Amazon News: AI Listings, Tariff Landmines & FBA Space Cutbacks

Amazon News: AI Listings, Tariff Landmines & FBA Space Cutbacks Unknown Speaker: Welcome, fellow entrepreneurs, to the Amazon Sellers School podcast, where we talk about Amazon and how you can use it to build an e-commerce empire, a side hustle and anything in between. And now your host, Todd Welch. Speaker 2: Hello, hello. How's it going, everybody? Another Friday is here. Got my Amazon Storage Pros brother, Jackson Trigg, on the episode with me today. So we're going to be holding down the fort. Everybody else is out of the office today. So looking forward to diving into some good news with you guys out there. If you're watching and you have any questions, comments, concerns, throw them in the chat and we'll be happy to bring them into the show. So, of course, what are we going to start off the show with? Can anybody guess what the hot topic is right now? Of course, we've got tariffs going on like crazy. And we've talked about this a little bit already in the past, and Jackson and I were talking about the fun tariff issues that we're dealing with, with businesses that we work with. Everybody's kind of struggling trying to figure out exactly what we're going to do. I've got a client who gets a lot of his products from China, a good amount from other places as well, but a lot of them from China and he actually white labels one of his products. For a customer and their bill went from I believe it was $3,000 to like almost $8,000 with all the tariffs and everything. So of course, they're like, well, doesn't make any sense to even bring those in at this point. So it's really going to start hurting the economy and really start hurting businesses and stuff out there. So you've seen some issues over there as well, right, Jackson? Speaker 1: Yeah, you know, in my world, it's just like, we're on the cusp of figuring out how hard is this going to hit? What's it going to look like? What are the exact numbers going to turn out to be when it hits port? We've got an LCL that's about a week away from delivery and another full container load that's, I think, just got on the water a couple days ago. So, you know, we are basically in a position with this one brand where we got to keep selling and thankfully we're a high margin higher price point product where you know we can survive sort of with with the tariff in place it's just like annihilates cash flow and and makes things challenging but hopefully the storm weathering period is not going to last that long. And yeah, maybe we'll see what happens in Switzerland in the next few days, if anything. Speaker 2: Yes, for sure. So let me read this article here real quick, which I went away from accidentally, but So this is a post that we're talking about here from Gary Wong. And it's tariff workarounds that could get Amazon sellers in serious legal trouble. So, Gary warns Amazon e-commerce sellers against following illegal tariff workaround advice being spread by some suppliers and online forums. Common tactics like under-declaring invoice values, falsifying country of origin, and misclassifying HDS codes are actually federal crimes with penalties including audits, fines, and even prison time. So, got to be careful there for sure. Gary emphasizes that U.S. Customs is ramping up enforcement with algorithms and whistleblower rewards, meaning the risk is higher than ever. For Amazon sellers, staying compliant is non-negotiable. There are legal strategies to protect profit margins, but fraud is not one of them. Really awesome that you guys have a high profit margin, high enough to kind of eat this right now, but obviously that's not something you want to do long term. So hopefully this will be going away sooner rather than later. And just to give you guys some of the breaking news right now, we asked Grok What the latest talks are, latest news on the tariffs with China. So it looks like China has agreed to meet in Switzerland to start discussions on the reducing the tariffs and figuring out some kind of trade deal. I think a big part of that is probably because the UK has brokered a deal with Trump, which Trump announced yesterday. Maybe not that big of a part of it, but it's definitely a part of it because now that the UK is done, the rest are just going to start snowballing and at some point China's going to have to come to the table. Do you have any thoughts on that, Jackson? Speaker 1: Yeah, it's fascinating to watch it all play out. I'm trying to keep up on the news and I've got my favorite YouTube channels that I perceive as non-biased and just kind of giving the information. It really does seem like we're just in like a historic era shift right now where it's like, however this all plays out, whatever it turns out to, it's like the end of one era and the beginning of a new one when it comes to how the world is going to work together with regards to geopolitics and trade and all this sort of stuff. I just hope that it all works out in a way where the Chinese people get a good deal out of it because it disrupts the CCP. That's kind of where I would like to see things go. But yeah. Speaker 2: Yeah, I mean, honestly, a fair deal all around would be ideal. But it looks like in the deal with the UK, Trump is sticking with the 10%. Speaker 1: Yeah. Speaker 2: As a like the floor. So that's going to be his floor, even in the negotiations. So there could be some, you know, Reality to his wanting to eliminate the income tax in favor of the tariffs, which personally I think the result of eliminating the income tax and doing the best that you can to replace it with tariffs and other taxes and such would be an economic boom for the United States for sure overall. Speaker 1: Yeah, no, I agree there. Like that's, that's the trick is can you, can you arrange the system in a way where you can, you can cancel the federal income tax for whatever, you know, everybody under 200 or who knows if they're, if they're saying everybody under 200,000 so that when it comes to all the politicking that can be like, you know, everybody under 150 or everybody a hundred and under or something like that. But whatever the case, it certainly would, would, increase confidence and a lot of people wanting to start up small businesses here and you know, just people feeling a lot more confident and in a lot of ways, it's like, well, if you're not losing 15 to 20 to 25% of your income to taxes, Then you will immediately be like, well, I have 15 to 20 to 25% more buying power. So stuff goes up in price a little bit. It's not really hurting me. And if I