Podcast: Download (Duration: 41:18 — 47.5MB)
Today I have my friend, Yoni Mazor back on the show.
In this episode we dive into the latest Amazon updates and uncover what might be Amazon’s sneakiest fee increase yet—decide for yourself if the e-commerce giant is pulling a fast one on sellers.
What You’ll Learn
- Amazon’s new refund and reimbursement policy
- The hidden costs on selling on Amazon
- Click here to join Getida and get $400 in free reimbursements
Sponsors
SellersSummit.com – The Sellers Summit is the ecommerce conference that I’ve run for the past 8 years. It’s small and intimate and you’ll learn a ton! Click Here To Grab The Recordings.
The Family First Entrepreneur – Purchase my Wall Street Journal Bestselling book and receive $690 in free bonuses! Click here to redeem the bonuses
Transcript
You’re listening to the My Wife Could Her Job podcast, the show where I cover all the latest strategies and current events related to e-commerce and online business. Today I have my friend Yoni Mazur on the show to talk about all the latest fee changes with Amazon, especially in regards to their new refund and reimbursement policies. I think Amazon’s being a little deceptive here, but I will let you be the judge. But before we begin, if you haven’t picked up my Wall Street Journal bestselling book, The Family First Entrepreneur yet, it’s actually available on Amazon at 38 % off right now.
00:28
My book will teach you how to achieve financial freedom by starting a business that doesn’t require you to work yourself to death. Plus, you can still grab my free bonus workshop on how to sell print on demand and how to make passive income with blogging, YouTube, and podcasting when you grab the book over at mywifequitterjob.com slash book. So go over to mywifequitterjob.com slash book, fill out the form, and I’ll send you the bonuses right away. Now onto the show.
00:56
Welcome back to the My Wife Quitter Job podcast. Today I’m thrilled to have Yoni Mazur back on the show. And Yoni is the founder of Getita and he’s helped thousands of e-commerce entrepreneurs get their money back from Amazon. He’s spoken at my conference, the Seller Summit on many occasions. And he is one of my go-to guys when it comes to Amazon news because he literally goes to every single event, every single Amazon event, every single e-commerce conference. He’s very well known in the industry. Anyway, in today’s podcast,
01:24
We’re going to discuss all the latest fee changes from Amazon, including significant changes to their FBA refund and reimbursement policies. once again, Amazon is squeezing FBA sellers, but this time they’re making it sound like they’re doing you a favor when in fact they are not. And we’ll get more into it in this episode, but welcome back, Yoni. How are you doing today? You’re good. Thank you so much for having me again.
01:48
You know, it’s been a while since you’ve been back on the show and we actually missed you at the last seller summit for the first time in many, years. So how has everything been going on with you so far? Thank God. can’t complain. You know, unfortunately, with quotation marks, I to be in Hawaii at the same time. I missed the beloved seller sub minute for a lot of dough, but yeah, it was.
02:12
I would have done the same thing, Yoni. I would have done the okay. So we’re good in that place right now. And it just dawned on me and clicked on me that I’m like your field news reporter. You’re like, yeah, you have a central command center, like CNBC News or whatever. And then I’m on the ground level when there’s a storm or whatever, Tornado with the jacket on or the hoodie on and reporting live. Yeah. So it just framed it in an interesting way. It just clicked on me. It is true though. I think you literally go to almost every single event. Am I right?
02:40
I’m a twister chaser. I’m on Twitter. There’s a twister movie, right? There’s something like that. think. Yeah. So let’s just jump straight into it. A little while ago, Amazon announced that they will now proactively reimburse you for FBA items that get lost in their fulfillment centers and, and they’ll issue this reimbursement as soon as it’s reported as, you know, by the fulfillment center, which can be fully tracked in seller central. And when I first heard this news,
03:09
I immediately thought of you because this is essentially what Getida does. But then, know, kind of when I read the fine print, I heard that this is just one more way that Amazon is squeezing FBA sellers this year. So if you can explain what’s going on, including the fine print, that would be great. Yeah, thank you. Thank you for the opportunity to clarify this a little bit. So I’ll try to unpack this as simply and straightforward as possible. So July 24th, just to be more exact,
03:38
Amazon came out with this update announcement right on time for the Olympics ceremony. Just, you know, use the aura of the Olympics to put out a message out there. So that was an interesting timing. But the notification said something like you said for lost warehouse, which is one claim type or one issue out of 30 that we look into. So once I get recap, one out of 30. So one out of 30, they’re kind of saying we’re going to automatically reimburse you for that. But the reality is they forget to say that they already do so. Okay, let’s start with that.
04:07
So the reality today is that they already do so and you have 18 months to look back and see whatever they missed out. And if they missed out, they need to reimburse you for that, their automatic system. So the announcement started by kind of stating the obvious as if it was a new thing. We’re saying we’re going to automatically reimburse you for that. But then later on saying, OK, even though we’re going to automatically reimburse you for that, you still have to audit us and check us on this. But instead of having 18 months, you’re only going to have two months. And the deadline that will begin this new time frame will be October 23rd.
