/How to Sell in Gated Categories on Amazon and Limit the Competition

• Jan 3, 2021 • 17 min read

How to Sell in Gated Categories on Amazon and Limit the Competition

Dillon Carter

Co-Founder, COO at Aura

Selling in Amazon gated categories can be a lucrative opportunity for sellers looking to limit competition and access exclusive markets. However, these categories come with their own set of challenges and requirements.

Understanding the legal challenges and requirements associated with Amazon restricted categories is crucial. Sellers must be well-informed about the regulations that govern these restricted areas to avoid legal issues.

The process for seeking approval to sell in these categories often involves providing detailed documentation and meeting specific criteria set by Amazon.

How to Limit the Competition and Sell in Amazon Gated Categories

This is the ultimate guide to Amazon gated categories and how to overcome them.

So if you want to:

Know which categories are gated
Get ungated in all of them
Learn how to get auto-approved

… this is the guide for you.

As many of you know, selling on Amazon can be a long and winding journey; It is easy to start, but hard to master. Along with the journey comes great experience as you learn from your mistakes and find new ways to become a better, more efficient Amazon seller.

One of the largest misconceptions new Amazon sellers have when starting is assuming he or she can sell any product or brand. The reality is, there are several categories and brands that Amazon place limitations on in order to restrict the majority of sellers.

Amazon specifically targets new sellers with many restrictions. These restricted markets on Amazon are called Gated Categories. Gated categories can discourage new sellers from joining Amazon, but you just have to be aware of what products and brands aren’t allowed to be sold.

Understanding Amazon's restricted categories is crucial for new sellers. These categories often require specific approvals and paperwork, making it challenging to sell in these gated areas. However, just because Amazon has placed these restrictions does not mean it will always be restricted from you. Even if you are a new seller, there are several categories that you can begin ungating yourself from.

Some categories are more difficult and require paperwork, others are extremely simple and have the chance for “auto-approval.”

Why Should You Care?

Amazon is currently the largest online selling platform. There are so many unrestricted categories, why should I care about the handful that are restricted?

It’s simple:

Oftentimes, it can be very difficult to find new profitable items to sell on Amazon. By selling products that require you to ungate, you are eliminating the competition of sellers who don’t want to bother with the hassle of unrestricting a certain product.

Certain markets can become saturated and you may find that one or more of your listings have accumulated more competition than you anticipated. More sellers on a listing usually translate to reduced profits in your pocket.

Once you learn to unrestrict your account and navigate the challenges and processes involved in obtaining approval for gated categories on Amazon, you may soon instantly gain access to several markets with far less competition. This opens up opportunities in both gated and ungated categories, potentially increasing your profit margins.

Why does Amazon Gate Certain Categories?

The first step in the process of ungating is understanding why exactly Amazon has certain categories restricted in the first place.

Amazon has a very consumer-centric view where protecting its customers is the number one priority. In order for Amazon to maintain its reputation, they limit and verify the sellers of certain products, especially those in restricted categories. These restricted categories involve legal and regulatory complexities, requiring sellers to meet specific criteria for product compliance and go through an approval process.

By doing this, Amazon can reduce the risk of counterfeit goods selling on their site.

This practice is beneficial for all parties as consumers become more willing to purchase products on Amazon without thinking twice.

Think of eBay or other online marketplaces; you would usually double-check before purchasing an expensive item and only reserve your business to top-rated, history proven sellers.

Types of Amazon Gated Categories:

There are two types: Brand gates and Category gates. Gated categories on Amazon present significant challenges and requirements for sellers seeking approval to list products in these restricted areas. Sellers must navigate through steps such as providing documentation and proof of authenticity, and they must understand brand restrictions that may impact their ability to operate within these categories.

Brand Gates

Brand gates can be more difficult to overcome as these brands have different motives for why they do not want people selling their goods on Amazon. Often times it can be but not limited to:

Their items are often counterfeited
Items are easily stolen from retail stores
The brand doesn’t want the perceived value to be decreased
The brand is sold exclusively elsewhere

Ungating specific brands, which fall under the broader term of gated category, is usually more difficult. It oftentimes requires a direct relationship with the brand and sometimes a monetary fee. The approval process for accessing these gated categories necessitates specific documentation to ensure product authenticity and compliance with safety regulations.