choose wisely and how I steward my spending, I can even come out on top, right? So, you know, I agree with you. I think that would be really positive. But the sooner they can, they can get it to that state, the better, right? Because How many people who are anti-Trump or anti-right or whatever are just going to not be able to argue with the benefit of their taxes coming down when the time comes and be like, hmm, well, I don't like them, but I'm okay with this, right? Speaker 2: You would think. There's seemingly more and more politicians out there that are in support of publicly wanting to increase taxes and being against any forms of tax cuts. There's been a lot of people that pretty strongly came out against no tax on tips and no tax on overtime and all this. I'm not sure how you can be against those kind of exemptions. That's like working class people that are getting those exemptions. Speaker 1: Yeah, it's very bizarre. Speaker 2: Yeah, for sure. Speaker 1: Yeah, it's all it's very interesting time and to be alive. Speaker 2: So yeah, a couple other pieces of news out there. So Trump was talking about possibly reducing the tariffs for China from 145% down to 80%. which is better, still definitely not where ideally they would be. I don't think no matter what happens, China is going to be as low as everybody else. I got a feeling their floor is going to be somewhere around 25% tariffs regardless because the goal is no matter what to try to push people away from China and diversify supply chains. Speaker 1: Yeah, I agree. I think it's going to be a much higher floor long term just because it's like, you're, China's whole economy is so based around product manufacturing that, you know, it's a messy situation, right? Like I feel for the people that will be impacted negatively by it over there, but it's one of those things where If all you have is like cities full of factories, you're not going to be incentivized to repurpose anything until it's not economically viable to, you know, to not, right? So it's like, it's just one of those things where, you know, things have been entrenched the way they are. And now the only way to unentrench them is with some, some brute force, which, you know, agree or disagree with it. I do think that something needs to change. Speaker 2: I agree and disagree with it. It's complicated. You have to have the ability to hold more than one thought in your head, opposing thoughts at the same time to be able to I really hope it gets worked out quickly because it's the small guys who are going to get hurt first. The big companies, Amazon's going to be fine, Walmart's going to be fine, Apple's going to be fine, but Joe Blow selling on Amazon and his products are made in China. He can't as easily move his factories around or negotiate with Trump to get some kind of an exemption like Apple did. Speaker 1: Yeah, that's I do feel for people that, you know, are all in China with their whole catalog, or maybe just starting up and like, worst of the worst is like, you just decided to start an Amazon business late 2024, put in your first order, paid your deposit, and then it's like ready to ship after the tariffs came in. And you're like, I can't make any money now. What do I even do? Right? That's a nightmare. Um, But yeah, for those of us that you know, we've got diversification already to some degree in different countries can kind of survive it and yeah, hopefully it does resolve quickly because yeah, there is going to be it's one of those. The light bulb getting invented and all the candle makers are caught with their pants down kind of situation, right? Speaker 2: Yeah, yeah, yeah, for sure. A couple other things here that I seen, the US imports from China have already dropped by 50% and they're projected to decline another 75 to 80% for 2025. China's factories are closing with a potential 16 million jobs lost. And China has already exempted some US goods like pharma products, microchips, aircraft engines from their tariffs going into China. So they're starting to, you know, there's some cracks in the levy, so to speak. Speaker 1: Yeah, that's for sure. Speaker 2: But then they're also, it looks like they're boosting their economy with stimulus. So they're, you know, dumping money in. Kind of like we did in 2008, if you remember, we just I threw a bunch of money at the problem and hoped that we could keep the balloon from deflating. And there are four Chinese exporters that are planning to resume US shipments here soon. So I think it kind of shows that there's some cracks in the wall of China saying that they wouldn't come to the table, right? Because in the beginning they're like, we're not negotiating. They're starting to come to the table. They're just trying to do it in a way that they can make it not look like they actually came to the table, right? They got to make it look like they won. The US has to make it look like we won. Kind of thing. So it's going to be an interesting deal for sure. Speaker 1: Definitely. Everybody's got to exude strength. So absolutely. Speaker 2: Um, let's go ahead and jump onto this next one here, which is, uh, I'm going to jump to Steve Chu cause this is also kind of related to tariffs and stuff. So let me jump to that article. So this one is why Chinese sellers dominate Amazon and what US sellers are up against. So over half of top Amazon sellers are now based in China, up from 30% in 2015. And it's not just about lower prices. Steve Chu highlights how Chinese sellers avoid U.S. taxes, tariffs, and liability insurance while operating from subsidized hubs that support black hat tactics and rapid account relaunches. Meanwhile, U.S. sellers face high taxes, rising compliance costs, and stricter account enforcement, putting them at a massive disadvantage. Chu calls for mandatory U.S. entity registration, visible seller origin, yeah, visible seller origin, and stricter accountability to level the playing field. So this is, you know, you were just talking about this, how they have entire cities Set up and dedicated as factories. He's also talking about how in those cities they essentially have You know like we have classes how to sell on Amazon and create a private label product. They have classes on how to cheat on Amazon and they've got you know operation centers set up to launch Accounts and do fraudulent reviews and all this different stuff and And so it makes it really hard to compete on Amazon when you're dealing with that. I don't know if this is playing into what Trump is thinking. I don't know if he gets this much in the weeds of selling on