarding Product ID numbers.
- The bundle must have its own standard product identifier or manufacturer part number. The identifier of any individual product in the bundle may not serve as the identifier for the bundle. Using a UPC from any single product in the bundle to identify the entire bundle may lead to immediate removal of the listing. You are responsible for obtaining a UPC for each bundle you create.
- Do NOT bundle branded products with generic products. This may mislead customers into thinking that the generic product belongs to the same brand.
If you read the basic bundling rules on Amazon, it would seem to be OK to use your own UPC code…as it has always been in the past. However, we see problems on the horizon.
Here’s the phrase that is causing so much angst:
“The use of false product identification information, including product IDs, is prohibited and can result in your ASIN creation privileges being removed. Product IDs will be confirmed against the GS1 database.”
Clear as mud, right? What is going on?
Here’s what you need to know:
- This rule is not new, but Amazon hasn’t enforced it until recently
- This is designed to stop sellers from creating derivative products from branded items
- It is designed to protect rights holders – a good thing if you are the rights holder
- It makes it easier for Amazon to verify authenticity of the products being sold on its platform
- It will encourage more sellers to go the Private Label route and….
- Yes, sellers will get suspended for not following the rules
We have two clients who are currently unable to create new listings because they lost their privileges.
Amazon started this last year about this time in Grocery. Food sellers were told they could no longer create multi-packs unless the manufacturer was selling a multi-pack (think Sam’s Club® or Costco® bulk purchases or wholesale bags/boxes) and commodity foods needed to be branded.
The interpretive dance at that time around this topic was a) what was a commodity food? And 2) would current listings be grandfathered in? Many current listings WERE grandfathered in. This doesn’t mean that Amazon won’t shut them down one day, but when the rules went into effect, they stopped sellers from creating new listings that broke the rules, but didn’t take down all the old ones necessarily (some came down).
Nobody got suspended at that time that we know of, but I have since seen warnings to sellers who are trying to sell commodity goods without properly branding and packaging their products. Under the new rules there is no piggy-backing on someone else’s listing for a commodity product unless they are buying it retail or wholesale, basically – like Hershey Bars®.
If I want to sell one-pound bags of certain kinds of candy, for example, I need professional equipment to take a 20-pound bag and place it into 20 bags with my brand on them – even it if it is a branded candy like M&Ms®. Someone else selling a 1-pound bag of M&Ms can sell the retail package or create their own brand and packaging. Confusing? You bet. Same with sunflower seeds, coffee or any other commodity. Simply putting it into a polybag or food-grade box won’t work anymore. If you want to make money on bulk food these days, you need to be in the food packaging business, basically.
People who sell bras, shoes and apparel need to particularly keep the GS1 database in mind. Often there is no manufacturer UPC code when you are buying the product at Marshalls® (for example) but that doesn’t mean that there isn’t a UPC code for that item somewhere.
In the case of multi-packs, don’t buy a UPC code and use it unless you are SURE there is no UPC number for the item. Just because you can’t find it doesn’t mean it doesn’t exist. That’s why you may need to check the GS1 database yourself if you are selling a branded product where you can’t find the UPC code. Contact the manufacturer first and then check the database. The GS1 database doesn’t tell you every single UPC code out there, but it tells you if your brand has an extension registered with them. This greatly enhances the likelihood that there is a UPC code for that item and that you need to find and use that rather than using your own.
An extension is like the first few digits of a credit card. They tell Amazon and others who owns the codes that follow that extension. For example, if brand X uses 1234 xxx xxx xxx for product ID codes, you know that ANY UPC code starting 1234 belongs to brand X. You don’t need to check all the digits. That is what Amazon is doing when it checks the GS1 database. If your UPC code doesn’t start with 1234 for that brand? You’ll eventually be flagged.
Now don’t even start. I can hear it now. “How long before they flag us?” We don’t know. I just know it will happen because now it is automated. That means Amazon’s searchbots are at work. Resistance is futile. Assimilation is inevitable.
Q. Do I have to buy my UPC codes from the GS1 Now? They’re expensive!
I don’t know. If you are a manufacturer or private label, I’d suggest you do. When you put your bundles together now, really think through the issues first. As long as your bundles avoid being associated with any one brand, you should be OK – think Cynthia’s Fabulous Gift Boxes vs. SpongeBob Squarepants® Bundle for 8-Year-Old Boys. You probably don’t have the right to sell SpongeBob bundles, but you can sell gift boxes. Semantics? Yes, but think about how the Amazon robots work. They use key words, titles, UPC codes.