Most of the time, Amazon must verify that you have written permission from the brands to sell their products. Here you can explore the list of Gated Brands.

Category Gates

Here is the list of Amazon Gated Categories for 2021:

Selling in a particular category on Amazon often requires an approval process, especially for gated categories. These categories have different regulations, and it is crucial to confirm product listings within the desired category to ensure compliance with Amazon's guidelines.

One rookie mistake to look out for is if you see a certain product is restricted, it may just be the specific brand and not the category. It is best to double-check.

Additionally, here is a list of prohibited categories.

More Types of Restrictions:

Subcategory restrictions

Less commonly there are subcategory restrictions. These restrictions are a little different than regular category restrictions.

Oftentimes, Amazon will leave certain categories unrestricted however a few subcategories require to be ungated before you can sell those types of products.

An example of this is Amazon leaving the Toys category unrestricted; however, they restrict the sale of learning game toys and building block toys.

The categories that you may experience Subcategory restrictions are in:

Beauty
Health & Personal Care
Toys

ASIN restrictions

Another type of restriction Amazon places on sellers are ASIN restrictions. Some products may not be able to be sold on the basis of Amazon blocking specific ASINs. Amazon does this due to IP infringement concerns, product quality, or product safety.

Holiday Restrictions

During the Hectic Holiday season, Amazon includes more restrictions. These restrictions include anything in the Toys and Games category.

The good news is these restrictions only apply to sellers who Merchant Fulfill and aren't able to meet Holiday Selling Guidelines. If you sell using the FBA program then you have nothing to worry about. Amazon only does this in order to reduce the chance of new sellers being late with orders.

Nobody wants their Christmas presents to arrive the day after Christmas!

However, if you've demonstrated past success with Merchant fulfillment you should be fine.

Product Condition Restrictions

Amazon includes restrictions on certain conditions of products in several categories. The following categories restrict the sale of used items:

Baby Products
Beauty
Clothing, Accessories & Luggage
Grocery & Gourmet Food
Health & Personal Care
Jewelry
Shoes, Handbags & Sunglasses
Toys & Games
Watches

Additionally, the Pet Supplies category has specific requirements for sellers. It is a gated category that involves regulatory steps for approval, and products can be listed as new, certified refurbished, or used.

There is one caveat to this rule. Used Toys may be sold in Collectible Condition. Here is more information on specifics of Amazon’s condition criteria.

Okay, Now How Do I Ungate My Account?

Next thing you’re probably asking yourself. Okay now, how do I start unrestricting these Amazon gated product categories?

The Process to apply for approval is:

Log in to Seller Central and BeginDo this by selecting “Add A Product” in the inventory link

Find the Application FormSearch for the item you want to sell and click the “Listing limitations” link next to the item.

Request Approval

Click the Request Approval button to begin the application process.

Next, request the approval...

Ungating your account doesn’t have to be complicated, many times it’s far from it. If you are already a seasoned seller, chances are if you request approval for a restricted category you may automatically be approved.

Amazon mostly looks for you to be performing within their required targets.

These performance targets include a defect rate below 1%, pre-fulfillment cancel rate below 2.5%, and late shipment rate below 4%. Different categories also have different criteria that need to be satisfied.

Depending on the category, Amazon may request documented proof of where you source your goods. The documented proof is often an invoice from a wholesaler or distributor.

In order to meet Amazon’s guidelines, the order must be for 10+ units of the specific product you are attempting to ungate. Amazon may also request a letter of approval to sell from the manufacturer or brand owner, monetary fee and various documentations (LLC, Tax ID, Address, etc).

If you applied and get denied it is no big deal, especially if you are a newer seller. Just wait three to six months and reapply. Oftentimes it is because you are “too new” but once you have more sales under your account Amazon will approve you.

Special Requirements by Category

For the most part, category applications will only require you to present certain business information, an invoice or just meet Amazon's Required Performance Targets.

