For brands selling on Amazon, the decision of whether to own their inventory can be one of the most crucial choices they make. While the allure of higher margins through direct selling on Seller Central (3P) is compelling, many established brands ultimately decide against taking on inventory ownership - and for good reasons.

The financial considerations often top the list. Traditional banking relationships are built around lending against purchase orders and accounts receivable, not inventory stored in Amazon's fulfillment centers. CFOs and finance teams frequently express discomfort with having significant assets stored in facilities they can't physically audit or control. This fundamental shift in asset management can create friction with existing financial structures and relationships.

The operational complexity of managing inventory across Amazon's vast network of fulfillment centers presents another significant hurdle. When transitioning from Vendor Central (1P), where Amazon handles purchasing and distribution, brands suddenly find themselves responsible for forecasting, logistics workflows, and inventory monitoring across 30+ facilities. This dramatic shift requires new systems, processes, and expertise - all of which need to be implemented quickly, especially if Amazon has issued a 60-day termination notice.

Risk management also plays a crucial role in this decision. Without Amazon's regular purchase orders providing predictability, brands must take on all inventory risks and responsibilities themselves. Mistakes in inventory management can be costly, whether through stockouts that hurt sales rank and visibility or excess inventory that ties up capital and incurs storage fees.

Fortunately, brands don't have to choose between staying in an unfavorable 1P relationship and taking on all these challenges themselves. Partners like AMZ Atlas offer an alternative solution by acting as exclusive resellers on Seller Central. These partners purchase inventory directly from brands and assume all the risks and responsibilities of inventory ownership while still allowing brands to maintain control over pricing and brand presence. This hybrid approach enables brands to capture many of the benefits of 3P selling without the operational complexity and financial risks of direct inventory ownership.

As AMZ Atlas CEO Corey Thomas advises, "If you're uncomfortable owning inventory in a facility that you can't control, don't even bother setting up an account - instead look for a partner who will sell on your behalf." This pragmatic approach has helped many brands successfully navigate the transition away from Vendor Central while maintaining their operational comfort zone and financial stability.

Inventory ownership is a critical question for all brands looking to maximize sales on Amazon

A well-known specialty pet supply brand was facing pricing issues. After establishing a relationship with Amazon in 2017 to open a new, growing sales channel, problems associated with their arrangement escalated directly alongside Amazon’s traffic skyrocketing.

While Amazon presented itself as a promising channel for the brand, they were experiencing price erosion, profit loss, and damaged relationships with other retailers due to a lack of control and optimization of prices and listings on Amazon.

With over $75 Million in total sales and their Amazon channel increasing to $4.5 Million, the brand needed to avoid future profit losses and further damage to its brand reputation in the retail market.

AMZ Atlas helped the brand to accelerate eCommerce, take back pricing control, create greater value on Amazon, and repair relationships with other retailers with a one-of-a-kind Amazon strategy. Read on to learn how this was accomplished.

How it All Started: Product Prices Were Eroding on Amazon – And Along With it Their Faith in Amazon as a Profitable Sale Channel
Other retailers were demanding answers. The brand’s low-price pet product growth on Amazon was undermining their pricing on other channels and pressuring them to lower across their product portfolio metrics. The brand not only needed to regain control of its listings but also reclaim its pricing power.

1 – Missing the MAP
Pricing had dropped from 20% to 33% below the minimum advertised price (MAP) on Amazon.
Their own listings were competing with multiple unauthorized third-party resellers that were breaking MAP. The brand needed a plan to take control of unauthorized third-party sellers and enforce their MAP so they could regain pricing power.

2 – Downward Pricing Pressure Removed Pricing Power
The unauthorized sellers had created downward pricing pressure for the brand on Amazon. These lower-priced listings were undermining their true pricing and causing price pressure across their product portfolio.

3 – The Brand’s Reputation at Risk with Consumers and Retailers
Due to the mix of unauthorized product listings, the brand’s products were represented in a myriad of ways by different sellers at prices below MAP challenged their relationships with The Big Three retailers. The brand needed to regain control of its brand presence on Amazon to strengthen its relationship with other retailers and grow eCommerce sales off and on Amazon.

4 – Declining Revenue
Revenue was suffering despite rapidly growing Amazon eCommerce sales volume. The downward pricing pressure had shrunk their margins.

With prices being pushed lower and lower, volume increased considerably, putting the brand in a riskier financial position.

 A well-known specialty pet supply brand was facing pricing issues.

