Importing Private Label Products from China and Selling on Amazon – By Rachel Greer

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Importing private label products from China, and selling on Amazon, enables startups and small businesses to rapidly bring products to an established market. While buying from Chinese suppliers is challenging enough as it is, selling on Amazon adds a whole new dimension of complexity.

To get things straightened out, we decided to ask an expert – Ms Rachel Greer, of Cascadia Seller Solutions. With years of experience working for Amazon, before she founded her own firm – she is truly a leading expert and industry insider. Keep reading, to learn more about compliance requirements, quality assurance and intellectual property issues – when selling private label products on Amazon.com.

Rachel, tell us a bit about yourself and what you do at Cascadia Seller Solutions?

I founded Cascadia Seller Solutions last May after leaving Amazon – actually one day later! When I was at Amazon, I first worked in the Transaction Risk Management department (Seller Performance, Fraud, Claims, Chargebacks) as a law enforcement liaison for fraud cases involving customers and sellers.


I then moved to the Product Compliance team, and managed Recalls, Product Safety, Private Brands Compliance, and Global Imports Compliance over the course of five years.
At Cascadia, I’ve assembled a team of former Amazonians who are uniquely well positioned to help clients build their own brands on Amazon, in a safe, compliant, and Amazon-centric manner. Whenever there is a problem with the account, one of the consultants who is a former NA Seller Performance manager handles these complaints.

If there are struggles with Customer Service, our Customer Experience expert steps in to help clients create a blurb library and guidance on how to speak to customers effectively. Our whole firm is based around the Amazon ecosystem and thriving on Amazon.

In the last two to three years, we’ve seen a large increase of interest in selling Private label products on Amazon.com. Why do you think this is the case?

Amazon has some of the most amazing foot traffic in the business. Traffic is phenomenal, even for lower performing products. Additionally, while conversion at typical e-commerce sites is around 1-2% at best, on Amazon, conversion starts around 5% and can be up to 50% for many products.
This is a very attractive platform for many sellers, where the revenue jump from being on Amazon is not just significant, it’s turned small businesses into $1M+ businesses in a couple months.

The other reason private brands are appealing to sellers is that competing for the buy box is becoming more and more difficult, and relies on having strong suppliers, deep pockets, and excellent technology – or, a shopping cart in the clearance aisle.

This means a lot of midrange sellers are being priced out of the reselling game, either by the big wholesalers or Amazon, or on the other end, small size arbitrage sellers buying on clearance and reselling online.

Amazon recently cracked down on seller’s of non-compliant balance scooters. Should sellers start taking product testing and labelling seriously?

Sellers should of course be taking product testing and labeling seriously, for a variety of reasons. First is that the failure in this case burned down homes and injured people.

I know people want to be successful in growing their business and making money, but making money at the risk of someone dying because of you cutting corners is pretty dark stuff in terms of a strategy to get rich.

In more practical and less moralistic terms, the Fine Jewelry category used to be completely overwhelmed with garbage products that claimed to be gold and were not, and so on. So, they instituted a new QA program whereby everyone has to submit an application and have their products tested, and if they don’t pass, they can’t re-apply for a year.

In addition, they randomly test products in your catalog 2-3 times a year, and boot you off the category if you fail.
I strongly suspect that this will happen in other categories, especially high risk foods and supplements, toys, baby items, and plug in electrical devices.
In terms of risk, anything ingestible, topical, electrical, or for children are going to be the most risky. Of secondary risk are items that touch food in the normal course of use, and products explicitly regulated by the many government agencies in the US, like composite wood, Edison light bulbs, car parts, wireless devices, and more.

Does Amazon have any specific product compliance requirements for sellers?

The CPSC, FDA, FCC, and FTC are the most common agencies to encounter with any given product a seller may wish to sell in the US.

The CPSC regulates all consumer goods not regulated by another agency, and sometimes there is overlap.

The FDA regulates all produced food (milk and eggs are considered “produced”, the USDA governs agriculture and animals), drugs, cosmetics, and food contact products. The FCC regulates all communications devices.

The FTC regulates all labeling claims in “advertisements” (the detail page) at the point of sale, with specific regulations governing jewelry, made in the USA claims, furs and textiles.

The (Amazon) Terms of Service clearly state that the seller must be compliant. Amazon leaves this intentionally vague so that it can be enforced on however they see fit. To be truly certain of having no issues with Amazon, sellers should work with a qualified consulting firm like Cascadia, or directly with a lab, although the latter approach is often more expensive, but not always.

