Several days ago Amazon US posted an Important Announcement for Drop-Shipping Policy.
Many Amazon sellers already had a chance to comment on this policy and note that nothing new was announced, but at least one positive aspect was found by everyone: the drop-shipping policy has become more clear and straight to the point.
We should take this chance to examine the entire policy, its meaning in general and important details, that you should not ignore when you choose this business model.
So, let’s start!
The policy starts with this statement:
If you fulfill orders using a third party, a practice known as drop shipping, you must follow all Amazon policies to ensure a consistent customer experience that easily identifies only you as the seller of record.
EXPLANATION: you need to make sure that a customer buying the product from you on the Amazon platform will receive an item, which will state yourself as a seller. This is very important for Amazon, and this is a reason why Amazon prohibits drop shipping from other online retailers (like Walmart for instance), as Amazon clients would receive a product with a Walmart label and next time will go shopping directly there, skipping this “unnecessary stop” at Amazon marketplace. It is fine to source from Walmart, Home Depot, Lowes, or Bed, Bath and Beyond, but you cannot drop ship from their online site directly to customers. Amazon does not want customers ordering from their site to receive something in a box with Walmart or Home Depot written all over it.
The next paragraph states another important aspect:
As an important reminder, all violations of the Drop Shipping Policy can break customer trust. As a result, any violation of our Drop Shipping Policy will negatively impact your account health and your ability to fulfill future orders using our Merchant Fulfilled Network (MFN).
EXPLANATION: This means, that if Amazon somehow finds out or suspects you are drop-shipping from other retailers or suppliers who keep their labels on the package, your account might be deactivated and you would need to go through several rounds of appeals to explain yourself, or to use professional services like ours to resolve things faster.
But we would like to make sure you understand the difference between the brand label and the supplier label. When an Amazon buyer wants to buy a branded product, let’s say “XXX”, the product must state the brand name, as customers expect to receive exactly this branded item. The supplier label must state YOU as a seller, and not any other third-party.
Further Amazon explains the exact prohibited actions:
The following drop shipping methods are strictly prohibited on Amazon:
Drop-shipping is a very beneficial strategy:
But in order to have all these benefits, you have to assure Amazon that you are a reliable and responsible seller, acting partly on behalf of the marketplace. The old and the new policy provides the details, you have to consider to be trusted. Put yourself in Amazon’s shoes and you will understand, that they don’t want the products to be delivered to their beloved customers from their competitors.
The last part of the policy pretty much repeats the above statements, except the one:
If you fulfill using drop shipping, you must strictly adhere to following requirements of our policy:
We wish you good luck with your business on Amazon and as always, if you have any questions, don’t hesitate to turn to us.