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How Much Inventory Should I Store in Amazon FBA?

Amazon’s logistics network received quite a bit of attention in 2020. Quarantines led to surges in online buying, and Amazon’s fulfillment centers struggled to keep up (although Amazon grew 40% year-over-year in Q2). To cope, Amazon temporarily restricted which product categories it would accept into fulfillment centers, increased the minimum performance requirements for utilizing their systems, and limited the maximum number of products that could be stored in their warehouses.

But even before COVID-19, Amazon logistics were a hot topic. In the great game of supply and demand, the question has always been how to provide enough inventory without overstocking. Here at Kaspien, we live by the idiom “always buy enough, but never too much.” That, however, is much easier said than done.

Running out of stock can result in cascading repercussions that damage the velocity of a listing, so it’s imperative that we consistently strike a balance between having enough but not too much inventory. – Joy Kuykendall, Account Manager

There are many factors to consider when deciding how much inventory to ship and store at Amazon, several of which we’ll cover here. Your first step: determine your goals before assigning a strategy.

What are My Company Goals?

Is your strategy geared towards cash flow management? If so, you’ll more than likely consider a more conservative approach, what we call a “lean model” here at Kaspien. If your goals are focused more on revenue this year, you’d probably consider a more aggressive approach, pushing higher quantities to market and supporting sell-through with pricing and marketing strategies.

Inventory Management Strategies

Once you have goals in place, you can determine if you want a lean model or an aggressive model. Obviously, both come with their own set of considerations and risks. But what exactly are the consequences for stocking too much or too little inventory at Amazon?

Overstocking Results in Fees

Most Amazon sellers are aware that Amazon charges monthly storage fees per item (by cubic foot). If, for one reason or another, you wind up with too much inventory at Amazon, you’ll be subject to what are referred to as “Long-Term Storage Fees” in addition to monthly storage fees. Per Amazon, “Inventory that has been in a fulfillment center for more than 365 days will be charged a monthly long-term storage fee (LTSF) of $6.90 per cubic foot or $0.15 per unit, whichever is greater.” These fees compound the longer the inventory sits in the warehouse without selling, eroding your bottom line.

At Kaspien, we have a devoted team to monitor our inventory levels and ensure listing price supports a healthy sell-through rate.

“It’s important for sellers to find the optimal level of inventory. Overstocking inventory increases storage costs and can negatively impact a seller’s IPI [Inventory Performance Index] score.” said Autumn Roybal, Pricing and Inventory Manager.

The best way to avoid these fees would be to not overstock at the warehouse or to conduct a removal, which has its own set of associated fees.

Understocking Costs Sales & Impacts Marketing

Sellers also face repercussions when they run out of stock at Amazon. If you run out of stock, then competing sellers or competing brands will win the sale. But running out of stock has more than just an immediate impact. Once out of stock, your listing won’t hold its rank, and product rank ties directly to product searchability and discoverability. As a result, marketing and sales performance suffer even after you replenish inventory.

As Joy Kuykendall, Partner Optimization Account Manager, puts it, “We must closely monitor inventory cycles of each listing to ensure there is enough inventory to prevent stocking out, especially in listings for which we are the only Prime seller. Running out of stock can result in cascading repercussions that damage the velocity of a listing, so it’s imperative that we consistently strike a balance between having enough but not too much inventory.”

How Much Inventory Should I Buy?

As with most things, a balanced approach is generally the safest and most impactful route to managing inventory levels. One of the most valuable tools for determining your ideal inventory level is historical sales data, ideally for 30-60 days. You can also reference year-over-year trending, if you have the data available, to further help forecasts.

Using historical sales data, you can predict how the product will sell over multiple months, though it’s not quite linear. You must also account for seasonal trends and channel details, such as seller saturation, rank, and reviews. Third–party sales estimators can give you a good idea where to start if you don’t have access to historical sales data, such as when you’re launching a new product or product line.

Also, keep in mind product– specific nuances. Is the product at a high price point? Does Amazon consider it oversized? Is it meltable? Hazmat? Not only will these items have different sales velocity, they will also have different implications when it comes to fees associated with long–term storage at Amazon.

Amazon Inventory Storage Fees

The below fees are accurate as of November 2020.

Monthly Amazon Inventory Storage Fees (Non-Hazmat)

Standard Size

January – September $0.75
October – December $2.40

Oversize

$0.48
$1.20

Monthly Amazon Inventory Storage Fees (Hazmat)

Standard Size

January – September $0.99
October – December $3.63

Oversize

$0.78
$2.43

Determine Amazon Inventory Carrying Costs

In addition to storage fees, you should also keep in mind other costs your inventory will accrue so you can factor it into your margin calculations. Amazon inventory carrying costs refers to the total expenses associated to managing, shipping, and storing inventory at Amazon. This includes the aforementioned storage fees, as well as general operational costs to your business in discovery and planning, manufacturing or acquiring, shipping and handling, and any insurance or taxes for the item. Lastly, FBA fees should be considered part of the Amazon inventory carrying cost: “The Fulfillment by Amazon (FBA) fee is a per-unit fee, based on the dimensions and weight of the item.”

How can I Prepare for Supply Chain Disruptions?

As we all learned in 2020, supply chain disruptions can be a very real threat to a seller’s ability to “always buy enough, but never too much.” Some of these disruptions can be accounted for, such as major holidays in the countries where you produce products (Chinese New Year is a great example). In these cases, you can plan ahead and prepare for these events. You can also extend forecasts and stock up more than normal to account for the months where the lead times won’t support timely inventory fulfillment.

For unexpected disruptions like we all experienced with COVID-19, it may behoove you to develop a “backup plan,” such as a dropship listing you can turn on in a pinch in the event that your FBA inventory runs out. Seller Fulfilled Prime (SFP) and Fulfilled by Merchant (FBM) are other worthwhile options to protect against out of stocks if you have the means to support them.

How Should I Plan for Peak Seasons?

Sellers generally see improved sales across the board during peak seasons. You can determine peak seasons for your specific product or brand based on historical sales, but generally, trends on the marketplace are common sense. Sunscreen sells well in the summer months; Toys sell well around the Christmas holidays.

Make sure you prepare early to ensure you have enough inventory allocated for the higher velocity season. You could consider negotiating discounts or improved payment terms to offset the larger cash investment for allocation. Obviously, be mindful of your normal best practices for ordering, and always expect Amazon to impart some sort of kink in the chain (see Amazon Inventory Restrictions at the top of this post).

Peak seasons also tend to have longer lead times due to port delays and increased freight velocity/surcharges, so be sure to account for those during your planning.

In Closing

There’s plenty to consider when determining how much inventory to ship into and store at Amazon, and when you’re first developing your strategy, it can take some trial and error. Remember that not all SKUs are created equal and tailoring your most effective strategy can take some time. Using the above tips and tricks will help you on your way!

Learn More about Inventory & Supply Chain Management

The Electronics category is one of the largest, most competitive, and most mature categories on Amazon. Amazon itself has a dominant presence, both as a first-party retailer (1P) and in a private label capacity, with Amazon Echo, Alexa, Kindle, and Fire TVs being just a few of their offerings in Electronics.

But, Amazon isn’t the only established player in this space. Major brands like Apple, Sony, and many others have large catalogs on Amazon. The Electronics category also sees a surplus of copycat and knockoff products, as there are plenty of factories that will happily produce the same product for two brands and apply a different sticker to each.

Even with these challenges, there have been tremendous success stories. Brands like Anker and 1More both established much of their initial business on Amazon and have grown into major players on and off the channel. But selling in this category is difficult; brands need to be ready to hit the ground running. It’s a marathon sprint, and the race has already started.

Overview

Amazon 1P Dominates Electronics Sales

Amazon has a strong first-party (1P) presence in the Electronics category, accounting for 43% of the total sales in Consumer Electronics, according to Amazon’s responses to the US House Committee on the Judiciary’s Questions for the Record.

Amazon’s dominance in this category is partly owed to Electronics brands themselves, many of whom choose to partner with Amazon 1P as their wholesale online retailer. We can see this played out on Prime Day in 2020. A Rolling Stones poll found that on Prime Day, the top selling products were:

Apple AirPods with Charging Case (sold by Amazon)
Bose Solo 5 TV Soundbar (sold by Amazon)
YI 1080p HD Wireless Home Security Camera
VANKYO LEISURE 3 Mini Projector
Echo Show 5 (sold by Amazon)
Amazon Smart Plug (sold by Amazon)
Back Bay Wireless Bluetooth Shower Speaker
23andMe Health + Ancestry Service
Pure Clean Automatic Vacuum Cleaner (sold by Amazon)
YOSUDA Indoor Cycling Bike

During Prime Day 2020, Amazon 1P accounted for half of the top ten selling products. Eight of the top ten selling products were from the Electronics category, including the top seven products. Digital Commerce 360 estimates that Amazon saw over $10.4 billion in sales on Prime Day 2020, and that Amazon claimed 65% of those sales.

Amazon’s Prime Day sales demonstrate Amazon’s control in the Electronics category, as well as the enormous interest in purchasing Electronics on Amazon. Shoppers have learned they can find nearly all their Electronic wants and needs on Amazon, making it a key market for Electronics brands and sellers.

The Electronics Category is Saturated

Of course, when there’s so much value up for grabs, everyone wants a piece. The Electronics category is not just saturated; it’s among the most saturated categories on Amazon. It is one of the most-purchased-from categories, one of the most competitive with ads and pricing, and rife with knockoffs and counterfeit products. There are literally tens of thousands of purchasing options for headphones alone, making it into its own sub-category.

Brands entering the Electronics category have a difficult road ahead. For new brands, rising about the clamoring crowd of lookalike products is incredibly challenging in most established sub-categories, such as headphones, speakers, and mics. However, there are strong opportunities in emerging technologies, such as “smart home” products.

The saturation of the Electronics category is, of course, a long time in the making. Electronics sellers have been on Amazon for many years, maturing into one of the most experienced categories on Amazon. Which brings us to our next point…

One of the Most Mature Categories

The Electronics category is one of the most mature categories on Amazon. What exactly does that mean?

By maturity, we mean that the sellers operating in this category tend to have an above-average understanding of what goes into selling on Amazon. They understand the competitive landscape, Amazon’s dialectic role friend and rival, the necessity and value of marketing, how to marry their brick and mortar and ecommerce strategies, etc. When the category is so saturated, sellers have had to learn to adapt or fail.

This maturation is leading the category into the next phase of its lifecycle, where major players are reclaiming the landscape. As mentioned, Amazon dominates much of the category by retailing products from leading brands and creating its own low-cost private label products. In 2020, Amazon’s retail sales account for 97% of their sales in the Electronics category, while private label accounts for just 3%.

Despite its small share, you shouldn’t write off Amazon’s private label. AmazonBasics is a growing threat in the landscape, as AmazonBasics often develops their own versions of successful items on the market at a much cheaper price.

This practice landed Amazon in hot water in 2020, when the Subcommittee on Antitrust, Commercial, and Administrative Law of the Committee of the Judiciary published a report that claims Amazon uses private third-party information to inform its private label decisions.

However, Amazon isn’t the only one taking a larger market share. Major brands like Bose, TLC, and Sony are taking more ownership of their Amazon channels as they realize the opportunities of this marketplace. If the trend continues, the Electronics category may shift to consist of several dominant brands in established sub-categories, while they and new brands continue to fight for market share in emerging sub-categories.

Learn More

There are many challenges in the Electronics category: seller saturation, competitive ads and pricing, direct competition with Amazon 1P, knockoffs, counterfeits, quality control, safety testing and certifications, and more. It’s a lot for any brand to handle on their own.

