Back in December, it was revealed that Amazon identified CRaP products (Can’t Realise a Profit) which Amazon retail didn’t really want to sell. These are heavy or bulky products they sell which are expensive to store and fulfil and Amazon would rather that Brands fulfilled CRaP products themselves or radically redesign product packaging to make them ecommerce friendly.
Amazon CRaP products include items such as bottles of water, paper towels, and snack foods, which are usually sold for less than $15, are heavy and/or bulky, and have margins lower than other products that Amazon sell.
Amazon are working with some manufactures where Amazon sales will be shipped directly from the manufacturer. They are working with other brands to have products repackaged so that they become more profitable to sell online. For all of the other CRaP products, Amazon are relying on their legion of third party merchants to pick up the slack.
One retailer that has picked up the Amazon CRaP products challenge and radically redesigned their product packaging. Where once the American Proctor & Gamble’s brand Tide would ship in a plastic bottle, their new Eco-Box packaging sees the detergent shipped in a bag in a box format – somewhat reminiscent of boxes of wine.
“The name “Eco-Box” is a nod both to eCommerce and the lighter shipping footprint these packages are designed to drive. Products sold online typically need to be packaged with a second or third layer of packaging like cardboard boxing and bubble wrap that’s then discarded by the consumer. To address this, P&G designed the Tide Eco-Box to ship as efficiently as possible on its journey from a manufacturing site to a retailer’s warehouse to a consumer’s front door.”
– Procter & Gamble
In what Amazon used to call ‘frustration free packaging’, Amazon want products on their shelves which are easy to ship, easy to store and use an absolute minimum of additional packaging. Forbes has reported that come September, manufacturers in the US whom Amazon consider that their product packaging needs improvement will be billed an additional $1.99 for each item shipped. Those who update their products before the 1st of September deadline will receive a $1.00 per product shipped credit.
Merchants using FBA will already be packing items according to Amazon’s requirements and at times this can incur significant cost and time. When sourcing products, especially if you are having your own products manufactured, specifying branding designed for ecommerce will pay dividends when it comes to shipping – whether from your own warehouse or third party fulfilment including FBA.
How do Amazon classify product packaging?
Amazon assess product packaging in three tiers – previously they were classified as ‘Frustration Free Packaging’, ‘Ships in own Container’ and ‘Preparation free packaging’.
Amazon Tier 3 Packaging
These are products ready to be shipped and require Amazon to package but not necessarily in a traditional box. They may be boxed with other products or shipped in a card mailing sleeve.
Amazon Tier 2 Packaging
Products assessed as Amazon Tier 2 are ready to be shipped with the simple addition of the shipping label. They don’t need Amazon to package them and the advantage for the supplier is that their own branding appears on the box rather than an Amazon brown box delivery. Consumers who don’t wish labels attached (for instance if the purchase is for a present) can still opt to have them packed in an Amazon box through the gift options.
Amazon Tier 1 Packaging
Products in Tier 1 are, similarly to Tier 2 products, ready to ship but with fully recyclable packaging – generally at the kerbside through household’s normal council collections. Packaging will be easy to open (frustration free) and there won’t be any polystyrene fillers that can’t be recycled.