04:37
That’s pretty much the message. The message is this one claim type, parenthesis what I’m telling you out of 30, not all the 30, you know, we’re going to automatically reimburse you and instead of having 18 months of look back, you’re going to have only two months of look back. I guess that’s the cost of them automatically reimbursing. But the short and sweet of it for the sellers is to know that if you’re watching this or listening to this right now, you’re on a deadline, October 23rd. So you should act fast.
05:04
and go back 18 months and clean up everything that you can because October 30, if you don’t do so, you can only gonna have two months available to clean up on that. Right? So, yeah, go ahead. What I’m confused about is, did Amazon really announce anything beneficial to the seller in this case? In the first paragraph, it kind of seems so. When they’re saying we’re going to automatically reimburse you for that, they just failed to mention that they already do so. Right. So, they didn’t really announce anything beneficial is what you’re saying. No, but the way that they package it, it seems beneficial.
05:34
They’re going to automatically reimburse you for that but never left the same. So if you look closely at the second paragraph, say almost all of these were reimbursed to you automatically but you still have to audit us. And even though you have to audit us, instead of having 18 months like you usually have right now, you have only two months. I think the interpretation of it is that it’s more challenging. I’ll put it this way. Just put it very nicely. It’s going to be another challenge for the sellers because right now if they have 18 months to look back and procrastinate and
06:03
and take it easy, they don’t, they have like two months. So they’re going to probably have to go out and look for help with that. They also made it imply that they’re devoting more resources into this. At least that’s how I read into it. Is that accurate or did nothing really change except now that you have nine X less time to file something? Yeah, that’s a 90 % drop on the time from allowed. So right now it’s an unknown. Once the deadlines start to click in and see, you know, and coming to a, guess, a realization.
06:32
We’ll be able to see if they improve. guess the only thing I can say is that they’re automatically reimbursed for this type of issue. What the words that they’re saying, it implies that hopefully they’ll reimburse more or improve the auto reimbursement. But we don’t see it on the ground level yet. We might see it later. But even if, so if we see that they’re fully covered, okay, that’s fair. They’re fully really doing it. You have two months to check and when you check two months, they’re not really missing anything. That would be a good outcome for the seller, right? But if the reality is they didn’t really change or they changed it really, you know, with a few inches instead of a few miles.
07:02
then you only have two months to kind of deal with it, it’s not going to be so beneficial for the seller. But if I, you know, there’s another way to look at it. They could have said, you know what guys, we’re going to start automatically re-impercing you for this, right? And then you’re going to have, let’s say a month or two, 60, 30 to 60 days to look back 18 months to see how we’re doing. And after 30, 60 days, then we’re going to narrow down the window from eight months to two months. But they’re kind of doing the opposite. First, October 23rd.
07:29
You have instead of 18 months, two months. And then a week later, we’re to start automatically reimbursing you. That’s kind of upside down. If you really analyze it to the ground level, say, hey, first you’re cutting my time to review it, and then you’re going to do your work. First do your work. Give me the time frame allowed, like now 18 months to see your work. And then you can cut it down. But it’s not the case. I don’t know if they really thought about that Amazon fully on the way they structured it, where they’re closing the window, and then they’re showing you what they’re doing.
07:56
But if they’re not doing well, you’re kind of… But I’ll put it this way, if you’re using a provider like Getida, you don’t have to do anything. We’re going get you covered because if you’re using us now, your 18 months are cleaned up. So once the new gates close and it’s only two months, you’re already cleaned up. You’re good. No, no, you don’t have to worry about it. The problem is the sellers who never really use Getida and they’ll come after October 23rd. We’re not going be able… And this claim type, once again, one out of 30. We’re not going be able to go back 18 months and recover all that was left. know, it’s only going to be two months. And I’m going to give a scenario in numbers just to illustrate.
08:26
So it’s not theoretical. Okay, so on an annual basis we see that the discrepancy rate on all 30 claim types can range between 1 to 3%. So if you’re a seven figure seller, the ultimate keyword seven figure seller, hopefully you’ll be an eight figure seller in a few years with inflation, but you’re doing a million dollars in FBA. That means that on an annual basis you might be owed 10 to 30 thousand dollars, 1 to 3%.
08:52
Let’s say this claim type, which is material, is not the largest, but it is material, it can be 1 % out of the 3%. Let’s say it’s like a third, just for simplification. That means that it’s worth for you $10,000 right now. This claim type is worth $10,000 for you, which is 1 % from revenue if you’re a seven figure seller during a million a year. Right now we have 18 months, that’s why it’s $10,000. Come October 23rd, 90 % drop in time frame, so that $10,000, $9,000, we’re not going to be eligible.
