Now that my book has been out for a couple of weeks, questions are starting to come in. I’m grateful to my thoughtful readers – and hope their questions help you, too:
Q. Most Of The First Book You Wrote Told FBA Seller Startups To Shop At Retail And Discount Stores As A Good Way To Get Started. Given Why Sellers Are Getting Suspended, If You Were Going To Get Into This Business Today Would You?
Amazon FBA has changed a lot since I got started. Mistakes that I made in the beginning without consequence are more vigorously pursued by Amazon today. That being said, I still think Amazon is a great opportunity for a small seller on a budget to get started. I would still dive in. What I would tell the new retail arbitrage seller today is to make sure that the products you buy are PERFECT and gift-ready. If you find yourself standing at a shelf wondering if you should buy something based on its appearance…the answer is probably “no.” You can’t afford faded, dirty, scuffed packages with crushed corners, torn labels, etc. It needs to be pristine. Take great care removing labels so the box/package is perfect when you send it to Amazon.
Next, make sure that there is plenty of protective packaging whether it is bubble wrap, poly bags, double-boxing…whatever it takes to make sure that your product makes it all the way from your house to the customer in perfect condition. You can’t rely on Amazon to ship your product with the same care that you would. Ultimately, product quality is your responsibility.
Lastly, buy from sources that provide an invoice or receipt that Amazon will accept. You need to have the full name of the product on your receipt/invoice and – ideally – the UPC code. This means, for example, that Target receipts are usually OK, but Marshall’s receipts aren’t. If you are ever accused of inauthentic or counterfeit, you MUST have an acceptable receipt or invoice. When you shop, you need to look at the receipt first and then the product quality and then the price and potential margin.
You may want to sell some of your goods as Used-Like New instead of new. While they do not explicitly say so, Amazon considers goods bought retail as being used and they are not currently pursuing product quality claims on used goods unless there are a LOT of complaints like you might see with a defective product. I’ve not yet seen anyone selling used goods suspended for counterfeit or inauthentic.
I would also say for new retail arbitrage seller that the ultimate goal is to graduate to wholesale or private label. The reason I say this is that these sources provide invoices that meet Amazon’s requirements. Private Label products are branded by you and – presumably – unique to the Amazon platform and hard to duplicate. This provides maximum profit to you. Wholesale offers opportunities that may not be available via retail arbitrage or at least not in the desired quantities.
Q. How Are You Approaching Your Business Today?
Even before I started reinstating Amazon sellers, I was moving away from retail/online arbitrage to wholesale sources and representing exclusive products. I did this for two reasons. In the first place, I was moving my business to one that was automated and where I could outsource many of the processes to a pick and pack company and my team of virtual assistants. I wanted to spend as little time as possible sourcing and shipping. When reinstatement work blew down my doors, I had to automate or close up shop. That meant wholesale. I didn’t have time to shop nor did I have time to teach anyone else to shop for me. Luckily my work with Frank Florence made it possible.
Once I saw how Amazon was suspending sellers for issues relating to buying retail to resell on Amazon and how having the wrong invoice could make the difference between selling or banned for life, I decided to focus on unique products where I would have little to no competition. I would like to stress here that there is no way I could have started where I am today. I had $200. Selling used books and retail arbitrage was the only choice I had with my limited budget. I still have a lot of books in my inventory that I will be selling off over the next year or so.
Q. Are There Any Stores You Won’t Shop At Today?
Yes. I’ve stopped shopping at dollar stores, Marshall’s, TJ Maxx, thrift stores and other stores with poor receipts – at least for NEW items. I’ll still shop thrift stores for used books, etc. I’m clearing out old inventory and won’t be buying more from those sources.
I stopped buying from ToysRus.com a long time ago because of their poor quality control. I would routinely order new product from them and get something that had obviously had some hard shelf wear before they threw it (yes, threw it) into a box. I got tired of sending inventory back and decided it wasn’t worth the hassle. They obviously re-sell returns as new to their online suckers…er, customers.
Lately, I’ve been equally unhappy with the Disney Store online. They have cute, cheerful boxes but they take no care with my goods. If you are buying via online arbitrage or wholesale, it is important that you either see the goods before they go to Amazon or you work with a partner you trust to really inspect the items when they come in. I outsource my prep and packaging and I have been very pleased with the experience because my partner is very particular about pulling out less-than-perfect inventory.
