Updates: MDW and INFORM Consumers Act
Memorial Day weekend recap, summer sales events, and the INFORM Consumers Act.
Memorial Day weekend & summer sales events
And we’re back! Hope everyone enjoyed the Memorial Day weekend and took advantage any Memorial Day sales. This was the first taste of summer sales and a good chance to scoop up some inventory to start off the summer.
It was also the first time we gave paid subs a heads up on some cash back promos that were live and we’ll probably keep doing so on an occasional basis.
Summer sales events
If you didn’t do any sourcing, that’s okay. There’s plenty of other deals that pop up on a daily basis. This wasn’t a major sales event by any means.
The real “can’t miss” sales event should be sometime in July, whenever Amazon announces Prime Day. All other major retailers will follow suit and offer their own major sales events around this time as well.
We’ll most likely see another “end of summer” sales event in August as well, where you’ll see discounts on anything they didn’t move enough of (usually seasonal). Retailers will look for any excuse they can to drum up slow summer activity. This year will be especially true if market conditions worsen and spending starts to slow.
That will be the time to start building Q4 inventory **if** you have the excess capital to buy and hold. If you’re on a tight budget as it is (e.g., you’re often stagnant while you wait for sales to recoup your cash), then summer sales events will be just another cash builder—albeit for lower returns than if you held to Q4. Then, Black Friday and holiday sales will be for your Q4 inventory.
INFORM Consumers Act
The INFORM Consumers Act is a new US federal law that comes into effect on June 27, 2023. Under the law, retail marketplaces like Amazon must collect, verify, and disclose information on high-volume third-party sellers and their businesses.
What defines a high-volume third-party seller? Those of us who have sold 200+ new/unused consumer products and had $5000+ in gross revenues in any continuous 12-month period during the previous 24 months.
If this is you, Amazon most likely sent you an email or notice in your account telling you to provide this information. It’s a 3-step form that’s fairly easy to fill out (though some reported tech issues early on when form first went live). You’ll need to provide your business info, verify your address, and send in pictures of your ID (e.g., driver’s license). If you’re familiar with crypto exchanges, this very much felt like a KYC process.
What are they trying to do with this law?
The goal of the law is to improve transparency and accountability with online retail marketplaces. Basically, they’re trying to make it harder for anons to sell counterfeit or unsafe products on places like Amazon. Amazon and Walmart both struggle with overseas sellers on the US marketplace at times in both these departments. The law also gives consumers the ability to lookup seller information in the event that they suspect fraud.
Our take
We like the idea of the law but we’re skeptical of Amazon’s ability to strictly enforce it. Getting rid of the scammy sellers would be a welcome relief for many of the legitimate sellers on the platform. And we truly truly hope this law helps with that.
Amazon should bring in a team of trained compliance specialists and builds automations to handle enforcement. But we would be concerned if this is dumped on the existing Seller Support teams.
In that’s the case, it’s not beyond the realm of possibility that ID verification will be fairly easy to circumvent. If scammers were already okay selling unsafe and counterfeit products, what makes you think they couldn’t fraudulently bypass the ID checks?
Oh, and who is enforcing Amazon? We think the FTC will be able to audit Amazon’s seller reports for completeness and accuracy? Hm.
In time, we believe KYC services like those that crypto companies use will ultimately be the answer. But that will all depend on how smoothly the current rollout goes and how capable the FTC is to hold Amazon accountable.
Wrapping up
This week, it’s back to our regularly scheduled programming. More posts on sourcing for both our free and paid subs. Talk soon!
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