Amazon officially kills rebates [Crew Review]

Big changes ahead

Rebates Are (Officially) Against TOS

Amazon just dropped its most critical policy update since it banned incentivized reviews way back in 2016.

In as clear and unambiguous language as any, Amazon officially announced Tuesday that offering discounts and rebates outside of Amazon is against TOS.

This could have far-reaching implications to sellers, especially with regards to successful product launches, where product giveaways are all but essential.

What does this mean for your business?

Scams Galore

Amazon, and by extension, third-party sellers, are fighting scammers on multiple fronts.

Just this month, a customer pleaded guilty to duping Amazon out of $300,000 over several years by shopping for relatively expensive items, “returning” inferior ones, and reselling the actual items for profit.

More recently, a UK survey revealed that more than 1 million households have potentially been hit by Amazon brushing scams.

“Brushing” is simply an unscrupulous seller sending cheap-to-ship items to unsuspecting customers and logging those shipments as genuine sales in order to shore up their sales volume, which obviously matters for winning the coveted Best Seller Rank on the marketplace.

With off-Amazon rebates and giveaways now no longer an option, more bad actors could carry out more scams like these and make the marketplace a lot more difficult for honest sellers.

It goes without saying that playing by the rules is still a reward in itself, as Amazon could become more heavy-handed with account suspensions if grey hat tactics and scams to game the system persist.

Amazon Impersonators Stole $27M+

Speaking of gaming the system, according to CNBC, the Federal Trade Commission confirmed that phony Amazon representatives stole $27M from customers in over 96,000 incidents between July 2020 and July 2021.

According to the report, phony “Amazon representatives” would call customers about suspicious activity on their accounts, successfully obtain access to the customers’ computers or phones so they can “fix” the problem, and would pretend to have paid too large a refund and ask the customers to return the difference.

In many other cases, the perpetrators send texts or emails telling customers that they won free Amazon products and would obtain credit card information from there.

An Update to Small and Light

Another (potentially) big change coming to Amazon are the recently updated eligibility requirements to the Small and Light Program.

As per the announcement, as of October 29, 2021:

• Amazon no longer requires a minimum sales velocity for your ASINs.
• It no longer requires a minimum number of units per ASIN for each shipment to fulfillment centers.

This could be great news for sellers selling S&L products who’ve never signed up to the program or those who did sign up but eventually got out because of all the requirements and the whole restock limitations fiasco.

A Zero-Profit Q4 for Amazon?

As we’ve seen from its 2021 Q3 earnings report, things are not looking great for Amazon, at least insofar as its retail business is concerned.

It missed both top and bottom line predictions, and for the first time ever, its net service sales (including AWS, advertising, and other services) eclipsed its net retail sales, which sounds kinda weird for the largest retailer outside of China.

Worse, the earnings report might have put some Amazon investors on edge, as CEO Andy Jassy said that the company is expecting to incur several billions in additional costs on account of labor shortages and global supply chain disruptions, presumably in the interest of consumers and sellers.

Of course, this financial guidance comes with the knowledge that third-party sellers make up the majority of Amazon's retail business, according to its Small Business Empowerment Report.

One positive thing (from Amazon’s perspective) that the Q3 earnings report did reveal is that it has managed to double its logistics network in the span of the pandemic. This initiative reflects Amazon’s desire to be the global logistics company, though we might be seeing more viral videos of non-Amazon personnel climbing out of Amazon delivery vans in the future (Your guess is as good as mine).

Amazon Is Still The Place To Be

Despite its sluggish growth and having to battle scams on multiple fronts, Amazon is still the go-to marketplace for ecommerce entrepreneurs, at least that’s what Feedvisor’s 2021 Amazon Behavior Report tells us.

According to the report, which is now in its fourth year and has taken into account consumer behavior throughout the pandemic, 92% of consumers are more likely to buy products from Amazon and that the A-to-Z marketplace is relevant in all stages of the customer journey.

Sellers could be looking at a lot more opportunities coming their way, particularly through critical sales days like Black Friday and Cyber Monday, which are just around the corner at this point, and Amazon advertising.