Amazon. Maybe, hopefully somebody's in his ear on that. This is part of what needs to be fixed in any kind of trade deal when they actually do come up with something. Hopefully, this is something they're talking about. Because like he says here, the Chinese companies, they avoid the income taxes. They figure out ways to avoid the tariffs. They don't really worry about the liability insurance. They have no liability. If one of their products hurt you, there's nothing you're going to do about it. Then they get banned. Their accounts get banned. If you're a US seller, you're going to have a lot of trouble. You're not creating another account. Speaker 1: Yeah, you need to have fake identity to log in new accounts with. They're going to figure out who you are, just IP and address and everything, right? Yeah. I wish I could say I hadn't had first-hand experience with being attacked by one of these You know, government helped hubs of Amazon cheating. But no, last year, a brand I work with launched a new product line beginning of last year, so about, you know, 14 months ago. No, it was January in 2024. Anyway, It was three different product lines. One of them came out the gate strong, number one new release, all that sort of stuff. And immediately after we started getting traction, the hijacker offensive came relentlessly, just utterly relentlessly. We had four different variations of the product. We had at any given time somewhere between two and five different fake accounts selling two or three of the variations, you know, doing the classic move where it's like two, three dollars lower. With shipping times that are obvious that it's being drop shipped if they're even going to ship anything at all and not just cancel the order, right? Just basically annihilating listing. It went on for about four months and then we could never get the listing back, right? Like the reviews were bad. We didn't totally die on reviews, but whereas like all the competitions like 4.6, 4.7 were down stuck between like 4.3, 4.4 because so many people got, you know, knockoff products and didn't contact us and just left a bad review. And then it's just the, you know, the BSR impact because when your listing goes from selling 20, 30 a day or whatever it is, to all of a sudden that SKU is selling or that ASIN is selling like two to some fake scammer that then cancels the order. It's just like your listing dies, right? The fault of the brand was that the primary owner, he filed the trademark well in advance, but unfortunately he filed the trademark tied to a product line that hadn't been launched yet, that was still in development. So by the time we really, really, really needed like brand registry to give us some level of power to try and kick these guys off. The trademark got refused by the USPTO, right? Because it was like, you don't sell this product. And there was no coming back, they had to file a new one. And it was like, well, by then it's too late, right? So But it was horrific. Probably, so over the course of that four months until they finally left us alone, I think we cycled through somewhere between like 12 and 20 different fake seller accounts that just would pop up one after the other. You know what I mean? Like, I bought probably like, I test bought maybe like six units across that whole time. It's just a waste of time. It doesn't do anything. Amazon won't honor anything. It doesn't matter. And then by the time you actually fight Amazon on a case to get these guys blocked, they basically leave of their own volition after you've ordered from them and given them a negative feedback so that everybody can see their account as like one star, you know, their seller account. Then they just give up and start a new one. And it's like, you can't do anything. So that, that one thing alone, if a trade deal could somehow prevent that, like I'm with, I'm with, Mr. Wonderful, you know, on this stuff where it's like his issue is you can't, there's no legal recourse with bad actors in China. And that's the thing that needs to be figured out. It's either Chinese sellers cannot sell in the US. And it just needs to be like, yeah, you can manufacture, but you can't be a seller based in China because there's too... Speaker 2: Hey, Amazon sellers, tired of losing money on storage and shipping fees? Well, Amazon Storage Pros is here to take the headache out of logistics. We manage everything from inventory and creating efficient shipping plans to working with 3PLs and Amazon's AWD so that you can focus on growing your business. Start with a free storage cost audit and discover exactly where you're overspending and how to fix it. Don't let logistics eat into your profits. Visit AmazonStoragePros.com. That's AmazonStoragePros.com to get your free storage cost audit and start saving today. And now back to the show. Speaker 1: It's just too, you need to get special like, like you need to jump through certain regulatory hoops so that you are liable if something goes wrong. And that's the only pathway to actually becoming a seller, right? If you're based in China, something like that. You know what I mean? Speaker 2: I don't know. Yeah, you it's it's hard. Because there's so many different loopholes that they could jump through. But at a minimum, I think you need to have some kind of US presence and not just an LLC in Delaware, but a physical person who's in the USA with an office or a location or something that Can be held liable for whatever products, you know, maybe you require some kind of like a social security number or something like along those lines. I don't know. It's hard. There's no clear solution on how to fix that, but it's definitely true that I had the same issue, not quite as advanced, but We were selling a product and a hijacker jumped on from China, Chinese account. I click into their account and they're selling like 200 products and I looked at a bunch of them. Speaker 1: They're all hijacked of all different brands. Speaker 2: All private label products that they're selling for half the price and they have like 10 negative feedback on their account. It's like, why is Amazon just allowing this obvious? Speaker 1: It's so obvious. Yeah. Why is there no automatic AI that can figure that out when it's so obvious? You know what I mean? Speaker 2: So obvious. I mean, if you're selling a hundred products that no one else has ever sold on and you're selling them at half the price that they've ever been sold. Speaker 1: With a 21 day shipping turnaround time. Speaker 2: Yes. Speaker 1: And your account is with no feedback, you know what I mean? Or has