#664 - All about the Amazon Ships In Product Packaging Program

#664 - All about the Amazon Ships In Product Packaging Program Michelle Barnum-Smith: Many Amazon sellers lament increasing fees on the platform. But do you know there's programs that can actually decrease your Amazon fees? Today we hear direct from Amazon about one of these programs. How cool is that? Pretty cool, I think. Hello, everybody, and welcome to another episode of the Serious Sellers Podcast by Helium 10. I am your host, Bradley Sutton, and this is the show that, as you can see, a special edition. We are live right now at the Prosper Show in Las Vegas before it opens, so the crowd is clear here. We cleared out our whole booth here, and we have a very special guest here from Amazon. Can you go ahead and introduce yourself to the audience? Speaker 1: Yeah, it's nice to meet everyone. My name is Kirsten Freiheit, and I lead the North American Division for Selling Partner Engagement. We're Sustainable Packaging at Amazon. That's a mouthful. Michelle Barnum-Smith: Oh my goodness. But what's the acronym? That's going to be a lot easier to remember. Speaker 1: Yes. So SIPP is what we're going to be talking about today, which is also the Ships in Product Packaging Program at Amazon, a portion of our Sustainable Packaging suite of products. Michelle Barnum-Smith: Perfect. All right. So I think that's a little bit easier for you guys to remember. Now, would I ask all my guests, you know, a little bit like where were you born and raised, first of all? Speaker 1: Yeah. I found out that a lot of people think this is fairly unique, but I am a Seattle native, so born and raised in Seattle where I still live. Two boys, yep, whole life. My two boys, my husband, for those that are familiar with Amazon, we're a really big dog culture, so I would be remiss if I didn't talk about my beautiful chocolate lab, Mika. And then we also have a fluffy cat named Mac, which my boys would be very disappointed if I didn't wedge that in there. So a multi-pet lover family. Michelle Barnum-Smith: Let's talk about your Amazon background. How long have you been at Amazon now? Speaker 1: I've been with Amazon for just over six and a half years actually. Michelle Barnum-Smith: What color is that then? Speaker 1: That is a yellow badge. You get your yellow badge at five years. And I've done a variety of different roles. It started in sales because my background was in sales and consulting, primarily in software and technology and started off at Amazon Business and then moved into a variety of program and then also program and operations management roles. And then about a little less than a year ago, I had the opportunity to speak with my boss. My now boss, and he was trying to tell me about the sustainable packaging program and what is SIPP. I had never heard about it, had no familiarity with it, didn't even know that packaging engineering was a thing and an actual degree because my entire team now is all packaging engineers, which makes sense because we're working with sellers like yourself to redesign packaging and allow for better packages to be delivered to the customer doorstep. As I was walking through, I made some interesting connections with my previous experiences. I started off at a dot-com chemical company. One of my product lines was powder coatings. I didn't reflect on it then, but reflecting on it now, getting powder coatings safely to a customer and working with suppliers and the end customer It's important that it's sealed, that the integrity on the inside of the box is well sealed so you don't have any moisture, temperature control, things like that. So getting the box safely to the customer was a really important part of our distribution. And so looking on that now and some of the things that we do in the SIPP program, it really has a fun connection. Bring me back to the start of my roots. And then I ended up talking my husband's ear off for about an hour after having this conversation with my boss on all of these ideas I had with packaging, how I was going to innovate, how I was going to approach customers and sellers with it. And at the end of that hour, I left. To myself and kind of thought, I'm going to have to take this job, aren't I? And that's where it all started. So just passionate Amazonian for building new programs and processes and bringing my excitement of really bringing excellence to my customer relationships to our sellers. Michelle Barnum-Smith: Love it. Love it. Speaker 1: And then I think, you know, as we look at the value that my team provides to sellers, we get an opportunity to reduce seller cost. elevate sellers' brands, and then also with the Charter of Environmental Sustainability at the heart of all we do, which I think is pretty cool. Michelle Barnum-Smith: I remember when you asked me before about the products I sell, your eyes perked up when you found out about the famous Coffin Shelf. Speaker 1: Yes, I was so excited. Michelle Barnum-Smith: You've got a friend, right, who