Fortunately, we’ve got the resources to help. Download our free Amazon Seller’s Guide to the Electronics Category to learn even more about the category landscape, shopper psychographics, and category-specific marketing strategies.

Download the Amazon Electronics Category Guide

Originally published on Forbes.

In today’s global and fast-paced world, information flows at the speed of light. It’s also widely available, so new competitors appear very quickly. To survive in this landscape, companies must be able to react to new information quickly and strategically. In short, they need to be “agile.”

Agility is a social process. It comes from how individual employees and teams operate on a day-to-day basis. However, fast responses put a company at risk of internal teams becoming siloed and falling out of alignment. When teams fall out of alignment, the company loses its agility.

In the tech industry, one of the most critical yet common disconnects in alignment is between developers and external-facing teams. In this article, I’d like to share five steps that company leaders can take to keep their teams aligned and company agile.

1. Regularly Remind Employees About Your Value Chain

Creating and maintaining clarity on the value chain is the first step toward alignment. The value chain is how a company delivers products and services to customers. Each employee should understand, at a basic level, the components, how the company delivers value and their role in that.

For example, a software company may break the value chain into four main components: build, sell, onboard and operate. Of course, this is a simplified view, but what matters is that each employee understands the overarching premise of the company’s value chain because they can then think about how others affect their work and how their work affects others.

2. Structure Your Company To Support Alignment

The next key to alignment is organizational structure. The divisions, departments and teams within a company should be arranged vertically and horizontally in a way that promotes strong communication between employees who should be influencing each other.

This may not map one-to-one to the value chain — and in many cases, it shouldn’t. Take our previous example of four components. If one division is mapped directly to one component in the value chain, it becomes siloed, and that can impede alignment and agility.

Instead, I recommend companies map out their organization in a matrix, placing the teams in charge of creating products or services on the y-axis and the teams in charge of delivering value to customers on the x-axis. Place teams with intention so that each intersection identifies two units that should be regularly communicating. This structure can enable economies of scale and scope.

3. Promote Consistent And Predictable Company-Wide Operations

Creating a matrix also helps visualize and facilitate the third step: predictable company-wide operations that balance between strategy and operations horizontally and constant communication vertically. Divisions, departments and teams should work collaboratively and in unison. Employees, managers, directors and executives should communicate frequently both up and down the chain. That could mean anything from daily standups to monthly business reviews to biannual planning sessions. Keeping teams aligned and productive is a balancing act between too few and too many meetings, so workshop it until you find what works for each team.

By keeping operations predictable and consistent, the company can maintain alignment and confidently plan its future strategy, progressing toward even greater achievements.

4. Everyone Operates In Teams

So far, I’ve discussed from a top-down perspective how to assemble a value chain, organization structure and operating procedures with the aim of aligning back to a company’s mission and objectives. While a top-down perspective is useful for discussion, at the end of the day, it’s the employees who execute and make the vision into reality. How does one ensure that every person in the organization stays aligned as they perform their day-to-day job, make decisions and so on?

That’s where the team framework comes in. Teams are the foundational unit of how companies operate, not individuals. Everyone operates as part of one or multiple teams, no matter their seniority or role. They may work largely independently, but their work still contributes to a larger vision and is therefore part of the team. Effective teams communicate openly and regularly about objectives, plans to reach them, obstacles and timelines.

For example, you may have a team focused on delivering a software product. Members of that team would include representatives from the development, product, marketing and sales teams all coming together with the common goal of producing, optimizing and selling the product. Where there was once misalignment between siloed teams, there is now a unified team aligned in its understanding of what’s needed to drive success.

5. Teams Have Communication Networks

As I touched on in my last Forbes article, working well together within a team is not enough. Leaders should guide their companies a step further and ensure that teams are also working in unison with other teams.

Teams have stakeholders that care very deeply about the outcome of the team (because their goals could be dependent on the team’s results), even if the stakeholders aren’t part of the daily execution. It’s critical that teams maintain a constant two-way flow of information with their stakeholders so they avoid siloes or bottlenecks.

It sounds great in theory, but the reality is never so simple. To accelerate the adoption of this framework, each team should:

Identify stakeholders. Which other teams depend on them? Which other teams do they rely on?
Identify the best way to communicate consistently and predictably with those teams.

In short, go deep with your team and wide with other teams.

Live It Every Day

Creating an aligned organization is a daily effort. When you work on a project, ask yourself: Are you part of a team? Are you following the team framework? Who are your stakeholders? Are you communicating with them and how? Adopting these five frameworks can be key to creating and maintaining alignment throughout your company. Their success starts with you.

One of the most important topics in ecommerce is channel control. In ecommerce, channel control means a brand has complete control of their representation across all marketplaces (Amazon, Walmart, eBay, Target, Google Shopping, their website etc.). This includes consistent appearance and voice, consistent pricing, and a consistent product experience for all consumers.

Brands have struggled with channel control for years, and 2020 has made accomplishing that mission even more difficult. As the number of online sellers increases at an overwhelming rate, so too does the number of rogue sellers and Minimum Advertising Price (MAP) violators.

Why is Channel Control Important?

Channel control is essential for protecting a brand’s bottom line, and perhaps even more importantly, their reputation. Every day, we hear from brands that are struggling to enforce their reseller policies and are seeking assistance. They frequently find rogue sellers in their listing violating MAP and it can be extremely difficult to identify the source of the rogue seller’s product.

Such situations are frustrating and time-consuming, but they must be addressed because channel control is fundamental for a brand’s success.

It Affects Shopper Confidence

When brands lack channel control, it results in inconsistent branding, inconsistent pricing, inconsistent customer service, etc., all of which can put shoppers on guard. Is the product a fake? Is the atypically low price a deal or a scam? Are they receiving reliable answers to questions about product use, appearance, and safety?

To maintain channel control, brands must have an enforceable selling strategy. Many brands have MAP policies, and some have Authorized Reseller Agreements or Exclusive Agreements. However, even among these brands, many still lack a plan for how to enforce their policies, and a policy that can’t be enforced isn’t worth anything.

How to Remove Rogue Sellers and Counterfeits

So, how can you enact and enforce a strategy to safeguard your brand’s channel control? Monitoring and managing thousands of sellers is certainly no small effort. At Kaspien, we recommend utilizing software and/or partnerships to make this enormous task more manageable.

Price & Seller Tracking Software – Perispect

If your strategy requires enforcing a MAP policy tracked across multiple listings and sellers, Perispect will save you valuable time.

Perispect is Kaspien’s proprietary brand protection software. It empowers brands to track sellers and their pricing across 6 marketplaces and 9 countries, all in one platform. Why is that helpful?

Marketplaces Do Not Enforce MAP or MSRP

Well, twenty-five years in, it’s no secret that Amazon takes a hands–off approach to enforcing MAP or MSRP. Amazon’s mission to have the lowest prices available with the quickest delivery. When sellers price down, even if it’s just a few cents, they make the marketplace more attractive to shoppers. Other marketplaces, such as Walmart, eBay, Wish, etc. are following Amazon’s lead as well. As a result, brands cannot rely on the marketplace to help them enforce their pricing policy; they must do that themselves.

Perispect Empowers Sellers with Actionable Insights

That’s where Perispect comes in. Perispect scans each marketplace, identifies the sellers in your listings as well as their listed price, and stores this information in a centralized, easy-to-read dashboard! If a rogue seller appears or a seller drops below MAP, Perispect immediately notifies you.

As a result, you don’t have to manually monitor your brand’s listings and sellers. Even if a seller changes their name, Perispect’s seller tracking capabilities will record the name change and associate it with the previous record, so you can track a seller’s actions regardless of whether they rename themselves.

The software also provides brands with the seller’s contact information, including email, phone number, address, Merchant ID, and their seller rating, along with their total number of ratings. This enables brands to quickly assess the seller and send violation notices. These notices are then tracked in a case management dashboard, making it easy to follow up.

Gain Evidence to Enable Enforcement

In Perispect, brands can easily see their channel from a brand level or by seller. At a brand level, brands will see all their listings, MAP price, number of offerings, and the lowest price. A dropdown on each listing shows the sellers, their pricing, and a screenshot of their pricing to use as evidence in the event of a pricing violation. The screenshots are stored for 2 weeks.

How Much Does Perispect Cost?

Perispect starts at $99/month.

Unauthorized Seller Removal with VantageBP

While Amazon plays a hands-off role with MAP policies, Amazon does take product infringement very seriously. As your channel grows, so too does the likelihood of counterfeit products and rogue sellers entering your listings. VantageBP can help brand’s remove these sellers.

VantageBP Removes Counterfeits and Unauthorized Sellers

VantageBP is a proven ecommerce monitoring and enforcement agency that specializes in identifying rogue sellers and eliminating counterfeit products from the marketplaces. VantageBP’s rapid scanning technology quickly identifies unauthorized resellers and new products listings.

When VantageBP discovers a violation, they send an automated seller notification requesting the seller’s information and where they obtained your products. If no response is received after 48 hours, they send a second notice. If the seller provides an invoice, receipt, or supplier information, they will be marked as “verified” in VantageBP’s system. If they do not respond with adequate information, the seller is flagged as “unauthorized.” VantageBP then generates and files an enforcement action request with the given marketplace to expedite removal.

What Happens if Sellers Cannot be Removed?

If the seller provides a supplier invoice or supplier information, VantageBP cannot remove the seller from the listing, as they are following Amazon’s reseller policies. However, VantageBP will still pass along any information they gathered to you so you can inform the supplier of your reseller policies.

Track Progress in Real-Time

VantageBP shares a real-time dashboard with their clients showing their finding. Brands can review information by listing or by seller. By receiving the information updates in real-time, brands can have immediate conversations with suppliers, instead of waiting for weekly or monthly updates. The information gathered from the sellers is saved within the dashboard, giving you access to the evidence you need for relaying requests to suppliers.

Why Doesn’t Kaspien Remove Rogue Sellers?

Kaspien partners with brands in one of three ways – as their wholesale retailer, as their ecommerce agency, or as their software provider. Because Kaspien is a third-party seller, there’s a conflict of interest if we try to remove other third-party sellers. However, many of our partners request assistance in removing unauthorized sellers from their listings. That’s why we partner with VantageBP to provide this important service.

How Much does VantageBP Cost?

Kaspien’s partners receive a referral discount when working with VantageBP. VantageBP customizes their monthly fee based on your brand’s needs, and there are no contracts locking you in. After working with VantageBP for just 4 months, one of our partners saw a 62% increase in listing control!

Other Ways to Protect Your Brand on Amazon

While achieving and maintaining channel control may be difficult, it’s well worth the effort. In addition to Perispect and VantageBP, here are some free resources on other ways brands can safeguard their online brand integrity.

Podcast – Protecting Your Brand Online: Counterfeits, Pricing, & Rogue Sellers
Podcast – Product Compliance & Risk Management on Amazon
Podcast – Resolving Compliance Issues on Amazon, Featuring ‘Amazon Sellers Lawyer’
Blog – Why You Need A Clean Amazon Sales Channel From Day One
Blog – What The Dept. Of Homeland Security’s Counterfeit Report Means For Amazon
Blog – Should You Sell To Multiple Sellers Or An Exclusive Seller On Amazon?
Blog – 11 Ways To Protect Your Brand Against Counterfeits, IPR Violations, & Rogue Sellers
Blog – How To Resolve Common Amazon Issues

Amazon has long dominated online marketplaces in the US. However, in 2020, Walmart launched a series of initiatives that would borrow from Amazon’s learnings to bring Walmart into a competitive position, such as Walmart Fulfillment Services and a subscription service, Walmart+ (Walmart Plus).