Q. Are There Any “Safe” Categories?
Every category has its own rules and the seller who ignores them puts his/her account at risk. When I look at the majority of our clients, I can see that Amazon has been cracking down hard on health & beauty and electronics. That doesn’t mean we haven’t had suspensions in the other categories. What this also tells me is that we may see Amazon bear down on different categories over time. They closed the fine jewelry category for more than a year while they tested everyone’s product and rooted out counterfeits. Hopefully this will not be necessary for other categories.
I predict grocery will be next. There are a lot of sellers who are not following the rules in that category and Amazon just changed the rules this Spring without much fanfare (one email, basically) for commodity goods which includes candy. Most sellers don’t realize that. I had to eat (not literally) hundreds of pounds of bulk candy that I suddenly could not sell and that I had ordered wholesale in advance.
Q. I’m Nervous About Selling On Amazon Now. I Don’t Want To Be Suspended. Should I Be Worried?
Most people are worried about selling today because the suspensions seem so random and catch the sellers by surprise. Sellers are waiting for the other shoe to drop and fear that something they don’t know about will bite them in the butt. That’s why I wrote Suspension Prevention – to arm sellers with information, strategies and tactics to keep their accounts active. Forewarned is forearmed. Sellers aren’t happy to hear it, but many of us will have to change how we do business – there’s no way around that. A deeper commitment to the customer and to product quality often affects customer service, shipping, sourcing inventory and company policy. However, all of these are within our grasp. We can do it.
Q. You Mention In The Book That There Were Some Sellers You Couldn’t Reinstate. Why Not?
We’ve learned that there are certain situations that we can’t fix:
- If Amazon shuts you down for selling stolen goods or if someone has illegally accessed your account and you can’t plug the security hole, you are out of luck. Amazon will keep your money, your inventory and lock you out of your account forever. Depending on the situation, you may need to hire an attorney to protect yourself from prosecution (not from Amazon, from law enforcement).
- Illegally maintaining multiple seller accounts on Amazon. To do this successfully involves a great deal of deceit. While they don’t arrest you or anything, you are banned for life. Many people who secretly opened up additional accounts on Amazon were dismayed to learn once they were suspended that all their accounts were shut down. This is because Amazon doesn’t turn on the “seek and suspend” software until after you are suspended. All those folks who thought they had successfully hidden themselves from Amazon were unhappy to learn how wrong they were. While we have gotten some people reinstated who made this mistake, they still lost the second account and had considerable expense getting their inventory back.
- Old suspensions. We’ve had sellers come to us months to years after their account was suspended and we were not able to get them reinstated. There seems to be some time frame beyond which they will not look at your account again. If your first appeal was turned in within the 17-day timeframe and you keep working on your appeal with Amazon, there doesn’t seem to be a set cut-off time. If you let it go and don’t try to appeal again in a timely way (wish I could tell you what that was exactly), then they won’t look at it after a certain point.
- Genuine counterfeit. Most counterfeit claims aren’t actually counterfeit goods. The product may be damaged in shipping or may not be in the retail packaging the customer expects, or it may be dirty, dinged and faded, but it is authentic and we can usually prove it. Even if the invoices/receipts aren’t what Amazon wants, they will sometimes reinstate a seller because their source seems legitimate enough. If Amazon is convinced that your product is counterfeit, however, you will not be reinstated. We had this happen to a client of ours. She bought 1 DVD at a Walgreens or somewhere similar with a bad receipt. We originally thought they were denying her because of the receipt. We found out later that they denied her because she priced her product so far below Amazon’s that Amazon was convinced it must be counterfeit. After all, they get terrific deals that most sellers can’t get on DVDs, etc. They concluded that she had bought counterfeit product – it was the only way she could have priced her product so low. Tragically, we could not convince them otherwise. She was a new seller and made a bad pricing mistake on top of buying from a retailer with a bad receipt. Had she actually sold the DVD, it would have been at a loss. It was a rotten situation all around.