is into this stuff? Speaker 1: Me too. Bradley and I were actually talking about this last night because I don't know if you thought it was a joke sometimes when people are like, oh, Coffin Shelf. I have this neighbor who lives up the street, a really good friend of mine. It goes all out for Halloween every single year. I got to share some pictures with Bradley. It's a really big production. People come to our neighborhood just to see this. She's a huge, obviously, gothic theme overall, year-round, not just for Halloween. I was telling Bradley that this would be an amazing gift for my friend. It's on my list for purchases for her birthday in September, just in time for Halloween. What was interesting about this, when we think about how the Ships in Product Packaging Program came to be, when we think about the North American fulfillment chain for sellers like yourself, shipping a product like this to my friends, we all appreciate the fast delivery and speed that Amazon brings. But when we think about this, this product is coming from you, the seller, or maybe for other products, it's direct from the manufacturer, or maybe it goes to a repacker to get repacked for a better e-commerce design, and then it goes to Amazon to get packed, sorted, and shipped through our distribution network. And along the way, a product like this might get additional packaging, whether it's bubble wrap, Added bags, additional materials, maybe an outer box, and it's really with the intent of getting this product safely to the customer. So when this arrives on my girlfriend's doorstep, it's in a nice, pristine condition, and she has this amazing product. I'm from your brand. She can tell me how delighted she is with this. Looking at this entire chain, we thought to ourselves, it's a lot of packaging waste and a lot of additional materials. How can we do it a better way? How could we potentially send a product direct through Amazon without the need for all of this additional packaging? Then the idea was Maybe there's some products that can ship without any additional packaging, and that's really the origin story of how the SIPP program was born. Michelle Barnum-Smith: Basically, as she said before at the outset, this stands for Ships in Product Packaging. So if I wanted to enroll this particular package, and this actually is like now a double package where here's the coffin shelf inside here, and then this is my package. Now, for me, this is actually, I mean, this one is kind of messed up. It's been around the world a few times. But if I had like a very sturdy box that wasn't part of my package, like this is actually, hey, I want them to have this as a gift box. But if this was just a regular package... What ships and product packaging means is this here you you would just put the like the shipping label and give it to the carrier and there's no extra package that basically I get oversimplification but but in a nutshell what this program is about. Speaker 1: Yeah, in a nutshell, you know, straight to the customer in its original packaging and we'll talk more about some of the benefits that come with that and then also Some considerations because not every product and Bradley and I had talked about this too when you have items that are highly collectible or maybe the package is part of the product itself and you want that experience or maybe it's a gift and I don't want her to see the coffin immediately and I do want that Amazon over box. We do have the ability for consumers to conceal the product, or maybe it might make sense to not participate in the program. Michelle Barnum-Smith: That is a random thing I was just thinking about, though. Like, if I just ordered this, okay, great. I kind of picture that now. This is just going to come with a label right here on this. But like, let's say I order about four or five things, and three of them are from the local distribution center facility. Now, does that mean it's still going to be three separate packages or like could this still potentially go just be dropped into like a bigger box that has my other stuff? Speaker 1: Yeah, that's a great question. So most of our SIPP program is based on single ship. It's right when individual product is shipping direct to customer. And when we talk about multiple shipments, and multiple shipments together, there may be times where we do consolidate just from an overall cost, transportation costs and efficiency and also speed to customer where it does make sense to have multiple products in one box. Michelle Barnum-Smith: Okay. Now, I know we're going to get into the pricing a little bit later and stuff, but if I had enrolled this in it and it still was put in another box, do I lose that discount that I get? Speaker 1: Great question. And he's already getting into cost. Michelle Barnum-Smith: I'm just going to look at my... We'll talk about the cost a little bit later, but if I don't ask this now, I'm going to forget about it. Speaker 1: It's actually a great segue and we can talk immediately about