The success of these initiatives immediately underwent a trial by fire as the coronavirus pandemic swept the US. Amidst quarantines and dramatic swings in consumer buying behaviors, Walmart’s online segment has conducted itself admirably.

So, in this post, we’re taking a closer look at how Walmart Marketplace compares to the great leviathan of US ecommerce.

Walmart vs Amazon – History

Amazon’s History

Amazon was founded as an online book seller on July 5, 1994. The company went public just under three years later in 1997, then expanded into music and DVDs in 1998.

Amazon as we know it today, with millions of third-party sellers selling alongside Amazon on its platform, began in 1999, when Amazon launched its third-party seller marketplace. Amazon Web Services, or AWS, joined the fray in 2003.

2005 brought the introduction of Amazon Prime. From there on out, Amazon continued to grow into the behemoth we know today. The last 15 years have been filled with acquisitions and ventures into all types of industries, including mobile phones, robotics systems, the Washington Post, Twitch video game streaming service, Whole Foods, the creation of Echo and Alexa, prescription medication, and more.

This article contains a thorough summary of Amazon’s major milestones over the years.

Walmart’s History

Walmart is far older than Amazon, founded in 1962. The company went public in 1970.

The next 30 years saw rapid growth in physical store locations, but it wasn’t until 2000, just five years after Amazon launched, that Walmart launched online stores. Likewise, it wasn’t until 2009 that Walmart launched a third-party seller marketplace, 10 years after Amazon.

However, Walmart beat Amazon to the online grocery game, starting online grocery pickup in 2015.

Walmart acquired Jet.com in 2016, a move that would ultimately teach Walmart many lessons about ecommerce, but not drive any immediate, significant growth.

Walmart launched TwoDay Delivery in 2017 to compete with Amazon’s 2-day shipping, then NextDay Delivery in 2019.

Though Walmart had been making progress in developing its online marketplace, it wasn’t until 2020 that their online marketplace really began to capture brands’ attention as a high-opportunity ecommerce marketplace.

In February 2020, Walmart launched Walmart Fulfillment Services. In September 2020, they launched Walmart+, a subscriptions service with exclusive benefits, similar in theory to Amazon Prime, but each offering a different set of perks enabled by their unique positions.

Walmart vs Amazon – Size

Ecommerce Share

Amazon currently controls roughly 38% of the United States ecommerce retail market, according to eMarketer. On the other hand, Walmart only controls approximately 8% of the ecommerce retail market.

Amazon has over 95 million monthly unique website visitors in the US, while Walmart.com has over 100 million monthly unique visitors.

Physical Locations

It should come as little surprise that Walmart’s physical locations vastly outnumber Amazon’s, given each company’s history. Walmart has 5,353 US stores as of July 2020, while Amazon had 589 physical stores as of August 2020.

International Presence

Amazon has marketplaces in 16 countries, while Walmart has its online marketplace available in 10 countries and physical stores in 27 countries.

Walmart vs Amazon – Customers

How do Walmart shoppers differ from Amazon shoppers?

The answer? Not a whole lot. According to Walmart, Walmart’s and Amazon’s customer demographics are nearly identical when viewed by generations or by income levels.

Walmart’s VP of Walmart Fulfillment Services delved into more Walmart vs Amazon myth busting in our co-hosted webinar. You can watch it for free on-demand.

Walmart Fulfillment Services (WFS) vs Fulfillment by Amazon (FBA)

Speaking of Walmart Fulfillment Services (WFS), let’s take a look at how it compares to Fulfillment by Amazon (FBA).

For the moment, WFS and FBA share many similarities. Both services allow third-party vendors to ship their product at a fulfillment center, where the product is stored until purchased, then fulfilled. Both will:

Pick, sort, pack, ship, and track products
Handle shipping, returns, and refunds
Provide 2-day shipping
Provide same-day shipping in select areas

One big difference is that Walmart.com allows for item pickup at any of its stores, while Amazon only has a few stores that do online pickup.

WFS vs FBA eBook & Webinar

We offer a comprehensive breakdown of WFS vs FBA in our free eBook. If you’re interested in learning more about WFS, watch our on-demand WFS webinar that we co-hosted with Walmart’s VP of WFS.

Walmart vs Amazon – Marketing Services

In terms of marketing, Amazon and Walmart.com are very similar, but Amazon has many more options to choose from.

Amazon Marketing Services

Amazon marketing products available to sellers include:

Walmart Marketing Services

Extensive right? In contrast, Walmart offers a limited selection of marketing products for sellers, including:

This difference in selection is not surprising though. Amazon has been focused on ecommerce for 25 years, while Walmart has only really made ecommerce a heavy focus in the last five years. Over time, Walmart Marketplace will develop new marketing services to match Amazon’s list.

For the time being, online sellers will see far greater returns from marketing dollars invested into Amazon marketing than in Walmart marketing. Amazon’s services offer greater control over audience targeting and more data insights, which, in turn, yield higher profitability.

Walmart Plus vs Amazon Prime

Until recently, Walmart did not have a competitor to Amazon Prime, Amazon’s premium paid subscription service. In July 2020, Walmart announced Walmart+, its own premium paid subscription service. These subscriptions are very similar as both give you access to perks and benefits like two-day shipping and one-day shipping on a host of products.

Walmart Plus Member Benefits

Free 2-day shipping
Early access to deals
Express delivery for groceries and select goods
Fuel discounts at Walmart gas stations
Scan & Go service in Walmart stores
Walmart dropped its minimum $35 purchase requirement for 2-day shipping in December 2020
Planned Walmart Plus credit card
Planned Walmart Plus entertainment package

Amazon Prime Member Benefits

Free 2-day shipping
Early access to deals
Express delivery for groceries and select goods
Prime video
Free video games
Free access to Amazon library
Ad-free Amazon Music

Amazon Prime costs $119/year, while Walmart Plus costs $98/year. Amazon Prime has 126 million members in the US as of October 2020, so Walmart has a lot of catching up to do.

Walmart vs Amazon – Challenges

Counterfeit Products Plague Amazon

Amazon has the ignominious reputation of being rife with counterfeits and unauthorized sellers. In January 2020, the United States Department of Homeland Security released a report detailing counterfeiting on the Amazon marketplace platform. The company has been slow to face the issues but has been making some strides.

Unlike Amazon, Walmart.com is a gated marketplace, which has helped mitigate the risk of counterfeits and unauthorized sellers.

Amazon Accused of Stealing Third-Party Data

Another problem facing Amazon is the accusations of stealing data from businesses that use its marketplace or Amazon Web Services (AWS). Jeff Bezos, founder and CEO of Amazon, testified before United States Congress about these allegations on July 29, 2020, and Amazon provided written answers on September 4, 2020 to the committee’s follow-up questions.

Walmart is Playing Catch Up

Walmart Marketplace’s greatest hurdle is that it is starting so far behind Amazon in the ecommerce game. However, Walmart has an extensive infrastructure, capital, and the benefits of learning from Amazon’s successes and failures. As we touched on regarding marketing, Walmart is still well behind Amazon, but they have made admirable progress this year with the launch of Walmart Fulfillment Services and Walmart Plus.

Walmart vs Amazon – Ecommerce Growth

As anyone can see, there are pros and cons for both Amazon and Walmart. Amazon may be the giant in the ecommerce space, but that means they have a large target on their back. Both Amazon and Walmart have seen tremendous growth in 2020:

Walmart Ecommerce Quarterly Net Sales Growth

Q1 2020: 74% year-over-year
Q2 2020: 97% year-over-year
Q3 2020: 79% year-over-year

Amazon Quarterly Net Sales Growth

Q1 2020: 26% year-over-year
Q2 2020: 40% year-over-year
Q3 2020: 37% year-over-year

Clearly, both companies’ offer huge growth potential. In general, we recommend prioritizing Amazon over Walmart because the sales potential is, currently, so much greater on Amazon. However, Walmart is growing rapidly, and you would be wise to try to get on Walmart sooner rather than later so you can grow with it.

Want to learn about selling on Walmart.com? Check out our free eBook!

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WFS: Walmart’s Gamble to Challenge Amazon FBA

Selling on Amazon offers many opportunities and is an excellent way to grow your brand. One of the most helpful tools that Amazon offers sellers is Fulfillment by Amazon (FBA), which boasts a sprawling network of Amazon-owned warehouses across the country. Sellers ship inventory to these Amazon fulfillment centers for storage and eventual fulfillment to the end consumer. Amazon’s fulfillment services are a foundational component of Amazon’s success.

However, these fulfillment centers aren’t perfect. They regularly make mistakes that cost sellers money, and sellers must petition Amazon for reimbursement if they don’t want to eat the costs. With many sellers unaware that they need to take action, we often see significant amounts of money left on the table.

Why Does Amazon Owe FBA Sellers Money?

Amazon’s fulfillment centers regularly lose or damage inventory, overcharge fulfillment and storage fees, or under-reimburse sellers. To get fully reimbursed, FBA sellers have to cross reference up to 17 reports to identify and submit cases.

Most Common Types of Mistakes in Fulfillment Centers

There are quite a few mistakes for which Amazon may owe an FBA seller reimbursement, but two case types in particular account for the vast majority of inventory reconciliation cases:

Inbound Discrepancy

Inbound shipments with items that have a discrepancy between shipped and received after 15 days.

Lost Inventory

Inventory lost minus inventory found and reimbursed.

At Kaspien, we see these two case types account for 95% of all FBA seller reimbursement cases. Below are other types of cases that account for the minority of reimbursement cases.

Amazon Inventory Reconciliation Case Types

Carrier Damaged Return

Customer returns that were damaged by Amazon-partnered carrier minus reimbursed.

Commission Discrepancy

Orders with SKUs where the charged referral fee (commission) exceeds Amazon’s estimated referral fee for the order date.

Damaged Inventory

Inventory damaged in the warehouse.

Destroyed Without Permission

Inventory destroyed.

Dimension Discrepancy

ASINs with either dimensions or weight that have significantly increased compared to previous values, affecting fulfillment fee and/or monthly storage fee.

Failed Return

A refund was issued to a customer for a return, but the items returned were fewer than the number that was refunded.

Fulfillment Center Damaged Return

Customer returns that were damaged in an Amazon fulfillment center.

Fulfillment Fee Discrepancy

Orders with SKUs where the charged fulfillment fee exceeds Amazon’s estimated fulfillment fee for the order date.

Missing Reimbursement

Customer return flagged as ‘reimbursed’ but the seller doesn’t see the reimbursement come through.

Missing Return Unit

Customer return was flagged as ‘Unit returned to inventory’ but the unit was not actually returned to inventory.

Over Refunded

Refund issued to customer exceeded the actual order total.

Returned Inventory Discrepancy

Customer returns with units returned to inventory under a different SKU than that which was purchased.

Under Reimbursed Failed Return

A refund was issued to a customer for a return, then the customer failed to return the item, and the reimbursement was issued but the reimbursement amount is less than the refunded amount.

Under Reimbursed Return

A refund was issued to a customer for a return, the customer returned the item, and the reimbursement was issued but the reimbursement amount is less than the refunded amount.

Unfulfillable Damaged Inventory

Damaged inventory that has been damaged for more than 20 days and is therefore unfulfillable.

How to Get an FBA Reimbursement

Manual Amazon FBA Reimbursement

Due to the ambiguity of Amazon case management, managing inventory reconciliation manually is laborious and inefficient. Here’s the general process for manual case management:

Download separate business reports (in some cases, this may add up to 12 separate reports).
Cross-reference reports to identify reconciliations.
File and manage separate Amazon cases for each instance where Amazon owes you money while complying with each case’s unique allowance window.
Manual case management can take up to a month to actualize, which requires careful tracking and frequent follow-up on all submitted cases.
Review your Amazon statements to ensure you were reimbursed for the correct amount, even after the case is closed.