09:21
when the deadline hits. Only $1,000 will be available. That’s what it means in numbers in paper napkin calculations. This change for you if you’re not actively getting those reimbursements in the past 18 months or using another provider. That’s pretty much what this means in numbers. So that’s why I think there’s a sense of urgency. So we appreciate you putting this in front of the sellers and in front of the listeners, knowing that if they act now, they’re going to be able to recover that $9,000 before it’s too late in this scenario.
09:50
And this is assuming you’re not doing any of this right now yourself, right? Yeah, so if you’re doing it right now, for example, you’re owed $10,000, that’s actually a good point. Maybe you’re getting out of the $10,000, $3,000. So you still owe $7,000. So when the deadline comes in, you’ll be able to get that $1,000, $6,000 you won’t because you’re not as advanced as like Geteera. We don’t go as deep. You don’t fully understand the complexities when you actually order for it. this is what we encourage you to do. Do the maximum you can do to get everything that you can.
10:18
Then we can come in whatever you missed out, we can recover that and only for successful, only then we get rewarded. So that’s a win-win kind of thing. That’s what we do. I highly encourage you guys to do the maximum that we can cover you guys up. Let me ask you a question. You mentioned there’s 30 reimbursement types. What would you say? And obviously not all 30 have equal weight. So what are like the top, I don’t know, three or four that you need to worry about? the, the usually the typically statistically the more major one is what
10:46
most sellers are aware of it because it’s a bit more intuitive, it’s what they call lost inbound, meaning you ship your units FBA, let’s say you ship a thousand units, and instead of receiving a thousand units, they only receive 900 units. So a hundred units are missing. Right? That is not being improved by Amazon or that’s This is no change. Right now, no change. Right now in the United States, you have nine months to reconcile and get reimbursement. That stays. In Europe, you have six months. And by the way, I want to give some perspective. Brigatier de France is not…
11:15
a big shock or anything, why? Because we see this trend over time. When Amazon first launched FBA, all the claim types and issues had 18 months. And people ask me, why? Why so much time they give? It’s pretty generous. You’re going have to go back and reconcile. It’s pretty generous. You got to think about it. So probably early on what happened was that it was all new. Amazon’s team was new, the whole FBA system was new, and the sellers are all new to it. So they said, okay, arbitrarily, let’s give 18 months so we can deal with this kind of stuff later. Just ship us all the stuff. Let’s create offers in the marketplace.
11:44
And we’ll deal with all the shenanigans later. Kind of thing. Attitude. So over the years, Amazon system got better, their employees got better more more, and also the sellers got better and more professional. And that’s why the signals came in the past few years. So 2019, inbound used to be 18 months. Amazon said in 2019, no, no more 18 months. In the United States, you have nine months to reconcile it and get reimbursements for it. And then in Europe, you have six months. And then 2020, around 2020, they changed the same thing.
12:13
not same thing, they changed the time allowance for another claim type called when a dimension overcharges. So when you sell on Amazon FBA, you get charge fees for fulfillment based on the weight and dimension of the product. So the larger and heavier Amazon system thinks your product is, they’re going to charge you incorrectly. So if they’re supposed to charge you $6 every time they pick and pack and fulfill a unit, they might charge you $15, $9 extra because they think your product, which is maybe a phone cover, is the size of a refrigerator. Right?
12:42
So this kind of claim type or discrepancies have 18 months and around 2020, they narrowed it down to say only 90 days now, only three months. in other words, over the years, we see the trend of Amazon expecting the sellers to professionalize. They still willing to give you everything that they owe you, but they want you to be more professional about it and do it in a more timely manner, right? So they can kind of really focus on other things instead of waiting all the time in the world for you. And that is challenging the sellers. That’s why it sell, you know, at the end of the day, it kind of creates the industry for us.
13:11
The sellers are challenged with these shorter, shorter time frames. have plenty of other things to do because it becomes more sophisticated and complex to sell on Amazon. It doesn’t get more easy. Right? Think about advertising, think about global logistics, think about sourcing. It’s all constantly changing. So now with reconciling and auditing, you have less and less time to do it. That’s challenging. So they go out and look for a partner, a solution provider to be on top of it 24-7, day and night. That’s when we can come in.
13:37
like a Rolex, know, like clockwork, we’re always on it because this is the only focus emission that we have. So in a way, by Amazon challenging the sellers, it kind of creates the opportunity for us to come in and bridge that gap and that need to be on it on timely matter. So back to your question, that just gives perspective all around. To your question, the inbound discrepancies are pretty high up there and they’re very common since most sellers are aware of them. I would say second in command is lost wires, which are about to be adjusted.
14:06
We don’t know how better not yet. There’s not enough data. But we do know that will be less time to handle it for the sellers. And then the wedding dimension and fees, like I told you, is kind of the third one. So I kind of told the story of each one. This is big three. Yeah, these are the big three, I would say. I’ll give another one just for bonus. But these are the big three. And I showed you each one has a different dynamic and a different logic and a different time frame. So we see this from our perspective. So we’re more than fully aware of the trends. For the sellers, we’re seeing this notification that
14:35
think because they don’t know how deep this goes. This is the only claim in town and they’re going to improve it. That’s the end of solution providers. in fact, it probably creates more need for solution providers when you really drill into what’s going on.
