💰 Amazon to Reimburse

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Hey there 👋,

Over the last week we’ve had some great discussions in our community on Skool (now 65+ members), such as running / scaling ads on Amazon.

Our Smart Seller community is free to join and inside we have, and alongside discussions we also have classes on how to hire top talent, a roadmap to a 7 figure exit, and automation templates ($497 value):

Here’s the link to our community.

All our classes are currently free to access, we will be locking some down and charging in the future.

Ok, on to this week’s top news and insights!

🤖 Amazon to Reimburse for Lost Inventory

The biggest story for Amazon sellers this week is Amazon's announcement that almost all reimbursement claims related to warehouse lost and damaged and customer returns cases will now be proactively reimbursed.

This change is expected to significantly reduce the frustration and workload for both sellers and Amazon customer service representatives.

And it begs the question: what now happens to reimbursement services:

The new policy, starting from November 1, 2024, means that Amazon will automatically reimburse sellers for lost inventory without the need for manual claims submission. This change aims to streamline the reimbursement process and reduce the workload for both sellers and Amazon customer service representatives.

🛑 New Consumer Trends: What Smart Amazon Sellers Need to Know

The new Jungle Scout Consumer Trends Report for Q2 2024 just came out, showing big changes in how people shop online. Let’s dive into the important insights that could shape your selling strategy in the upcoming months.

👥 Generational Spending Patterns

• Gen Z: Highest increase in online and overall spending.

• Gen Z: Least likely to start on Amazon, most comfortable with TikTok.

• Millennials: 90% report inflation impacts on spending habits.

• Millennials/Gen X: Prefer Amazon or Walmart.

• Baby Boomers: Favor search engines like Google.

• Strategy: Tailor offerings to budget-conscious Millennials and tech-savvy Gen Z.

📊 Category Performance Highlights

• 13 out of 19 Amazon categories saw sales increases.

• Patio, Lawn & Garden: 80%+ growth.

• Other growth areas: Automotive, Electronics, Grocery, Health & Household.

🚚 Prime Membership and Shipping Trends

• 64% of consumers have Prime access (14% increase over two years).

• Increasing priority on Prime shipping.

• Tip: Optimize your offerings for Prime customers.

💰 Price Sensitivity and Payment Options

• Lowest prices remain top priority for most Amazon shoppers.

• 16% increase in preference for flexible payment options.

• 14% increase in influence of Subscribe & Save.

• Consider: Competitive pricing, flexible payments, and subscription options.

📌 3 Key Insights to Watch

• Amazon's dominance shifting: Product search initiation on Amazon down 15% since Q2 2022.

• Inflation's widespread impact: 84% of consumers report spending affected by rising prices.

• 30% increase in consumers likely to buy directly from social channels.

Link to Report →

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📦 Key Factors Influencing Order Fulfillment Costs

Order fulfillment costs on Amazon can seriously eat into a seller’s profits.
You need to know these factors to make more money and stay ahead of your competition:

💸 Primary Cost Drivers:

• Product dimensions and weight.

• Storage duration.

• Shipping speed and distance.

• Seasonal demand fluctuations.

• Return processing.

📊 Impact on Profitability:

• FBA fees: Can range from 15% to 40% of the product’s selling price.

• Storage costs: Increase for items stored over 181 days.

• Shipping: Prime-eligible items may incur higher fulfillment fees but often lead to increased sales.

🔍 Key Considerations:

• Inventory turnover: Faster turnover reduces storage costs and improves cash flow.

• Product selection: Choose items with healthy profit margins after accounting for all FBA fees.

• Pricing strategy: Factor in fulfillment costs when setting competitive prices.

• Seasonal planning: Prepare for increased storage and fulfillment fees during peak periods.

💡 Cost Optimization Strategies:

• Utilize Amazon’s Revenue Calculator to estimate profitability.

• Consider multi-channel fulfillment to diversify revenue streams.

• Implement efficient inventory management to avoid long-term storage fees.

• Optimize product packaging to reduce dimensional weight charges.

Link to Article →

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• Free Supply Chain Audit: Identify and eliminate bottlenecks.

• Tailored Solutions: Customized strategies for your unique needs.

• Results-Driven: Tangible growth and improved efficiency.

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🤖 AI Revolution for Amazon Sellers

Amazon sellers are seeing a huge change with AI in their operations. There are several different ways that AI tools can improve your Amazon operations.

🕵️ Product and Market Intelligence: AI tools analyze market trends, competitor strategies, and keyword performance.

✅ Listing Optimization: Automated generation and refinement of product descriptions and titles.

👀 Visual Content Enhancement: AI-powered image analysis and creation for more appealing listings.

📈 Predictive Analytics: Advanced sales forecasting and inventory management.

💡 Customer Insights: Deep dive into buying patterns and preferences.

🤔 How to implement AI in your business?

1. Assess Current Operations: Identify areas where AI can have the most significant impact on your specific business model.

2. Start Small, Scale Fast: Begin with one or two AI applications and measure their impact before expanding.

3. Invest in Data Quality: Ensure your data collection and management practices are robust, as AI's effectiveness relies heavily on quality data.

4. Continuous Learning: Stay updated on the latest AI advancements and regularly reassess your AI strategy.

5. Human-AI Collaboration: Train your team to work effectively alongside AI tools, leveraging both human creativity and AI efficiency.

Link to Article →

That’s it for this issue - hit reply to let us know what you thought, otherwise we’ll see you in the community.

Cheers!

Lucas