cost because I think that's one of the first and most important questions for most of our sellers is how much does this cost? And I think The question Raleigh just asked is super important because. We want sellers to participate in the program and therefore we give you the cost savings based on inbound because we don't want you to be penalized for me putting a concealment around my gift box because I don't want somebody to see the package or maybe other consumer behavior. So we do want to reward sellers for going through the effort to redesign packaging and also certify within our program. Michelle Barnum-Smith: Okay. So, I think, you know, when Amazon sellers are thinking about any kind of program at Amazon, their first question is like, hey, what's in it for me? Kind of mentality. That's fine. It's understandable. Always thinking about profit margins. So, I think the main benefit that comes to sellers' minds is, is there any kind of financial incentive for me? So, can you talk a little bit about that? Speaker 1: I think one of the benefits of the SIPP program is it is a cost benefit for our sellers and As a longtime seller, I think you've seen this yourselves and we've gone through the coffin example. And how we deliver these cost savings to sellers is we actually reduce fulfillment fees based on those inbound certified shipments. And those can range anywhere up to a $1.32 in North America and up to a 1.54 euros in Europe. So we are in US, Canada, and then the EU5, which would be Spain, Italy, Germany, France, and the UK. So shipping into any of those markets allows for eligibility as part of the SIPP program. Michelle Barnum-Smith: Alright, so that's a literal cost savings from my fulfillment fees that a seller would see when they're doing their P&Ls. What about some indirect costs and then maybe if there's some real-life examples you can give of people who have found these benefits? Speaker 1: Yeah, I love this question because it extends to your point so much more than just the initial dollar back on fulfillment fees. Some of the indirect savings, we've seen a lot of sellers Actually move products into smaller sort tiers. So a smaller fee tier structure by reducing cube and kind of right sizing the packaging. So that's another way to have some additional cost savings. Then there's also things like unexpected prep, where we might be putting a bag around that product and charging you for it, right? If you have this as part of the SIPP certified program, you eliminate those unexpected prep fees. And then in addition, if the package is right sized and built for your product, There's a likelihood that there's going to be less product damages. Michelle Barnum-Smith: And then so let's talk, you know, I obviously haven't enrolled yet in the program. So can you talk about other brands who have and their experiences with it? Speaker 1: I think my favorite part is getting to hear stories directly from our sellers on the impact that our program has had. It really brings the work that I do to life. And we got to highlight one of our sellers, Go North. We had an example of their woolly mammoth blanket where they highlight the durability and the longevity and just like the integrity of the blanket on the outside of the packaging. One of their first products that they enrolled, they've been a SIPP customer since November of 2023. And since then, they've been able to enroll 200 different products. And as a result, they saved $280,000 in fulfillment related costs. And I think one of the best things about that is that they were able to reinvest that money in their business. So then we're also allowing to fuel business growth, which I think is just amazing. Michelle Barnum-Smith: Awesome. That's a quarter of a million dollars for you math whizzes out there. So now, you know, we're not just talking about cost savings, but, you know, sustainability is also very important to many and should be if it's not important to you. What are the benefits? How can we tie in sustainability to this program as well? Speaker 1: Yeah, so to weave in another seller example, we have a seller called Cool Life who is really all about quality, luxury luggage, but also with a huge sustainability charter. And they had about 1,200 products. Shipped across the US or North America and also European markets. And they've managed to enroll 90% of their products in the SIPP program. And they've been around since 2016. And in 2024, through the SIPP program, as well as other sustainability initiatives, they've hit sales targets of $5 million per month. In 2024, so really helping fuel their brand growth and traffic that year. Michelle Barnum-Smith: So I think another benefit when we think about brandy, too, you know, there's a lot of people who really want to deliver that value when you're selling through another company that's shipping. You lose control as a brand over the delivery process and how it arrives and stuff. And so like this is another way I think that the program can actually help. So