Welcome to the Jungle
There is no question that Amazon has changed the game for many small businesses looking to expand to a wider audience. But the question worth asking is: at what cost?
Just as recently as September 3, 2019 Amazon has begun charging sellers a fee for products that do not comply to the Frustration Free Packaging Program guidelines. The end goal being to minimize costs and waste associated with oversized and unnecessary packaging. This is not only good news for the planet, but by reducing oversized packaging, Amazon can also reduce the cost of moving items through its distribution network.
In the recent announcement, Amazon stated that their expanded packaging requirements include transitioning smaller items from corrugated boxes to flexible mailers, optimizing boxes for a specific product’s size and weight, and implementing fully recyclable mailers. Amazon also stated that they are working with vendors to develop more “ready-to-ship” packaging.
From September 3, 2019, very item larger than 18″x14″x8″ sold through Amazon must have a design certified as ready-to-ship Tier 1 – FFP or Tier 2- SIOC. This means that the packaging must be right-sized; ensure damage protection, ready-to-ship without additional packaging needed, recyclable, and easy to open.
To gain this certification, packages must pass Amazon’s tests that are geared at simulating the conditions a package faces while in the distribution process.
These tests include; ISTA 6-Over Boxing, which tests the package’s ability to withstand environments that could cause damage; forces, motions, and various conditions of transportation. ISTA 6-SIOC Type A, B, C, D, E, F; with each type dealing with packaging of different weight categories.
Type A meant for packaging weighing less than fifty pounds, Type B for those that weighing above fifty but are not more than a hundred pounds, and Type C meant for packaging whose weight is more than a hundred pounds.
Failure to comply with the requirements by then will see suppliers incur chargeback costs of $1.99 for every package that does not meet the new standards.
More about Frustration Free Packaging here
The Packaging Problem
Have you ever bought something as basic as a USB stick, and wondered why anyone thought it was a good idea to use an oversized non-biodegradable, indestructible, plastic clamshell?
Well, the reason is fairly simple. In a retail environment, packaging often serves the dual purpose of both product branding and theft deterrent. Small products are placed in packages that might seem oversized, when in reality the goal is to make the product more difficult to steal. However, the online marketplace is different than your local Walmart. Online, there is no need for beautiful eye-catching packaging, and no need to worry about thieves walking out of the browser with your headphones. So Amazon wants to know, why not downsize and simplify?
Remember that the primary cost faced by online retailers is in shipping. Larger packaging equals greater shipping costs, and Amazon wants its suppliers to help cut those costs.
Giving Up Control
Amazon’s requirements might seem reasonable at first glance– until you consider the risks involved with retooling your business to fit one platform.
This strategy is similar to the strict packaging requirements instituted by other large retailers. For example, both Walmart and Sam’s Club have long required vendors to provide exclusive sizes and quantities for their membership club, which makes price comparison more difficult.
That is not an issue if you are company the size of Nabisco and Coca Cola, but it can be a huge financial commitment from smaller brands looking to break into the big box stores.
New packaging also changes the branding and overall unboxing experience for customers. This might seem inconsequential, but in fact it isn’t. The association between a product and its packaging is often more powerful than one might think. Can you imagine if Coca Cola was sold in a Tetrapak?
The Lesson for Entrepreneurs
The real lesson is this: be wary of building your business around someone else’s platform. This doesn’t mean you shouldn’t sell on Amazon, or advertise on social media, but you should certainly assess the risk of pigeonholing your brand into one avenue of distribution.
It certainly can be tempting for driven small businesses to want to dive head first into a marketplace that puts their brand on the world stage. But it is also worth pausing to consider what risks might be associated with kowtowing to Amazon’s ever changing requirements.
5 Star Packaging can help your brand navigate the treacherous waters of online retail packaging, and serve as a one-stop shop for custom flexible packaging, corrugated, and chipboard boxes. Feel free to request a quote on our homepage, and a representative will contact you shortly to help.