14:50
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15:19
just sign up right there on the front page via email and I’ll send you the course right away. Once again, that’s mywifequitterjob.com slash free. Now back to the show.
15:30
This is just, I mean, as someone that does this all the time, this is already a trend that you’ve been seeing. Like this announcement is really nothing new to you. It’s new to someone like me as a seller, especially the way Amazon phrased it so that it’s beneficial to me. But for you, this is something you’ve seen over the years anyways, right? That’s right. Okay. as far as this policy has changed, it only changes their loss and damaged inventory.
15:57
None of the other of the big three that you mentioned are affected by this. That’s right. Okay. Sorry. Give the bonus. Yeah. The bonus one could be like, you know, customer return issues. It could be kind of two types of issues. One of them is that, you know, a consumer got refunded and never sent back the inventory. So they got refunded and you never got restocked. Right. So it’s a customer return issue. Basically you lost the product and you lost the sale. That’s another type of typical issue, but also it could be that they sent back the wrong item. It’s called the wrong FNSQ return.
16:26
You you sold them your beautiful, family-first entrepreneur book and they send back a baseball. So it’s a completely wrong item so that can be another one. So that’s two more for us as a bonus if you like. But it goes on and on and no ASIN is made equal to another so it’s a pretty wild variances but all in it’s up to 3%. From revenue can be within the 30 types of issues. Let me ask you this. The last time they reduced the time frame on what was the inbound shipments?
16:55
Did they promise to do better? No, actually a few things happened. They gave less time and they created more workload. said, because back in the old days, you can go 18 months and just go to sell essential, find the shipment, see that it’s missing units, you click a button, they investigate it if it’s missing, they just pay your reimbursement. That was a good old days. That was like the garden of Eden days. Today…
17:19
You have less time, have nine months, and when you look at the shipment, you can’t just open a claim. They tell you, okay, we need you to send us documentation. First, us, send us invoices or packets of show us that you actually own this product. And then also give us a POD, proof of delivery. So less time, more bureaucracy, and more workload. The sellers were plastered, so we created Getida as a platform, as a solution, we created a platform. We can centralize all that work.
17:44
And then we can create actually some of these documents for you or fetch them for you. Like proof of delivery, we have our API connections with carrier. So we go do the full work for you. So it becomes a set in and forget it. Something that’s very labor intense and a lot of documents shoring up. We take all that load and head off and just make it a set and forget and turnkey solution. I don’t know why, but just hearing this just really upsets me. Not your part, just the Amazon part. Because they are purposely making it harder in hopes that people aren’t going to file.
18:14
And they save money in this way and they have less headache to deal with, right? And then what really makes me angry is they pitch this as a benefit to the seller when in fact they’ve reduced the amount of time for filing tremendously, which ironically makes your company even more valuable in what it does. After you come to a realization that, you know, at the end of the day, even if they do really amazing stuff to do this workload and have less time to do it, because even if they do 99%, you still want that 1%.
18:43
So you’re still going to audit them, but you have less time to handle it. And that 1 % will still be gone. Right? So you’re right. In a way, may have been a better way to frame it. But nevertheless, you got to keep in mind the reality is that Amazon is huge. It’s like a government. Amazon really is larger than most governments, I would say. The revenues are over half a trillion. That’s most economies. They have 2 million people. That can be more than many countries. And it’s just another back, you
19:11
I think you said earlier, this is not the main thing of business, an Amazon business. The main thing is sourcing, launching, advertising, driving, chatting. That’s really the core of the business. This is like the fringes. What happened after you have to reconcile it? So I don’t think there’s much craftsmanship or I don’t think it’s sinister or anything. Somebody sitting down there and kind of, they’re just trying to make it easier for them to scale, right? So they said, okay, we’ll try to improve it a little bit, give you less time as a result and expect you to elevate your game. If you can’t, there’s an app store, the solution providers, get you those in it.
19:40
Do what you can do. That’s kind of how the ecosystem works on this. But if you really look closely on many other things, on the logistics and advertising, right? They add all these features, sponsored ads, sponsored brands, so da-da-da-da-da. Okay, generates more income for them, more revenue for them. But in return, generates more also traffic for you, more eyeballs, more branding. So I don’t know how to fully interpret it, but we’re just a just a more cynical person than you are, Yoni. Here’s the thing. Amazon already knows all this data. What’s getting damaged and lost.