can you talk a little bit about like the difference of, hey, like, we're relying on Amazon to deliver, which is fine. It's still going to get there in one piece. But from a branding perspective, The SIPP program actually might give you a little bit more control over how that product arrives to the customer. Speaker 1: I don't think many sellers have maybe thought about this in the SIPP context. And when you think about rather than a brown box showing up on your doorstep, The delight that somebody can have when you have your branding and messaging and something that's very eye-catching in that moment of the very first interaction that your consumers have with your brand, and I think that that is so powerful. One of the examples that always makes me laugh, it's example, cloud paper. And on the outside of the box, it has the messaging, this paper saves trees, which always makes me giggle a little bit because it's so creative. The product is bamboo paper towels. So it's very catchy on the outside. And then when you open up the box, on the inside, they have QR code where you can go and learn more about their brands, learn more about their charter. And also, it's a great way to engage consumers to do more with your brand than just the purchase. I think it's such a great way to differentiate brands as a whole. When you think about the overall customer experience, you're also eliminating all of that additional packaging, even the additional Amazon Overbox. Think about a recycling bin at a time of the holidays or when your recycling doesn't come because it's snowed. We have that challenge. Michelle Barnum-Smith: I don't have that problem in Southern California, but in Seattle. Speaker 1: And your recycling hasn't been picked up in four weeks. So just from that, it's a better customer experience overall, tying back into sustainability, but really putting your brand at the forefront of the customer experience. Michelle Barnum-Smith: Yeah, just from a personal viewpoint, I have a terrible memory. I'm very notorious for it. But anyways, sometimes I'll forget when I order stuff from Amazon, and then I'll remember it later. But then what happens is like maybe a week later, I'll ask my family, hey, did X or Y ever arrive? And then they'll say, Oh, I don't know. But I think we did get an Amazon box. But like, It's just a brown box, which is fine, but you don't know what's inside that. If you don't remember what you ordered, you lose the excitement. But then if I got my coffin shelf delivered in my coffin-shaped box and I was really waiting for that, I would have been like, somebody would have come to me and said, hey, who ordered this coffin shelf? Usually, they don't open the box. Or hey, if I said, hey, did my coffin shelf arrive? Oh, yeah, yeah, I saw that. It's right over here. So you lose that when you just rely on the outer packaging. Speaker 1: Yeah. And then we also see fun and unique brand experiences where our box is actually reversible and it becomes A bigger part of the product itself, or I've also seen in pet products, where the box becomes a cat playhouse that you can actually re-origami into a playhouse for your cat, which I think is always a great, innovative way to rethink about your packaging as part of the product, but in a fun and engaging way. Michelle Barnum-Smith: I love it. Reversible box. I have to look into that. I've never heard of that before. Okay, so we've been talking about kind of like from the seller's viewpoint, you know, from the customer's viewpoint, what other impacts does this program have? Speaker 1: Yeah. So, you know, sustainability at the core of what we do and really the charter, right? That history of how the SIPP program came to be in eliminating materials and waste. And since 2015, we've eliminated packaging weight by 43% per shipment. Which is a little over 3 million metric tons. And to give a more visual concept to it, my hometown Seattle, it's about the equivalent weight of 285 space needles, if you can think about that in quantification. And then since 2020, we've also eliminated 80,500 metric tons of single-use plastics because plastic reduction is a huge initiative. And also we hear that a lot from our sellers as well. And then in 2023, we were able to ship 12% of packages globally without the need for any additional Amazon packaging. Michelle Barnum-Smith: Wow, that's amazing. So, first of all, how long has the program, again, been around? Speaker 1: Yeah, so the program's been around for a while as SIPP for sellers. It's been available since February of 2024. Oh, so it's still relatively new. Michelle Barnum-Smith: And speaking of new, what's new like here in 2025 with the program? Speaker 1: Yeah, so we talked a little bit about the overall benefits of the program, but when I think about engaging with sellers and getting them to adopt a new product or program, ease of use, And how long is it going to take me to accomplish? So speed and overall ease of use. And a couple of ways that we've tried to make this even better