two negatives or something like that, yeah. Speaker 2: Yep. Now for us, we did have brand registry, which it helps a little bit, at least you can open cases. So we did do test buys and we had to wait for the product to come. So that's like two weeks. And we did finally get the knockoff product and I submitted it to the case. That person got removed and then a new one came on with a different, you know, 20 character long name, all random letters. Did another test buy, got that one, got that one removed. And so this was over a month later, finally they're gone and no one else has since jumped back on and we're working on getting that product into the transparency program. Which should stop it. I've heard some horror stories of people getting around that as well, but it should stop it. But it adds an extra five cents for the barcode or the unique number from Amazon. And then you got to print a barcode and slap it on or have your factory put it on or whatever. So that's an extra 25, 30 cents in labor right there that you're adding on to your product. So it's very annoying. That's at least one solution. Any of your other brands that you work with, do you guys do anything to try to prevent hijackers? Speaker 1: Now really at this point, I haven't been doing in recent years any startups aside from that one last year. I used to kind of specialize with little startups and it was like, yeah, you had to get brand registry ASAP, otherwise you're totally liable to get hit by this if you have any success. The only other strategy really, I think it's kind of like, it's the same thing as As Mr. Wonderful talks about, why am I forgetting his last name right now? Speaker 2: Kevin O'Leary. Speaker 1: O'Leary, yeah. His angle is like, as soon as you get past this certain sales threshold, All of the, you know, competition copycatting comes out after you. And I think on a smaller scale, if you show any signs of becoming a threat to established, you know, Chinese brands in any specific niche where it's like you show up and you are, you know, unique enough, different enough, Whatever it is that you get a little bit of attention to the point where it's like, oh, crap, they could take 15, 20, 30 of our market share, you just get dogpiled, right? So the strategy is, find a niche you can go into. And you don't need to be in the top 50 of sellers of that product subcategory to be a success, right? Find a niche that's big enough where If you are somewhere in like the top 90 to the top 300 of that BSR subcategory, you'd still be fine. Because then you're going to be off the radar of like the evildoers. Speaker 2: Yeah, yeah, yeah, that's a good strategy or try to find a category, a subcategory that doesn't have that much Chinese competition, which there are some out there. They're getting harder and harder to find, but using a tool like SmartScout or something, you can find those categories. That have lower percentage of Chinese sellers. Yeah. You know, obviously, like vitamins and stuff is one, but that's a brutal one in and of itself. I think even the US sellers are doing the black hat on that one. So just because you have to to be able to survive. Speaker 1: Yeah. Speaker 2: Yeah. Speaker 1: I think, you know, if you're one of the things that's a benefit, you know, long term of what's going on trade wise is it definitely is opening the door to Different strategies of how to source, whether that's, you know, figure out how to make it in the US. If there's, if it's a product that you're, of your own devising, right? Like 3D print stuff to test things. I don't know. Cause it, you know, some things, if you're bringing unique stuff to the market, if it's not already got a mold made for it and China is no longer viable, then making the mold somewhere else can make sense. Right? Speaker 2: Yeah. Yeah, yeah, if you're able to, but it's not cheap to make a mold. That's for sure. Speaker 1: It's been my opinion that it's been many years since you can realistically start an Amazon business with like 10k. You know what I mean? Speaker 2: Yeah, it depends on the niche that you're in and what size of a market you're going at. There's some niches and markets that you could get away with $10,000, but you're not going to be selling millions. Speaker 1: No, yeah. You're not going to make a living off of that business for a long time until you scale it up, right? Yeah. Speaker 2: But if you're going for the big leagues and you're looking to build something big, yeah, definitely going to need more I would say maybe $50,000 kind of minimum, $50,000-$60,000 you'd be able to get away with. Because you got to be able to make your first purchase, $500,000, $1,500, whatever you need. And then if they start moving quickly, You've got to be able to make that second purchase and get it on the way before you run out of stock, obviously, right? Before you run, you get all of your money back. So you got to have enough to make the first order plus the second order plus carry your business in that timeframe. Speaker 1: Plus market. Speaker 2: Plus market, yes. So it definitely is going to take a good amount of money, 50, 60,000, I would say. For you to do it correctly, you could get away with 10 to 20,000, it's just going to be a lot longer haul, and a lot slower growth. Speaker 1: And you probably with that budget, you'd be looking at like, you got to find products that are under 50 cents a unit if you're going to scale anything on it. You know what I mean? Speaker 2: Yeah, for sure. Yeah, absolutely. So Chu mentioned here, his solution for Amazon was to publicly show seller country of origin. Dane would agree on that. He talks about that all the time, that Amazon used to have that and they took it away. That's one thing I like about Etsy. When I shop on Etsy, you can turn on, only show me products from the USA. It's not country of origin, but it's only sellers in the USA. Speaker 1: Yeah, I have a habit now where it's like if I'm looking at something and I suspect it's like totally Chinese business, I check their, you know, their seller account and go, Oh, okay. They have a normal sounding LLC name and they're based in Florida. I'm okay buying from them, right? They're going to actually have customer service and I'm not, you know, funding anything negative in the world, so. Speaker 2: Yep. Yep. For sure. Yeah. And make foreign sellers register US entities for tax and legal compliance, which we mentioned is definitely to be required. Speaker 1: Yeah. There has to be legal compliance. That's the main issue, right? You can't just be a bad actor with no consequence. Speaker 