As you can see, the FBA reimbursement process is arduous. In the long-term, few brands can afford to spend the time managing the manual process, but neither can they allow cash to bleed from FBA errors.

Automated Amazon FBA Reimbursement

Luckily, there are plenty of software solutions for this problem, including our own proprietary seller reimbursement software, Channel Auditor.

What is Channel Auditor?

Channel Auditor is a software that helps FBA sellers mitigate fees and recover lost funds. It does so by automatically identifying cases that are eligible for reimbursement and expediting case creation. It’s your Amazon auditor that never sleeps.

Does Channel Auditor Automate Case Creation?

Amazon’s policies expressly forbid automating case creation in Seller Central. Those violating this policy can be fined, suspended, or banned.

Channel Auditor does not automate case creation, but it does the next best thing. It automatically identifies cases that are eligible for reimbursement, then provides the exact text and evidence needed to petition for reimbursements. All you have to do is copy and paste, click submit, and Channel Auditor does the rest.

How Channel Auditor Automates Amazon FBA Reimbursements

Automatic Case Identification

First, sellers connect Channel Auditor to their Seller Central account, allowing it to pull inventory reports for their channel. Channel Auditor immediately and automatically starts cross-referencing multiple reports to identify Amazon reimbursement cases. Using this information, Channel Auditor can forecast how much money a seller can be reimbursed.

Expedited Case Creation

After inventory reconciliation cases are identified, sellers select the cases they want to create from within Channel Auditor. Channel Auditor provides the exact text needed, including links to evidence that supports the claim.

Easy Case Management

From there, Channel Auditor automatically tracks case progress and notifies the seller of their results.

Channel Auditor Case Study

A brand in the Health & Personal Care category started using Channel Auditor in June 2020. In a single month, they were reimbursed over $7,000! In less than five months, they recovered over $13,000 in Amazon seller reimbursements!

See How Much You’re Owed

If you’re curious how much Amazon owes you but aren’t ready to start a subscription, that’s alright. Request a quote from Channel Auditor – for free – and we can tell you exactly how much money Channel Auditor could recover for you if you used it.

Request a free quote today.

One of the most frustrating experiences as a brand owner is seeing copycat competitors undercut your pricing. In retail, competition is healthy because it forces businesses to innovate, resulting in better deals and products for consumers. However, sometimes it’s not a matter of two quality products vying for patronage. In some cases, it’s a high-quality product being undercut by a low-quality product.

There’s not much that brands can do about competitors’ prices, but there’s plenty they can do to convince shoppers that the higher cost of their product is well worth it.

How to Defend Against Competitors Undercutting Pricing

#1 – Highlight What Makes Your Product Better

On Amazon, customers have many choices when looking at products. A simple and free way to help your products stand out is to promote your differential features in the copy, images, and A+ Content. Differentiators are features that make your product different from your competition, such as location of production, quality of materials, performance, additional features or capabilities, aesthetics, or warranties. These factors can help convince customers that your product is worth paying a little more.

#2 – Use Amazon Live

Amazon Live is an Amazon service that allows sellers to broadcast livestreams in which they demonstrate product usage, features, and benefits. Featured products appear directly below the live broadcast window. Brands can use Amazon Live to share their story, live events, educational content, and so much more. Customers on Amazon Live can ask questions and receive answers in real time. Amazon Live allows customers and brands to connect on a more intimate level compared to a video or listing and is an excellent (and free) way to increase visibility.

#3 – Engage with Your Audience on Social Media

Social media is one of the most powerful tools that brands can leverage to grow their audience. When we talk about social media, we’re meaning Facebook, Instagram, Twitter, LinkedIn, Snapchat, TikTok, YouTube, and so many more platforms.

Brands can use social media in many ways, but one of the most important uses is actively engaging with your customer base. This means responding to comments in a timely manner, creating social posts that invite your audience to actively participate in a discussion, and responding to all direct messages. Audiences want to feel a connection to a brand, and engagement on social media is one of the top ways to do so.

Most importantly, a strong social media presence builds brand trust. Consumers are more educated than ever, and social media is a big part of that education. They’ll initially turn to your social channels to ensure your brand is legitimate but they’ll stay to engage with your brand on a personal level.

If you need assistance in growing your brand’s social presence, look into our social media management service.

#4 – Respond to Reviews, Comments, and Questions on Listings

When managing many listings, responding to each and every review and comment can seem daunting. However, responding to your customers, regardless of whether their feedback is positive or negative, is critical to differentiate your brand from competitors. Responding to questions, praise, and criticism takes time and energy, and not everyone is willing to do it. By taking time to respond to customers in a timely manner, you demonstrate that your brand cares about your customers, and shoppers will favor you for that.

#5 – Represent Your Brand Consistently Across All Sales Channels

Consistent representation across all sales channels is often overlooked, but it’s incredibly important for maintaining brand integrity and strong customer relations. Inconsistent representation can lead shoppers to question quality and product authenticity.

Brands should seek to maintain a consistent brand name, brand voice, high quality copy and images, and prices across online marketplaces. This ensures you provide a fantastic customer experience with your brand, no matter where shoppers find your products. By doing so, you cultivate a reputation as a reliable brand that cares about your brand, products, and customers.

#6 – Be Where Your Customers Are

The ecommerce landscape is constantly changing. In order to stay ahead of your competitors, you need to meet shoppers where they’re at. In today’s age, that means listing your products online, such as on Amazon, Walmart, and Google Shopping. As mentioned above, that likely also means curating an active presence on social media. In addition to posting and responding regularly, consider running social media ads and leveraging influencer marketing. You competitors may simply wait for shoppers to find them, so you can get a leg up by getting directly in front of shoppers, no matter where they’re at.

This article was originally published on Forbes on June 22, 2020.

Selling on Amazon is full of challenges, but some of those challenges are unnecessary. I lead a company that’s helped over 4,000 brands sell on Amazon over the last 12 years, and during that time, we’ve seen a lot of mistakes, some of which are shockingly common. To help remedy this problem, I’ve put together the seven most common mistakes we see brands make on Amazon and how to fix them.

7 Common Mistakes When Selling on Amazon

1. More Sellers Does Not Equal More Revenue

When brands first embark on Amazon, many have the belief that having more sellers equates to more sales, which in turn equates to more purchase orders. While brands may receive more purchase orders, we’ve seen this approach lead to unforeseen problems hundreds of times.

Having too many sellers, especially if you’re not collaborating closely with each, creates the “too many cooks” problem. Since any seller in the listing can edit listing content and set their own price, inconsistencies and inaccuracies can quickly appear. Low-quality images and poor wording misrepresent your brand, and fluctuating prices can make shoppers question product authenticity. Sellers are likely to compete on pricing, risking a race to zero, which hinders their ability to place future purchase orders.

There are also problems for marketing: When multiple sellers run marketing for the same listing, their ads compete, driving up costs without generating more sales.

To fix this issue, we advise two steps: 1) Work with one or only a few sellers so you maintain control over your brand’s online representation, and 2) ensure that your contracts limit to whom buyers can sell your product, helping mitigate the risk of unauthorized sellers.

2. Running Marketing Only On Amazon

Running marketing only on Amazon is a tactical error because it leaves opportunities on the table. Running off-Amazon marketing — such as paid search, paid social, and influencer marketing — increases the number of shoppers you can reach and the number of touchpoints guiding them to purchase. By leveraging both on- and off-platform marketing, brands create a feedback loop of more visibility, which leads to more traffic, which leads to more sales, which improves organic product placement, which leads to more visibility…and the cycle continues.

3. Running Marketing Only During Peak Seasons

This is a much more grievous sin. Halting marketing during the off-season is a serious mistake because Amazon marketing takes months to gain good traction. By turning off marketing during slow sales seasons, brands are essentially surrendering ground to competitors. When their sales season comes back around, they have to claw their way back to where they left off instead of being positioned to capture new market share.

To fix this issue, don’t ever turn off marketing completely. It makes sense to reduce marketing spend during slow seasons when competition isn’t as fierce, but you should never completely fall off the radar.

4. Not Aligning Amazon Strategy With Brand Strategy

Another common error is failing to align your Amazon strategy with your overall brand strategy. For example, a brand may run promotions off Amazon that are not carried through to Amazon or produce new stunning images and brilliant copy for their website but don’t update their Amazon listings with them. Amazon is a growing marketplace and needs to align and complement your overall strategy if you want to maximize your online sales.

5. Noncompliant Claims In Listings

It’s never been a good idea to make misleading or inaccurate claims in product listings. Such claims result in suppressed listings and account shutdowns, which can cost a brand thousands in sales.

This mistake is likely to become an even bigger issue, as Amazon faces increased scrutiny. Before the coronavirus captured our attention, congress was considering the Shop Safe Act, which would hold Amazon responsible for counterfeit or noncompliant products sold on its platform. Based on our own data, we saw the early indications of how Amazon would respond in February when it tripled their requests for proof of product testing.

If your listings contain unsubstantiated claims or have not passed U.S. safety testing, then you need to fix that.

6. Not Understanding Amazon Profit Margins

Selling on Amazon is not like traditional retail, and neither are the profit margins. These three factors are commonly overlooked or misunderstood:

1. Amazon fees: Amazon collects a sales commission as well as shipping, storage and fulfillment fees. These fees take a large chunk out of profit margins.

2. Inventory errors: Sometimes, Amazon’s fulfillment centers lose or damage inventory, overcharge fees or underreimburse. While its automatic systems catch most of these errors, it misses some. Those errors add up, eating into profit margin.

3. Marketing: Marketing costs money. Some brands see that and stop there. But if your marketing is effective, the profits exceed the costs, sometimes dramatically so. If your profit margins are narrow, you should consider investing in marketing to widen them.

Addressing these issues starts with gathering data. You don’t know what you don’t know, so start by pulling reports and analyzing data. If you discover a red flag, you can seek help. There are many agencies, consultants, and software applications available that help optimize shipments to Amazon, identify reimbursement cases and improve marketing efficiency.

7. Poor Inventory Management

All too often, we see brands sending way too much inventory into Amazon warehouses without realizing that Amazon will charge long-term storage (LTS) fees, especially around peak seasons. On the other side, we also see brands sending in too few units, resulting in out-of-stocks. Running out of stock harms marketing performance and organic product placement, creating a domino effect that can be tough to bounce back from even when stock is replenished.

To fix these errors, you or your seller needs accurate sales forecasting, which is typically obtained through software.

Amazon truly is like navigating a jungle, but there are many experts who can help. Alternatively, you can push up your sleeves yourself and dig into the many resources about selling on Amazon. The Amazon opportunity is too great to ignore.

Selling and marketing on Amazon involves dozens of moving pieces. To help with this problem, we’ve compiled a list of 100 terms every Amazon seller should know, including terms related to digital marketing, logistics, finances, and the fundamentals. For ease of use, the terms are listed in alphabetical order.

Also check out our list of 20 Terms Every Walmart Seller Should Know.

1. A9 Algorithm: Amazon’s proprietary search engine algorithm for determining search results on Amazon.com.

2. A/B Testing (Split Testing or Bucket Testing): An online marketing strategy used to see which of two versions of marketing collateral yields the best results. The difference between the two versions is typically limited to a single element, such as the subject line of an email, so that testers can confidently attribute differences in performance to the changed element.

