To my former colleagues in Amazon Compliance
Hi you guys. It’s been awhile. I left in 2015, after my promotion was blocked by a senior manager who was angry that I didn’t let him import products illegal to sell.
Needless to say, it was frustrating.
But now, it looks like you’re finally paying attention to compliance on the Marketplace! For years, at Amazon and outside of Amazon, I have been telling people about the egregious compliance violations, ever since I was part of the team when a Marketplace seller’s product killed an infant – when my own infant was only a few months older than the one who died.
Compliance isn’t about government red tape harming business; it’s about protecting kids from their house burning down, or babies from suffocating in poorly designed or manufactured products.
Download your Guide to managing your Supplier
Everything you need to protect your investment and business when sourcing your own products!
So thank you for finally asking for documentation showing compliance!
Finally, Amazon is asking third party marketplace sellers to produce documentation proving compliance with regulatory requirements.
The items that have come across my desk recently are for water filters, children’s pajamas, and dietary supplements. These are clearly items that have significant risk to consumers – poor water filters can leave consumers vulnerable to heavy metal poisoning or other kinds of contamination; children and especially babies are the most vulnerable population of humans and therefore a higher standard of care applies; and anything you ingest, there should be a reasonable expectation that it won’t harm you.
The water filters were interesting to me, as they appeared to be originally requested due to counterfeit water filters being sold on Amazon in the years after the Flint water crisis. There is only a voluntary safety standard here, and a few clients didn’t have the paperwork on hand, and had to get testing. They passed, as expected, because they weren’t selling counterfeits.
The children’s pajamas one is, in my opinion, the most obvious one that should have been running long ago, along with any other product intended for children. I think that we, as humans, need to agree that no preventable death is acceptable, and the preventable death of a child is a tragedy to which annual budget planning should not be applied.
If you can’t prevent your company from selling products that might accidentally harm or kill a child, then you shouldn’t be in business.
The fact that I ever got pushback regarding budget – and in fact one year got no budget increase at all with which to do my job – is to me a moral failing and the exact opposite of customer obsession. No parent wants selection that harms their child.
The dietary supplements issue is one that I’m not surprised about at all – Amazon is now requiring third party laboratory testing and lab issuance of Certificates of Analysis (COAs), which is not typical in the industry, and pretty much no one I’ve worked with has these.
I do not disagree with the decision to put the compliance review in the hands of the labs; Amazon has long allowed supplements with illegal prescription drugs or just illegal drugs to proliferate on the site. It’s a serious problem, and it deserves a serious and in depth review of a product before it’s made available for sale.
Whenever a situation becomes especially dire, the response is often to react just as strongly in the opposite direction. So, in that, my former compliance colleagues, I have no bone to pick with you – although the idea that a laboratory should be on a label? That’s just not going to happen, these labs aren’t certifying the product, they’re not going to let anyone put their name/information on product packaging. I suggest striking that particular requirement.
So why, now that you’re finally asking for documents, do I still have a bone to pick with you?
Because you keep treating everyone like they’re the same, and that compliance starts with the product. It doesn’t; compliance starts with the company, and the commitment of that company to producing compliant products.
In my time working with companies of all different sizes – at Amazon, at BDA (a large promotional products distributor), and as a consultant here at Cascadia – what differentiated the companies that never had problems from the companies that regularly had problems was their commitment to a culture of compliance.
What I mean by that is that the companies that cared about compliance could produce their compliance protocols and SOPs within hours of being asked. They could produce their documents within 24 hours of being asked, per CPSC (Consumer Product Safety Commission) standards. They could produce their Certificates of Compliance without asking their manufacturers, because they kept them on hand themselves. You could get on the phone with someone who had their preferred laboratory on speed dial.
It was equally easy to spot the companies that didn’t have a compliance culture. They would ask things like, is that really necessary? Or, do you have a recommended lab? Or, my manufacturer gave me these documents, will those work?
Working with Mattel was very different than working with many other companies – which is as you might expect, given that Mattel has one of the best compliance programs in the world, especially after getting snot on its face in 2007.
Amazon, however, treats every Marketplace seller as though they’re exactly the same. The same portal, the same requests, the same crappy too-fast review by underqualified personnel overseas.
Part of me has to take responsibility for this, as I designed the Restricted Products tool in 2011 to be agnostic of sellers. It instead focuses on the content in the Catalog, whatever it may be – sometimes, almost nothing at all. Because getting listing data for sellers was more difficult and resided in a different database, it was slated for a later phase in the launch program, and it apparently was dropped by the team that took it over during my maternity leave (and incidentally took my name off the project when it was presented to the S-Team, yet another joy of being a woman in tech).
But, I was the PM for that project in 2011! I like to think that you all in the Compliance team at Amazon would have realized that the design was lacking by now?
So you’ve made your point, what would you have us do differently?
When I was managing direct import for Amazon, I implemented a “Reasonable Testing Program” review. The Reasonable Testing Program term is one used by the CPSC to describe an organization that has a clear and solid plan in place to review and evaluate components and design for compliance issues, and is highly likely to produce compliant products.
Pretty much every company I’ve worked with that had a strong compliance culture already had a testing and inspection program in place, and many also had a manufacturer audit program in place as well.