2: And it has to be more than just opening up that Delaware LLC, as I mentioned, because that's just the common thing that foreign entities do to be able to funnel money around and things like that. Speaker 1: It'd be pretty crazy if Amazon could set up some sort of system where it's like if you create a fake account and I'm sure part of it is it's just like impossible to properly police on Amazon side too, because it's like just knowing from experience of that other story, it's like, guaranteed, the guys that are doing the hijacking, they're not making any money, right? Like this is a funded exercise where these accounts They have some sort of bank account tied to them that can handle, you know, taking in cash from fake sales and then refunding it at a loss for some amount of time for some amount of units until it's, you know, that's too much. And then they start a new one or whatever. Right. And it's like, so when I was dealing with that, it's like, there's some budget that they have, there's some service that they're paying for some entity that's operating this. And it's like, pay us $5,000 and we'll hijack them for three months or something like that. You know what I mean? Speaker 2: Yeah. It's like you mentioned in this article. In those factory cities, there's these companies that do the black hat tactics for you. If I put myself in their position and I'm a factory in China and I've got one of the top selling products for I don't know, a tennis racket. And I see a US company starts coming up, taking some market share. Well, I'm going to go over to this company over here and say, hey, can you help me take those guys down? And that company is like, yeah, sure. We'll spin up some accounts. Put up fraudulent goods and we'll tank their reviews and tank their speed of delivery, which is going to tank their BSR and they take care of it. That's just the part of doing business in China, which we've talked about before. There's a lot of corrupt people in the US and Europe. But if you look at the culture of Europe in the US is built on Christianity. Speaker 1: Yeah, rule of law. Speaker 2: The Bible, Jesus, do unto others as you want them to do to you and do the right thing, don't sin, and things like that. That's the groundwork for our culture. And in China, they don't have that. They're much more anti-religion. They try to shut it down, kill people if they get Too big in religion and stuff like that. And I think they don't have that culture basis that we do. Speaker 1: I think the saying goes, the only sin in China is to not make money. Speaker 2: Yes, exactly. So it's a business part of their business culture is to lie, cheat and steal, right? It's not necessarily frowned upon in their culture. Speaker 1: Yeah, so anyway, that that's the biggest thing, right? Is it's like, if you're, if you're acting fraudulently, there needs to be some sort of mechanism to punish that. So it's like, if you're a company, and you're charging people five grand per quarter of hijacking or whatever it is, or whatever bad action, if your company can be sued, and have to pay damages, at least that's something, right? Speaker 2: Yep. Yeah, definitely have to do something. You know, you mentioned that you click over to the account to make sure it has a US address of some kind, which I do that as well. The next step beyond that that I do if it's like an important purchase is I look at their customer service slogan that they have in there and see if they changed it from the default. Speaker 1: Yeah, yeah, yeah. There's that too. I'll actually search up their LLC if it's ambiguous and it's like, this could have been a Chinese company trying to make themselves look like an American company. I'll look up the LLC and see if they have a website and all this other stuff and yeah. Speaker 2: The website, yes. I definitely do that for everything that I buy for our baby. I definitely don't want to buy anything that is not from a reputable US-based company. Even when it's a US address, I still jump over to their website, look them up, throw it in the X or in the grok, I should say, and ask, who owns this company and stuff like that. I have found times where it's like, this company is owned by this shell company that's owned by this company in China. It's like, okay, I'm not buying that one. It definitely happens. They get sophisticated, but at least when they get sophisticated like that, they've got a US presence that can be held liable if their products cause harm. Still, I'd still rather buy from someone who's actually in the US. Speaker 1: No doubt. Yeah. Even if they're ordering from China, you know, it's, it's just the, you have a secondary level of, you know, some trust society filter for, you know, dealing with any problems that could happen, right? Products we work with, it's like, hey, if someone has a problem, doesn't matter if we made it in China, they got to deal with us and we got to help solve their problem, right? Speaker 2: Yep, exactly right. Speaker 1: It's not always as simple as, okay, we'll refund or okay, we'll send you a replacement. You know what I mean? Sometimes the problems are more complicated than that. Speaker 2: Yeah, for sure. All right, let's go ahead and jump on to the next story here. So Amazon's newest AI tool aims to improve product listings for sellers. Amazon has released Enhance My Listing, a generative AI tool that suggests improvements to product titles, descriptions, and attributes based on seasonal trends and catalog gaps. Sellers can accept, reject, or edit these AI-powered suggestions to streamline their listing updates. The tool is powered by Amazon Bedrock and is rolling out to US sellers with over 900,000 already using Amazon's generative AI tools, most accepting content with no edits. For Amazon sellers, this could save time and boost listing quality, especially across large or seasonal catalogs. So shifting away from the tariffs here, not to kind of drag us back into that, but A majority of Amazon sellers are accepting the AI with no edits. I can imagine that 60% of the Chinese sellers, 60% of sellers are from China. They're probably just accepting everything that the AI is telling it. They're like, hey, we have actual real English in our listings now, so that's good. Speaker 1: Yeah, it's funny. I actually don't really have any problems with this because you remember when I shared those images A while back when Amazon was doing experiments without people's consent. And doing those weird like labeled images where they were describing a completely different product and pointing to a feature