Take care of product compliance yourself?
As a new and largely inexperienced Amazon seller, many important questions and decisions come your way. Whether to take care of product compliance yourself is one of them. That’s why we want to offer you an objective look at why it can pay off to hand over product compliance to a partner.
As a business owner, you’ve probably already noticed – it often arises whether it makes sense to do certain activities or tasks yourself or hand them off to someone else. Some tasks are time-consuming and simply belong in the background but do not directly contribute to the company’s growth. These include customer support, product sourcing, accounting, and Amazon management, i.e., creating product listings, delivering goods, and advertising management.
Product compliance is also one of these responsibility areas; communication with manufacturers and laboratories, the former typically from countries with different time zones, is very time-consuming. It also requires legal knowledge. If tests, measures, or labeling are not carried out or are carried out incorrectly due to incorrect information, this can cost a lot of money.
Submitting product compliance: Useful for new sellers, or not?
As a new seller, you should consider two points of view. First, it makes sense to inform yourself, learn, and then take care of all company processes yourself. In the beginning, of course, you also want to ensure that the Amazon FBA project works as you envision it and brings in enough profit. In addition, as an entrepreneur, it is advisable to have at least a rough idea of all the processes that go on in the company.
That said, in some cases, it can be an excellent decision to hand off product compliance from a reasonably early stage. For example, if you want to go into a highly competitive niche like small electrical appliances or nutritional supplements. These product niches are known because competitors like to warn off quickly.
Depending on the available start-up capital, it is also possible to only partially outsource product compliance. For example, you can start by handing over the packaging labeling. In the case of a later repeat order, the product could then also be made compliant.
Once you have established yourself on the market and are generating a good cash flow, you should ask yourself whether it doesn’t make sense to outsource specific tasks to use your time even more effectively.
Doing product compliance yourself: Advantages and disadvantages
Product compliance make yourself: Disadvantages
Product compliance is not an easy topic, as there are countless regulations, guidelines, and standards that you have to observe as an Amazon seller. Legal knowledge is, therefore, almost a must. In addition, you need a certain basic understanding of chemistry to recognize problems.
- Lack of experience: As a new seller, you are probably not yet very familiar with the workings of Amazon and control authorities. There are specific gradations when it comes to compliance violations. In particular, there are things that you can safely tackle a little later since the risk of getting caught is relatively low. Other points you should definitely get right from the start, as violations are very obvious with these.
- Time-consuming: Acquiring the necessary knowledge is very time-consuming. You will have to do a lot of research. An illustrative example of this is Amazon’s PAN-EU program – it shows that each European country has different or even additional compliance requirements that need to be considered.
- Higher costs: As a small individual customer, you often pay more for a laboratory than larger customers like Tradavo because we can negotiate more favorable prices due to larger orders. Especially as a new seller, it can quickly happen that you order extra tests. In addition, if products are tested for compliance with a standard that does not apply to them, they must be retested entirely. Even with existing test reports or manufacturer certificates, you are not automatically on the safe side because they may not be valid for various reasons.
- Wrong labeling: If your labeling is (obviously) incorrect, Amazon may block your product, or you may be warned by a competitor – in both cases, you will have to temporarily stop selling your product.
- False documents: You risk submitting wrong or outdated documents to authorities or even Amazon. This can have far-reaching consequences for you and your company.
In this article, we have also summarized 5 mistakes that happen to most (new) Amazon sellers. However, with the support of an experienced compliance partner, you can avoid these expensive mishaps.
Do product compliance yourself: Advantages
- Acquiring knowledge: A prerequisite for further training around product compliance is that you are also interested in the legal and often technical, or more precisely, chemical topics. If you deal with these, you can acquire a lot of valuable knowledge to help you with other projects in e-commerce.
- Control: If you take care of product compliance yourself, you have complete control over every single step and full responsibility.
- Money saving: If you take care of the compliance of your products yourself, you will firstly save money, especially if you are familiar with the legal and chemical background. However, the opposite is often true for most sellers. If your knowledge of product compliance is not as intense, you may do more testing than you need to – and that can cost you more money than you initially saved.
How can we support you?
At Tradavo, we offer our support in all areas of product compliance. Thanks to our many years of experience, we can provide you with expert knowledge at every step – from product search to correct labeling. In addition, you benefit from shorter turnaround times and lower prices thanks to our cooperation with specialized laboratories. Please don’t hesitate to contact us.
You need assistance?
It is best to book an appointment directly for a free initial consultation.
Who wrote this article?
As an author, Christina fills the blog section of our website with exciting and informative articles, so that our readers can always take care of product compliance in their company in the most well-informed way.