Cordelia Blake in the ScannerMonkey group is conducting an experiment with her own GS1 code. Check it out if you are interested.
Q. Why is Amazon Picking on Us?
It is all about cleaning up the catalog. There are too many duplicate pages and too many improper listings. In addition, it is hard to test the authenticity of a product if the UPC in the catalog is wrong. Many major brands (really big brands like Disney and Sony) have provided Amazon with their UPC codes. This means when you list a Disney product that doesn’t match their list of UPC codes, you’re in trouble.
We had one client who used her own UPC code for everything she sold on Amazon. It was a nightmare cleaning up that situation. She thought Amazon was like eBay. It wasn’t deliberate, but you can see why Amazon takes a hard line with that kind of behavior. It leads to lots of duplicate listings.
Q. What Bundles CAN I Sell?
If you’ve created a bundle of, say, Disney Princess plates, napkins and cups for a party pack, is that OK to sell? Maybe. 99% of those items are licensed rather than direct from the brand. If you buy them from the rights holder (licensee) AND you have permission to re-sell them on Amazon, then you probably can create a bundle. What if you buy them at Target and create a bundle? Probably not. I say that from experience. I’ve been kicked off of listings by Amazon because I didn’t have the right to re-sell part or all of the bundle on Amazon even though I bought them retail at Target.
What if you are selling a gift bundle and it is full of candy and toys? If all the items are branded, you are probably OK. You can have a Hershey’s bar with a package of Minions Mike ‘N Ike® with a SpongeBob toy and a Cars® coloring book with Crayola® Crayons. That’s how I read the rules. In the title you would call it a bundle and not list any of the brands until the description bullets: Bundle: 8-Year-Old Boy Special “Feel Better” Gift Box by Cynthia’s Fabulous Gift Boxes for Special People™.
Last Word on UPCs…For Today
I’ll write more about this topic as I find out more. Currently I’ve not been able to reinstate my clients’ ability to create new listings once they’ve lost that ability. I’m not giving up, however. This enforcement is new which means mistakes will be made and Amazon will improve the process as time goes on.
Bottom line, I predict there will be suspensions and sellers will need to prove to Amazon that their bundle or multi-pack follows policy. It may be that sellers will need to provide invoices for every item in a bundle. If your bundle consists of a bunch of dollar store items, you may have a harder time proving authenticity unless the invoices are detailed and you are buying wholesale from the Dollar Tree® or Dollar Store® vs. retail.
Is Amazon Changing its Policies for USED Products?
Recently I’ve seen inauthentic claims that surprised and worried me as someone who sells used books and media on the platform. My understanding has been that Amazon does not seek authentic sources for used items. They know we are buying this stuff at book sales and thrift stores, etc. – all places that have lousy receipts. In fact, most of my receipts are hand written (disallowed as proof by Amazon). Many of my books were bought in large lots. I used to find CDs and DVDs the same way.
However, three times now I’ve seen Amazon go after a seller (including me) for inauthentic for used media. In previous cases I basically said, “Used media is not subject to the same authenticity scrutiny as new items” and it was OK. My Carl Sagan Cosmos book was allowed.
Last week we got a different response back from Amazon that said, “counterfeit is against policy whether new or used.” OK, but seriously? This was some obscure classical music CD my client bought at an estate sale. I felt a chill down my spine. If this is truly new policy, the implications are horrifying. Nearly all used, collectible and possibly refurbished items on the platform would vanish overnight if sellers had to provide detailed invoices.
What is Going On Here?
We escalated this issue with Amazon to see if we can get a clear answer on policy from Jeff Bezos’ team or someone senior. Rachel Greer and her team at Cascadia Seller Solutions helped us with our research. After a flurry of emails, a member of the senior executive team reviewed the case and told my client, “counterfeit is counterfeit,” and they still want to see invoices.