20:10
They should already just do it automatically. You shouldn’t have to double check their work. It’s like the US tax system. Like they already know how much you owe them, but then you got a file and then they do the comparisons. It’s a similar thing here. It’s actually a session that actually it’s a wonderful analogy because IRS, if you’re just an employee and you have a W-2 and you just get sell, that’s pretty easy. They should know that should be easy. But the more you get hopefully older and you become more diversified, you have
20:40
Also passive income, maybe you some real estate, maybe you have some stocks and dividends or savings account or retirement account. So it becomes a bit more complex. then you need a not going for the common case, but yes. Yeah, then you need an accountant to kind of make sense of all of it and to see also what kind of deductions you have so you can pay less taxes and all these gains that you have. So, you you need a really good accountant. Why? Because they’re able to identify from all the spectrum, all these eligibility that the IRS says, oh, you have kids.
21:09
That’s an allowance. That’s a deduction. Or you work from home, that’s a deduction. You have daycare. You have to know all these eligibility to get the maximum tax deduction so you pay the least taxes because you’re eligible for that and you’re good to go. So, like I said, Amazon is like a government. So in this case of the reimbursements like in IRS, and you have all these eligibility in time frame so you need the best partner to come in and make sense of it all. And that’s why we come in. So sometimes, you know, the IRS can change, hey, instead of getting $500 per kid, you get $400.
21:38
So they take away from this, they might all of sudden give you an allowance for your property taxes. So it’s a constantly changing mix of things within this environment and ecosystem where they’re saying, we’re going to improve the auto reimbursement. We hope that it is so, but we’ll give you less time to handle it. That’s the government and I saw this in this case. There’s no metrics either. Anyway, let’s switch. I love it because you think like an engineer that you are, which is good. I cannot argue with that. So that’s on you.
22:07
So I’ve been chatting with a bunch of my colleagues and this is in general, been a much harder year for Amazon sellers. A lot of brand new fees were introduced in the middle of the year. Sellers are facing pressure. PPC costs have gone up. You have a high level view of the entire landscape. What are you seeing in general? Oh man, I’m going to open this up. So I’ll be ready. Ready? Sure. Okay. So on the one hand, they’re narrowing it down, making it more challenging on shelling out the money with reimbursements.
22:34
On the other hand, and on the flip side, saying, okay, we’re going to charge more fees. So now you have the inbound placement fees, meaning you’re shipping all these inventory units in bulk. And then it’d be before you sold anything, just to receive it, they’re charging you a fee. Unless you split it, which means labor, you’re going to have more cost to split. You want to send in your containers, but no, if four and a half containers there, three and a half containers there, 15 containers there, and you have to come view your supplier to deal with that, which is labor and time. That’s a new, if you do that, you’re going to avoid the fees later. Okay. So it’s a bit more complex.
23:04
There’s also the low inventory fee. So if you have a hot selling item and you have less than four weeks of supply for this hot asin, right, this hotcake that’s selling, they’re going to charge you a fee for that because they’re losing sales because you don’t have enough supply. That’s all new. It’s all very challenging. It creates all these new guardrails and all these thresholds that sellers are acclimating and this will be the survival of the fittest, right? So you see how on the FBA side of world, it’s going to be more costly to play and then
23:33
it’s going to be more complex on getting recoveries when you’re eligible. This is just one angle of, of, of, of FBA, right? Which we kind of covered quickly. Yep. Let’s look at Mac or Amazon. This is where it’s going to become interesting. Cause you said the bird’s view. First of all, Andy Jassy is in charge. He’s a CEO, right? Coming after Jeff Bezos. He comes from the AWS Amazon web services, which is the cloud division, which is the cream, the milk, the cash cow.
24:01
Margins there are phenomenal out of this world and behind the scenes over these years, that was the cash cut that enabled Amazon to lose money in all these activities including retail, including FBA, building this massive monstrous infrastructure. So he comes from the division of margin. Margin, margin, really good healthy margin. So right now AWS is really doing well because the AI revolution, it needs a lot of computing power so that’s good for them and the demand is up.
24:28
Advertising has crossed $41 billion on Amazon. It’s massive. It’s becoming the triopoly from the duopoly of Meta and Alphabet, which is Google. Now Amazon is a major, major contender and it’s ramping up because now they bought NBA rights, NFL rights, and if you’re Amazon Prime to watch stuff, even if you’re paying for Prime, you’re still going to have ads on the movies you’re watching, the live sports, whatever. So it’s going to create more opportunities for brands.
24:57
or at least major brands to advertise in those eyeballs. So ad revenue booming, good margins. They looked into the FBA side, okay, what do we do? What do we do to create more margins? Okay, I’ll introduce this whole layer of fees and on the reimbursement side, create more, call it challenging, know, less recovery. Right, so package all these instances together. You’ll see, if you look carefully, I saw this on the Wall Street Journal, that Amazon is…
25:26
profit margin projection for the next three years. And you see the projections are to double it from 6 % right now. Amazon with hundreds of billions of dollars, 6 % profit margin. The next three years, they plan to double it 12. That’s the projections. So it’s gonna be like 6 % to like 9 % to 10 % to 12 % the next three years. So that’s a macro, but being in the micro, call it on the FBA side or maybe, know, valuing a little bit on the cloud side or the advertising, you see how it comes to life. All this margin.
