Being one of the most popular online selling platforms in the world, Amazon is always up for modifying the traditional ways of selling products. In one such attempt, Amazon has introduced something called Amazon Warehouse Deals, which outfits the regular sell and purchase equation of goods. These deals are more like clearance listings, but in reality, they are more than that.
Today, we are here to simplify the complexity around the clearance listings promoted under the brand “Amazon Warehouse Deals” (AWD). Though the concept of Amazon Warehouse Deals is new to and is becoming a center of curiosity for several vendors, sellers, and brands selling on Amazon, a good number of discounts loving traffic has already highlighted its role and impact on the selling parties.
There can be a lot of questions around Amazon Warehouse Deals and getting a simple answer to them is not that simple. In this article, we will try to explain what Amazon Warehouse Deals are, where to find them, the process behind them, and discuss their meaning for a brand competing in the same market. We will dig deeper, but first, let us see what exactly are these Amazon Warehouse Deals.
What is AWD?
Amazon Warehouse Deals is an integral part of Amazon.com. This extension from Amazon is one of the most reliable places to source out open-box & refurbished products.
These deals are not associated with few products of a particular segment but include a wide range of collections from gadgets to home furniture. These amazon Warehouse Deals classify tons of products in 30 departments and thus can be considered as an entire marketplace unto itself.
Every product that is listed on Amazon Warehouse Deals mentions a specific category that underlines the condition of the product as it is not a new one. This information is crucial as at this point only; potential shoppers can realize what they can expect at the time of purchasing.
What are the listing conditions?
As most items listed on Amazon Warehouse Deals are used, returns, warehouse-damaged items, or refurbished items, their conditions vary from each other. However, to simplify the understanding of their condition, they are tagged with one of the five terms namely "like new" or "open box", "very good,” "good,” "acceptable", and "renewed.” Not only the condition improves the transparency on purchasing a product, but it also dictates the final price of a product. Here is a little more insight into each of these conditions:
- Like New or Open Box
It portrays that the product is in perfect working condition. The original packing of the product has been opened, but it is intact and in good condition with minor damage possible. All the instructions and accessories are included with the product if they are tagged with this condition.
- Very Good
The condition means that the product has seen limited use with maximum care and remains in good working condition. The product tagged with this condition may show some but limited signs of wear with small scratches or cosmetic blemishes. Packaging of the product may be damaged or changed and it may have missing accessories. However, anything that is being missed is clearly defined to the customer while the time of purchase.
This condition is tagged with products that have enough signs of wearing due to their use. However, the tagged product remains in good condition and does not lack any functionality. Packaging of the product may be damaged or changed and it may have missing accessories. But those missing accessories, noticeable damages, and marks on the product are mentioned to the customer.
A product tagged with this condition means that it has been used, it is worn but it functions properly. Such a product may have aesthetic issues such as scratches, dents, and worn corners. Packaging of the product may be damaged or changed and it may have missing accessories. But those missing accessories, noticeable damages, and marks on the product are mentioned to the customer.
A renewed product means that it was a new product that was never owned by anyone, has minimal to no signs of wear, no noticeable cosmetic imperfections, and may arrive in a brown or white box with relevant accessories that may be generic. Such a product is sold only once it is inspected and tested to work and look like new by an Amazon-qualified supplier (a seller or vendor) or by Amazon. In addition to that, a warranty is also provided with the product that allows a customer to replace or claim the refund within 90 days of purchase if the product does not work as expected. A selection of products is eligible for the Amazon Renewed Guarantee. Any exceptions to this condition description will be mentioned on the product detail page.
On amazon warehouse deals you can find a variety of different category items that are not new at shockingly low prices. Each of these products is inspected at 20 different points before they are put in front of the customers for selling. In addition to that, each item comes with a thirty-day return policy, which means that customers can simply return it to Amazon if they are not happy with the product. And for prime customers, all the products listed under amazon warehouse deals come with free shipping. All this equates to one thing; the product is an open box one, but the offer is completely customer-centric.
The reason behind creating Amazon Warehouse Deals is simple; to create an interface for selling used, opened, returned, warehouse-damaged, or refurbished products that are not “new” as per the definition but are still in good condition to serve. While these deals operate similarly as compared to other third-party sellers, here a seller is benefited from the trust which customers vest in Amazon. Plus, they can tap Amazon’s extensive resources since Amazon Warehouse Deals are an extension of the main brand.
There are few more benefits of amazon warehouse deals which are put together in the next section of the article. Let’s have a look at them.
Why purchase from Amazon Warehouse?
Probably the question should be why not to purchase from amazon warehouse deals. This is because, at amazon warehouse deals, customers can make substantial savings say 50-70% on the actual price of the product while getting a new product. For a few, it may not sound a great deal but for customers who don’t mind damaged packaging, repacked items, items that may have been returned, minor cosmetic damage, or items missing manuals or bonus materials, it’s an ideal way to shop.
In addition to that, these products may be new like but they are coming from Amazon Warehouse, which gives a trust of buying directly from the source. Plus, buying a product like this is eco-friendly and sustainable.
Where to find Amazon Warehouse Deals?
Amazon warehouse deals are available at a specific landing page within Amazon. On this page, customers can find 30 categories to browse, which have hundreds of products in different conditions. In addition to that, a particular amazon warehouse deal can also be found on the individual product listing, in case such a listing exists for the original product. One thing that is important to note is Amazon Warehouse doesn’t compete for the Buy Box but is located under “Use and new” or “More Buying Options” on detail pages.
Upon reaching such an area, customers can simply click on the tab and reach a page of offerings for the specific product. As a customer, you can find many of such products labeled with amazon warehouse with highlighted price and condition.
