It’s that time of the year again: the holiday season is approaching, and Amazon sellers are stockpiling their inventories and looking forward to the major sales boon the end-of-year consumer bonanza brings to their bottom line.
Yet every August, Amazon sends an email to sellers that can deliver a crushing blow to those who don’t know what’s coming.
Did you see it in your inbox?
Amazon’s email tells sellers all the strict criteria they must meet in order to sell in ‘Toys & Games’ during Q4. Unsurprisingly, ‘Toys & Games’ is one of the top-selling, most lucrative categories during the holidays. So, if sellers don’t comply with the rules, they can miss out on massive sales.
Remember: Amazon wants to be sure its sellers are able to deliver. Thankfully, it reminds sellers of these requirements early enough that you can still get ready for selling in ‘Toys & Games’ this holiday season.
Here’s a break down of exactly what you need to do.
Amazon’s 2020 holiday ‘Toys & Games’ requirements
Let’s take a look at Amazon’s email regarding the 2020 holiday season so we can get a better understanding of all this.
Note: This requirement is just for sellers who are merchant-fulfilling toys from November 2, 2020 through January 3, 2021. This announcement does not apply to FBA. If you are using Fulfillment by Amazon exclusively, you don’t need to worry about meeting the criteria laid out above. If you are approved to sell in ‘Toys & Games’, you can sell as much as you want using FBA.
The first two criteria are the most important:
- Your first sale on Amazon must be made prior to September 1, 2020, but it doesn’t have to be a ‘Toys & Games’ product.
- From August 15, 2020, through October 14, 2020, you must have processed and shipped a minimum of 25 seller-fulfilled orders.
These two pieces of criteria should be pretty easy to meet. Basically, if you’re a new seller, you must make a sale before September 1, no matter the category. And you must also ship out at least 25 Fulfilled by Merchant (FBM) orders between August 15 and October 14.
The last three criteria that Amazon requires are to:
- Keep your pre-fulfillment cancel rate must be less than 1.75% from September 15, 2020 through October 14, 2020.
- Ensure your late shipment rate is less than 4% from September 15, 2020 through October 14, 2020.
- Have an order defect rate that is no greater than 1% as of October 14, 2020.
All of these metrics are always in place when fulfilling orders through FBM, except the pre-fulfillment cancel rate percentage. It is stricter than it normally is.
Pre-fulfillment cancel rate
Typically, you want to keep your pre-fulfillment cancel rate (seller-canceled orders) under 2.5%. But for the holiday season, Amazon has made this rule stricter with a 1.75% cancellation rate. Basically, do not cancel any FBM orders you receive.
Late shipment rate
Your late shipment rate increases if you are confirming your order shipments after the expected ship date. For example, if you received an FBM order on 8/21/2020 and have an expected ship-by date of 8/25/2020, then you MUST ship out that order before or on the 25th. If your shipment is confirmed after that date, your account metrics will worsen.
Order defect rate
Your order defect rate is all orders with a defect (defined below) as a percentage of total orders during a given 60-day time period.
A defect is defined by an order that results in negative feedback, an A-to-Z Guarantee claim that is not denied, or a credit card chargeback. Your goal, at all times, is to keep this below 1%.
Amazon uses this metric to measure your ability to provide a good customer experience.
How to check your account health
To keep an eye on these metrics in Seller Central go to the Performance tab > Account Health.
On this page, you’ll be able to track all three key metrics:
- Order Defect Rate
- Late Shipment Rate
- Pre-fulfillment Cancel Rate.
Why Amazon has holiday selling requirements in ‘Toys & Games’
The holidays are by far the busiest season for Amazon, and for retail in general, so they’re doing everything they can to maintain and exceed customer expectations.
If you’ve been selling on Amazon for a while, or frequently buy from Amazon, you know Amazon is customer-obsessed. With their lax return policies, 24/7 customer service, ultra-fast free-shipping — they’re a consumer’s dream.
What I’m trying to say is: Amazon is all about customer happiness and satisfaction. And during this time of year, customers are shopping more than ever and are much less forgiving of mistakes/delays.
Amazon does not want to put trust in merchants who have not proven to be rockstar sellers. Fast fulfillment is what Amazon has built its business around, so they want to maintain that status.
Think about it this way: if you ordered a gift for someone on Amazon and it arrived late, would you blame the seller or would you blame Amazon?
How to meet Amazon’s holiday requirements to sell in the toy category
If you really want to meet this requirement but have not merchant-fulfilled many orders this year, here are a couple of tips that can help you reach the 25 FBM order requirement.
1. Flip low-priced items from retail stores
First, go to a retail store such as Walmart. Next, begin scanning the shelves using your Amazon seller app — or any other scanning app you prefer. Finally, try to find items you can purchase cheaply so you can resell them on Amazon. This is called retail arbitrage.
A great thing about using the Amazon seller app is that it will show you how many sellers are on the listing. It will also show you if there are any FBA offers; look for listings without any FBA offers. That way, you won’t be competing against an FBA seller for the Buy Box.
Have any used books lying around your house? Scan those as well and see what they’re selling for on Amazon! (P.S. Books are very cheap to ship!)
I know this sounds easier said than done. The point, though, is to just find cheap items you can flip quickly and ship yourself to meet this requirement. Even if you only break even, it’ll be worth having the ability to merchant-fulfill toys during the last few weeks of the holiday season.
2. Pause your FBA offer and activate an FBM offer
If you are selling private label or wholesale products and have some spare inventory at your house/warehouse, you can pause your FBA offer and replace it with an FBM offer. This works well if you are the only seller on the listing. That’s because your FBM offer will replace the FBA offer in the Buy Box.
Do this until you reach 25 FBM orders.
Note: Because your conversion rate may decrease if your listing no longer offers Prime shipping, only do this if you are confident your listing will go back to normal once your FBA inventory is active again.
What to take away from this
This was a lot of information, but here are a couple of key takeaways.
- This ONLY applies to ‘Toys & Games’ from November 1, 2020 – January 3, 2021. You are still free to list as FBM in all other categories on Amazon during this time period.
- You will still be able to sell toys using FBA even if you do not meet Amazon’s criteria.
And that’s it! If you want to be sure you can list toys as FBM during this holiday season, simply follow this guide and you will be good to go.
Have any other questions regarding this update? Let me know in the comments below!