25:56
you know, uh, increase, uh, a strategy that comes from Andy Jassy. This is my analysis. It’s just my commentary of what Amazon is, what Andy Jassy is, what’s his background with Amazon, how he thinks about business and margins and how he’s implying it now across all the business units that he’s in charge of being the CEO. Yeah. I mean, I can see why Amazon needs to do that because they’ve been slowing down over the years, but in terms of the seller, at some point you can only squeeze so much, right? So is their idea only to
26:25
But only for the professional guys to survive, the guys who know what they’re doing? It’s inevitable. It’s very common in most industries. If you look at Walmart carefully in the early days, we were kind of playing with everybody, making it the most fertile ground, the most comfortable ground for them to come in because they needed goods. They needed to get more selection, right? And expand with stores all around the country. So 60s, 70s, 80s, Walmart was very accommodating. then slowly but surely, they expected demand…
26:53
lower prices and lower prices and better margins for them, better margins for them. Granted, they wanted to roll over the savings to the consumers as well. But then they created with all these, you know, guaranteed margins, all these conditions and then it became very common with retail like Macy’s, thing, or Coles, the department. they’re saying, which is crazy, meaning only the largest and best brands can survive because they’re telling you, you got to guarantee a few things. First thing, pay me a few million dollars just to get good shelf space. So before you sell anything, pay a few million to get, that’s like Amazon ads.
27:21
Traffic, eyeballs. Just for the eyeballs, pay me upfront. And then whatever you give me to the store, whatever sold, I’ll pay for it. Whatever didn’t sell, I want you to pay me for the margin. I’m expecting it’s called guaranteed margins. Right. So it’s sold game. And not only that, when you ship the products in to Macy’s, to Walmart, all these guys, they have chargebacks. Meaning if you didn’t pack it correctly or you missed a few things, they charge you and charge you, that’s a profit center. So that’s common in brick and mortar.
27:49
retail where the big brands, Nike’s and this and that, have so much margin and so much brand awareness, all that stuff. So they’re able to make their money at the end of the day. But if you’re small, trying to get your brand together, it’s extremely hard. The barrier to entry is extremely hard if you’re just from the street. So the American dream in that way kind of faded away for many unless they go to Shark Tank or they’re to really somehow survive. But statistically, it’s very, very challenging. Amazon has a wonderful story right now, not on only the American level, but also on the global level. You have people…
28:17
based in Europe or Asia or Africa that kind of figured out how to source, how to launch with a little bit of money and roll it and roll it then create brands and create six figure revenue, seven figure, eight figure, makes, some of the millionaires on a global level because they’re able to tap into the US consumer market and European, the Western consumer market with Amazon’s platform because they figure it out. But they’re going to have to constantly improve themselves and they can survive. And once they do and they figure out the game, whoever is new and they don’t have enough resources, enough money, enough budget.
28:46
It’s not impossible, it’s just going to be harder statistically. That’s just how evolution goes with retail, seems, if I can look into history on that. What are your thoughts on Amazon’s announcement of their new Tmoo Chinese marketplace? You’re saying in China or in the US? Well, Amazon announced that they’re launching a new Tmoo-like marketplace on Amazon where Chinese sellers can ship direct from China, right? And they don’t have to pay import taxes or anything like that and there’s a separate marketplace for that.
29:16
Yeah, so there’s two phases. There’s that marketplace, but also I think even before that they said for the apparel category, they kind of caved because they had 17 % or 20 % selling fees and they reduced it to if you lower, if you sell it under I think $15 or under $10, they reduced it to like 5%, which is, whoa, unheard of. So that’s a signal to the US-based sellers that we want you to play in this category so we can compete with the Shane and Timu’s of the world at the fast fashion or…
29:45
of the world. So that’s one face of that within the US base sellers. exactly like you’re saying, on the Chinese base sellers, guess the factories or distributors, all these guys over there, to have that layer inside. So they’re trying to corner or at least compete with Chen and Tim on these two fronts. What I think about it, it’s inevitable. I mean, they have to at least give it a fight. I don’t know if they’re going to be successful or not. There could be politics involved or it can be just… But in terms of the seller here in the US, what are your thoughts on that?
30:14
I think they opened up that ability for the American seller to sell in those price ranges, under $15. That’s pretty much under $20. That’s pretty much what the whole segment is. So yeah, they already signaled, we’ll charge you only 5 % instead of 70 because if they’re charging you 17 % and Temu charging 5 % or less, you’re to sell on Temu or you’re crushed. You have no way to compete. So they created that vessel, that track. Not a profit with a pH, meaning a prophecy. Yeah. I don’t know.