3. Ad Management Software: Software used to streamline management of Amazon ads, typically by improving data visibility, the user interface, and automation. In the case of Amazon, most ad management software is for pay-per-click (PPC) ad types, such as Sponsored Product Ads.
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4. Advertising Cost of Sale (ACoS): The cost of ad divided by the sale. For example, if a product costs $10 and it takes $1 worth of ad spend to generate a sale, the ACoS would be $1 divided by $10, or 10%. ACoS is often used to assess the efficiency of advertising campaigns on Amazon.

5. Amazon A+ Content: An extra feature for product detail pages available to brands that are enrolled in Amazon Brand Registry. This feature allows brands to add additional copy and images below the bullet points in a product detail page. Amazon claims they increase conversion rates by up to 10%.
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6. Amazon Ad Groups: On Amazon, Ad Groups are a subsection within a sponsored ads campaign that contain ads, targets, and a default bid. Ad Groups can contain a single ad or multiple ads grouped by like products, brands, or campaign goals. Targets can be either keywords, ASINs, or categories. Ad Groups are available for Sponsored Product and Sponsored Display campaigns.

7. Amazon Attribution: An Amazon service that allows sellers to measure the impact of different sales channels, such as email, video ads, and display ads, by creating unique URLs that enable attribution tracking. The Attribution dashboard in Seller Central allows users to see conversion metrics, such as “page views,” “add to cart,” and “purchases.”
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8. Amazon Best Deals: One of several types of promotions that sellers can run on Amazon where a product is offered with a 15% discount over a 2-week period. During the deal, the product is featured on the Today’s Deals page. The product must have an average rating of at least 3.5 stars and selling price of at least $10.
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9. Amazon Brand Gating: An invite-only Amazon program that allows manufacturers and private label sellers to control who can resell their products. This program helps prevent unauthorized third-party sellers from listing products.
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10. Amazon Brand Registry: An Amazon program that enables brands to gain additional protections and access to additional marketing services. Enrollment in Brand Registry is free, but requires a trademark registration number. Brand Registry provides access to Amazon’s infringement reporting tool, brand stores, A+ Content, Sponsored Display Ads, Sponsored Brand Videos, and more.
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11. Amazon Brand Store: A curated digital storefront on Amazon where brands can list their entire Amazon catalog in a convenient and branded experience. This feature is available only to brands enrolled in Amazon Brand Registry.
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12. Amazon Buy Box: The top right section on the product page where consumers can add items to their carts. The Buy Box is awarded by Amazon to sellers based on product price, availability, seller performance, and whether the product is offered with FBA or Prime shipping.
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13. Amazon Coupons: Advertisers can enroll up to 50 ASINs into a single coupon and offer either a dollar amount or percentage off. The coupon cost to the advertiser will equal the discount + $0.60, both of which are subtracted from the coupon budget. Each coupon must have a minimum of $100 for the budget, however, advertisers will be charged only for redeemed coupons.
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14. Amazon Damage Allowance: To cover the cost of handling and disposal of damages, Amazon charges vendors a damage allowance. Vendors can choose not to agree to this damage allowance, but they then must fund the cost of returning the item themselves.

15. Amazon Early Reviewer Program: The Early Reviewer Program is an Amazon-run initiative that can generate up to five new reviews on a selected product. Amazon randomly contacts verified buyers of an enrolled product and offers the customer an incentive to leave a review within the specified offer period. Amazon offers the buyer a small Amazon account credit (typically $1-$3) that can be used on future Amazon purchases. To qualify for the program, products must have a price point of at least $15 and fewer than five reviews. The product can remain in the program up to one year or until it receives five new reviews, whichever comes first.
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16. Amazon Enhanced Brand Content: A feature offered to Amazon’s vendors and Brand Registered brands that allows them to add additional information to their product detail page. This extra real estate appears below the bullet points on a product detail page.
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17. Amazon Headline Search Ads: Renamed to Sponsored Brand Ads, this ad type displays a banner ad at the top of the search results page. The banner ad contains a brand image and features up to three products. This ad type is typically best suited for generating brand awareness.
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18. Amazon Lightning Deals: Deals that run for several hours on and appear on the Today’s Deal page. This deal type offers a limited quantity of units determined by the seller. To be eligible, the brand must have a proven track record of selling well, a minimum 20% discount off the lowest price in the trailing 30 day price or lowest price YTD (whichever is lowest), sales history, and a 3–star rating or higher.
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19. Amazon Live: Through Amazon’s app, Amazon Live Creator, sellers can broadcast livestreams where they demonstrate products usage, features, and benefits. Featured products appear directly below the live broadcast.
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20. Amazon Marketing: Marketing services that are available on the Amazon platform, including Sponsored Product Ads, Sponsored Brand Ads, Sponsored Display Ads, Sponsored Brand Videos, Amazon Coupons, Deals, Amazon Live, Amazon Posts, DSP, Brand Stores, A+ Content, and more. Amazon continuously adds and retires marketing services.
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21. Amazon Product Categories: Amazon groups products by specific categories and has different selling requirements for each. These requirements can include additional fees, performance checks, and other qualifications. An example of a product category is “Apparel,” which includes Outerwear, Athletic Wear, Innerwear, Belts, and Wallets.

22. Amazon Prime Exclusive Discounts: A price discount exclusively for Amazon Prime members. Products with Prime Discounts display strike-through pricing. To be eligible for this promotion, a product must be Nationally Prime Shipping Eligible, have a rating of 3.5 stars or above or no reviews, offer 20% off current price, the discount must beat the lowest price offered for the ASIN in past 30 Days by 5%, and the seller must have at least a 4-star seller rating.

23. Amazon Seller Central: An Amazon platform used by Amazon sellers to market and sell products to Amazon customers.

24. Amazon Sponsored Brand Ads: Formerly called Headline Search Ads, this ad type displays a banner ad at the top of the search results page. The banner ad contains a brand image and features up to three products. This ad type is typically best suited for generating brand awareness.
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25. Amazon Sponsored Brand Videos: An Amazon ad type that displays a video on the Amazon home page and in the search results. The videos display on mobile and desktop. Amazon recommends including subtitles in the video.
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26. Amazon Sponsored Display Ads: Pay-per-click (PPC) ads on Amazon and Amazon-owned websites and apps that target shoppers by searches, views, purchases, or products.
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27. Amazon Sponsored Product Ads: Pay-per-click (PPC) ads that appear in strategic areas on Amazon, such as the top of the search results page and within a product detail page. These ads give brands’ products more visibility and increase the likelihood of purchase by consumers.
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28. Amazon Spotlight Deals: Deals that run for 24 hours on the Amazon Today’s Deals page or until stock runs out. These Deals are subject to minimum revenue and units sold thresholds. Criteria for Spotlight Deals include whether the item is Top Selling Product, the lowest price trailing 365 days, and a 4-star rating.

29. Amazon Standard Identification Numbers (ASINs): A unique alphanumeric code for a product listed on Amazon. The ASIN can typically be found in the URL of an Amazon product detail page and in the further details section of the product detail page.

30. Amazon Vendor Central: The Amazon platform used by manufacturers and distributors to sell product directly to Amazon’s first-party (1P) retail division, Amazon Retail.
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31. Amazon Vine: An invite-only program for Amazon customers who regularly leave reviews marked helpful by other customers. These customers are deemed trusted reviewers and gain access to free products, for which they provide customer reviews. These reviews are identifiable by a green stripe and labelled with Amazon Vine Program.

32. Amazon Web Services (AWS): Amazon’s cloud computing platform that offers services such as infrastructure as a service (IaaS), platform as a service (PaaS), and packaged software as a service (SaaS). AWS also offers solutions for database storage, compute power tools, and content delivery services.

33. Automatic Campaigns: A campaign type within Sponsored Products in which the advertiser sets a default bid at the Ad Group level and Amazon places ads automatically for customer search queries it deems to be relevant. These are commonly used to find new keywords that Amazon’s algorithm views as relevant for the products being advertised.

34. Average Order Value: The average amount a customer spends at a digital storefront in a single order. You calculate this by dividing sales revenue by the number of orders taken.

35. Average Time on Site: The average amount of time a visitor spends on a website. Usually defined within a specific timeframe.

36. Bid: The maximum amount an advertiser is willing to pay in order to get an ad to place for a specific search term.

37. Bid Optimization: The act of adjusting the bid for keywords in Amazon ad campaigns in order to improve performance. Bids may either be increased because ads are not competitive enough for important keywords, or they be can be decreased because ads are utilizing budget too quickly.
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38. Brand Awareness: The degree of consumer recognition of a brand based on the brand’s copy, colors, logo, products, qualities, and style.

39. Business to Business (B2B): A transaction in which a business sells products or services to other businesses.

40. Business to Consumer (B2C): A transaction in which a business sells products or services to an end consumer.

41. Call to Action (CTA): The action that marketing materials are trying to encourage the audience to take, such as “subscribe,” “add to cart,” or “sign up.”

42. Certified Service Providers (CSP): A person or organization that is certified under the Streamlined Sales and Use Tax Agreement to perform sellers’ sales and use tax duties (excluding the obligation to remit tax on its own purchases).
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43. Chargebacks: When a customer contacts their bank about a charge they don’t recognize or dispute, rather than contacting Amazon or the seller about the issue.

44. Click-Through–Rate (CTR): The percentage of visitors on a page who first view then click on an advertisement.

45. Copywriting: The writing of marketing, advertising, and promotional materials.
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46. Conversion Rate: The percentage of visitors to a page who take a desired action, usually in the form of purchases.

47. Cost of Labor: The sum of employee wages that have been paid. This also includes employee benefits and payroll taxes.

48. Cost-per-Click: A method of billing determined by the number of times a visitor clicks on an advertisement. This is Amazon advertising’s primary billing model.

49. Demand Side Platform (DSP): Amazon’s advertising platform that enables advertisers to use Amazon’s consumer data to target shoppers on Amazon and Amazon-owned websites and apps with display and video ads.
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50. Dropshipping: A method of retail fulfillment where the seller does not keep product in stock. Instead, the seller waits until a consumer purchases the product online, then the seller buys the product from the manufacturer and has the product shipped directly from the manufacturer to the consumer. This method is often used for products not eligible for preferred fulfillment methods, like FBA.
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51. Discount Code (Coupon Code or Promo Code): A code that shoppers use during checkout to redeem special offers or discounts.

52. First-Party Seller: A seller who owns the marketplace upon which they sell. Amazon Retail, for example, is the one and only first-party seller on Amazon.com.
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53. Fulfillment by Amazon (FBA): An Amazon service in which third-party vendors keep their product at an Amazon fulfillment center. Amazon will pick, sort, pack, ship, track, and handle shipping, returns, and refunds of these products for a fee.

54. Fulfillment by Amazon (FBA) Fees: A fee charged by Amazon for each unit processed through FBA. The fee is based on the product’s size and weight.

55. Fulfillment by Amazon (FBA) Storage Fees: A fee charged by Amazon for your inventory that occupies space in an Amazon Fulfillment Center. This fee is based on the daily average volume (in cubic feet).

56. Fulfilled by Merchant (FBM): A fulfillment method where the seller manages and controls their handling and shipping process, as opposed to Amazon or a third-party logistics provider.

57. Fulfillment Centers: A physical location where third-party logistics (3PL) providers, like Amazon Fulfillment, fulfill customer orders for online sales.

58. Gross Margin: The revenue a business retains after subtracting costs, calculated by subtracting cost of goods sold from net sales revenue. The higher the gross margin, the more working capital a company has.

59. High-Converting Keywords: Keywords in a pay-per-click (PPC) advertising campaign that drive high conversion rates. Identifying these keywords and adding them to sponsored ad campaigns is an essential part of optimizing an ad campaign.

60. Influencer Marketing: The promotion and selling of products or services by having people with social influence and followings promote the product on their social media accounts.
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61. Invoice: An itemized record of a transaction between a seller and a buyer.