- Fake invoices. Amazon knows that some sellers will make up receipts and/or invoices. They are not amused. This is why they ask for contact information. They want to verify your source. We tell our clients not to modify their invoices/receipts in any way beyond inserting arrows and/or highlights. This is why they don’t like digital receipts from online arbitrage sources. They are too easy to manipulate.
- Repeat offenders. If our clients were suspended and reinstated previously and then suspended again for the same reason, then Amazon concludes you are a poor learner and unlikely to follow your second plan of action any better than the first. If you promise Amazon you will do something in your plan, you better do it. I have gotten clients reinstated multiple times, but the situation was different in each case. They had proven they could learn from previous experiences.
Q. What One Piece Of Advice Would You Give A Seller On How To Avoid Getting Suspended?
Toe the line. Many of my clients are in trouble because they tried to get away with something whether it was sending in questionable quality inventory in as new or buying from questionable sources or opening multiple accounts. One seller broke his agreement with his supplier to not sell their product online. They made an inauthentic claim and he can’t defend himself because he did acquire the product improperly. It is not counterfeit, but it is inauthentic because it is disallowed by the manufacturer.
Q. I’m Afraid A Competitor Can Lie About My Product And Get My Listing Or My Account Shut Down. How Can I Prevent This?
This is a rational fear and it happens. What I can tell you is that we usually get our clients reinstated in this situation…and then we go after the son of a…gun later. There are three things you can do to help yourself in this situation:
- Investigate all claims. If Amazon is sending you performance notices and you cannot find the complainer in your negative feedback, messages, returns or product reviews, then what has most likely happened is that another third-party seller has filed a policy violation that you can’t see. Alternatively, it may be that the other seller left you negative feedback. This is helpful information to you when preparing your counter-claim later. So first, find out what someone told Amazon.
- Send your results to seller performance – even if they say you don’t need to respond. Once you find out what is going on, let Seller Performance know that you investigated, what you found and what you will do later to prevent it from happening again.
- File a policy violation of your own. Even though you may have no idea which of your competitors filed the bogus claim against you, you can ask for Amazon’s help to investigate the other seller’s behavior. Sometimes it is stupefying how obvious your competitor can be. I’ve seen cases where two buyers in different geographic locations sent in the same picture to Amazon (of the open box of the so-called counterfeit product). The exact same picture. Did they think no one would look at the pictures together?
Q. Is There Anything New At Amazon Since You Wrote Your Book?
In the brief weeks since I finished my book, things are already changing at Amazon, some good some worrisome. I’ve noticed that Amazon is giving sellers a bit more help with their plan of actions. They are now giving examples which is helpful. If you are suspended and you click on your “appeal” button you will see links to examples. These are new and much better than what they used to give us.
Amazon is cracking down on listing quality now. This is a natural extension of their focus on product quality. What I mean by them cracking down on it is they are issuing warnings and making it a suspension-worthy offense if unaddressed.
I suggest that all sellers regularly close down/delete inactive listings. You do not want to be on the hook for a listing quality issue on a listing that you are not even selling on anymore. Also, you need to inspect your listings as you send in new product to make sure your product matches EXACTLY. I can’t tell you how many of my clients swore to me that their products matched exactly and then when we looked at them together you could see the differences. Whoops! You don’t want to be suspended for something as stupid as a listing problem. If you can’t fix the listing, create a new one but make sure no one can claim “not as described” or “not as advertised” with your inventory.
Q. Are You Teaching Any Classes On Suspension Prevention?
Next week (Friday, Nov. 6th) Chris Green, Stephanie Inge and I are hosting a full-day conference in Dallas, Texas and I will cover suspension prevention. It is $199 for the whole day and includes lunch. We have a few seats left. It is a small group so sign up now if you are interested.
Otherwise, I don’t currently have plans for a formal class. Anyone who leaves me an honest book review on Amazon over the next two weeks will be invited to a private video cast with me to ask questions. I will also be speaking at various conferences next year on the topic.
Q. Where Can I Buy Your Book?
Just like my previous book, I sell the Kindle/Nook/PDF versions myself and Amazon sells the softcover version.
Suspended? Worried about being suspended and want an assessment? Interested in having us keep an eye on your account for you every week? Check out our services at my new website: http://suspensionprevention.com. Still have questions? Please ask them in the comments below and I’ll answer them in a future blog!
