Don't Panic Mr Mainwaring (FBA Is Dead!)
OK, So this week has been a little alarming for many people selling OA/RA products in the USA. First a well respected member in the Amazon community announced that in early October, Amazon would no longer accept receipts as proof of purchases. The post also advised people to sell all their current OA/RA products.
Then a few days later, Amazon released a feature for PL sellers which allowed them to restrict their brand for other sellers if their PL was already Brand registered.
Now is this a coincidence that some brands such as Funko, Nike, Adidas and Lego are now restricted? Is it Amazon doing this or the Brand themselves? I personally think the latter. You see you have to put yourself in the mind of the Brand, they want to protect it. So now you have to send in 3 certified invoices from the manufacturer or authorized distributor, along with a letter from the brand to get approved. Some of them are even demanding $1000 or more to list their products and become an authorized seller.
Out of Order Right! Well no actually, this is a great way for the brand to whittle out all the bad eggs. It’s their way of saying show us your commitment to the Brand! In my previous life I had an equestrian retail business, if you wanted the top brands you had to be prepared to commit to them, put in large opening orders and maintain certain levels of stock. This is no different, they want the best of the best, the real businesses not fly by nights.
So what’s happened? complete panic, FBA sellers are quitting right, left and centre. Arbitrage is Dead! This is the end of FBA! are common comments flying around. People scaring other sellers telling them to sell all their stock as it will happen in the UK very soon! (Really how do they know, unless they are buddies with Jeff of course). The real answer is we don’t know when or if it will ever happen in the UK. There is no crystal ball so we can’t see into the future. The US market is very different from the UK market, there are hundreds and hundreds more FBA sellers, and the market value is massive compared to the UK. You just can’t compare the two.
But there is something we can do, you see we may not have a crystal ball but we do have our friends over the pond! We have the answers for this problem already! If it does happen here then we have time to get prepared unlike our US friends. We know what brands will be affected so go out now and try and get accounts with distributors of these brands, be one step ahead of the game. Now this doesn’t mean you have to stop doing OA/RA and only do wholesale and buy from distributors, but it does cover you if the same thing happens here.
Now this won’t be easy and many of you will get knock backs, but there is always a way. Last year I wanted to sell Funko products, I knew they sold fast but also knew that the opportunities through OA/PL were limited. So I approached them and the answer was a big fat NO! You don’t have a retail premises etc and you are Bob t/a Bargain Toys blah blah blah.
Now most people would have given up, but that’s just not me. So I waited for the annual Toy Fair in London to arrive got some fancy business cards made up, changed my business name and created a Ltd company with a swanky registered office address. Got suited and booted and went for the kill! When I met them in person I was no longer Bob t/a Bargain Toys trading from his house, but Carl Sears Managing Director of ********* Ltd, with a turnover of £600k looking to expand his company’s business with new innovative products. (You get the idea). My point is I went with a purpose and made them believe they needed me! I came across professional! That day I managed to get Funko along with 4 other distributors.
If OA/RA does change in the UK get prepared, be ahead of the game and you will survive. Get wholesale suppliers but pick them wisely! Most won’t stand up to the changes Amazon have imposed in the US, they need to be authorized distributors not middle men. Build up a relationship with them order products when you can, then if it does happen here you will be ready. Now I’m not saying get every brand! that would not be feasible and most would reject you anyway, but just one or two would keep you in the game.
If you want to quit then quit! I’m not going to stop you and neither will anyone else. Remember you are a business and every business needs to evolve, change and tackle problems. If you need to change your business model then do it. EVOLVE!
DON’T PANIC MR MANNERING!