As of March 29th, 2022, Amazon has announced that mobile app traffic data will now be provided via the Business Reports data tools for Amazon Sellers through Seller Central. This will appear in the form of both “sessions” and “page views”, finally giving sellers a heightened level of visibility into traction from the ever-popular mobile medium.

This data will only be backdated to 3/22/2021, which is a bit of a letdown because Amazon could have gone back a full two years. But, many are clamoring for the provision of data even older than that, so this could change in the future. This change is long overdue considering that in most cases up to 70% of traffic comes from the mobile app, meaning up to now, the majority of traffic data hasn’t been available. This change will also prompt a shift towards “mobile-friendly” content as sellers work to optimize that end of the experience.

What do these changes mean for me and my business?

The largest implication stemming from this change is the fact that up till now, item-level conversion rates have more than likely been vastly overstated. Amazon wasn’t just not segmenting this data: they weren’t including it at all, so essentially the past year has now been backfilled with previously unrecorded sessions. With all those previously unrecorded sessions now present, historical conversion rates could (and probably will) shift dramatically.

As we look ahead, we can’t help but wonder why this data still does not provide transparency into conversion rate by traffic source–a valuable nugget of information–and we’re betting it will only be a matter of time before Amazon provides this data if only to reinforce the value of optimizing products for the app.

Data, ultimately, is only as powerful as the insights you garner from it. Use this new data to think critically about your business and the buyer’s experience when interacting with your marketplace. This data can be leveraged to improve important elements of your business like conversion rate, price competitiveness, discoverability, and overall traffic.

Amazon sellers can now view data regarding mobile app traffic in the Business Reports tool via the “sessions” and “pageviews” metrics. This signifies continued commitment to emphasizing the mobile medium and will allow sellers to think critically about these statistics, ultimately leveraging them to improve their business.

AMZ Atlas is a strategic partner that steers brands through the complex terrain of Amazon to secure brand control and drive optimal results. Instead of simply increasing your ad budget, we focus on optimizing the fundamentals (brand, product, pricing, and inventory) first, then obsess over finding the best way to build long-term value for your brands.

Our team is made up of ace strategists and tacticians, from former brand managers with hard-earned Amazon success to specialists who live and breathe the world of Amazon commerce, and veterans in areas like retail pricing, inventory, brand protection, and operational experts who thrive on efficiency.

We’re confident we can help you because we’ve scaled the highest peaks of Amazon ourselves and helped others do it.

 to learn more about how AMZ Atlas can help you to achieve peak performance on Amazon.

As of March 29th, 2022, Amazon has announced that mobile app traffic data will now be provided via the Business Reports data tools for Amazon Sellers through Seller Central.

How AMZ Atlas Led An Established Specialty Pet Supplies Brand to Success On Amazon

After working with dozens of brands representing millions of items on Amazon, it’s worth assessing the Amazon marketplace to see if we can identify trends. One such trend that we’ll focus on today is the Brand Renaissance we are seeing.

Founded in 1994, Amazon’s first two decades of success came from a combination of the rapid growth of ecommerce in the United States as well as a relentless investment in infrastructure that powered its direct and third-party sales. In creating the logistics network required to create a consistent customer experience, Amazon built a multi-hundred-billion-dollar competitive advantage in the form of warehouses that drives its business today.

That was Amazon 1.0, The Marketplace Phase – consumers went to Amazon to buy products from brands they recognized, often at a discount that was sold by Amazon directly or from an undifferentiated reseller that scaled on the back of the Amazon logistics network.

Beginning in 2015, Amazon moved beyond The Marketplace Phase and entered the Private Label Phase – Amazon 2.0. This phase grew out of the immense potential that Amazon 1.0 had revealed. Make no mistake, if Amazon hadn’t created a large enough platform during The Marketplace Phase and created consumer confidence in the shopping experience and the products sold on the platform, the Private Label Phase would never have happened. Once consumers began trusting Amazon more than the brands of the products they were buying, and the size of the opportunities on Amazon were big enough for companies to invest in, this second phase exploded.

The critical shift in strategy from Amazon 1.0 to Amazon 2.0 was that sellers went from fighting for lower prices on brands that consumers recognized, to selling their own products with their own brands.

This strategy worked because Amazon had taken the brand out of product searches. Instead of searching for “Energizer” or “Duracell batteries”, the search was just for “batteries”. This explosion of new brands from companies targeting customer search behavior removed the value from brands and turned products into nothing more than a search, a commodity – “Kitchen Knife”, “Air Mattress”, “Bluetooth Headphones”.

