What is Amazon CRaP and what does it mean for Vendors?

Vendors may have heard of an Amazon CRaP list, but what is it and can it have a negative effect on your business? Below we cover what Amazon CRaP is and what impact it could have on your brand. 

What is Amazon CRaP?

Amazon CRaP stands for Amazon Cannot Realise any Profit, and relates to products where this applies. The pandemic forced many people to shift all of their shopping to online, which for a marketplace which sells all manner of products such as Amazon was great. However, for sellers themselves with this increased growth of custom also comes more pressure maintaining profitability on the Marketplace.

Products that are put on the CRaP list can appear there for several reasons, such as:

  • Competitive pricing from other e-tailers: If a product similar or the same as the one you are selling has a lower price on another online retailer, Amazon will match it- reducing the profitability of that product.
  • High customer returns: Amazon builds return costs into allowances.  If returns are high, Amazon may need more funding from the vendor to avoid CRaP status. 
  • Over supply: As with the pandemic, a sudden increase in demand can trigger a larger order from Amazon. When the demand dies down the order may not necessarily reduce too, meaning that Amazon is left with excess inventory, causing them to reduce the price in order to sell more.
  • Short expiration periods: When demand drops for perishable items Amazon will dispose of these excess units rather than sell them to consumers. If brands do not factor in transportation time too it can mean that the expiration period for products is too short for Amazon to sell.
  • Heavy and/or bulky items: Heavy, large, or odd shaped items may cost more to ship than margins allow.

What impact can Amazon CRaP have on your brand?

So, how could ending up on the Amazon CRaP list impact your brand? Amazon has been known for using various tactics for under-performing products – starting with your product losing the Buy Box, and shortly followed with search suppression.  In some cases, Amazon delists CRaP products, as well as reducing your on-platform advertising and promotional capabilities.

What’s worse is that Amazon does not directly tell you if a product has been put on the list, you will only know when it is reflected in your sell-through.

How to avoid CRaP status on Amazon

What can Vendor’s do to avoid their products ending up on Amazon’s CRaP list?

  • Enforce your minimum advertised price (MAP): Although there have been anecdotes of Amazon not honouring a MAP, they say they do and therefore Vendors should ensure none of their products are reduced below an unprofitable price.
  • Manage your margin: When offering costs to Amazon, find a balance that is fair, and attractive, to both parties without leaving you without.
  • Create bundles: Spread your shipping costs across many lower-priced items by creating exclusive to Amazon multipacks or bundles of the same product, or variety packs to spread the shipping costs across more units.

Vendors experiencing issues with CRaP listed products should get in touch with our team of Amazon specialists to discuss solutions.

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