On the other hand, other categories become more complicated. Here is a list of the more complicated categories and their requirements.

You may find additional guidelines here.

Fine Art

Already have been an established art dealer with three years of experience

Have a professional working website of your brand with an established presence

Fine Jewelry

Already Be Established (Must have at least 50k in annual revenue)

Pay Amazon's Fine Jewelry $5000 entry fee

Submit your products for Amazon's Quality Assurance Testing

Wine

Be registered as a domestic winery, importer, or wholesaler with retail sales privileges

Watches

Must List all Watches with manufacturer's UPC code

Have methods for testing pre-owned watch accuracy and water resistance

Kindle Accessories

Be prepared to pay 45% sales fees on Kindle products.This may not necessarily be bad, bigger fees = less competition

Collectible Coins

Maintain Proper Memberships with one of the Coin Collecting Organizations:PNG, ICTA, PCGS, or NCC/PMG

Have at least 70% of your coins gradedAny coin valued at $1500 or greater must be graded

Must set up an Anti-Money Laundering Program

Must have a website

Automotive and Powersports

Have your own Website

Use Compliant Product Images

List with Proper UPC Codes

All Certified Refurbished product parts must be warranted by the manufacturer

Must have reviewed Part Finder and Fitment Data page

Categories Amazon isn't accepting any more applications (at this time)

Textbook Rentals

Giftcards (Unless you are the company the gift card is for)

Categories that are incredibly easy to Ungate (Common Auto-Ungate Chance)

Sexual Wellness
Collectible Books
Clothes, Accessories & Luggage

As long as you have an eCommerce store with a working shopping cart (incredibly easy nowadays with handy templates)

Auto-Approval

As your Seller Central account "ages", Amazon will increase its trust in you. In doing so, you'll find that you're auto-approved immediately after requesting the ungating on many categories and brands moving forward.

From personal experience, this begins roughly 6 months and over $100,000 in annual sales.

The "Prohibited Product Claims" Policy

Amazon is very strict when it comes to managing expectations for their customers. The Pohibited Product Claims Policy protects them from sellers setting false expectations.

An example would be showing a 3-pack in the featured image on a listing but the actual product only contains a single unit.

As a best practice, Amazon's policy followed the Federal Trade Commission's regulations. Specifically, it targets the "unfair or deceptive" advertising.

In parallel with the above issues, the Prohibited Product Claims Policy also states that Amazon bans products tha advertise they can "cure, mitigitate, treat, or precent diseases in humans or animals without FBA approval."

It's highly recommended that you read through and better understand the FTC's "Green Guides", which further break down the details.

The "Prohibited Product Claims" Policy

Amazon is very strict when it comes to managing expectations for their customers. The Pohibited Product Claims Policy protects them from sellers setting false expectations.

An example would be showing a 3-pack in the featured image on a listing but the actual product only contains a single unit.

As a best practice, Amazon's policy followed the Federal Trade Commission's regulations. Specifically, it targets the "unfair or deceptive" advertising.

In parallel with the above issues, the Prohibited Product Claims Policy also states that Amazon bans products tha advertise they can "cure, mitigitate, treat, or precent diseases in humans or animals without FBA approval."

It's highly recommended that you read through and better understand the FTC's "Green Guides", which further break down the details.

Consequences of violating Amazon's restrictions

You may find yourself tempted to break the rules or try "gray hat" tactics to avoid them. Don't as these tactics could put your business at risk.

Amazon has a long list of reactions but the most common are the following:

Amazon could delete / cancel your listings
Amazon may apply further limits as to what you can list
Amazon could take away your ability to list new products
They could suspend your Seller account entirely

Is selling restricted products worth it?

That depends. For more experienced sellers, it should be a non-issue. For those brand new sellers learning how to work through the system of selling on Amazon and understanding the rules of the game, you may want to consider holding off a bit longer.

If you're an Amazon seller that is detail oriented and focused on doing the right things, you shouldn't have any issues. Do keep in mind that these categories offer a ton of new opportunity but should be handled with care.

Like most things in business and life, focus on areas where others may have a harder time succeeding.