of one product. And it's like, no, that makes no sense. And so I don't really have a problem with this if it's one of those things where it's like, hey, you can elect to not use it to use it or to edit it as you please. Makes perfect sense. This is like the proper way to use AI where you're making it like an option to improve things. Whereas if it's something where they're like, oh, What would normally be Amazon is Amazon has introduced an AI feature where it's going to automatically update your listings as it sees fit and you can do nothing about it and you don't know when it's going to happen. So moving away from that is great. Speaker 2: Yes, I agree with that 100%. The statistic here though that 90% of the time merchants accept the AI generated content without any edits. That makes me nervous a little bit for anybody who's actually serious about their Amazon business. Speaker 1: Yeah. Speaker 2: Because I can guarantee you it messed up something in your list. Speaker 1: It makes me wonder if this is like mostly being rolled out with like Vendor Central or something like that. Because I haven't seen it in any account I'm working in. I haven't been getting any sort of like, here, try our AI rewritten listing. It's not popping up. You know how Amazon always has to kind of put things out in phases across accounts. So I haven't really seen it yet. Speaker 2: Yeah, I haven't seen it on my account either. I should actually try editing a product right now live and see if it pops up for me. One cool thing that I have seen, well, cool in quotes, is that the error messages are getting much better and Amazon has implemented the AI into the error messages. I don't know if you've noticed when you update the title, if it doesn't meet their requirements, it will say, hey, you've got the word for in here too many times. Speaker 1: Yeah, I have seen that. Speaker 2: Thank you AI, I appreciate that. Speaker 1: Yeah, it's super annoying when there's an error and it doesn't tell you where or how to fix it. Yeah. Speaker 2: Yes. Yeah. So that has been nice that it actually instead of because in the past, you know, you'd make a change and you'd save and it just wouldn't go live. Speaker 1: Yeah. Speaker 2: And then you got to open up a support ticket. And it's like, what's going on here? We don't know. And they'd look at it. And then maybe they'd be like, Oh, maybe it's this kind of thing. But now that the error messages are getting much better with specifically like, this is what we don't like and that you need to fix. That's nice for sure. Speaker 1: You don't have the edit attribution rights to this listing, even though you made it in your account two years ago. Speaker 2: Yes. And your brand registered and everything. Exactly. Speaker 1: Yeah. You're the brand owner, but you can't change your listing. Only this person can that has never done anything with this listing. Anyway. Speaker 2: Yeah, nine times out of ten when you run into that where you can't make a change, usually it's Amazon Catalog that made a change without your permission and so now they have control. Speaker 1: Yeah, now they have to read and write. It's so stupid. Speaker 2: Yeah, you got to wrestle that back through a ticket and usually they'll give you back control of it if the change you're making is legitimate. Like I had one just yesterday that I had to change because I seen that one of the products we sold was in the voice of the customer and had several returns because it was the wrong size. And so I went in there and looked at it. And in my back end, I had it entered that it's a one ounce bottle of this paint that we sell. But Amazon catalog had changed it to 16 ounces. Speaker 1: Yeah, that's terrible. Speaker 2: So I had to open up a case and everything and they said they were changing it. I haven't checked today to see if they've actually updated it. Hopefully they have. But yeah, situations like that are gonna happen and that was very likely maybe AI that did that suggested that change to somebody in catalog and they just clicked accept and made the change. So that's why you gotta be careful. These AI tools, which I am not seeing, I'm editing a listing right now that we have brand registry for and everything and there's no button in my account currently. To update it with AI. So it's definitely being rolled out across the counts, but don't accept it without reading it. If you're out there updating your listings and you're listening to this, be smarter than 90% of the other sellers that are out there and actually make your own edits because I can guarantee you there's probably mistakes. It's definitely not CO optimized because Amazon does not care about Making sure your product is 100% search engine optimized. Speaker 1: Yeah. Speaker 2: Um, they're just trying to make things the best for them, not necessarily the best for you. Speaker 1: Sorry. Speaker 2: No worries. So very important that if you're using these AI tools, always check them because they get them wrong. ChatGPT gets stuff wrong all the time. Grok gets things wrong. Amazon's going to get things wrong. So pay attention to what they're actually doing for you. If anybody out there watching actually has this edit tool in their account, shoot us a comment and let us know. Speaker 1: Yeah, it'll be interesting to see. All I still have is the improved listing quality, a little notice on the left side where it'll tell you which fields you haven't filled out, which you can deem are important or not, right? Speaker 2: Yeah. Now, that's one area where this would be even cooler. If you have a lot of products, if you're a good seller, you probably take the time to make a really good title, bullets, description. But you may not necessarily go into all the other little detail things that you should fill out. So that is one area. If you could say, hey, AI, just fill in everything that's blank for me. Show me what it was. And I can hit approve, you know, if everything is correct. That would be very helpful because it is a pain to fill in all those little optional fields a lot. Speaker 1: Yeah, yeah, exactly. Yeah, and if there's some of them, it's like, I don't really care about like, I've got one in front of me right now. And it's like, okay, it's asking for the unit weight and the item weight. And it's like, Hmm, I don't know how relevant that is to anyone buying it. You know what I mean? Like, it's technically already in there in a different field, blah, blah, blah, right. But yeah, but whenever whenever it's something that could have potentially have some SEO benefits, it's like, hey, why