Now you may be thinking that how come these products are reaching and getting ready for getting sold again. In the next section, we are pointing out exactly how Amazon warehouse deals work.
How does it work?
There are several ways through which a product can end us as a selling unit on amazon warehouse deals. However, in most of the cases, these are the products that are taken from sellers, vendors, and brands who relinquish possession of the unit. Once the product has exchanged its hand, amazon conducts an inspection of the product to check its quality and relist the product on amazon warehouse deals with discounted price as per the condition of the product.
In other cases, the products are the ones that were either lost once but found later or got damaged during warehousing. For such products, Amazon reimburses the “right” amount to the sellers and takes possession of the product. This way such a product reaches the amazon warehouse deals page.
Whatever the case may be, products listed on amazon warehouse deals are heavily discounted which is a point of attraction for the customers. They love this whole idea as along with the discounted price, they also receive the benefits of Amazon’s standard customer service, fulfillment process, and guaranteed return policy.
But one thing that bothers customers, especially the new ones is the generalization of condition. For example, if two similar products are tagged with the “new like” condition, are they the same. Further, what is the degree of variance for such a product in comparison to a new one? Well, there are no particular answers to such questions as in most of the cases – it depends.
But, on the same node, does such listing mean anything for brands and businesses competing in the same market? Thankfully there is an answer to that – yes. How? Let’s see in the next section.
How can AWD impact brands & businesses?
There have been so many cases where brands and businesses have pointed out their exclusive products listed on amazon warehouse deals, despite restricting any third-party sellers to put it there. This creates a challenge for the existing brands and businesses as they need to compete with their products that are available at a discounted price.
Now you may be thinking that if a seller is not authorized, how these listings are getting created and allowed to exist? This is because when an order is not fulfilled due to amazon’s fault, the seller of the item is reimbursed with an amount by amazon itself. This way amazon gets possession of the product and sellers to get a price. However, this price is not the original price that customers pay and is often less as it comes with an assumption of the price for the particular product. For doing so, amazon uses other factors to determine this amount, including the average selling price, sales history, and the sales history of the particular ASIN in question. In case, if amazon fails to determine the right value for the product, they simply offer a default reimbursement amount for it.
Ok, so Amazon gets the product but what about packaging. The default setting in Amazon seller central allows amazon to repackage the product, in case an order is deemed unfulfillable and reimbursed. Thus, Amazon can repackage such products after conducting an inspection and make them ready to be listed on amazon warehouse deals. And in this way, among the millions of products that are available on amazon for customers, a bulk of inventory is carved out that is new like but discounted.
Now, the next question that pops in the mind is if amazon is reimbursing money without dealing with regular customers and the hassle of returns, isn’t it good for brands and businesses. In most of the cases – no. This is because the sellers are reimbursed with conditional pricing which reduces the profit margin for them. But the bigger challenge for brands is the loss of control of customer experience as the ownership of the product changes on paper but for a customer, the product is the same. This often results in bad reviews for the item due to unmet expectations.
Further, there can be a difference between the perspective of amazon’s quality control system and that of a customer regarding the condition of the product. For example, as per the Amazon warehouse deal, a product is “new like” but a customer may not agree with the same. In such a case the customer returns the product and leaves a low-star review. It may not hurt the original brand or business directly but in the longer run, it can end up hurting the brand value.
In addition to that, the prices offered on amazon warehouse deals are low and often create a challenge for the original products due to their price advantage. This is also reflected when a product is added to the buy box. As the Amazon algorithm consistently recognizes amazon warehouse deals as the dominant seller just like it does for the main Amazon brand, it helps the deal in winning the buy box. And, as the products that own the Buy Box are eligible for PPC, items from amazon warehouse deals can advertise instead of original brands and businesses.
All in all, brands need to compete with an amazon extension in their market and win the Buy Box for their products if they want to make a sale. the good part- it is possible. Let us see how?
How can Brands save themselves from getting affected?
Previously, brands had the option to opt-out from the “repackaging” option which restricted Amazon to take possession of the items and put them on amazon warehouse deals. However, this is an old story now as amazon has taken that option from the sellers.
But still, brands and businesses can choose the option for a return of unfulfilled orders or warehouse-damaged units to them rather than choosing an option for reimbursement. Though it may bring an additional shipping cost, sellers can still liquidate these items on their own and keep the control of the product in their hands only.
These all are just suggestions and may suit one seller but not another. So whether you let amazon warehouse deals manage your products in a special case or not, as a seller you must be aware of its effect on the Buy Box for your sales, your customers' expectations, and your brand.
How to stop AWD from selling your products?
Unfortunately, there is no way for sellers that can completely restrict the selling of a particular product on amazon warehouse deals. However, it can be restricted to reduce the volume of products ending up in the Amazon warehouse and being offered at a lower price.
As said earlier, brands cannot opt for amazon’s repacking services as now it is mandatory. Still, they can say no to Amazon’s refurbishment program by disabling refurbishment options on Amazon. Plus, they can purchase the inventory directly from Amazon to protect their brand value or have complete control over the price.
Amazon warehouse deals are amazing as they help customers in saving a substantial amount of money. Though the quality of the products available at amazon warehouse deals are not as great as new, they are still inspected for their functionality and come with all the benefits that Amazon offers on the sale of any new product.
However, it may not sound that great to you if you are a seller on amazon. Amazon warehouse deals impact a brand’s reputation in the long run and often win the buy box against the original companions. to avoid such situations, brands were given options to restrict amazon from taking possessions but days are gone. Such options are shrinking meaning it will be more challenging for a brand. There are still some options available that can cost brands a bit more, but still worth to go for considering their long-term value.