is through the enhancements in our Seller Central portal. And one of these is our product family groupings. So within Seller Central, We have a list of all eligible products for your seller portfolio. And we've gone a step further to group like ASINs. So maybe think of a t-shirt that might be roughly the same size, similar colors, and you have 10 different sizes that are all in roughly the same bag. Being able to run one test and then enroll all of those products with a single test can drastically reduce the amount of time it takes to enroll. So that's number one. And then number two, from an overall product portfolio, we now have a one-click report You can see that entire list of ASINs, certified dates, eligibility, as well as general portfolio analysis. Why this is so important is it makes it really easy for you to see highest costs or highest benefits from an ASIN perspective and then really make a decision on which ASINs you want to start with so that you can be making the best decision for your business when you start participating in SIPP. Michelle Barnum-Smith: Alright, so like maybe one of our listeners right there is all ready to go in this program. Where do they go to get signed up and what's the process? Speaker 1: By thinking about ease of use and mind and speed, we have four easy steps to get enrolled, but taking a step back from that, we've actually identified a number of different ASINs and products throughout our fulfillment network through different attributes, machine learning, and have used AI modeling to already enroll some products within the network. So you might find some of your products are already enrolled, and you can see all of that through Seller Central. But for ASINs that you'd like to maybe think about enrolling or maybe you're not sure where to start, the first is just understanding your ASIN portfolio. And again, we have that one-click report. We also have ASN family groupings that can coordinate that list for you and give you an idea on where you might want to start. And some of your products might be very easy to convert or maybe already compliance day. So start with just the product portfolio analysis. Really grouping those products together to make it as easy as possible. So identifying those ASINs that can be similar, that are within a certain weight range, certain packaging type. And we have different requirements that are outlined both on our website as well as within Seller Central. So again, trying to make it as easy as possible for you to navigate and know where to start. And then from there, once you've identified your ASINs or your grouping of ASINs, Testing. We want to make sure that each product is tested to withstand e-commerce fulfillment. We want to make sure your products don't get damaged for your damage rates, obviously for the end consumer experience. And two things to keep in mind, if it's less than 50 pounds and then also not sharp, not fragile, and not a liquid, it's eligible for a self-test, which is a great option because it's free. So we all love that. And it can easily be done. You just submit the video and test results, and then we can certify it through our lab. If it doesn't qualify with those requirements and it is fragile, liquid, sharp, it does need to go through an ISTA-6 certified lab and we do have resources both on our website and then additional areas that we can help if for some reason you're not familiar with that type of testing process. Michelle Barnum-Smith: What kind of materials can the outer packaging be? Like obviously cardboard boxes and stuff like that. And you said something that's not sharp, so I can't have like a wooden, you know, probably box. But then like, for example, I, in this Coffin Shell brand, I've got this bat shaped bathmat of all things. And obviously, that's not fragile. So that to me, that would be a candidate. Would that qualify? Or does that not? Speaker 1: So if we segment like two things to consider, You've got rigid packaging, and then we've got flexible packaging. And for rigid packaging, it has to be six-sided. The box has to be sturdy enough. So again, through that testing process, is that corrugate or whatever the material is strong enough to protect the product? And a lot of this is also what's on the inside of the packaging, right? So thinking all of that in mind as you're designing When we think about flexible packaging and also rigid packaging, sealing is critically important, right? We want to make sure that package isn't coming open and we don't have your products coming apart or out in a fulfillment center. So that's probably one of the most critical pieces. And then when we're looking at flexible packaging, we think about protrusions or cutouts and different things that Don't lend well for e-commerce fulfillment. I also think about Funko Pops, right? You're a big Funko Pop fan. So is my son. Think about that cutout window, also with Funko Pops potentially being highly collectible. Those types of products you might want to put in an