Amazon forced most Hoverboard sellers to provide the necessary compliance documents, including UL documents. Does Amazon normally check if the goods sold on its platform are compliant?

Amazon rarely checks for compliance documents, proactively. However, Amazon has been taking actions like it took with the Hoverboards since 2007. That issue just happened to be a very significant one, unlike the normal scope of the issue, which is limited to a few SKUs.
The team that handles these takedowns, the Product Safety team, typically takes action on products only, not on seller accounts. But for a private label seller, sometimes that is their best selling product, and in terms of the revenue impact, it may as well be like having the account suspended.
Having your ducks in a row for high priority items is always a good idea, and take EVERY customer complaint seriously.
It took Amazon weeks to take down the hoverboards after the first fire complaints started coming in; I would have advised a seller to price their product to move and not replenish inventory to try to get out from under that liability as quickly as possible.

Where do you predict Amazon will go with this in the future? Should sellers expect Amazon to enforce labelling and document requirements more strictly in the years to come?

I have no evidence to justify my opinion, but yes, I do believe that there will be more enforcement in future, and product testing being done by Amazon itself, and then enforcement action taken on sellers.
It’s very simple to test plug safety, or test for lead content. Sellers should make sure that every product they import and sell on Amazon is safe and compliant, as Amazon won’t tell you when they might start a program like this.
The Jewelry QA audits were performed on hundreds of sellers without their knowledge, and then they were booted out of fine jewelry with no warning at all.

You also do sourcing. A major challenge for overseas buyers is assessing a manufacturer’s capability to make ‘compliant goods’. How do you manage this, considering that many Asian suppliers don’t even know which standards are mandatory in the US?

When we start working with a new supplier, we provide the testing protocol and inspection checklist with the required AQL in the purchase order. If it’s a higher risk item, we will do an audit ($750 one day audit) to assess the factory’s capabilities and areas of weakness.
In this way, we have made it clear what our expectations are for our clients, and the factory has agreed to meet them. We have also evaluated where they may struggle to actually meet them. To help with this process, we may advise the client to perform raw materials inspections on incoming materials, particularly with children’s products.
For other highly regulated products, such as electrical products, we recommend during production inspections, where the inspector can provide feedback to the factory directly and they have the authority to stop production for the client if the issues are egregious.
Basically, we assume that the factory doesn’t know what compliant goods consist of, so we spell it out for them, and we assess, test, and re-assess their performance.

Product compliance is not the only risk that Amazon sellers must deal with. Is it correct that Amazon only allows a defect rate of maximum 1%?

The Order Defect Rate, or ODR, can be only 1%. This refers to the number of customers who either file an A-Z claim or who leave negative feedback, or who file a chargeback. It is possible to have a much higher product defect rate than this.
Often, FBA will shut down sellers in excess of 5-15% defect rate, because this is obviously costing the seller quite a lot of money to pay the FBA fees each time, but this isn’t performance related. Keeping returns down helps to keep the ODR down, as typically customers who return items are returning them because something was wrong, and presumably, some of them will then file a negative review about the product.
But we’ve seen successful products with quite high defect rates in Clothing and Accessories, so the return rate is more of an indicator of where to look than a hard and fast rate.

What happens if a seller fails to keep the Order Defect Rate (ODR) below 1%?

When the ODR is above 1%, the seller is warned about this, and their funds are placed in reserve, typically for 30 days, to help Amazon cover any expenses related to those negative customer experiences.

Many Amazon sellers ship their cargo directly from the factory floor in Asia, to an Amazon fulfillment center in the United States. How can these sellers prevent a large number of defective units from entering the market?

Quality control inspections are essential. This is actually a bigger concern in terms of enforcement in my opinion than ODR for private label sellers.
What I see seller’s doing on a regular basis is failing to package items properly, or evaluate items properly, so they arrive damaged or in poor condition, and the customer then complains in their feedback, product review, or returns annotation, and the Amazon Product Quality sends the dreaded, “We have taken down your listing due to a buyer complaint about the condition of your product.”
This could be used, sold as new, or not as described, or inauthentic – most of these describe the same issue, though, which is defective or damaged product arriving to the customer. This can be because of sloppy production and a lack of quality control inspection before shipment or due to poor packaging that allowed the product to become damaged after production in the shipment.
Without the quality control inspection, you won’t know which one it is, which makes fixing it on the next shipment even more difficult. We recommend using packaging that meets the ISTA 3A standard, which also is the standard used for Amazon’s Frustration Free Packaging initiative.

