Important change for media publishers using Amazon Advantage

This morning I received an important announcement from Amazon Advantage, the program for publishers of physical media (books, DVDs, etc.) to ship physical stock to Amazon warehouses which can then be sold on Amazon’s websites and mobile apps. It’s how I supply paperback copies of Lean Media to sell on Amazon, as well as a series of popular technology cheat sheets.

First, some background. The Advantage program has been around for years, but it doesn’t have a good reputation. It’s been jokingly called “Amazon Disadvantage” in some circles for its slim margins (they demand a 55% discount off retail) and error-prone back-end interface.

Earlier this year, things took a turn for the worse. My company, i30 Media Corp., and several other small publishers experienced a major shift in Amazon Advantage purchase orders. Instead of receiving medium-sized orders several times per week to a single warehouse in Kenosha, Wisconsin (interestingly and perhaps not coincidentally, Reince Priebus’ hometown) we started receiving lots of tiny orders to more than 10 warehouses scattered across the country. Alarmed, I sent this message to Amazon on June 7:

Advantage recently changed the delivery destinations from a single warehouse (Kenosha) to multiple warehouses all over the country. Not only that, I am getting orders for a single item at a time. These are mostly low-cost items and this change has resulted in increased shipping, packaging, and time costs for me to the point where many shipments are unprofitable, even if combined. What is the reason for doing this and how can I just ship to one destination, as before?

The reply was classic Amazon “squeeze the supplier” language:

I understand that it is causing inconvenient for you to ship the units to different Fulfillment centers.

Amazon uses multiple locations for Advantage products, which helps your product reach customers more quickly.

Using multiple locations allows us to receive Advantage orders in a more timely manner and reduces the possibility that we may order an Advantage title from a distributor instead of directly from members.

This will also increase the time your title is listed with an availability of “Usually ships within 24 hours”

All of these factors combined should result in greater availability of titles for customers, faster fulfillment of retail orders, and quicker delivery of your products to the customer. This should translate into increased customer satisfaction and sales of your titles, which is good for both Amazon.com and you.

Translation: We’re shifting our costs to you, by forcing suppliers to ship directly to our warehouses across the country, instead of to a single location. It’s great for customers and great for us … and you as a small supplier will just have to eat the extra shipping and handling costs.

The part about “increased customer satisfaction and sales”? Highly unlikely, as most customers won’t notice much of a difference, and few leave reviews or re-order one-off purchases like books and CDs.

The part about this being good for my company? Laughable.

I scrambled to cut costs. The only practical way to do so: I began delaying delivery of product to Amazon to combine more tiny orders into a single shipment. This was absolutely necessary to avoid losing money on the purchase orders for a handful of cheat sheets to, say, Bakersfield, California or Middleton, Delaware. I also resolved to stop supplying certain items to Amazon after my inventory ran out, because it just wasn’t worth the time or money to supply Amazon in this manner.

A change in Amazon Advantage purchase orders after August

But I may have to rethink this, after I received the following message from Amazon Advantage this morning:

First, we are reducing our planned and reactive ordering cadences. Currently, our systems can issue orders up to six times per week (two planned, four reactive). Going forward, our systems will issue orders up to three times per week (one planned, two reactive). We anticipate this will reduce the operational complexity required on your end, and allow you to process larger order volumes across fewer shipments.

Second, we are changing the Amazon fulfillment centers to which you ship. Our fulfillment center network has expanded in recent years and this required us to rethink how we ingest Advantage inventory into the network. Going forward, you will be eligible to ship to 1-4 cross dock facilities depending on your average weekly shipment volume to Amazon. These facilities have been chosen to give your products enhanced coverage across our fulfillment center network and will help ensure customers receive your products as quickly as possible.

This is potentially big news for any publisher using Advantage to ship stock to Amazon, if it actually results in larger POs to a smaller number of fulfillment centers, which makes it easier and cheaper for suppliers. I believe “cross-dock facilities” are not warehouses but rather are transshipment centers where incoming inventory is immediately shipped out to fulfillment centers.

I’ll get a chance to test out the new system in a few weeks, and will update this post accordingly.

 

9 thoughts on “Important change for media publishers using Amazon Advantage”

  1. Has this been resolved for you? I have the same issue and wonder what the mean by you will be “eligible” to ship to 1-4 cross dock stations. Does that mean you have to have a certain turnover to qualify?

    Advantage sends me POs from a single warehouse for the same item in varying quantities. This requires me to send e.g. 4 items and 40 items of the same ASIN in different shipments to the same warehouse.

    You seem to suggest you can combine these POs in one shipment? Would I attach two shipping labels to the box and insert two packing slips? And assign the same tracking number in my ASNs?