While Amazon 2.0 was wildly successful for thousands of companies, there was a double-edged sword to this success. Winning a search on Amazon didn’t necessarily make the underlying company any more visible to customers than the undifferentiated resellers of Amazon 1.0. All these companies were selling was a kitchen knife, an air mattress, or a set of Bluetooth headphones and oftentimes they were selling their products primarily by differentiating on price. It was this competitive pressure on price that would launch and destroy hundreds of thousands micro brands selling a handful of undifferentiated products.

The Private Label phase is coming to an end. As Amazon incrementally increases their fees and takes a larger percentage of revenue from third-party sellers for order fulfillment, storage, and advertising, the competitive advantage of offering a similar product for less on Amazon isn’t working.

We are now beginning to enter Amazon 3.0: The Brand Renaissance.

In The Brand Renaissance, companies with products that are deliberately searched for by customers will have the ability to maintain margins and stay ahead of the increasing cost of doing business on Amazon.

These same companies with desirable products that also establish consistency on and off Amazon, will endure and thrive over the next five years.

Alternatively, any company whose products are only valuable if they are the cheapest, the competitive pressures of the marketplace, increases in platform fees, and dramatic increases in transoceanic freight costs and tariffs will destroy their business.

If you’re managing a brand selling products on Amazon, the most important investment you can make will be creating a brand with desirable products. Once you have that demand for your brand, you must ensure you have consistency across all points of distribution and sale, especially Amazon, or you’ll be back to Amazon 1.0 tactics.

After working with dozens of brands representing millions of items on Amazon, it’s worth assessing the Amazon marketplace to see if we can identify trends.

For tens of millions of people in the US, the frequency of purchasing products on Amazon rivals any destination outside of maybe the local grocery store. “The Everything Store” has everything we need, anytime we need it, all from the comfort of our couch. And while Amazon may have everything, we all keep coming back because our experiences buying from Amazon are usually positive.

, Amazon has the 4th most valuable brand in the world behind only Apple, Google, and Microsoft.

When considering the number of purchases or interactions a customer will have with brand in a year–in other words, the number of times a brand can create a positive or negative customer experience–Amazon clearly carries tremendous positive momentum from one transaction to another. Amazon is able to maintain this customer loyalty in spite of the fact that 

 on the marketplace are from products sold by other companies.

mazon’s most undervalued core competency, a secret superpower, is consumer confidence. Consumer confidence for Amazon is its ability to create a consistent customer experience even when millions of products come from invisible sellers on the Amazon Marketplace that Amazon may or may not even fulfill.

Those same purchases we talked about above, can you even remember what you bought or the brand that it was from? How often do we buy a mostly brandless item and place our trust in Amazon because it was a “best seller”?

If consumer confidence is Amazon’s secret superpower, could it also be its kryptonite?

Imagine if you had an allergic reaction the next time you purchased a “best-selling” multi-vitamin. Or 

 with the word “explode” on Amazon’s own private label AAA batteries.

Amazon’s greatest existential threat is a cascading loss of consumer confidence.

Unfortunately, this risk is only going to increase overtime. Although Amazon is increasing the safeguards for consumers by increasing the standards required by sellers and brands on the platform, the intense competition, increasing platform fees, and increase in transportation costs create incentives for sellers to cut corners in the production of their products. If one of the most reliable ways to create a best-selling product on Amazon is by selling the cheapest product, eventually compromises will be made.

It’s for this reason that Amazon should change the incentives for sellers and brands based on performance and total sales. Amazon doesn’t need another seller of wooden spoons, there are over 3,000 search results for that term. Inevitably there are varying degrees of quality in those search results. Rather than Amazon turning customers into guinea pigs, left to surface bad products from invisible sellers through product reviews, Amazon should proactively align itself with the very best sellers by offering discounted fees when certain revenue and performance thresholds are met.

Amazon has been adding thousands of new sellers to its platform every day for years. It’s time Amazon invested in the best 1% of their sellers and brands while also raising the barriers for new sellers on the platform to better protect consumers and Amazon itself.

When was the last time you bought something on Amazon? Earlier today? Yesterday? Within the last 30 days?

We all dutifully pay our membership fee for the perks of free shipping, free movies, and dozens of other lesser-known perks.

For many of us, Amazon has won over our hearts and minds because it has almost anything we could ever want all in one place. On the surface, this endless digital shelf seems like Amazon’s greatest strength and what keeps us coming back. However, what we’ve all really fallen in love with is Amazon’s supply chain and logistics network.

