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Questions as Amazon Cracks Down on Sellers

With third-party merchants now accounting for 45% of the units sold on Amazon, the marketplace has the unenviable job of ensuring they provide good service to customers. Over the summer, Amazon has been cracking down hard on sellers, resulting in questions about the methods the marketplace is using to weed out poorly performing sellers.

While many sellers welcome what they see as a cleanup of the site, some are concerned that Amazon is overreaching and fear some good sellers may be getting in trouble for factors outside of their control.

Amazon spokesperson Erik Fairleigh responded to questions about seller concerns. “We value sellers and see them as our customers. If sellers ever feel we’ve made a mistake, we hope they reach out to let us know. Sellers can always contact us through the Seller Central channels, or email us at seller-performance@amazon.com,” he said.

Problem One: Bots Gone Wild
Sellers have been reporting two main areas of concern – the use of bots, and a change in how Amazon treats FBA returned inventory.

“Amazon is definitely trying to improve the customer experience and for this, I applaud them,” wrote one EcommerceBytes reader who sells on Amazon. “However, I think they are over doing it. At the moment, they are using bots to scan through every single product review and buyers’ emails to pick up keywords that Amazon think is detrimental to buyer experience. For example: defective, damage, broke etc…”

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That’s a common concern among sellers.

The reader didn’t have a problem with the technique per se, but rather, he was concerned that sellers would have no way to investigate and rectify mistakes. “Sellers are kept in the dark what is happening. We no longer have any metrics to rely on and we don’t know how we are doing.”

He believes the problem with bots has been happening since June, 2015. “Interestingly, that actually coincided with launch of the new Amazon product review system.”

Lisa Suttora is a consultant who works with online sellers on marketing strategies, and she is one of the people who applauds Amazon’s actions over the summer to crack down on poorly performing sellers.

“I’ve have heard people speculating that Amazon is scanning product reviews looking for negative keywords and then suspending accounts,” she told EcommerceBytes. “However, in working sellers who have been hit with a policy violation or account suspension, we’ve seen no evidence that product reviews alone are causing suspensions.”

Nevertheless, industry boards are full of complaints about bots-gone-wild. A second reader told us that in reacting to the real problem of sellers who list “shoddy/arbitraged/liquidated goods,” Amazon was hurting good sellers – “some magic number triggers a suspension rather than ODR,” she said.

One Amazon seller told us the problem is compounded by some buyers who put down wrong information about their returns so they don’t have to pay shipping back to Amazon.

Amazon confirmed it uses bots – “This mechanism is not new,” Fairleigh said. “For many years we’ve used tools, including bots, to identify potential customer issues.” Could he confirm there has a rise in seller suspensions? “We do not share this type of seller performance information publicly,” he said.

“We use a variety of mechanisms, both automated and manual, to help ensure that customers can buy with confidence on Amazon. We expect both sellers and the products they offer to meet Customers high quality bar.”

Problem Two: Mis-classified FBA Inventory?
The second reader we mentioned above explained a problem we’ve also seen reported on Amazon selling groups – how Amazon workers handle FBA returns – and this is a problem Suttora confirmed was happening.

“Customer-returned goods are inspected and if they don’t appear defective, they are put right back into saleable inventory,” a seller told us. And any FBA seller can immediately see the possible problems that can arise with this practice: if the warehouse worker misses a problem with an item and it is later resold to another customer, that seller will get penalized.

“And even worse, now Amazon automatically replaces the outer shrinkwrap or bagging if a return comes back without it and they deem the item sale-able,” the seller said.

Suttora agreed this is a major problem that she has seen over the summer. “Amazon has enabled the FBA Repackaging Service on accounts even though the seller previously disabled it.”

And, she said, Amazon is not doing a good job of checking returns and are repackaging defective/unsellable products. “In some cases, the higher return rate has immediately led to account suspensions. It is definitely an issue. We advise all our customers to check ALL their settings on a weekly basis now.”

We asked Fairleigh if he could confirm that Amazon was using a different system for dealing with returned inventory and if he could specifically address the concerns raised by sellers.

“We have launched a Repackaging Service in FBA that provides sellers with the opportunity to return some customer returned units to sellable status when the units are otherwise in new and sellable condition,” he said.

“We have not detected defects in the program since introducing the service, but welcome feedback from sellers on how we can improve the experience. More information about the Repackaging Service can be found on the help page,” and providing this link.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.