62. Key Performance Indicators (KPIs): Metrics that are actively tracked in order to gauge a company’s long-term overall performance. These are usually set to compare the company’s performance to other companies within the same sector and to previous years’ performances.

63. Keywords: Words or phrases that shoppers frequently use when searching for a given product. Including keywords in the copy on the product detail page or in Amazon sponsored ad campaigns helps products place higher in the search results and drive more traffic to listings.

64. Landing Page: A webpage created solely for an advertising campaign. It is where visitors “land” after clicking on an ad or a link.

65. Listing Optimization: The process of revising the copy and images on a product detail page in order to improve organic placement in the search results and conversion rates. This process often includes adding keywords to the listing title and bullet points, revising copy to improve readability and highlight key features, and including images that demonstrate product use, features, and benefits.
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66. Low-Converting Keywords: Keywords that drive particularly low conversion rates within a pay-per-click (PPC) advertising campaign. Identifying and negating these keywords is an essential step in improving the efficiency and performance of a sponsored ad campaign.

67. Minimum Advertising Price (MAP): The minimum price for which sellers can advertise a product, typically issued by the manufacturer.

68. Minimum Order Quantity (MOQ): The minimum number of products or units that a supplier will produce at one time. This number helps ensure that the supplier is producing enough products or units to drive a profit after the costs of production.

69. Marketing Campaign Management: The planning, executing, tracking, and analysis of marketing campaigns from the beginning to the end.
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70. Marketing Co-op: An agreement between a manufacturer and a seller where the manufacturer pays for a portion or the entirety of paid marketing efforts for their product.

71. Marketplace Facilitator: Businesses or organizations that arrange with third parties to sell products and services on its platform. Through this they can facilitate retail sales.
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72. Marketplace Facilitator Laws: Legislation around sales tax responsibilities of Marketplace Facilitators.
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73. Manufacturing Cost: The cost of materials and production borne by the manufacturer.

74. Media Gallery: The section at the top of an Amazon product detail page containing images and videos.
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75. Net Profit Margin: The percentage of revenue that a company retains as profit after subtracting all costs.

76. Net-Terms: The amount of time that passes between a seller acquiring inventory from a manufacturer and the seller paying the manufacturer for that inventory. This delayed payment enables sellers to generate revenue to help pay for the purchase order.

77. Paid Social: Paid targeted advertisements run on social media platforms, such as Facebook and Instagram.
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78. Pay-per-Click (PPC): A type of digital marketing in which marketers pay a specific amount each time their ads are clicked. This model is used in most types of Amazon ads.

79. Purchase Order (PO): The order a retailer places with a vendor to acquire product. This includes the quantity of product ordered and the price paid for it.

80. Product Description: A section near the bottom of the Amazon product detail page where additional product information can be shared.

81. Product Detail Page: Also called a “listing,” the page featuring a specific product that includes a title, bullet points, product description, media gallery, enhanced brand content, and customer reviews.
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82. Product Profit Margin: The difference between how much the product sells for and the actual cost of the product itself. This is sometimes referred to as a “markup.”

83. Product Rank: A product’s rank compared to other products in each category as determined by Amazon’s algorithm. A lower rank is better, indicating higher customer reviews, more traffic, more sales, and better organic placement on the search results page.

84. Production Costs: The cost for manufacturing products or services. These can include labor, raw materials, supplies, delivery costs, and general overhead.

85. Retail Arbitrage: The practice of buying products from distributors, wholesalers, retailers, and so on, then reselling those products at higher price. The resale usually takes place online.
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86. Retail Price: The price of product when sold to an end consumer.

87. Return On Advertising Spend (ROAS): A measurement of the effectiveness of a digital advertising campaign. Very similar to ROI, this metric is specifically for paid advertising campaigns and helps online business determine best methods and improvements for future digital advertising campaigns.

88. Return-On-Investment (ROI): A comparison of the amount invested to the amount generated by that investment. ROI is frequently used when measuring the value of paid marketing in generating overall revenue. To calculate ROI, divide the amount generated by the cost of the investment.
89. Sales Tax: A tax on a sale, transfer, or exchange of a product or service. Usually this tax is applied to the end consumer and not the seller.

90. Search Engine Optimization (SEO): The science of making web pages more attractive to search engines by implementing highly searched keywords in a page’s frontend content and meta content, optimizing content length, and more. On Amazon, SEO typically involves implementing keywords into product detail pages to improve their organic placement on the search results page.
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91. Search Engine Results Page (SERP): The page that is generated from a system after the user inputs their query. An example of SERP would be the Google results page.

92. Seller Agreement: A contract signed by businesses that sell on Amazon wherein they agree to comply with all of Amazon’s policies.

93. Social Media Marketing: A type of marketing conducted on social media platforms such as Facebook, Instagram, Twitter, LinkedIn, Pinterest, Snapchat, and more. This marketing typically seeks to connect brands with their target audience, build brand name recognition and loyalty, increase sales, and drive website traffic. Social Media Marketing often involves content creation, engagement with followers, analysis, and running paid social media advertisements.
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94. South Dakota v. Wayfair, Inc.: A landmark supreme court decision that holds sellers responsible for collecting and remitting sales tax in any state where they surpass a certain sales threshold, even if the business lacks a physical presence in the state.
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95. Third–Party Seller(s): An independent company that sells products on a marketplace they do not own, such as Amazon. Third-party sellers are common on Amazon, accounting for over 50% of all sales on Amazon.com.
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96. Third-Party Logistics Providers: A business that provides services for inventory management, distribution, warehouse storage, product preparation, labelling, and fulfillment for other companies.
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97. Today’s Deals: A page on Amazon that features products currently running Deal of the Day, Lightning Deals, or Best Deals. This is the second most visited page on Amazon.
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98. Use Tax: A tax on a storage, use, or consumption of a product or service which has not had sales tax applied to it.

99. Vendor Fees: A fee collected by vendors to cover the cost of processing sales taxes and transferring them to state and local governments.
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100. Wholesale Costs: The price of products purchased in bulk from the manufacturer, as opposed to the retail price, which is an increased price charged to end consumers commonly used by retailers/resellers.

Continuing our focus on looking for the helpers during the pain and uncertainty so many are feeling right now, we’re dedicating this blog post to some of the biggest helpers at Kaspien: leaders by title and action who are helping Kaspien and our partners navigate through the immediate and long-term impact of the coronavirus.

This expert spotlight features five Kaspien leaders:

Bryce Burchak, Director of Strategic Initiatives
Keri Rhodes, Director of Marketing
Darby Meegan, Director of Business Intelligence & Product Management
Kelsey Gruis, General Manager of Subscriptions
Jed Nelsen, Senior Compliance Manager

We asked these leaders 5 questions about how they’ve been affected by and responded to the coronavirus.

Learn more about how Kaspien is supporting brands during the coronavirus in our COVID-19 Status Update.

1. How has your team’s work been impacted and how have you adapted?

Bryce Burchak (Strategic Initiatives): To be honest, the biggest change we’ve seen is moving to work from home. My team works closely with our internal departments to accomplish our objectives on time. With our primary objective being to maximize the growth of our partners’ brands, our work has not changed. We have some different strategies to maximize that growth with the new COVID landscape, but we are still, just as always, focused on identifying and executing tailored solutions for each of our partners to grow their brand.

Keri Rhodes (Marketing): COVID-19 has forced us to change our marketing calendar and strategy. Instead of running B2B marketing for tradeshows, spring, and back-to-school, we’ve had to adapt and respond to the coronavirus. We’ve worked with our local and state government to coordinate support for impacted businesses, created new discounts and offers to make accessing tools and services easier for impacted brands, and worked with our supply network to direct PPE equipment to several hospitals.

Darby Meegan (Product Management): We’re now all working remote. The team has had to suddenly become thoughtful about how we do work in a new way – a strange thought, and frankly, something I’ve taken a bit for granted. The team has been super malleable: we’re video chatting more, finding new methods to collaborate and communicate both synchronously and asynchronously, and communicating progress twice as often. The most evident win is that our team understands the vision and show ownership outside of the normal work structure we’re all used to working in.

Funnily enough, several team members have made comments about there not being a good substitute for whiteboards when we’re problem solving as a team – a problem we’ll need to solve as we see our team working more and more remote into the future, not just because of this pandemic.

Kelsey Gruis (Subscriptions): Rightfully so, our partners look to us to be the experts on marketplaces. With the uncertainty and turbulent landscape caused by the COVID-19 crisis, our brands are concerned about sustainability. While our need to support brands by being the marketplace experts hasn’t changed, I would say the magnitude of marketplace changes has. We’re working really hard to gather answers as fast as we can, and subsequently, adapt as fast as we can. We want to do anything we can to ease our partners minds and give them the breathing room to focus on other priorities.

Jed Nelsen (Compliance): COVID-related product restrictions have surged as Amazon unleashed its algorithms to address bad actors. We saw a 5x increase in the number of products restricted. Some of these suspensions were clearly wrong (we saw certain Funko Dolls restricted for having masks on their faces but not being in the HPC category). Our Compliance Team consolidated all the restrictions, prioritized by listings with inventory, and created cases to reinstate products. We had about one week of crazy, but we are beginning to beat the wave back.

2. What are your top priorities to help Kaspien and our partners get through COVID?

Bryce Burchak (Strategic Initiatives): Safety, sustainability, and supply chain, in that order.

It’s important that all of us work to address this situation as safely as possible, and we want to model that for our partners. In doing so, there may be some risks to normal business: most notably, managing an effective supply chain.

Obviously, Amazon has taken some large internal safety measures, and restricted the flow of some products to their fulfillment centers. In addition, some of our partners have shut down their facilities to protect their employees. Given the distribution network that Kaspien has established over our 12+ years, we have multiple means to deliver our partners’ products to their customers. If companies can no longer handle logistics or product prepping, we have a safe and effective means of handling that for them. Of course, not all products are the same, so we are working closely with brands to discuss how we can accomplish this in the most sustainable manner for their business.

Bottom line: We’re here for our partners, and we are working extremely hard to leverage our supply chain to mitigate COVID impact in the safest way possible.

Keri Rhodes (Marketing): The health and safety of our team members, and our unwavering focus on supporting brands through these volatile times. Many brands are being forced to change strategy due to COVID-caused economical shifts, and we have the expertise, technology and resources to help them. Marketing has prepared numerous resources that can help brands adapt quickly, and Kaspien has offered discounted rates to ensure brands can protect their bottom line and sustainability over the next few months. The more that brands can automate and trim fat in their businesses right now, the better positioned they will be as the industry evolves.

Darby Meegan (Product Management): Our team’s wellbeing, prioritizing key initiatives, and ensuring we’re all on the same page by over communicating.

Outside of some of the extreme health impacts of the coronavirus, everyone’s lives have been disrupted. Our coworkers are trying to find work arounds to celebrate weddings, birthdays, new births, and many other things that deserve clinking glasses, tears of joy and hugs. They’re also trying to find work arounds for supporting loved ones, friends who have lost jobs, their favorite gathering places, struggling to make ends meet, or the passing of loved ones. These are events where video chats can’t suffice. First and foremost, we’re making time to pursue human connection and support where we can.

Now more than ever, our team is ruthlessly prioritizing key initiatives. With the hurricane of potential projects and opportunities to jump on, we’ve paused and tried to measure twice and cut once, then review outcomes. We’ve tried to consistently ask our team, “Are we missing something over here on X? Is this really the most important thing we could be working on? What are we not working on that we should be?”