not? Yeah. Speaker 2: Yeah, yeah, I've got some products that, you know, keep telling me that I need to make an update to them to improve the listings. And they're products for a boat. And it wants me to enter which phone model it's compatible with. Speaker 1: I know that this subcategory sometimes has fields that that would make sense maybe, but no. Speaker 2: Yeah. And I put NA in it, like not applicable, but it doesn't remove the reminder for me to fix it. Speaker 1: These are the types of problems you wish Amazon would fix, but they're too gargantuan of a bureaucracy to get to it, you know. Speaker 2: Yeah, yeah. Some things like that, I mean, I get those are little things to burden yourself with every little detail in a catalog like that. But yeah, just kind of annoying that you can't just click, you know, not applicable. Stop showing me this recommendation. Speaker 1: Yeah. Dismiss and go away forever kind of thing. Yeah. Speaker 2: So instead there's four of them that just sit there and I gotta scroll past them every time I wanna see if there's other recommendations that they've got. Speaker 1: Yeah, that's annoying. Speaker 2: Yeah, for sure. All right, cool. So let's go ahead and jump on to our last story here and I'll pull it up. Justice from Justice May here. So Amazon slashes inventory capacity ahead of Prime Day. So we're having these joyful events again. Justice reports that Amazon has sharply reduced FBA inventory capacity for many sellers just before Prime Day with some brands losing up to 40% of their storage and getting restricted from sending more stock after hitting 98% capacity. Amazon support has stated that they are not authorized to amend or escalate these limits directing sellers to use Amazon warehousing and distribution instead. May outlines key action steps for sellers, including checking the capacity monitor, disabling auto cancellation on size adjustment requests, and verifying product dimensions to reclaim space. This unexpected move, combined with recent tariff pressures, is tightening inventory flexibility when sellers need it the most. Speaker 1: Yeah. Speaker 2: What have you seen, Jackson? Anything? Speaker 1: So now, no, not trying to put in a pitch for myself here, but the accounts I work in, what I specialize in is managing people's storage and that sort of stuff, right? And the main accounts I'm working in, I've never seen higher capacity limits. You know what I mean? Like, it's like we're using like a tiny, you know, I could send you a screenshot right now. But for instance, I'm looking at one, and we're using 13.89% of our capacity and that's the older size. And in standard size, we're using 30% of our capacity. And we're like stocked for, we're not like low on stock. We've got a bunch behind at AWD as well. Another account, standard size only account, we're using 10%. I'm the CEO of RMAX Capacity. And we're like, well stocked, you know what I mean? With plenty behind in AWD. So I'm curious who this has affected. Like, I wish we could have some stats, like where it's like, is this randomly happening to people that have like really bad IPI scores or something? Or is it just totally random? Because I'm not experiencing it. I've not seen it. I'm seeing the exact opposite. So I don't know. Now, mind you, I think everybody's been being impacted by Amazon, like not letting you ship certain things into FBA if they deem it as having too much stock or something like that. But I still haven't been terribly impacted by that in any way that I'm aware of. So I don't know. You know what I mean? I think it sucks for the people it's happening to, but I don't know why it's happening because I'm not seeing it. Speaker 2: My capacity, I'm looking at one of my accounts, has definitely gone down because my standard size is at 30.73% usage right now. I believe it was at like 3% not too long ago. Speaker 1: Well, they might have been cut from these accounts and I'm just not paying attention to it because there's so little being used anyway, right? Speaker 2: Well, I do have a red exclamation point for apparel. So they shrunk my apparel. I'm down to 169.8 cubic feet and I have 202.81 cubic feet in Amazon currently. So it's definitely happening that they're decreasing the capacity. There's rumors out there that the reason for this Is because Amazon ordered so much extra capacity for their own products from China before the tariffs. And so their warehouses are filled. So they're, you know, basically making everybody else pay the consequences for it. Speaker 1: Yeah. So here's, here's my own statistical evidence. The account that has 10% of its capacity being used. Is it a 599 IPI score? And the account that's 30% on standard and 14% on oversize is at 534 IPI score. Speaker 2: Okay. Speaker 1: I think those are pretty high, speaking average wise. Speaker 2: Yes, I believe I am pretty close to that. Let me get over there and I'll see what my IPI score is because that is supposed to play A factor into it. Yeah, mine is down to 496. I need to get mine improved. Speaker 1: Yeah, that's so good. Speaker 2: Excess inventory. Speaker 1: But I guess my point is, is I would not be surprised if a lot of people who are losing 40% of their capacity are like 450 and under. You know what I mean? Speaker 2: Yeah. Speaker 1: Because it's not easy to actually have a really good IPI score because a lot of the time, depending on your On your, you know, catalog and your logistics situation, it's complicated to try and appease Amazon's, you know, inventory performance stuff, because sometimes, like, for instance, You know, like if your product is small and light enough, and you have to order a ton of it at once, it might actually be fine to just pay a little bit of long term storage fees for the simplicity of your supply chain. But then you're going to get dinged for that, even though that's the most cost effective, right? So yeah, it can be messy. Speaker 2: The other thing that's been popping up for people is Amazon, even if you have the space, if Amazon thinks you have too much of a product in FBA, they won't let you send in more to FBA. Speaker 1: That's what I was mentioning before. Yeah, exactly. Yeah. Speaker 2: Okay. So they're, yeah, they're forcing you to use AWD. Speaker 1: Exactly. I think, I think that's really the undercurrent issue is that Amazon, you know, aside from however they've managed their own stuff, kind of, you know, whatever, behind closed doors, heads up on tariff policy so that they could get a head start on things. Regardless of how overloaded the warehouses are, I think that's the move