30:41
I can only vouch for this as a consumer. I don’t shop on any of those platforms. I’m not too attracted to it. I don’t either. don’t shop on T.V. I’m not too attracted to it, but I’m not, guess, the ICP, the ideal client profile. It’s probably the fast fashion is maybe getting more to women and ladies and teenager girls. So they want to constantly have the gadgets and this and that. They’ll be the old, it’s like, you know what it is? It’s like the boy bands, right? The boy bands, you know, you have…
31:07
plenty that made it really big and they have the ones that kind of tanked. you know, right now it seems like the boy band of Temu and Shane are pretty popular. Amazon is going to create its own boy band version of it in two ways with US-based sellers and also the Chinese sellers. If it’s going to be absorbed by the ICP, the ideal client profile to be determined, I guess I hope so because I want to wish best for the US-based sellers, also for the Chinese sellers. And I like the Amazon brand.
31:35
avid shopper user. Of course. Yeah. What do you think actually is if we open that up for a minute? Well, I here’s what I fear and nothing’s really up yet, but Amazon’s probably going to advertise these cheap products alongside of these other private label sellers that are essentially sourcing for a lot of the same manufacturers and doing a markup, right? And people who private label, they have to pay import taxes and duties and they have to ship it in bulk. Meanwhile, these new Chinese sellers are just shipping piecemeal direct.
32:05
Right? So they have better pricing and they don’t have to pay any import taxes as long as it’s under 800 bucks. So I really don’t see how private label sellers again, who sell very similar low end products can compete against that. So I think there’s going to be a huge shakeup in that area. Yeah. So the only kind of two ways to compete is differentiation. Yeah.
32:27
And branding, maybe a third one is if you have a mode, if you have a patent on the design or something that really is defendable, that’s only what is survive. If not, you better wake up now and pivot and create those modes around you or these edges around you. So it’s hard to penetrate. Yeah. Let’s switch gears once again and just talk. mean, believe it or not, the holiday season is like right around the corner again. And I know you mentioned a couple of deadlines earlier regarding the refunds. So let’s just talk about action items. What should you be doing right now?
32:57
in preparation for this new deadline, as well as the holidays in terms of, assuming you’re an FBA seller. Got it. So, yeah, October, 2030, you have the deadline where they’re to narrow it from 18 months to two months, especially for that claim type that we discussed. So to be clear on that deadline, all of the filings and reimbursements have to take place before October 21st, 23rd to take advantage of the 18 month. That’s That’s correct. That’s correct. So there’s two ways you can take action on that. One, I’m tell you how to do it.
33:27
Okay. Verbally. And then second, you can just use Gatira if you like. I’ll give you guys an offer you can consider. Yep. So on a quick note, you go to Sell Essential, you go to reports, fulfillment, you download the inventory ledger report. Inside the inventory ledger report, you have an Excel file, right? You have two columns. One is for F and skew. The other one is Trid, transaction ID to use, you you filter just for those. You visit Sell Essential again, you look in the search box and you type FBA lost.
33:57
warehouse reimbursement tool. Okay, we’ll pop up the tool, you’re come in. So you’ll have on the tool like two search boxes. One for the FNSQ, one for the trade, the transaction ID. It’s a copy paste game guys, that’s all it is. You copy paste those data points in there, the system will do the calculations and if it’s not eligible, it tell you, but if it is eligible, it’ll open a case for you. Amazon will investigate and of course if you are eligible, they’re gonna reimburse you. This is how you clean up the past 18 months.
34:27
Of course, this is like foreign to you. You never heard of this before. We don’t want to know where to begin. There are solutions providers out there that help with this. We happen to be one of them. So if you like a quick note on the Getita side, it’s free to join Getita. It’s free to stay. There’s no subscription. We only charge a fee based on discovery. And even with all of that, we’re going to give you guys a $400 offer by watching or listening to this. So you can just visit getita.com forward slash let’s make it you, C-H-O-U. Let’s do Steve because people have problems spelling my name.
34:56
Oh yeah, okay, so I’m gonna have to configure that. I hope we don’t have another Steve. How about you or Steve or my wife quit? One of the My wife quit her job or just… Just my wife quit. Don’t worry, I’ll put the link beneath the… Yeah, yeah, okay, so let’s do gettida.com, my wife quit. Hopefully you guys know how to that. have talked about this before we got on, Yoni. No worries. So yeah, so what we’re gonna do is actually for you guys, we’re gonna give you a $400 offer where the first $400 we’re gonna give you in FBA refunds will be free. We’re not gonna charge you anything.
35:26
Just so can try us out, know, go into the platform, acclimate. So it’s a guarantee, you’re have $400 extra in your pocket for taking a few months to set it up. And after $400, if you want to leave, you can leave. If you want to stay, can stay. Whatever you want to do, that’s fine. So these are two ways you can take immediate action and come to this fully prepared, where you clean up the past 18 months, you leave nothing behind, and going forward, you’re good to go. And by the way, the beautiful thing about recovering all this that you owe with reimbursements allows you to get two things. First thing is…
35:53
your cost of goods. All the products they lost, you get the cost of goods. But you’re also making margin, you’re making profit because when Amazon pays their reimbursement, they pay you retail value, not cost value. So you’re to be flush with all this cash, with all this margin, and hopefully you’re going to be smart about it. Reinvest it into your Amazon business. Especially like you said, Steve, Q4 is coming. So you have a larger ad budget, so can jump more traffic, or maybe you want to source and launch more products or stack up on more inventory, more stock. So, you know, so with these actionable, hopefully you’ll be better positioned and you’ll be on the right side of the flywheel instead of the wrong side.
