Home » How tos » How to master Amazon compliance
How to master Amazon compliance

How to master Amazon compliance


-commerce is the norm of today. No matter how you position yourself as a seller, having a virtual store is a given. As businesses naturally gravitate towards listing their products on online marketplaces, it may be a good idea to familiarize themselves with platforms like Etsy, ebay, Alibaba, and more! Emerging as a global e-commerce giant, Amazon has become aspirational for small and big sellers alike. However, to utilize its international reach, strong credibility, and to play the big leagues like a pro, there are a bunch of Amazon compliance requirements sellers are expected to adhere to. What are those? Let’s find out!

Amazon purchases in the USA alone make up to 50% of the country's e-commerce market

Amazon today has more than 9.7 sellers in its marketplace. Of these, more than 150,000 sellers have around $100,000 USD in annual sales. In 2020 alone, 3rd party sellers on Amazon sold products worth $300 billion USD.

Surpassing all its competitors, the company achieved this level of credibility and reach because of its stringent safety and quality compliance regulations with its sellers.

Pushing the sellers to constantly offer high-quality services rather than just listing their products, Amazon ensures that its marketplace has competitive goods that reach the customer with the highest quality and zero supply chain and/or safety hassles. Newer sellers often do not gauge the weight of this responsibility and lag getting less returns out of the Amazon marketplace’s potential.

This article by Qalara is all about understanding the compliance drill so you can sell better and smarter. The blog aims to simplify the compliance process and help you get your basics right into creating a steady system for your business.

For the longest time, buyers hesitated to shop online because of the uncertainty surrounding product quality. Amazon was a pioneer of sorts, changing this perception. Its credibility in this matter comes from its strict seller guidelines that leave scope for no mistakes in this regard.

Order defect rate is the percentage of orders that are reported by the consumer as faulty pieces or receive negative feedback. The feedback could be in any format including comments and reviews, escalation to customer care, or non-fraud credit card chargebacks. The escalations could be related to bad packaging, sloppy delivery timelines, and mismatched products as well.

Amazon instructs its sellers to keep their order defect rate to less than 1%. Enforcing this rule is one of the key factors that has built the credibility that this company enjoys today. There are multiple ways to ensure a low ODR, but it needs to be understood that the process requires a continuous and consistent monitoring system.

An increase in the ODR will subsequently lead to lesser visibility of your company’s products. But this is just the start. 

Prominent increases or consistent spikes in percentages could lead to more drastic consequences like the removal of your listing or suspension of your brand from the marketplace. Amazon can also withhold payments due to this and dispose of your inventory if your products’ fulfilment is carried out by them.

Maintaining product safety & compliance in a global marketplace is a lot of work. Different product categories require different compliance rules from regulatory bodies. These are usually government bodies specific to a region apart from Amazon’s own set of product safety guidelines.

Government laws and regulations on safety change by the region. The regulations also keep changing periodically and hence require effort on the part of the seller to stay abreast and adapt to the revisions. Additionally, as Amazon keeps expanding its market rapidly to newer locations, the seller needs to stay updated and verify location-based compliances accordingly.

Very recently, the company expanded its market place to Sweden in 2020. Parallely, it acquired Souq.com which was the biggest e-commerce marketplace in the middle-east, helping them expand to Saudi Arabia and UAE. While the Netherlands has had a market place since 2014, it could only sell books and e-books. Only in 2020, did the marketplace open up to all products like the other countries.

The complete burden of ensuring that the product is safety-compliant in these newer regions and conditions falls on the seller and any failure to do so will automatically hold your product from being listed in the region.

Amazon’s regulations impose restrictions on the sale of certain product categories. These restrictions vary, with some specific to countries and regions, while others are outright prohibited from sale. Additionally, certain products may require special labeling or quality standards to qualify for sale on the platform. Examples of restricted categories include alcohol, animals and related products, melting products, and more.

Sellers must accurately describe their products in their listings, providing clear and truthful information about product features, specifications, and conditions. As the customers’ entry point into your product, the title, description, and listing of other important features play a key role in increasing your Click Through Rate (CTR), search visibility, and conversion rate (CR).

Amazon’s listing style guide specifies how the title and images need to ensure a smoother user experience.

      • The title needs to be less than 200 characters
      • The first letter of every word can be capitalised
      • Use numerical instead of words wherever required
      • Spell out measurements completely. (Eg: ‘Centimetres’ instead of ‘cm’)
      • Include sizes, colors and quantities whenever the product is set
      • Avoid special characters like ‘?’, ‘!’, ‘&’
      • Use a white background
      • Product should cover 80% of the image
      • Ensure the product quality is about 1000 Dots per inch

Failure to uphold these guidelines will result in lesser visibility and suppressed search results. Once these specifications are taken care of, you could use apt keywords, descriptive content and SEO techniques that elevate user experience and bring your brand to the foreground.

Surely, there is a lot to consider, monitor, improve, and then maintain if you want to achieve a stellar Amazon compliance score. The multi-layered facets of Amazon compliance are precisely why sellers opt for third-party firms that have expertise in audits, compliances, and also understand the policies of Amazon.

It is a wise choice for the long run where the focus can be on sustaining your online market presence for a long time to come while the compliances are kept in check by third-party enterprises. Here is a listing of few such companies you could hire based on their services and reach.

Some of the most credible companies with a global reach and an understanding of amazon’s compliance regulations include QIMA, Bureau Veritas, UL Solutions and Intertek. They offer all around compliance and audit services that include:

      • Testing
      • Inspection
      • Certification
      • R&D training and consultation support
      • Software solutions
      • Total quality assurance
      • Assistance in increasing supply efficiency, sustainable practices, and quality

Amazon’s marketplace is undeniably among the big leagues. But to be able to sell on Amazon warrants an immense amount of work. Basically, you have to operate on high quality standards, making compliance procedures a part of your day-to-day tasks to keep growing.

Qalara’s efforts to help businesses ease into such practices have been ongoing, with a lot of blogs aimed at innovation in sales, supply chain efficiency, and sustainable systems. Have you come across any other compliance-related hurdles? Write to us at once and let us know if this summary of Amazon compliance helps you in your journey as a seller.

~ Written by Dhanush Dandu