Holiday FBA Legal News: Projections, Prime, and Pirates
Holiday shopping season is upon us. So, let’s take a minute to dissect a bit of ecommerce industry news…using a lawyer’s scalpel.
Holiday Prognosis For FBA Sellers = Less Than Ideal
Unfortunately, this holiday season may be a rocky one for some FBA sellers — especially neophytes.
Amazon is restricting warehouse services until December 19th. In past years, the online retailer implemented a handful of category-specific cutoffs to ensure sufficient processing time for the holidays, but this year’s blanket mandate is a first.
Why is Amazon doing it? The online retailer explained: We are restricting shipments from new-to-FBA sellers to ensure we have the capacity necessary to quickly receive and store inventory and ship products to customers. If new FBA sellers have not completed their first shipment to Amazon before October 10, 2016, we encourage them to start shipping to Amazon after December 19, 2016. If the situation changes before December 19, we will notify them by email. We encourage sellers to continue selling on Amazon and fulfilling orders directly to customers.
In short, it’s all about warehouse capacity; unpopular products clog floors and hamstring the distribution process, which has the potential to create a perfect customer service storm, and ultimately cause a complaint tsunami to crash down on Amazon.
The announcement shocked some folks. But should it have? Perhaps not. Earlier in the year, Amazon began forcing certain sellers to reclaim unsold inventory. Hindsight being 20/20, pundits are now wondering: Did we all ignore an important bellwether?
A market analyst further explained: Looking at the last couple holiday seasons, Amazon realized one thing that can help is better management or optimization of inventory on hand for holiday purchases. They’re looking at available capacity in terms of both third-party and first-party inventory, and clearly being more aggressive in managing what additional products are going to be sent to those DCs before the end of the year.
Amazon Prime In China
Prime finally arrived in a giant country obsessed with overseas products — China. The expansion could be an opportunity boon for savvy U.S. sellers.
Cheaper than its stateside counterpart, China’s Prime costs $57. Amazon cut the price to lure users in an already saturated market. But some pundits are skeptical because regional e-commerce competitors already offer free shipping packages, for less.
So, why push Prime onto an already crowded pitch? Ben Cavender, a senior analyst at China Market Research Group in Shanghai, explained: If they can offer products and brands the other guys aren’t, this could really work for them. They have so much data about what goods are popular overseas, they may be able to anticipate what products will be popular … in China.
Alibaba Is Still Fighting To Avoid The Infamous Pirates List
Dubbed “the bad boys of retail” by a U.S. executive, trade groups, like the AAFA, are practically begging officials to slap Alibaba back on the “notorious markets list” — an index of online and offline piracy souks. The threat has been lingering for several months, and Alibaba made the latest move by sending a statement to the U.S. Trade Representative, which, in part, read: We routinely collaborate with brands, associations, and regulators to maintain the integrity of our marketplaces. Our recent USTR [United States Trade Representative] submissions describe our steadfast efforts to fight counterfeiters online and the sources of such production offline. It also reflects our very strong commitment towards intellectual property rights protection.
Need Help With An E-commerce Business Issue?
Our firm, Kelly / Warner, regularly assists ecommerce entrepreneurs with routine business issues and aberrant legal matters. What do we do? Things like (but not limited to):
- Help people form asset-protecting businesses to avoid personal liability.
- Negotiate with websites, like Amazon, on account reinstatement issues.
- Act as counsel for enterprises involved in overseas shipping and marketing.
- Perform advertising and marketing compliance reviews.
- Handle payment processing setbacks and setups.