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How to Avoid Amazon Seller Account Suspensions

Who hasn’t heard about longtime merchants getting booted from Amazon for offenses that can range from the obvious to the puzzling? Seller suspensions have been on the rise since last year when Amazon changed its suspension algorithm, adding to seller anxiety.

No one knows more about this topic than Cynthia Stine, founder of consulting firm Online Sales Step by Step LLC. With 25 years of business, crisis, and turnaround consulting experience, she turned her attention to Amazon sellers and developed a system to analyze their mistakes, file appeals, and get their businesses back up and running.

In part one of this multi-part series for EcommerceBytes, Stine explains what has been behind the rise in suspensions of Amazon sellers in good standing; what you need to know about metrics for product quality; and why (and how) all sellers should practice suspension prevention in their businesses.

How to Avoid Amazon Seller Account Suspensions

by Cynthia Stine

When two or more sellers get together these days, the topic quickly turns to suspensions. Everyone has heard of someone who has been suspended and others who have been banned from the platform. Rumors fly and nerves jangle.

As someone who has helped a lot of sellers get back on the platform, I have good news and bad news for the seller community. The good news is that there’s a lot that a seller can do to avoid suspension in the first place – forewarned is forearmed – and keep their accounts clean. The bad news? A lot of sellers ARE getting suspended. An internal Amazon source estimated that more than 10% of sellers were suspended last summer. This is a serious topic.

What in The World Got into Amazon? 
When Amazon changed its suspension algorithm last year to include product quality issues, it didn’t send out an email or produce new metrics for sellers to follow. It simply started suspending sellers. Many were long-time sellers with great metrics. Most were bewildered because all their metrics on the Seller Central dashboard were green. They didn’t know what went wrong.

While the statistics may have looked good, sellers were being hit with a slew of product quality issues. Good product quality means that when the customer opens their Amazon smiley box, the item inside is in perfect condition and exactly what they expected. When a customer’s expectations are not met, sellers can expect to see complaints like “Used Sold as New,” “Counterfeit,” and “Inauthentic.” This puzzles a lot of sellers because they know their products were purchased new.

In many cases, sellers are purchasing imperfect products from retail stores, liquidators, online retailers, etc., that they sell as new but which are actually used (as in the case of a repackaged return) or so ugly that they look like they have been stored in someone’s attic for a few years (dirty, dingy, faded, dinged corners, torn shrink wrap, etc.).

In other cases, sellers are buying merchandise from the gray market to resell on Amazon. Wikipedia describes the gray market as: “…legal, non-counterfeit goods sold outside normal distribution channels by entities which may have no relationship with the producer of the goods. Gray market goods are often new, but some gray market goods are used goods.” Amazon wants to see a clear chain of custody from the manufacturer to the seller. They are rejecting invoices from the gray market as proof of authenticity.

One common example I saw a lot last summer and fall was Beauty sellers who would buy expensive hair care products through their brick-and-mortar salon and then re-sell on Amazon under a different name. This is expressly against their salon’s contract with the shampoo manufacturer. I suspected many times that it was the manufacturer who was filing the claims. Because my clients could not produce a legitimate invoice to prove their product was authentic, they got suspended from the platform. One seller was banned for life because it was not his first offense. Others I was able to get reinstated because they swore to only buy from authentic sources in the future.

The New Metrics for Product Quality
If Amazon won’t give sellers metrics to follow, what can be done? To answer this question, we created our own process that we give clients:

1) Review your negative feedback, customer messages, A-Z claims (if you are a merchant-fulfilled seller), returns and imperfect orders every week to identify products that are gathering product quality problems. We use a rolling 60-day metric with our clients.

2) Shut down problem listings with more than two negative returns and investigate. A negative return is when a buyer sends back an item and gives a negative reason like “used sold as new.”

3) Ask your buyers who returned goods for negative reasons how you could have made their experience 5-star. Listen carefully to what they say. We suggest sending out these emails weekly.

4) Fix the problem. “Not as Described” is usually a listing problem. “Used Sold as New” is an ugly product problem or a condition problem. “Inauthentic” is an inventory sourcing problem. Fix the problem and then re-list your item.

5) Only three “hard hits” in a six-month period – five in a year. A hard hit is inauthentic, counterfeit, not as advertised, not as described. You should get warnings before you are suspended. Always respond within a few days. These warnings are the only notice you are going to get before you are suspended.

Taking these actions on a weekly basis should head a lot of problems off at the pass. Because Amazon won’t share with us their actual metrics, we chose two or more as the stopping point for product sales. Be sure to close the listing, not just zero it out. Once you fix the problem, you can re-list and keep selling it.

Most importantly, take your returns seriously! Amazon does not look at them as a percentage of sales when they are negative. They view them in terms of absolute numbers. From Amazon’s point of view, it doesn’t matter if you have dozens, hundreds, perhaps thousands of perfect orders every day where there is no buyer complaint.

