As of October 14, 2024, Amazon no longer allows custom physical product bundles in key categories, including grocery, health, beauty, pet, and baby. This significant policy change impacts many third-party sellers who have relied on creative bundling strategies to stand out in a competitive marketplace. Whether you’ve been mixing and matching products to offer customers convenience or boost sales, the era of custom bundles is officially coming to a close.
For many sellers, this news is a game-changer buster. If bundling has been a core part of your strategy, now is the time to pivot. But how? Let’s break down what this means, how it impacts your business, and what steps you can take to remain competitive.
Understanding Amazon’s New Bundling Policy
Only manufacturer-created bundles are allowed on Amazon. This means that sellers can no longer combine products from different brands or mix unrelated items under their own private labels. For example:
- Compliant: A pre-packaged Crest Toothpaste and Crest Toothbrush Set directly from the manufacturer.
- Non-compliant: Creating your own bundle by pairing a Crest Toothpaste with a Colgate Mouthwash, even though both items are related. Similarly, bundling a toothbrush with unrelated items like a face towel or hand lotion is no longer allowed.
What This Policy Shift Means
- Custom bundles will be suppressed: Any non-compliant bundles will be removed starting in late Q4 2024. Amazon will give sellers a 30-day notice through email and the Account Health dashboard before taking action.
- Lost revenue potential: Sellers who’ve relied on bundling to stand out and increase sales may see a dip in revenue if they don’t pivot to alternative strategies.
- Inventory Challenges: Sellers with non-compliant bundles may face unsellable inventory on Amazon, which could eventually be classified as excess if not addressed. Developing a strategy to manage or liquidate this stock is crucial to avoid long-term storage costs and fees.
Key Challenges for Sellers
If you believe this new policy forces you to rethink your strategy around product bundling, you’re right! Here are the key challenges you may face:
- Inventory Management: What do you do with non-compliant bundles already in your warehouse? Will you break them apart, sell them elsewhere, or absorb the loss?
- Profit Margins: Managing returns, excess stock, and repackaging non-compliant bundles could impact your margins.
- Customer Expectations: Without the convenience of bundles, customers may start comparing your individual product offerings more closely with competitors.
Strategies to Pivot
The loss of custom bundling doesn’t have to be a setback. Here are six actionable strategies to stay ahead:
1. Let It Ride
Allow Amazon’s bots to identify non-compliant bundles, which buys you time to plan your next move. However, be proactive in reviewing your listings to avoid costly disruptions.
2. Leverage Manufacturer Bundles or Licensing Agreements
Connect with your suppliers to explore pre-packaged manufacturer bundles or consider entering into licensing agreements. Licensing rights allow you to offer exclusive bundles featuring popular brands, ensuring compliance while expanding your catalog.
- Pro Tip: Licensing agreements can give you the edge to create exclusive, compliant product combinations that align with manufacturer guidelines.
3. Strengthen Individual Product Listings
Optimize your individual product listings by enhancing titles, descriptions, and images to increase visibility and conversions. Remember to take down Storefront landing pages and remove cross-selling mentions in A+ content, Brand Story, and Posts after non-compliant bundles are suppressed.
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4. Explore Virtual Bundles
If you are Brand Registered, you can still offer virtual bundles. This feature allows you to combine FBA products into a virtual bundle without physically bundling the products, providing customers with a “bundle feel.”
Interested in learning how to keep your bundling strategy alive with Amazon Virtual Bundles?
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5. Leverage Promotions and Cross-Selling
Use promotions like “Buy One, Get One” or discount-based add-ons to drive sales across multiple products. Set up cross-selling strategies in your listings to encourage customers to purchase related items.
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6. Stay Ahead of Compliance Changes
Keep track of evolving Amazon policies to ensure you remain compliant and avoid costly listing suspensions. Partnering with experts who offer proactive monitoring can save time and protect your account health.
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What’s Next?
This policy change marks a significant shift in how sellers can offer physical bundles on Amazon, but it also opens new doors for optimizing individual products, leveraging manufacturer partnerships or licensing agreements, and developing creative promotional strategies. Here’s what sellers should keep an eye on:
- Inventory Strategy: Should you push ad dollars toward selling through current bundles that will eventually be suppressed, or pivot your strategy now?
- FBA New Selection Program: Explore whether this program could help you mitigate excess inventory challenges. MORE TO COME ON THIS TOPIC – STAY TUNED!
- Returns Management: Will Amazon’s new policy impact your return rates or force you to manage higher return costs?
Don’t let this policy change disrupt your sales—pivot now and let Avenue7Media guide your next steps.
Conclusion
Amazon’s new bundling policy is not the end of the road; with the right strategy, you can adapt and thrive! Whether it’s licensing agreements, improving individual product listings, or exploring virtual bundles, there are plenty of ways to stay competitive.
Stay tuned: We’ll continue to monitor the situation and provide updates on enforcement as more details emerge.
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