36:23
because sellers not paying attention to this, losing out on money, not optimizing cash flow, well, it’d be very hard for them to survive because of reason and many other reasons like we just discussed in this episode. So hopefully this is helpful. And then, yeah, was that enough or you want some more? Oh, I was just going to say that, so I use Katita. The way, the process that you described on Seller Central to do all this stuff isn’t as straightforward as you described. I mean, finding some of these things and
36:51
The offer that Yoni is giving you is essentially free money. If you’ve been selling on Amazon for a while and you haven’t done this yet, you’re leaving money on the table and Yoni will give you essentially $400 for free to try it. And this is definitely not something that you want to be spending brain power on as you’re selling online. Yeah. Once again, this is one type out of 30. If we had to cover all the 30 claim types, we’ll probably need 50 episodes, Steve, which we’ll never probably do.
37:21
So it’s also something for you guys to consider and I guess in the last notion about it is that we do encourage you to do the maximum you can do on your own, right? Do it. I actually gave you the the farm right now so if you’re able to follow it, try to do it and then we can come up after and cover up whatever you guys missed out on. In other words, it doesn’t have to be us or you, it can always be together. There’s some common questions that I get asked about your server so I just wanted to address them right now. So Amazon often loses your inventory but then they find it later. You guys don’t charge
37:50
until all that is cleared up. Like if Amazon finds your inventory later, you don’t obviously have to pay those That’s right. It’s called reversals, right? So when Amazon reverses, that we credit, you know, the user for that. So if we gain, sorry, if the seller gains, we gain and if they lose that gain, we lose that gain as well. Right. Right. So it’s safe and I do get questions asked about Katita from time to time, but it literally is, you shouldn’t be spending any brain power on that stuff. It’s called ROT, return on time. You have a limited amount of time, you and your team.
38:20
You want to really apply to the potent things that you can do to really move the needle and push your business forward. In a short note, I’ll give you a quick case study that I happened to learn by being with all these events and environments and masterminds. So I was in Mexico in a mastermind and then I meet the seller. Turns out he’s a client, also became a friend later. And he just laid out all of me and it kind of surprised me in a positive way. He says like, he tells me, listen, first of all, I’m German.
38:49
I’m an engineer and I’m really into the details, the mechanics of everything, everything. And as matter of fact, I’m so into the optimization of everything that I do that I moved myself from Germany to Panama. Why? No taxes. Right? He wants to make every dollar he can. That’s it. So he’s very cash. So business is good. I think he’s doing seven figures really. He’s like made for this game because he’s all into the numbers, the data, the optimization. Really impressive.
39:15
And he’s like, listen, what I did was on the reimbursement side of the auditing side, I had a whole team in charge of it. And from time to time was also getting involved and making sure, you know, making sure they’re up to date on the policies and the changes and everything like that. And I did it, you know, after a while I did a calculation of my cost and he said for every dollar that I recovered cost me 54 cents. So my cost of recovery is 54%. And then when I learned that Getudo is around and we, baseline is 25%, he said I was delighted because all of sudden immediately my cost
39:44
of recovery, got slashed by more than half. And not only that, I got more, because right now I did everything that I could. Because at some point it comes to point where you’re trying so hard and you’re not really getting everything, or Amazon is giving you some turnarounds and some challenges, you have to keep grinding it. So get diminishing returns. But for us, we don’t have. We’re much more optimized than that. yeah, his cost of recovery slashed more than half, and he was able to get even more. So that’s a much more powerful thing. So now he freed up his team’s time.
40:14
to do other things, more advertising, more sourcing, more launching, to more revenue, more profit. So was like a triple play win. Less cost, more recovered, and more gain on the general business. ROT, return on time. Yoni, thanks a lot for coming back on the show and letting us know that Amazon’s announcement is not really beneficial to sellers. It’s just a way for them to increase their profits to 12 % in the next three years or whatever their projections are.
40:41
It’s all good. It’s all love. You heard it. You saw it. You know what to do about it. You’ll be in a well-positioned, no harm done. It’s all good. You make profit. They make profit. Everybody’s a good hand. But all the best for everybody.
40:54
Hope you enjoyed this episode. Now Amazon continues to squeeze its sellers even more and at some point the dam is going to break. More information about this episode go to mywifecoupterjob.com slash episode 552. If you’re interested in starting your own e-commerce store away from Amazon, head on over to mywifecoupterjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.
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