Will You Be Allowed to Sell Your Next New Product Line on Amazon? (Part I of II)

July 2, 2014

Marketplaces ChannelAdvisor By ChannelAdvisor

I’ve said before that selling on Amazon requires you to learn a new language, but it’s also true that it requires learning a new playbook. And unfortunately, some of the Amazon rules in the playbook aren’t published, leaving sellers to learn as they go, or worse — learn the hard way. We’ve been hearing from a lot of sellers recently that have been caught by surprise in one area: brands and products that they’re not permitted to sell. A list that, to our knowledge, is not publicly published by Amazon in its entirety. (In Amazon’s defense, if such a list did exist it would require constant updates as category managers remove products/brands.)

This situation been particularly frustrating for some sellers who have invested money in a product only to discover that they can’t move it on Amazon — a main sales channel for them.  As many sellers are ramping up their SKU breadth and depth for the holiday selling season, this topic requires immediate attention in order to avoid sunk costs, unmovable products and worst-case scenario: suspension. Amazon

In researching this topic and trying to compile a definitive list of brands to avoid, we found an example of one of the things that we love about our community of sellers and e-commerce retailers in general — their camaraderie and willingness to share knowledge for everyone’s benefit. Here you’ll find a seller-maintained list of brands to that other retailers have reported as restricted or “problematic.”

There are a few restrictions that can put the brakes on your ability to list products on Amazon. Here’s a summary of those blockers:

  1. Published Restricted Products: First, there’s the published list of restricted products on Amazon. Some types of products are banned outright, like items falling under the Weapons category: guns, ammunition, explosives, etc. Other categories, though, just denote attributes of prohibited items, like items that are not deemed safe by the FDA or those not sealed in the original manufacturer’s packaging within Cosmetics & Skin/Hair Care. Very few categories explicitly list brands that are banned or not allowed. When they do, it’s as an example, like with Latisse, which is used as an example of a product that requires a prescription by a medical professional.
  2. Gated Categories: Next there are categories needing pre-approval (a.k.a. “gated” categories), which require sellers to complete an application process to be able to sell in them. Clothing & Accessories and Shoes, Handbags & Sunglasses are two of the most popular gated categories. If you’re not approved in these categories, then you won’t be able to list products within them.
  3. Closed Categories: Then there are closed categories, which aren’t open to new third-party sellers. Jewelry and Textbook Rentals are the main categories here. Toys & Games also falls under this category during the holiday season. Again, unless approved in a closed category, you won’t be able to sell products within them.
  4. Exclusive Amazon authorised Dealer(s): This is the most ambiguous umbrella of restricted products and the focus of this article. For some individual brands and products, Amazon has a closed list of sellers that can list items for sale. Many times you’ll see a single seller — often the brand owner — who owns the listing, like this Beachbody workout kit. Other times you’ll see a group of sellers authorised to list products, but no new sellers can join the ranks, like this Wedderspoon honey, which displays the message “Sorry, the ability to create a listing for this item is restricted.” when trying to list the product. The bottom line with these restricted products is that if you aren’t on Amazon’s authorised dealer list, then you won’t be able to sell these items.
  5. Manufacturer authorised Dealer(s): Once you’ve gotten through all the restrictions above, you can sometimes face listing issues from the manufacturer themselves, as is the case with many electronics brands. Some manufacturers prohibit the sale of their items on Amazon and/or the internet. Others will allow internet sales, but only for select sellers who comply with Minimum Advertised Pricing (MAP). On the other hand, some manufacturers will allow open sales to anyone as long as they are abiding by MAP. Amazon provides the Brand Registry program to allow brand owners some control over their listings, but often manufacturers lean on their distribution chain to control who sells their products. Some even resort to legal action to control the distribution of their products.

There are generally two ways that restricted and problematic brands and products (due to an Amazon authorised dealer list — fourth in the list above) are discovered. The first — and preferred — is that when completing the listing for your product, you receive a message that says, “Sorry, the ability to create a listing for this item is restricted.” It’s even better when you’re researching SKUs to sell and discover that a product is restricted before it’s in the receiving bay of your warehouse.

The second way that restricted SKUs can be discovered is when Amazon changes a product to an “Inactive” status within Seller Central. Unfortunately, this status change doesn’t trigger a notification and is often discovered when a seller does research into why a previously top-selling item has suddenly dropped off to no sales. Items stocked through fulfilment by Amazon (FBA) that go to an Inactive status are especially challenging since you’ll incur fees to get your items removed from FBA and returned to you, unless you sell them on another channel outside Amazon and still use FBA for fulfilment.

Hopefully by now you have a clearer image painted of what you can and cannot sell on Amazon as well as the associated risks involved. Be sure to stay tuned for part II of this blog post that will detail how to protect your growing e-commerce business. As always, if you have remaining questions please feel free to email us at marketing@channeladvisor.com.

 

Blog post by Rachel Miller, product marketing manager, ChannelAdvisor