    Any help is greatly appreciated 🙂

    Thanks, Jens

  2. I just received an answer to the second part of my previous comment and I guess it is worthwhile sharing. Amazon writes:

    Orders may be as little as one unit as determined by our ordering system. We understand that this may be frustrating when multiple small orders result. In such situations, we recommend that you confirm the orders as you receive them to prevent them from being auto-canceled. Confirmed orders remain open for 7 days from the expected delivery date (EDD) or 28 days from ship window end date, whichever is sooner. Then, to reduce your shipping costs, you may combine smaller orders, using the Combined Order Shipment guidelines below.

    * Print the Packing Slip and the Shipping Label for each order.
    * Separate each order with a layer of packing material or bind the items in each order together. Include the Packing Slip with the items in each order. When opening the box, it must be very clear which items are associated with each order.
    * Write the Order # for every order on the outside of the box so it is easy to read.
    * Affix only one Shipping Label to the box. (And, verify that all orders are going to the same fulfillment center.)
    * Affix all barcodes on the outside of the package if possible. This ensures that your combined shipment will be received as quickly and accurately as possible.

    1. Yes, I’ve combined Amazon Advantage orders for years. If I didn’t do that, I probably would have dropped out of the program, as the shipping costs (particularly in the bad old days when I had tiny orders to multiple Amazon warehouses) would have been too expensive.

      Only thing to add: Where Amazon says “Affix all barcodes on the outside of the package if possible” all you need to do is to attach the Advance Shipping Notice label to the outside of the box. It contains all of the PO barcodes in the Advantage order.

  3. Hi… I’m in a predicament with Advantage. Is there any way to contact a supervisor there? I’m trying to find a staff directory… There might be something in an Annual Report.

    Here’s my story. Maybe you know others in the same predicament? If you do, I’m considering action that could benefit us all.

    I’ve been a member of Advantage since it started, have sold thousands of books. I’ve stopped getting orders, even for my bestsellers. They’ve let inventory run out. So, many of my titles are no longer in stock or available. Yet they’re enrolled as active titles. They do still have inventory of a bunch of slower-selling title.

    Normally, if there’s a glitch, I report it and it’s solved in a day. In this case they’ve been telling me “a team is reviewing the issue” for FIVE MONTHS! This is obviously not true. It’s so terrible that they are lying as policy, apparently. And it really is terrible that they are ruining a hot new title of mine for no reason! They were making $ off of it!

    This is no longer business but crime. They are stealing my membership fee. But it’s so strange: they were making steady revenue from my sales. More than they’d get from stealing my fee. Why would they not re-order?

    If I no longer qualify to be in Advantage, they should cancel me when my annual fee expires. I’ve received no notice or warning. They tell me there is a freeze on ordering on my account. Again, no notice or sign on my end. So actually I don’t believe them. They say they can do this for “business and inventory purposes.” What’s that mean? Again, it seems spurious. There is NO “business purpose” for making less money. It is so strange!

    The main benefit of Advantage is “titles are listed as in stock.” Also, in membership instructions it says “when titles sell out they are re-ordered.” Obviously!

    There is nothing in any of their fine print about not re-ordering after selling out. They’ve re-ordered a hundred times for some of these titles! Did they suddenly get tired of making that money? Again: they are lying.

    The staffer who tells me this has listed benefits of Advantage when I asked and didn’t include that main benefit. I opened another case and asked about benefits and sure enough stocking was listed as the main benefit. …But I’m finding no recourse or accountability. I’ve already escalated to Executive Vendor Relations. She tells me the same thing I was told 5 months ago. It’s embarrassing. I’ve asked to contact their supervisor and she said no. Again, it’s the strangest thing. In business one can always talk to a manager. What is going on?

    1. The unfortunate new reality for most Amazon programs is automating relations with sellers, publishers, and vendors with sales of less than $10 million/year. They don’t want to talk with you (or me) on the phone to hear policy complaints or fix some problem it doesn’t consider to be important.

      Another thing that I suspect is going on: Amazon is getting ready to close Amazon Advantage and/or merge it with another program (probably Amazon Seller Central). This would explain why no new accounts can be opened, and possibly the issue you are facing.

  4. Ah. That makes sense. Thanks for your thoughts on this. …So they should just refund my fee. I keep telling them they need to cancel my service or deliver what I’ve paid for. They can automate or re-orient all they like but their policy is simple (lends itself to automation): “titles will be listed as in stock.” There is no exception. I’m pretty sure this is a legal matter. I’m paying for my books to be stocked. If they don’t want to stock them I need a cancellation and a refund of my fee.

    1. If the service is not providing the benefits it purports to offer, then it definitely should be cancelled. Hope you can sell your books via other means.

  5. Thanks. …There are no other effective means, I don’t think. Amazon is THE place for niche titles, it seems. I can still offer it via the Marketplace — selling direct. Heck, it gives a higher % to the seller.

  6. PS: I suppose I could also reformat it (or see if there’s a format that will fit it as-is) and offer it via Amazon’s Print-on-Demand. I already have it on Kindle, where it’s selling.

    Also, this applies to several of my titles.

    I just launched my first ACX audiobook version.

    My main title, though, FYI, is “New Wave Nordic Skiing.”

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