Here’s the problem. Counterfeit sellers are selling their products as used to circumvent the Product Quality team (who focus on New) so now they’re having to review Used products as well. Category gating has made it harder to list items of uncertain provenance as new, but it’s still simple to list as used. To combat these black hat tactics, used products no longer seem to be exempted from the automated algorithms. And as Rachel noted to me, “You know they’re not brilliant at separating the wheat from the chaff.”
She’s a master at understatement.
We were also told that it was not likely to be a regular thing (even though I’ve now seen three). Amazon knows that we won’t be able to provide receipts/invoices so how many inauthentic/counterfeit strikes do we get before we’re suspended? Three in six months, five in a year are the numbers I’ve heard before. I can’t confirm with Amazon, but seems right based on our experience.
Will They Actually Suspend a Seller for Inauthentic Who is Selling Used Media?
Yes. We have a case currently. It upsets me a lot. If you are selling counterfeit as “used” to avoid inauthentic claims? Your days are numbered. If you are an honest used media and collectibles seller? Those dishonest bastards just ruined it for the rest of us.
What Should I Do if I’m a Used Media or Collectibles Seller?
Assess your situation.
- Do you already have inauthentic claims against you that you couldn’t disprove?
- Are you engaging in other violations like listing DVDs in the “Everything Else” category, selling poor quality product, etc?
- Do you sell collectibles, DVDs or CDs? They are at higher risk for claims.
- Are you buying from sources with poor receipts or invoices?
Determine your risk comfort level and act.
- If you don’t have any claims against you now, take a wait and see approach. Going forward, buy from authentic sources. (see my blog post on the Gray Market for more on “what is authentic?”)
- If you have product quality, inauthentic and counterfeit claims on your account already, get rid of the high risk items in your inventory and sell them somewhere else or destroy them. Going forward, only list on Amazon products that you would believe to be authentic yourself, as this is really a customer experience/perception issue more than reality.
- If you’ve already been suspended for inauthentic claims in the past, time to clear out your inventory. You can’t afford another claim.
New Automate Repricing Tool by Amazon?
In case you missed it, Amazon soft launched in beta its new repricing tool…maybe. I have predicted for some time that Amazon’s insistence that we enter our high-low range for our inventory was the precursor to a repricing tool. Check out these two videos: Amazon beta launch; analysis from Stephen Smotherman and this article from eCommerce Bytes to learn more.
My friends at Feedvisor pointed out to me that this is a rules-based program rather than algorithm based which means it is focused on getting you the lowest price rather than the Buy Box per se. This is the problem with most repricing tools. It isn’t their fault, but generally that’s how it works. They race you to the bottom even if you decide not to go below the lowest price.
Right now you have to be invited to beta test the program. My prediction is that when they launch it officially, many sellers who are currently using rules-based programs will switch. Amazon’s is MUCH simpler and – as near as I can tell – will be free. It will be an awesome tool for smaller sellers and I’m excited to see Amazon offer it. For the high-volume and private label sellers, I think they are still going to want an algorithmicly based tool that allows them to compare their sales against their competition’s.
[Full disclosure: I am a Feedvisor customer. I’m biased…but it doesn’t mean I’m wrong.]
I’m heading to Atlanta next week for SellerLab’s RESONATE conference. In addition to being one of the experts at the conference, I’m hosting a dinner on Wednesday night (May 18) after the conference ends. Space is limited to 15-17 people. If you are in the Atlanta/Buckhead area, please join us!
The following week both my business partner Lesley Hensell and myself will be in New York City for the Feedvisor Seller Summit. I’ve been allowed to offer a handful of free tickets to this by-invitation-only event to my clients whose volume meets or exceeds $1.5 M annually (100K+ per month). The Miami Beach conference earlier this year was outstanding in terms of content and no sales pitches.
Please sign up HERE for the May 24 Feedvisor conference in Manhattan’s Meat-Packing District. You will be contacted by Feedvisor if you meet the criteria. RSVP cut-off is early next week. I am so delighted to offer this opportunity to my high-volume clients.
In addition to meeting our clients at the conference, we will be having dinner with our local clients while we are in town. Please check your in-boxes on Friday for an invitation to this very special private party at the Reserve Cut in lower Manhattan. It’s Kosher and supposed to be one of the best steakhouses in New York City. I can’t wait! If you don’t see your invitation by Monday, contact my assistant Lissa at: Lissa@onlinesalesstepbystep.com.