additional box or maybe not enroll in part of the program. But when we talk about flexible products, those soft line products where it meets all of those flexible requirements. Michelle Barnum-Smith: Can you define that for me? You just said a word that comes out in news. When I read Amazon, it was the first time I had ever heard hard line products and soft line products. And the first time I looked at it, I was like, what the heck is this? So just real, real quick, can you explain hard line, soft line? Speaker 1: So I guess soft lines, very layman's terms, if you think of something soft, think of a t-shirt, think of a bath towel, think of something that is kind of apparel in that end. And those products tend to be highly bagged or flexible product packaging and also at really low risk to damage. So great candidates for our program. I would just note, we do advise opaque packaging just for, again, concealment, customer privacy, and then also a great way to showcase your branding on maybe some opaque packaging. And then hard lines, you think of more the toy example, maybe heavier, bulky items like furniture, which can give you a bigger cost savings since it's going to be higher on that tier structure. So Also great candidates for the Ships in Product Packaging Program. Michelle Barnum-Smith: So after all the, you know, done the evaluation you talked about, did the testing and everything, ready to go, where's the actual enrollment place? Speaker 1: Yeah, so again, Seller Central in the SIPP app. Super easy. Once you've gone through all of that, you have your testing ready. Just bulk upload and you can enroll, especially if you have that larger list of ASIN groupings. Maybe you're enrolling 100 ASINs or more at a time with that one test report. So again, that ease of use and efficiency. Michelle Barnum-Smith: Would I need inventory to already be at Amazon to be able to do the enroll? Or like, let's say I just have a brand new product. I haven't sent the inventory in. Do I need to wait to enroll that one? Speaker 1: Yeah, we do need the test and certification because we do credit you upon inbound, so it would need to be certified prior to inbound. Michelle Barnum-Smith: Yeah, otherwise I already paid the other fee. Speaker 1: Yeah, because also if you think of it, maybe a test fails, you might have to look at redesigning or maybe it's just a simple seal that needs to be updated. It would be best to redesign that before sending into Amazon so that you get the full benefits I'm all the hard work that you've done through that redesign process. Michelle Barnum-Smith: So, there you have it, guys. This is a program, you know, sometimes you pessimists out there are like, oh, no, Amazon only wants to add more fees to us or, hey, guys, we just had a full episode. We're talking about a program that can actually save you fees and actually, you know, for sustainability as well. So, guys, this is definitely worth taking a look into. I assume if anybody wants to get like some extra questions, they can just like type in SIPP like in Seller Central and, you know, a bunch of documents and things will come up, resources. Speaker 1: Yeah, so SIPP is accessible through the sustainability hub within Seller Central. And again, we also have our SIPP dashboard and app. I do just want to highlight that when we talk about sustainability and also the value to your end customers, customers are asking for this, right? In a consumer survey, 69% of consumers have been thinking more about sustainability over the last two years. 80% are looking to make more sustainable purchases and 80% are actually willing to pay more for sustainable brands. So when you think of this in mind and the value of decreasing costs, increasing your brand awareness and your brand presence with consumers and also meeting the needs and desires of those consumers where they're at with sustainability, it kind of brings everything around full circle. Michelle Barnum-Smith: Awesome, awesome. Well, thank you so much for joining us today and let me know your stories, guys. How many of you are in this program already? Drop your experiences in the comments below and in a few months from now, you see one of us at a conference. Are you going to be at Amazon Accelerate, I assume, later on this year? Speaker 1: Yes, me and my team will be there. Michelle Barnum-Smith: Come up to us and let us know that you found out about it from this podcast and let us know how it's been for you. We'll see you guys in the next episode. Speaker 1: We'd love to hear your stories. Thanks so much. Michelle Barnum-Smith: Helium 10's got over 40 tools for e-commerce entrepreneurs. I know how overwhelming that might seem to try and figure out how you're going to learn how to use everything or maybe even to know which ones you want to get started with. So for a completely free course that's going to guide you through learning everything you need in order to become a Helium 10 expert, visit the Helium 10 Academy. That is h10.me forward slash academy.