This approach by Amazon galls sellers no end because they may be selling thousands of units of a product and be brought down by a relatively few negative complaints. Returns for changing your mind, wrong size, don’t like color, etc., don’t count against your negatives, by the way. Those kinds of returns are judged in comparison to the total number of units sold.

One client assured me that all the negative returns for a particular product were because buyers were lying to get free shipping on their returns. “Buyer-liars” are actually much rarer than sellers think. We prodded him to contact his customers with negative returns anyway. Lo and behold, he discovered that there was an intermittent problem with his product getting dinged up in Amazon’s warehouse. It was made from a soft metal and would show up with dents – not every time, but sometimes. By wrapping his items in fat bubble wrap before sending it to Amazon, he eliminated this issue and reduced his return rate on this product to nearly zero.

Solve Internal Problems to Meet Amazon’s Requirements
Thoughtful problem-solving is what Amazon requires of its sellers. The solution doesn’t have to be hard or expensive, but some thought needs to go into it. The question the seller needs to ask is, “how can I prevent this from ever happening again on any of my items?” That question has led to some major changes of my clients’ operations…usually for the better.

1) Understand the problem. Look at the situation from the customer’s eyes. Are they confused because of the listing? Did they actually get what they ordered? Is the product ugly? Where are you buying the product? Why do they think it is counterfeit? My DVD clients get this claim a lot, and it is usually because the product was bought in another country for resale here in the United States. It may not have the hologram or some of the other details U.S. consumers expect – even though it is purchased directly from the brand/rights holder.

2) Look at your entire operation holistically. The problem is often systemic and requires everyone in your company to fix – acquisitions, listings, customer service, packing and shipping.

3) Get your team(s) on board. Horror stories abound of employees who lie, fake invoices, embezzle, sabotage the boss by not following Amazon policy, don’t follow procedure when packing and shipping, and generally don’t care about the business. Your failures as a manager will show up in your seller account, I promise you. To fix a problem, one client of mine fired his entire customer service team and started over.

4) Review customer complaints regularly and adjust. Customer complaints are telling you something is wrong. While you can’t please everyone, if you are getting a volume of complaints around a particular listing, you need to stop selling it until you can figure out why. I’m surprised at how few of my clients ever look at customer complaints, let alone look for trends. If customers are getting the wrong items, you have a problem in your shipping department. If customers are getting ugly products, you have a problem with acquisitions and with inventory inspection.

5) Let go of bad products. If you are in a hole and want to get out, stop digging! Many of my clients will continue to sell a product that is getting them in trouble because it is a strong seller for them or they have a ton of it in the warehouse. If you can’t fix your problem product, get rid of it some other way like liquidation or selling it on eBay (much more forgiving of imperfect products). Find something else to sell. It seems obvious, but it is harder in practice.

The New Customer Dissatisfaction Metrics
While Amazon has yet to create product quality metrics for its sellers, two new customer dissatisfaction metrics are creating consternation in the seller community. Basically, when a customer interacts with you by email, they will be asked later if they were satisfied by the response. You must maintain a 75% positive rate.

Many of my clients are failing this because they don’t have enough positives to off-set the negatives. This is a problem that requires a comprehensive solution with my clients’ customer service teams and follow-up with customers to make sure they are happy. We are still working on ways to increase positive responses so our client’s metrics can withstand some hits. This is much harder than seller feedback to improve.

Currently, these metrics are in beta and don’t count against seller accounts, but we expect this to change in February or March.

Best Practices
Suspension Prevention is about best practices. Amazon is using its big suspension stick to get sellers to approach their businesses professionally. Customer service, listing maintenance, ethical inventory acquisition, consistent packing and shipping all lead to perfect product for buyers. That’s the bottom line. Amazon wants sellers to realize that it is their responsibility to provide perfect product to Amazon’s buyers.

It doesn’t matter whose fault it is when customers are complaining; what matters is that you will fix the problem if something goes wrong. Many practices that Amazon seemingly didn’t care about before (or at least did not enforce), they care about now. It doesn’t matter how long you’ve been selling or how high your sales volume is; you are not immune to suspension. For that reason, all sellers should practice suspension prevention in their businesses. By taking a proactive approach, many sellers will be able to avoid getting suspended.

About the Guest Columnist:

Cynthia Stine is also an influential blogger and the author of two popular books, “Suspension Prevention: Get Reinstated and Protect Your Amazon Seller Account,” and “Make Thousands on Amazon in 10 Hours a Week” – you can read more at SuspensionPrevention.com. And stay tuned for more from Cynthia in EcommerceBytes Newsflash.

Comment on the EcommerceBytes Blog.

Also see the follow-up article, “How to Reinstate Your Suspended Amazon Seller Account,” in the February 8th issue.

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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). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.