What we’ve all really fallen in love with is Amazon’s supply chain and logistics network.

Behind all the searches, one-click add-to-cart, subscribe and save, and “buy now” conveniences we’ve become accustomed to, it’s Amazon’s shrewd insight and capital-intensive supply chain that has given it the platform to dominate ecommerce for years to come.

To build this dominant network, Amazon started with warehouses, of which it now has hundreds of facilities across the world. Amazon then moved to the actual transportation network by building out a fleet of trucks, trailers, vans, and airplanes, to control the movement of goods into and out of its warehouses.

Amazon itself now delivers over 70% of all its packages and is on pace to become the largest package delivery carrier in the US by early 2022.

But it wasn’t always this way. How did Amazon come to dominate the package delivery industry seemingly overnight and disrupt industry stalwarts like UPS and FedEx? The answer, order data and the US Postal Service.

First let’s talk about the order data. For years Amazon has dominated ecommerce to the point that now 

 sales happen on the site. For perspective, the next nine largest ecommerce sites, Walmart, eBay, Apple, Best Buy, Target, The Home Depot, Kroger, Costco, and Wayfair, combined account for only 26.5% of total ecommerce sales.

Put another way, Amazon sold ~$367 billion in 2020 compared to the other nine companies that combined sold ~$241 billion – Amazon outsold the other combined sales of the next nine top ecommerce sites by $126 billion dollars.

All these orders gave Amazon mountains of data about customer orders and behavior as well as essential information about the logistics infrastructure that would be required for Amazon to service its own orders.

Armed with all that order data, Amazon rapidly scaled its own package delivery network to the point that in 2019 Amazon was able to drop FedEx entirely. The share of Amazon packages delivered by UPS and USPS are also 

, but the postal service in particular plays a vital role for Amazon that will linger for years to come.

It is this second component, the role that USPS plays, that when combined with order data, is turning Amazon’s package delivery business into a juggernaut. The role for USPS long-term with Amazon can be summarized in one word: rural.

It’s no secret that if you’re in the business of delivering packages, efficient operations and route density (the number of packages to deliver per route) mean everything. What’s challenging for Amazon is that when it offers Prime Customers “Prime Shipping” irrespective of the customer’s location, rural deliveries have the potential to destroy any notion of efficiency, drive up program costs, and hemorrhage money. But Amazon can’t market a service like “Prime” and exclude millions of rural Americans.

FedEx and UPS have dealt with this challenge for decades. Both companies have tried to mitigate the economic difficulties for rural deliveries by adding residential surcharges and providing slower delivery services, but no matter what they do, rural deliveries must always be offset by more profitable high-density delivery routes. FedEx and UPS are also at a significant disadvantage compared to Amazon because they don’t originate the order, FedEx and UPS only play the role of package delivery vendor.

In contrast, as Amazon was launching its own package delivery service, Amazon was able to cherry pick the orders and delivery routes that had the best economics and pass on the worst routes with the least concentrated orders to the US Postal Service.

Amazon turned the entire business of package delivery into a feature of their much larger business.

But why did Amazon pick the Postal Service as its rural delivery partner? It came down to the law. The USPS has to accept a large portion of these low density deliveries from Amazon due to the 

 that requires the USPS “provide service to people in all communities.”

For Amazon, the Postal Service’s USO gives Amazon the ability to offer a nationwide service like Prime Shipping to its customers without bearing the full cost of the low-density rural deliveries. Amazon gets to keep the package delivery routes that are economical for its business and delegate those that aren’t to the USPS.

And now that Amazon’s package delivery network is getting big enough, mostly from its own demand, Amazon can take the lucrative non-rural delivery routes and begin competing with UPS and FedEx for off-Amazon delivery services.

Don’t be surprised if, by the end of 2022, Amazon is a major package delivery services competitor to UPS and FedEx for non-Amazon purchases.

US consumers love Amazon, so much so that over one hundred million people in the US alone are Amazon Prime customers

The AMZ Update: Ensure You’re FCC Compliant

new requirements for radio frequency device listings”

. If you are selling radio frequency devices (RFDs) via Amazon Seller, you may need to make some changes to remain in or gain compliance with Federal Communications Commission (FCC) regulations and all federal, state, and local laws applicable to those products and product listings. This post will outline what has changed, who this applies to, and what to do about it.