Kelsey Gruis (Subscriptions): For our partners, our goal is to mitigate as much of this crisis as we can, so you don’t have to worry so much about your business. Your focus should be on your employees’ and your families’ health and safety. We’re here. Our teams are able to work safely and effectively from home, and we’re working to answer your questions and provide solutions.

Jed Nelsen (Compliance): From a compliance perspective, our aim is to provide good advice to our partners about Amazon’s policies (such as don’t mention COVID-19 or coronavirus in your listing, or it will get restricted) and ensure that their products are live and available on Amazon, Walmart, etc.

3. From your perspective, what actions can brands take that will be most impactful right now?

Bryce Burchak (Strategic Initiatives): Be creative and get scrappy. There is not one answer for every brand, as each business is unique. The widely applicable recommendation I can offer is to identify the most sustainable supply chain to your end customer. However, focus should not be limited to this. Brands should review the key functions of their business and get creative in how to best address. Take data–supported action quickly; don’t let analysis paralysis stymie your pivot.

Actions should be prioritized in accordance with estimated impact. If you’re focused on maintaining revenue, that may drive a different action than a cash flow focus. Spend time digging into each supporting process for your top objective and think creatively about how to adjust. For instance, if you’re focused on consistent revenue, have you updated your marketing spend to align with demand trends and increased lead times? You don’t want to create out-of-stocks.

Keri Rhodes (Marketing): Find ways to scale their current operations in every way, so that they can be nimble and prepared to change as the landscape changes. Brands should be focused on automating and finding the most effective strategies for their advertising, with the goal of increasing sales while cutting costs and time. Brands should also be aware of opportunities to help their bottom line, like recouping as many dollars back from Amazon as possible through tools like Channel Auditor.

Darby Meegan (Product Management): The highest priority is financial stability for your company and your team members.

The Paycheck Protection Program loan went live on April 3rd. If your brand needs capital to make ends meet (payroll, rent, mortgage, utilities, and other qualifying debts) this is the place to start. Brands are eligible for up to $10MM depending on their circumstances and if they meet criteria. Applications are available on the SBA website.

Second in my mind is ensuring the safety and wellbeing of their employees. Whatever a company does in a time of crisis either pays dividends or wreaks havoc once things recover. Their response today communicates to their customers and team members the unspoken values the brand holds, it communicates to their retail partners the resilience and longevity the brand holds, and it communicates to their suppliers they’re doing business with a trustworthy partner.

Third, expand your logistics network – even if only temporarily – to work with providers who can get your goods directly to consumers. Amazon’s supply chain is feeling quite the strain and many experts believe the worst of the virus is yet to come. There are a few options. Deliverr is my recommendation for best direct–to–consumer option – they can deliver for Amazon, Walmart, eBay, personal Shopify stores, and beyond. We’ve worked with them for a number of years and value their partnership. Walmart has recently announced their own fulfillment network, which is a great option to get on their rapidly growing marketplace, however, there will be some delays getting up and running in their platform (including an approval process).

Jed Nelsen (Compliance): Think holistically and long–term. Can you pivot your business to provide needed supplies for the crisis? Are you maximizing your channels that are still selling (grocery, online, etc.)? Finally, be careful not to be opportunistic (price gouging, hoarding, or bragging). If you exploit the crisis to grow your profits, the blow to your brand will be swift and painful.

4. What actions can brands take that will be most impactful in the long-term?

Bryce Burchak (Strategic Initiatives): This crisis has made many brands realize how overly dependent they’ve become on their Amazon sales. Now is the time for brands to diversify not only their online presence but also their means of distribution. Other marketplaces are working hard to catch up, with some exciting growth coming from Walmart, eBay, Google, and Shopify in the last 6 months, highlights listed below:

If brands limit their distribution and presence to Amazon, they’ll miss substantial opportunities for exposure, sales, and improved margins on these other marketplaces. This pandemic should be a catalyst for brands to re-assess their ecommerce strategy and work to broaden the number marketplaces they are represented on and explore new fulfillment strategies.

Keri Rhodes (Marketing): Find a partner that has the ability to work through these types of crises and has the team to support brands when they need to focus on operations and logistics. A holistic partner helps avoid frequent and reactionary changes in strategy, which can cause distraction and derail progress.

Darby Meegan (Product Management): Same answers as above: safeguard financial stability, protect your employees and reputation, and expand your logistics network. These efforts will help in both the short-term and long-term.

Kelsey Gruis (Subscriptions): Remember that, while we don’t know when, this will pass. It may take time to get back to ‘normal’, but it will. We must continue to be persistent in our presence and brand values, and that means maintaining a strong presence on your online sales channels. Ignoring your ecommerce strategy at this time would be detrimental in the long-term for two reasons: 1) Ecommerce is the current new norm. If people are shopping, it’s online. 2) Whenever this does go back to ‘normal’, brands who maintained their footing will be the best positioned to recover the quickest.

Jed Nelsen (Compliance): Ensure that you have the right partnerships in place to manage your brand, including marketing, supply chain, legal, etc. When times get tough, who is really adding value to your brand? Also, keep an eye on consumer trends, as tastes and buying behavior will change even once the quarantines are lifted. This pandemic will leave a lasting mark on the economy.

5. What skills and traits matter most during this crisis, for a business and/or leaders?

Bryce Burchak (Strategic Initiatives): Vision and composure.

This situation has understandably shaken both our current and future world. As leaders, it’s important that you are extremely communicative in navigating your teams through these uncertain times. Ensure everybody is often reminded of the vision you have beyond one day, one week, or one month. It’s important to not lose focus on the end goal with daily news bringing many interruptions.

That being said, it’s equally important that your vision is inclusive of changes needed to thrive in the post–COVID world. Now is the time for innovation and adaptability, so if you need to make a pivot, analyze the proposed change, update your vision accordingly, and get the message out ASAP.

Things are not easy right now. It’s understandable that many are dealing with anxiety and fear as they try to adapt to COVID life. Leaders have the opportunity to address this and set the tone for their business and employees. Maintaining composure is crucial. The top priority should be to protect employees and steer for safety, but do so as a voice of reason and understanding. Don’t get caught up riding the highs or the lows; keep an even-keel and let your teams rely on you to be the calm during the storm. Be the champion of composure for whomever you are leading.

Keri Rhodes (Marketing): “Find the helpers during tough times.” A great reminder for brands to seek out and provide support within and without their networks. It’s also important for business leaders to remain calm and search for the positives. Events like COVID will make many businesses stronger in the long-run and develop bullet-proof processes that can aid in times of crisis. Businesses and leaders should also be understanding that everyone in the world is being impacted by COVID, so while we are all in this together, people’s lives are being impacted in very different ways. Extending options and being understanding will go a long way for their protecting a business’s most valuable asset: their employees.

Darby Meegan (Product Management): Vision, teamwork, and ownership.

Vision cannot be beaten. The legendary Peter Drucker is quoted as saying “culture eats strategy for breakfast.” I totally agree, especially if your culture is built on a vision. Regardless of your position in your organization, what is the why behind what you do? If you and your team have a shared sense of purpose, things go smoother. Here at Kaspien, our vision is to be a brand’s ultimate online growth partner. Every team member here is empowered to put brand’s growth first and advocate for it. That vision of what we’re doing permeates our development team that creates tools for our customers and our internal teams, it enables our data and product teams to innovate and dig into data to create new solutions, it gives our operations team some gumption in positioning our partner’s goods the best way possible, and it ensures our Account Managers and Sales team are true advocates for the brands we work with. If we were just selling goods, I guarantee we wouldn’t approach our work with the ferocity and creativity that we do. Our vision is our true north and the engine behind our competitive edge.

Teamwork is always paramount in a business and a team. It becomes increasingly so in a period of urgency. Whether you’re a contributor or the leader, empower your teammates to utilize data, map out their approach, communicate their actions transparently, and make decisions. If your team can operate as a collective unit with each member bringing their distinct experience and perspective to the table, you’ll see times of crisis as a chance to reformat and empower your team. Teams need good process, but effective collaboration is even more important.

Ownership is next. If you can make decisions based on what is the best thing for your customers, you cannot go wrong. You’ll empower those around you. You’ll form partnerships with your vendors, customers, or suppliers. You’ll create momentum and start seeing others rise to the occasion. The bigger impact of ownership, however, is spreads to others. Don’t jump in and take on every project or solve every problem. Trust your team (ahem, see above), and hand over the reins. Teammates, bosses, and coworkers will rise to the occasion and you may be pleasantly surprised about how many key players have been waiting for their opportunity to shine.

Kelsey Gruis (Subscriptions): Empathy. I think understanding that each person (employee, manager, or customer) handles and deals with things, including crises, differently. My personal belief is that we need to meet people where they are at and acknowledge that how I deal with something is different than how you do – and that’s okay. Customers need to see a brand’s empathy in that way too. We can’t market a brand/product specifically on how I feel about the crisis; we have to take an even-keeled approach that focuses on sustainability and working together.

Jed Nelsen (Compliance): Leaders need to be calm, get good insights from the data, and be decisive. Don’t panic; it only makes things worse. Look to what your data is telling you and ask tough questions that get to the heart of the issues. Finally, if decisions need to be made, make them sooner rather than later and commit.

Chat with the Experts

If you have questions about how your business should be responding to the coronavirus, get in touch with Kaspien’s experts.

COVID-19 will be here for months, disrupting our communities and our businesses in ways that we are only beginning to understand. If you have only operated your business in brick & mortar stores, moving your brand online can help you shield your business from adverse effects of the economic fallout from the coronavirus. We can speak from firsthand experience: Kaspien was founded at the height of the last recession in 2008. While many industries struggled to survive the rough economy, we not only survived the recession, we thrived in a vibrant and fast-growing market.

Yes, online marketplaces like Amazon are a different beast today than they were 12 years ago, but there is still security to be found in diversifying your assets. Expanding your brick & mortar business to have a strong presence on Amazon, Walmart, and other growing online marketplaces is a smart way to position your brand to survive unexpected shifts in the market, like the one we are currently experiencing.

How to Start Selling on Online Marketplaces

When expanding to major ecommerce platforms like Amazon and Walmart.com, brands have three general routes for listing their products online: first-party, third-party, and direct-to-consumer.

Definitions:

First-party (1P): A first-party business model is when you sell product wholesale to the marketplace (like Amazon Retail or Walmart Retail), and they sell the product at retail price on their platform. In a 1P relationship, you get paid a large check once every few months.
Third-party (3): A third-party business model is when you sell product wholesale to a third-party seller (like Kaspien), and the 3P sells the product at retail price on Amazon, Walmart, or wherever else you’d like to curate a brand presence. In a 3P relationship, a single retailer can represent your brand across all channels. As with the 1P relationship, you get paid a large check every few weeks to few months.
Direct-to-Consumer (DTC): A direct-to-consumer business model is when you, the brand, manufacture product and sell it on marketplaces yourself. Instead of a periodic large paycheck, you generate a much smaller but steady stream of profits as products sell. This can be done independently (hiring the necessary teams internally) or by partnering with an agency (hiring the necessary teams externally).

Other than the cash flow model, the biggest difference between the three business models is in who provides the personnel, expertise, strategy, hardware, software, infrastructure, and time needed to successfully run an online business.

A Word of Warning About DTC

Although the idea of cutting out the middleman may have strong appeal to individuals with a strong and wholly commendable do-it-yourself attitude, there’s good reason that 1P and 3P not only exist, but flourish. Providing the needed resources – material and immaterial – is a lot of work. It takes teams of people and years of experience to excel at, so many brands find it easier and still highly profitable to use 1P or 3P. If they so desire, they can then work towards DTC while still actively growing an online presence.

