As Black Friday and Cyber Monday approach, cross-border e-commerce sellers were preparing for their annual sales push. However, an unexpected notification from Amazon has dampened the enthusiasm of many sellers: the company is terminating its brand authorization program. This sudden change affects not only products currently being sold but also authorized brand selections still in development, catching numerous sellers off guard.
The termination impacts participants in Amazon's brand authorization program across its U.S., European, and Japanese marketplaces. Sellers have received email notifications from Amazon outlining the following key points:
- Sellers can continue selling products until March 31, 2024, while still enjoying the benefits of the third-party brand authorization program.
- Amazon's FBA warehouses will stop accepting shipments of these products starting December 1, 2023.
For sellers who had obtained Amazon's brand authorization, this means they will no longer be able to sell authorized brand products on the platform—a development that has delivered a significant blow to their businesses.
The Once-Coveted Amazon Brand Authorization Program
What exactly was Amazon's brand authorization program? Essentially, it was a partnership initiative where Amazon granted official brand authorization to selected third-party sellers. These sellers were responsible for supplying and operating the products, while Amazon's brand team handled promotion. The program had high entry barriers, requiring rigorous factory inspections and documentation such as social responsibility reports and quality verification certificates.
For affected sellers, Amazon's decision has come as a shock. Many report being substantial manufacturers who, trusting in Amazon's platform, produced large quantities of Amazon-branded goods without clear contractual protections. With Amazon suddenly canceling the partnership and providing only two weeks for final shipments, sellers find themselves with insufficient time to adjust.
Sellers Rally for Rights Protection
Faced with Amazon's unilateral termination of contracts—despite sellers having fulfilled their obligations—many are expressing outrage. Some are seeking legal recourse, preparing to hire attorneys to defend their interests. Simultaneously, they've presented Amazon with several demands:
- Full refund of VINE program registration fees.
- Extension of sales period through December 2024, with corresponding extension for FBA shipment creation.
- Guaranteed stability of program resources until termination, including advertising permissions for authorized stores and removal of commission fees.
- Permission for sellers to register their own brands.
- Compensation for various losses including commissions, factory inspection costs, product testing fees, and other investments.
- Assignment of dedicated account managers to provide support until program conclusion.
Why Is Amazon Terminating the Program?
Industry observers offer various theories about Amazon's decision. Some sellers suggest it may relate to Amazon's significant financial losses and increasing antitrust scrutiny. The company recently announced major layoffs across retail, devices, and human resources departments, potentially affecting up to 10,000 employees.
Notably, these layoffs primarily target technical and support staff rather than frontline workers. The brand authorization program's cancellation may be part of this broader restructuring. Amazon's move affects thousands of sellers and represents a complex balance between platform and seller interests. Analysts suggest it might signal reduced preferential treatment for certain brands, potentially leveling the playing field for ordinary sellers.
Amazon's Official Response: Business Restructuring
Amazon has responded to the situation: "We regularly review our operating plans and assess the progress and potential of our products and services. Based on these reviews, we've made decisions regarding our third-party seller brand authorization program." The company emphasized this as part of normal business adjustments and stated it would take measures to protect Chinese sellers' rights.
For sellers, the immediate challenges are minimizing losses and adapting to Amazon's policy changes. This development introduces new uncertainties into cross-border e-commerce and serves as a reminder about the risks of platform dependence. Beyond pursuing rights protection, sellers must focus on building independent brand strength and operational capabilities to compete effectively.
The incident also serves as a cautionary tale for other e-commerce platforms about maintaining fair, transparent partnerships with sellers. As the industry moves toward greater standardization and professionalism, only those with strong brands, independent operations, and risk awareness will thrive in this competitive landscape.