It’s important to note that beginning March 7th, 2022, Amazon has begun removing listings that do not comply with these newly implemented regulations. Failing to educate yourself and eventually comply with these guidelines could result in your products being removed from the platform.

The FCC regulates electronic devices that emit radio frequencies. The FCC also notes that nearly all of the electronic products listed on Amazon are capable of emitting radio frequencies, meaning this new regulation will be applicable to practically all sellers of electronic or electrical products.

Brands that are selling products that include radio frequency devices (RFDs) on Amazon. Generally, this applies to “products that…contain circuitry that operates in the radio frequency spectrum”.

According to the FCC, almost all electronic or electrical products are capable of emitting radio frequency energy; so, it’s crucial that vendors do their due diligence in this regard, as they may be selling an item that falls under this broad category without realizing it.

The FCC broadly classifies RFDs as any electronic or electrical product that is capable of emitting radio frequency energy. Examples of products that are regulated by the FCC as RFDs include: Wi-Fi devices, Bluetooth devices, radios, broadcast transmitters, signal boosters, and devices with cellular technology.
You can learn more about what the FCC considers as an RFD here.

How can Amazon sellers prepare for this change?

Your 5-Step action plan to complete ASAP:

#1 – Talk to your Agency or Capital Partner or any other parties assisting you with the management of your Amazon listings to identify which steps (if any) you need to take to ensure compliance and avoid getting your listings removed from Amazon.

#2 – Identify the FCC rules that do or do not apply to your product (see the bottom of this 

#3 – Take steps toward compliance (use this 

#4 – Gather evidence of FCC authorization (see 

 to provide evidence of FCC authorization (either an FCC certification number or contact information for the Responsible Party as defined by the FCC.)

We’re confident we can help you because we’ve scaled the highest peaks of Amazon ourselves and helped others d

Click here to learn more about how AMZ Atlas can help you to achieve peak performance on Amazon.

If you are selling radio frequency devices (RFDs) via Amazon Seller, you may need to make some changes to remain in or gain compliance FCC regulations.

Amazon recently announced a slew of new changes that are pertinent to anyone selling on the platform, most notably affecting those doing business in Europe. These policies impact price-fixing, mediation, and refurbished goods and will take effect on March 31st, 2022.

This update will discuss these changes in detail as well as the implications of these changes for sellors and vendors. Furthermore, it will provide important advice for the delicate process of navigating vendor negotiations with the platform.

There are a broad range of new implementations, including…

Explicit prohibition of price fixing and search rank manipulations

Sellers now have the option to designate one mediator among a list of two provided by the CEDR (Center for Effective Dispute Resolution)

Changes to metrics measuring seller participation in 

Introduction of the Negative Review Rate and Product Quality Return Rate as primary quality performance metrics

Introduction of a new service called Lab Central, meant to perform compliance testing in a more convenient manner

These changes are most impactful to sellers operating within the European markets, but there are other more nuanced factors that may be reason to pay more careful attention.

Sellers regularly interacting with the Center for Effective Dispute Resolution

Sellers participating in the Amazon Renewed program (see above)

Sellers with reason to monitor performance metrics like NRR or PQRR

Sellers regularly requiring compliance testing (would be encouraged to look into Lab Central)

What can I do to prepare for the Amazon pricing policy changes?

By reading this article and attempting to educate yourself on the transient rules and policies surrounding selling on Amazon, you’re already a step ahead of the game.

The first thing you can do in order to prepare for these pending changes is review them carefully: first, examine the high level notes in the first section of this post and consider them within the context of how your business operates. 

Are you selling in European markets? Furthermore, do you frequently engage with any of the entities listed in these changes? 

If the answer to any of these questions is yes (or even maybe), it would be worthwhile to go directly to the source and read the details. You can do so 

Amazon recently announced a slew of new changes that are pertinent to anyone selling on the platform, most notably affecting those doing business in Europe.

We navigate Amazon’s complexities with precision, equipping brands with the tools and strategies to take control, unlock potential, and achieve lasting success.

Insights

Insights

Insight

Why Many Brands Choose Not to Own Their Amazon Inventory

News

A well-known specialty pet supply brand was facing pricing issues.

News

Amazon Makes Mobile App Data Available in Business Reports Tool

Brand Strategy

Amazon 3.0: Why Brands Will Thrive

Growth

Amazon’s Secret Superpower

Telescope

How Amazon Will Eat FedEx and UPS

News

ICYMI: New Requirements for Radio Frequency Device (RFD) Listings on Amazon

Update

Navigating the New Pricing Requirements on Amazon

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