too, is that they're kind of framing it as like, how can we force more and more people into the AWD system? Number one, to gain market share in the 3PL business. Number two, just so that they have more control over your inventory for their own logistical efficiency, right? Speaker 2: Yeah, yeah. Yeah, for sure. So if you're dealing with this, you know, your capacity, as well as being restricted from sending more in, your main option is just to use AWD. Yeah, I guess number one, make sure you don't have like a ton of inventory that's excess. And if you do, I'm not going to pull it out if it's worth it or liquidate it or something like that if it's stock that isn't going to sell to free up space. But otherwise just use AWD and get it upstream so Amazon can send it in because if the product is selling through or it starts selling through faster because you know you're running a sales or a sale I should say, They're going to send the product over to FBA as soon as they're able to. Speaker 1: Yeah. One thing I've noticed too, Todd, is even because, you know, we all, we saw this all the last kind of like three, four weeks where Amazon started showing like blocked SKUs and then you look at the reason why and your AWD dashboard and it's like, This product is, you know, there's too much over here, whatever. The reasoning that they give, which used to be that COVID notice, right? I found that even SKUs that are blocked from auto replenishment, you can still manually send stuff and they'll send it. It's not like they're completely blocked it off from sending it all. So it's very possible that a lot of these products, that they're not gonna let you send into FBA and they're saying send to AWD instead. If you do send to AWD, you might just be able to funnel it in however you like, as long as it's coming from AWD. I don't know, so. Speaker 2: Yep, I haven't had to try that thankfully, but it's possible Yep, it's uh Yeah, you just gotta Work the system. I mean, it's it's where we're at I'm gonna force you to do stuff and That's what you got to do. Yeah, so what are you gonna do? Speaker 1: I'm using their power. They're using their power and. Speaker 2: Yep, yep, for sure. All right. Cool. So anything else out there that you've seen, Jackson, in terms of storage with the clients and stuff that you're working with? Speaker 1: Well, um, nothing really of note with regards to just the normal operations storage with clients. But I did have a call with the development team in the AWD space a couple weeks ago. And Um, I don't have any solid information. All I could get out of the lady was that they're hoping to have their capacity issues at AWD resolved before Q4 this year. So the same thing that happened last year doesn't happen again where it's like, Hey, get into AWD and then you can't. Um, aside from that, uh, it does sound like they're, Basically, from the type of questions she was asking me for feedback on relating to like how they charge prices and stuff like this, I suspect that AWD is probably not making money. And that is still sort of like in its own startup phase within Amazon's whole, you know, Corporate ecosystem. And so I think they're still very much flexibly trying to pivot their way through how to become a fully fledged operating service that can stand on its own two feet. And who knows what that'll turn into in the next months and years as they kind of take back more of the landscape of warehousing throughout the whole country. Not that they really can take back. It's like they're, I would be shocked if Amazon didn't have like the most warehouse space of any organization in the whole country as it stands right now. You know what I mean? So taking more really, right? Speaker 2: Yeah. Yeah. Well, we got to keep in mind that Amazon lost billions of dollars for I don't know what was it like almost a decade I think that they were losing money before they became profitable. So if they have to lose A little bit of money to take over the 3PL space. Speaker 1: They'll do it. Speaker 2: Something that they're willing to do. Unfortunately, if you're a 3PL out there, I guess that's the competition that you're going to have to step up. Yeah. Amazon does, you know, AWD is only long-term stores. They don't do anything else. So, you know. Speaker 1: They might be trying to figure out what else they can do. I would be expecting that knowing how Amazon is, right? They're going to get their Foundation in place and then you're gonna be like, okay, how can we tweak this so we can take more business and take more business? Speaker 2: Yes, yes, that's I was gonna say that's eventually they might add that stuff in right now if you're 3PL. You're safe if that's where your business is at for the most part. Speaker 1: Amazon automation is coming to compete with you. There's no doubt in my mind. Speaker 2: Amazon's coming for it. Yeah, for sure. I mean, at some point you could have robots put on labels and transparency stickers and bagging and everything else, right? So that's all coming. Speaker 1: Yeah, I have no doubt that they're going to try and figure out a way to offer some degree of classical 3PL services, but we'll just see. They can't do individual pick and pack services. Unless they want to like move MCF out of FBA and make it work with both systems. I don't know. So there's still time for sure. But if I were in the 3PL business, I'd be thinking about how do I insulate myself from Amazon being a competitor to me? Speaker 2: Yep. Yep, for sure. All right, cool. Jackson, we're at the top of the hour here. So we'll go ahead and wrap it up. I appreciate you coming on. Speaker 1: Yeah, my pleasure, man. Thanks for inviting me. Speaker 2: Absolutely, and everybody out there watching, we'll be back next Friday. I will not be here next Friday. Dayna is going to be running the show because I'm in the process of moving. I'll see you all in a couple of weeks, but next week Danan and some others will be here to go over the news for you. Until then, happy selling everybody. Have an awesome one. Unknown Speaker: This has been another episode of the Amazon Seller School Podcast. Thanks for listening fellow Amazon seller and always remember, success is yours if you take it. Speaker 2: Hey, if you made it this far in the show, I really hope you enjoyed it and I'd like to ask you a favor. Could you head on over to Apple or Spotify or wherever you're listening to this and leave us a review? It would be greatly appreciated and would help us continue to grow the show and offer more episodes for you. Thank you. God bless and have an awesome day.