Intellectual property is another issue that especially Private labellers must deal with. How do you go about to avoid selling a patented product on Amazon?

Typically, we recommend checking if the product you’re trying to sell is the only version of that product on the website, and if so, it’s probably patented.
As an example, there’s a car seat that uses heavy duty suction cups to hang in a window. The suction cups are patented, and so no one else can copy that exact design – only Amazon and the original seller are listing that product for sale.
Sometimes you can also see when something is truly innovative that it is likely patented. There are many traditionally used products, or variations on the theme, that new Amazon sellers can use to build their brands, it’s not necessary to copy someone else’s brand or designs.
That being said, patent infringement is quite hard to prove on Amazon, and typically Amazon will require some sort of proof of successful legal proceeding. Where we see sellers get into trouble far more often istrademark and copyright infringement.
Sometimes, they’re using someone else’s name brand in their product description (never use the name Dr. Oz to promote your supplements!), or using someone else’s photo. Always try to have unique offerings and photos.
We also see a lot of our sellers targeted by nefarious sellers trying to take their market share by copying or hijacking their listings. We support our clients by doing test buys, reporting to Amazon, and filing detailed complaints of anti-competitive behavior like fake reviews.

Thank you. Now, how can Cascadia Seller Solutions help companies looking to sell products on Amazon?

We are uniquely positioned to help brand owners because most of the company worked on Amazon’s own private brands, AmazonBasics and Pinzon (among others), when we were at Amazon.
We are the undisputed experts on how to do private brands, on Amazon. Each of us has our own specialty that we bring to the table, and I end up involved in pretty much every client interaction at some point!
These specialties include sourcing, testing compliance, audits, packaging, customer experience, US Customs/freight forwarding, and performance. Our goal is to help small to medium sized enterprises grow from the ground up, and to go global.
Some of our clients are just starting out, while some of our clients have solid US based businesses, and they want to be compliant going into Canada, Mexico, the EU, Japan, or China.
We are also able to help our sellers with our years of insider knowledge in understanding exactly what Amazon is asking for in those vaguely worded performance emails asking for things like invoices or in explaining what exactly the meaning of a particular report is for a seller, or in how to achieve greater traffic and conversion and better reviews for your product.
For some of our larger clients, we engage in a shared risk model, rather than our typical fees for services model, where we work to build up the account and revenues in exchange for a fixed percentage of net receipts.
At the end of the day, our goal is to help our clients be successful on a truly remarkable platform, one not built on relationships or catering to buyers, but one based on data, sales, and understanding the pulleys and levers in the system. Happy Selling!

More About Rachel Greer

Rachel Greer spent over 7 years at Amazon in roles supporting the legal teams and private label/import compliance teams after previous roles outside of Amazon in legal firms and teaching abroad in Austria and Singapore.
While at Amazon, Rachel received her Masters in Business Administration from Seattle University, which can be seen either as a testimonial to hard work and perseverance, or just being too stubborn to admit when one is in over one’s head!
Rachel is passionate about making complex and difficult aspects of product development and global launches like quality assurance and regulatory compliance understandable for young small to medium sized enterprises.
Rachel founded Cascadia Seller Solutions primarily because she prefers to steer her own course. But she soon realized the market was so great she needed more help, and brought on some of the lovely women she worked with previously at Amazon to make a formidable branded product launchteam for eCommerce sellers.
Rachel enjoys crafting, and spending time outside in the beautiful often rainy Pacific Northwest, where she lives with her husband, two children, two cats, two parakeets, one dog, and a whole bunch of fish that her husband brought home one day.
She loves solving client problems and helping them achieve their dreams of financial independence and freedom from the grind of the 8 – 6 pm workday (let’s be real, it hasn’t been 9-5 for a long time), and enjoys working with people as passionate about making and selling great products as she is!

More About Cascadia Seller Solutions

Cascadia Seller Solutions is a boutique consulting firm based out of the Pacific Northwest that is dedicated to helping small to medium sized businesses succeed with selling on Amazon. Our primary areas of competency are:
1) Amazon accounts management; a shared risk model in which we guide the company through the best ways to grow their Amazon selling business for a portion of the net receipts;
2) Building a brand from the ground up, inclusive of global sourcing, product testing and inspections, Customs/freight, and marketing; and
3) Expert advice on how to manage with seller performance enforcement contacts, such as performance warnings, and how to have stellar customer service on Amazon as a seller.