We say this not to warn you away from DTC because we’re a 3P (through our platform model, we can actually serve as your 3P, agency, or provide you with industry-leading software for your own teams to use. To us, it doesn’t matter how you sell; we can help in the way that best serves your brand. But that’s another story). We say it to simply educate you about the reality of the situation and equip you with the information needed to make an educated decision.

Which Online Business Model is Best?

To determine which business model will best serve your brand as you look to expand your online presence, we’ve compiled a list of key considerations, as well as a list of next steps you can take immediately.

Our whitepaper, The Costs of Amazon, explores each of these considerations and more in greater detail.
Download it for free!

4 Key Considerations for Selling Online

There are four basic key considerations as you plan to expand your business on Amazon, whether it’s for the first time or you’re scaling your efforts there.

1. Cash Flow
We touched on this in our definitions of the three primary business models, but cash flow differs in each business model. In 1P on Amazon, for example, brands are typically paid on Net-90 or Net-120 terms. These PO’s also tend to be larger than what 3P’s purchase. In a 3P relationship, brands are typically paid on Net-30 to Net-60 terms, so brands are paid more frequently. In a DTC model, brands operate off of sales revenue. Each cash flow model has its pros and cons, and which serves a brand best depends on the brand’s existing infrastructure and whether a brand can adapt their revenue model.

2. Resources
Does your team have the experience and knowledge needed to run an efficient online business? This includes marketing, product preparation, inventory management, brand protection services, tax compliance, and more. Does your business already have the hardware and software in place to manage your processes and infrastructure? This is doubly important as businesses begin to work remotely to comply with social distancing mandates. It takes a village to run an optimal online business. The answers to these questions will be a significant factor in determining whether you pick a 1P/3P retail model versus a DTC model.

3. Services
We just mentioned the many services that go into driving a successful business on Amazon. In addition to asking “if” you have resources for them, you should also consider the quality and price of each. 1P and 3P’s offer many of the same services. Now it’s a question of who can provide the better results for the better price.

4. Control
Finally, and crucially, there is the question of brand control. When you work with another business – whether it’s a manufacturer, logistics provider, seller, or agency – you relinquish some control of your business. That’s just the reality, which is why it’s so important that you take time to explore their services, negotiate contracts with clauses about who can sell your product and who can update your product listings, and generally make sure you find a company that will work with you as a partner in the full sense of the word.

Next Steps to Start Selling Online

Those are the considerations, but what action items can you take today? Supply lines are hurting at both ends, and there’s a strong sense of urgency to act now so you can minimize the adverse impact to your business caused by COVID-19.

Here are our recommendations:

1. Shop Around
We’d love for you to work with us as your 3P, agency, or software provider, but you should do your homework. There are many 3P’s, agencies, and software providers out there. Which one offers the best customer support, the most effective services, and the best pricing? While selecting a partner to help you launch or expand your online presence is not a permanent decision, it will have lasting impacts, so do your due diligence and find a partner who will position your brand for long-term stability and growth.

2. Ask for Advice
Reach out to your professional and personal network for advice. Get advice from people with firsthand experience, whether that’s friends, family, colleagues, or even competitors. Faced with the threat of this crisis, it’s our duty to put aside competition and work to protect our communities and businesses, and thereby help prevent any greater economic hardship than we already face.

3. Once Informed, Be Decisive
Do your research but do it quick, and once you’ve found a good match, act quickly. The sooner you can get your online business running, the more damage you can mitigate.

4. Scale Smart
Ignoring online marketplaces as a business venture is risky, but going too far too quick can also be dangerous. As you seek to expand your brand online, make sure that you’re putting your best foot forward. Which products have the best opportunity to succeed? Making this assessment is largely dependent on category saturation and competitors. Invest in your most differentiated products first, and then expand your online catalog from there.

Learn More

We recently published a whitepaper that explores each of these factors in much greater depth. Download The Costs of Amazon whitepaper for free here.

We’re always happy to answer any questions you have. Please feel free to reach out through our contact form or schedule a call directly with one of our ecommerce specialists.

Death and taxes: the two certainties in life. This phrase is often credited to Benjamin Franklin, though the true source is unknown. Regardless though, the idea of taxation, and sales tax specifically, has been around about as long as commerce and trade itself.

This reality was temporarily destabilized by the sudden and rapid growth of online marketplaces like Amazon, with legislatures struggling to keep pace with the fast-paced innovations. For many years, brands and marketplaces alike avoided paying sales tax in many states. That changed in June 2018 with the landmark supreme court case of South Dakota v. Wayfair, Inc.

South Dakota v. Wayfair, Inc

South Dakota believed that online retailers like Wayfair were not paying duly owed sales tax, shorting the state important sales tax revenue. Earlier tax laws included “physical presence” clauses, which meant that if a brand did not have a brick and mortar store within the state’s borders, they were exempt from the sales tax. South Dakota argued that that these physical presence clauses no longer make sense in today’s digital economy, and they fought for the ability to tax online retailers for sales made in their state. Ultimately, the Supreme Court agreed.

As a result, brands that exceed a certain number of annual sales within a given state must pay the state’s sales tax, even if the brand doesn’t have a physical presence in that state.

Key Takeaways

Online sellers are now required to collect and remit sales & use tax for online sales in 42 states, even if they lack a physical presence in that state
33 states have enacted Marketplace Facilitator laws, which transfer the responsibility from sellers to online marketplaces like Amazon, Walmart.com, and eBay
Sellers who sell outside of online marketplaces, such as on a direct website, are still responsible for collecting and remitting sales & use tax
Some states have designated Certified Service Providers (CSP) that manage the tax nexus for online retailers. Kaspien partners with one of these CSPs to handle sales & use tax collection and remittance for our partners and clients

How Marketplaces Are Affected

This landmark decision opened the door for other states to revise or create ecommerce tax laws, requiring sellers to collect and remit sales taxes. So far, 42 states have implemented laws compelling sales tax collection for ecommerce sales.

States have recognized that these new laws are burdensome to both states and sellers, as they create more administrative work for both parties. As such, many states have taken steps to simplify the process and relocate the burden to marketplaces (i.e. Walmart, Amazon, eBay, Etsy, etc.) through Marketplace Facilitator laws.

Marketplace Facilitator laws were created because states believe that a platform is far more likely to consistently meet or exceed the economic nexus threshold, resulting in more consistent sales tax revenue to states. This approach also lowers states’ administrative costs, so they process returns for the platform instead of every seller.

Additionally, many states are working to create a more uniform sales and use tax system across the country because they realize that a simpler process will result in more widespread compliance. Twenty-four states have banded together to form the Streamlined Sales and Use Tax Agreement (SSUTA), with more states moving towards these same measures.

How Sellers are Affected

Not every state with ecommerce tax laws has enacted Marketplace Facilitator laws, which means that there are still some states where sellers bear the burden to collect and remit sales tax, rather than the marketplace.

Keeping track of all the laws and requirements of each taxing jurisdiction is a full-time job in itself, and not all sellers are equipped to make immediate adjustments needed to comply with the laws.

To help with this problematic situation, the Streamlined Sales Tax Governing Board (SSTGB) has designated certain providers as Certified Service Providers (CSP) of the SSUTA. These CSPs calculate and automate the filings at no charge to the retailers. Some CSPs utilize software applications to help sellers track when they have reached the point of economic nexus in a specific threshold, help you register in those tax jurisdictions, and then assist with the actual filing of returns for those areas. Some software platforms even integrate into your accounting software to track the transaction data and compile the necessary information to prepare the returns.

Kaspien offers one such sales & use tax service, partnering with TaxCloud to offer our partners and clients the best solution for automated sales & use tax compliance for both online and brick & mortar sales.

TaxCloud offers the following benefits:

TaxCloud automatically registers brands in SSUTA member states and assist with registration in non-member states
TaxCloud tracks brands’ total sales and alerts them when they are approaching a nexus threshold and may be required to register
TaxCloud can integrate directly into the Amazon Seller Central account or with the Walmart.com portal and pull in all transactional information without requiring any manual formatting
TaxCloud can file for brands in all 9,998 tax jurisdictions in the U.S. at the required cadence (monthly, quarterly, annually) for each

The advantage of leveraging TaxCloud through an Kaspien partnership is that we can provide the service in addition to dozens of others, functioning as your one-stop shop for all things ecommerce. View all of Kaspien’s services.

Request more information about Kaspien’s tax and compliance services through our contact form.

Ecommerce Taxation Around the World

Over time, how we do business changes, and with it, the collection of taxes. Currently, France is leading the charge in Europe to enact digital taxes on giant tech companies (Facebook and Amazon being some of the largest companies affected) because they feel that they are missing revenue from these companies. It will be interesting to see how all of that shakes out. Death and taxes; the two certainties in life. And from the looks of things, neither of those certainties are going to change anytime soon.

How Much Inventory Should I Store in Amazon FBA?

What are My Company Goals?

Inventory Management Strategies

Overstocking Results in Fees

Understocking Costs Sales & Impacts Marketing

How Much Inventory Should I Buy?

Amazon Inventory Storage Fees

Monthly Amazon Inventory Storage Fees (Non-Hazmat)

Monthly Amazon Inventory Storage Fees (Hazmat)

Determine Amazon Inventory Carrying Costs

How can I Prepare for Supply Chain Disruptions?

How Should I Plan for Peak Seasons?

In Closing

Learn More about Inventory & Supply Chain Management

Overview

Amazon 1P Dominates Electronics Sales

The Electronics Category is Saturated

One of the Most Mature Categories

Learn More

Download the Amazon Electronics Category Guide

Why is Channel Control Important?

It Affects Shopper Confidence

How to Remove Rogue Sellers and Counterfeits

Price & Seller Tracking Software – Perispect

Marketplaces Do Not Enforce MAP or MSRP

Perispect Empowers Sellers with Actionable Insights

Gain Evidence to Enable Enforcement

How Much Does Perispect Cost?

Unauthorized Seller Removal with VantageBP

VantageBP Removes Counterfeits and Unauthorized Sellers

What Happens if Sellers Cannot be Removed?

Track Progress in Real-Time

Why Doesn’t Kaspien Remove Rogue Sellers?

How Much does VantageBP Cost?

Other Ways to Protect Your Brand on Amazon

Walmart vs Amazon – History

Amazon’s History

Walmart’s History

Walmart vs Amazon – Size

Ecommerce Share

Physical Locations

International Presence

Walmart vs Amazon – Customers

How do Walmart shoppers differ from Amazon shoppers?

Walmart Fulfillment Services (WFS) vs Fulfillment by Amazon (FBA)

WFS vs FBA eBook & Webinar

Walmart vs Amazon – Marketing Services

Amazon Marketing Services

Walmart Marketing Services

Walmart Plus vs Amazon Prime

Walmart Plus Member Benefits

Amazon Prime Member Benefits

Walmart vs Amazon – Challenges

Counterfeit Products Plague Amazon

Amazon Accused of Stealing Third-Party Data

Walmart is Playing Catch Up

Walmart vs Amazon – Ecommerce Growth

Walmart Ecommerce Quarterly Net Sales Growth

Amazon Quarterly Net Sales Growth

Download the eBook

WFS: Walmart’s Gamble to Challenge Amazon FBA

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Why Does Amazon Owe FBA Sellers Money?

Most Common Types of Mistakes in Fulfillment Centers

Inbound Discrepancy

Lost Inventory

Amazon Inventory Reconciliation Case Types

Carrier Damaged Return

Commission Discrepancy

Damaged Inventory

Destroyed Without Permission

Dimension Discrepancy

Failed Return

Fulfillment Center Damaged Return

Fulfillment Fee Discrepancy

Missing Reimbursement

Missing Return Unit

Over Refunded

Returned Inventory Discrepancy

Under Reimbursed Failed Return