It takes about 5-10 minutes to review (quickly!) the documentation for any given product and make sure that all data and information matches between the documents and the Amazon listing. One of my clients was requested to provide 4000+ documents on about half a dozen brands. Let’s just say 4000 for the math. That will take 20,000-40,000 minutes, or 333-667 hours to review. That’s 8-16 people in a week to review documents for one brand. That’s at a cost of about $2300 per person per month, or a total review cost of approximately $4600 to $9200.
Or… you could review a statistically relevant sample size – which for 4000 ASINs is about 200, with a zero tolerance expectation of failure, PLUS their reasonable testing program. Reviewing a brand’s RTP typically required about an hour. This included a half hour review of their documents, plus a half hour on the phone to grill them about what they did in specific situations. Documents are one thing, but if they can’t produce specific examples of how they handle adverse events, then they don’t have a good program.
This approach takes about 1000-2000 minutes for the individual ASIN document review, plus 60 minutes for the RTP review. That takes one person about two days to review the level of quality of compliance this seller has, rather than 8-16 for a week, AND it is more accurate, for a total of about $200-400 for your overseas support staff and about $100 for your Seattle based expert. But still incomplete and not enough to keep customers safe.
To explain why it’s more accurate and still doesn’t actually promote safety on the Marketplace, please indulge me, dear former Compliance team member, with a story.
More than two years ago, I was contacted by a company that had been requested to provide Product Safety documents due to a choking hazard complaint. We got the product tested at a third party laboratory, and it failed. It was, in fact, a choking hazard.
The seller of course freaked out, said that if he had to recall the product, he would go bankrupt. He asked if we could fake a test report. I said absolutely not, and terminated our relationship with him.
However, I kept watching the listing, checking on it each week. And, after a couple of weeks, it was back up. Amazon had reinstated a product that was known to be unsafe. I sign an NDA with clients, and so I couldn’t tell Amazon about the issue. I did, however, file a complaint with CPSC, since there is a legal obligation there to report illegal activity that supersedes a business contract but they probably get a lot of complaints.
Just paperwork isn’t enough. It’s too easy to fake, it’s too easy for a material change to slip through, it’s too easy to be selling counterfeit products. It’s too easy to pat yourself on the back for a job well done, but a customer still gets hurt.
Therefore, Step 1 is to evaluate the paperwork for a statistically relevant sample size. Step two is to blind test from that batch. For a sample size of 4000, a Special Level 3 inspection would dictate taking apart and inspecting in detail or testing 20 units, selected randomly, pulled from Amazon’s warehouses, NOT submitted by the seller, and sent directly to a laboratory, just like the Amazon Jewelry program has done for many years.
If at that point, the seller has passed all documentation checks, has successfully submitted an RTP, AND has successfully passed a product testing audit, then simply whitelist them and only follow up when there are customer complaints – and there always are – because a company that does the right thing doesn’t suddenly stop doing the right thing.
Mistakes happen, but those companies aren’t the right target for your time and energy.
The system in the US is built on lawsuits to enforce compliance
If you really want to have safe products for sale on Amazon, and to make sure that no preventable deaths occur from accidents where a product bought on Amazon was the culprit, then you, my dear former colleagues, need to look at the seller first, not the product.
Top sellers direct from China now make up 49% of the sellers on Amazon, with only 47% being US-based. Chinese based businesses typically don’t have a presence in the US that can be sued or in any way offer redress to US based customers.
In a first of its kind in 2016, the CPSC successfully levied a $15 million fine against a company headquartered in China and Hong Kong. However, most Chinese companies selling on Amazon have no assets to seize and will simply close and re-open on Amazon if they’re sued. This practice of constant pop up shell companies used to sell on Amazon and defraud or harm American consumers is a direct result of Amazon’s business teams’ anti-small business and anti-consumer practices. Yes, Amazon does a lot of good for small businesses, especially in a pandemic. But that doesn’t excuse every time the created an uneven playing field and uphill battle for law-abiding sellers.
Sometimes, friction is actually the right approach. I know my former colleagues in Compliance are aware of this.
But while you’re at it, adding friction, if you want to really close the loop on this, you will need to track which sellers are Chinese based (and other foreign countries, China is just the biggest), and require them to provide proof of insurance as well as track compliance at a stricter level, because they are much less likely to bother with the legal requirements in the US than companies based here, whose assets can be seized here.
But even with all of the holes that still remain for you to plug in this endeavor to make Amazon actually customer centric regarding customer safety, thank you for finally taking this seriously.
It will make a huge difference for people like this young man, or little girls like these, or a baby like this one. All of whom deserved to live, and didn’t, because of Amazon’s lax compliance practices on the Marketplace.
Keep focused on evaluating the seller, or it’s just another pointless exercise in paperwork shuffling.
Are you a seller who needs help responding to Amazon Compliance? Send your inquiry here.
- An Exciting Addition to Amazon’s Marketing Options in 2020, Where Should Amazon Live Go In 2021?
- An Open Letter to Amazon Compliance
- Happy Holidays from Cascadia Seller Solutions
- Amazon Has a Fraud Problem – Choose Your Service Providers Wisely
- Amazon is Conducting the Next Big Social Selling Experiment… Here’s How.