Amazon has a term for sellers who deliberately violate policies, enact dirty seller tricks and ruin the buyer experience on the platform: bad actors. The company has new, tougher policies and is enforcing like never before. Here is the game plan as we are seeing it unfold:
Ever since the Chinese were invited to the US and UK platforms there has been a noticeable rise of dirty seller tricks and counterfeit on the platform. These actions are not only infuriating to the sellers involved, but many could be considered illegal and they abuse/cheat buyers. Bad actors on the platform cause Amazon to crack down on all of us even harder.
On the other side of the coin are the sellers who swear “it was my competitor!” when in fact they are guilty of many violations of Amazon’s policy. I don’t know if this is denial, ignorance or if they are trying to convince me thinking I’ll be more effective if I think they are innocent.
So a few words about this.
ONE, ABOUT 90% (MAYBE HIGHER) OF OUR CLIENTS ARE GUILTY OF WHATEVER AMAZON CLAIMS.
Amazon’s algorithm is REALLY GOOD. There’s no need to try and convince me you are innocent, a good seller…whatever. We’re going to help you in most cases. We believe in change and second chances. As sellers ourselves, we are sympathetic as to how hard it is to follow all of Amazon’s rules sometimes.
TWO, A LARGE PERCENTAGE OF OUR CLIENTS ARE IGNORANT, DON’T REALIZE WHAT IS GOING ON AND GET SUSPENDED BECAUSE THEY WERE SLOW TO TAKE ACTION.
Once reinstated, they are much more attentive and better sellers. We are happy to help them address their issues, fix their operations, etc. We provide suspension prevention services to help them stay clean.
THREE, SOME SELLERS WON’T OR CAN’T CHANGE. WE CALL THEM REPEAT CLIENTS. AMAZON IS AN IMPLACABLE MACHINE.
There are humans back there but you don’t get to write to them until after you are suspended. A harsh system. They don’t care about your history, your decency as a human being…etc.
Here is a quick review of what Amazon says in most cases:
It may not be your fault but it is your responsibility
Fix it
Work it out among yourselves
Normally it is NOT a competitor bringing you down. Over the course of more than a thousand cases, only a small percentage are the other guy….until lately.
These Amazon dictates make sense for the day-to-day disputes, copyright infringement cases, etc., but not against competitors who are listing on thousands of ASINs at a time – often with no product and no intention of delivering on the sale or delivering garbage which ruins the brand reputation. A huge percentage of these “pop up” sellers are Chinese but it would be a mistake to think that all Chinese sellers are bad actors. There are many who are suffering as badly as we are from aggressive policy breakers.
While this bad behavior is appalling (and sometimes criminal in the US and the rest of the western world), the long-term threat from China – one that no seller can afford to ignore – is their ability to scale and deliver. They can go from zero to hero in record time. Most of the sellers I met in China were in the multi-millions per year within a few months of selling. They would be embarrassed if they were only selling a few million a year. They are masters of logistics and technology, and have a large population of inexpensive labor.
Manufacturers can sell their goods directly to Amazon’s marketplaces without going through brick and mortar stores and middle-men. The Dragon Boat program means they are paying pennies per pound to ship their goods. Chinese sellers bring a lot of value to buyers and are here to stay on the platform. How will western sellers compete against them?
Create unique products
Discover hard-to-duplicate products
Develop exclusive relationships with suppliers
Partner with manufacturers and brand owners in China and other developing countries
Protect intellectual property legally with patents, trademarks, etc.
Western seller advantages:
We understand the western consumer a lot better than they do
Ingenuity. We are still innovators and problem solvers. They are copying OUR brands and products more than launching their brands to our marketplace
Amazon’s new account verification policies mean that a lot of Chinese sellers will not be able to sell in the US/UK.
Culture. The 5000+ years of continuous history the Chinese possess is both a strength and a handicap when it comes to selling on Amazon. Many of the behaviors we don’t like about Chinese sellers are normal there. They are genuinely bewildered by our common practices. It is much easier for western sellers to adapt to Amazon’s evolving policies.
When I tell a seller they can’t hound buyers to remove negative product reviews, for example, they flat out don’t believe me. That’s how common it is in China. You can tell they are thinking “surely they don’t really mean that….” I had a seller the other day tell me he had no idea why he was suspended. I looked at literally PAGES of performance notifications that he had garnered in a short time. I told him, “good news! I know why you are suspended.” The question is, why didn’t he know?
This is what Amazon is up against as they try to rid the platform of bad actors. And believe me, they are working very hard to clean up the platform. Internal sources tell me that they are overwhelmed but highly motivated. They know we are frustrated. The customer experience is at stake and their international reputation. Here’s some of the steps they are taking to address this problem (note, I make some predictions in here as well – MY opinion, not from Amazon):
Account verification
–this has already started. All NEW sellers on the platform must get verified. This is a rigorous checking of a seller’s identity, contact information and history. They are asking for passports and birth certificates. They are calling your credit card company and bank. This is serious. It takes time. Your credit card, bank, address, utility bill and ID must all have the SAME NAME. They will also want information on all partners/major shareholders in a business. Foreign sellers on the US or UK/EU platforms have a higher bar than local sellers. Please do not photoshop or fake any of these items. They are verifying you which means they check.
Pay to play
– Amazon already charges fees in some countries to sign up as a new seller and we’ve seen them charge fees to sell certain brands. They are making it expensive for sellers to have stealth accounts. They are gaining better control over products. I predict Amazon will start charging ALL new sellers to gain access to the platform. I expect 2017 will see a LOT more brands gated including private labels. Sellers who use legit invoices to get approved and then go buy retail arbitrage or liquidation for their ongoing inventory, BEWARE! The penalties for inauthentic after you’ve been brand approved will be severe. Don’t expect Amazon to be understanding.
Brand gating
– This will accelerate in 2017 (a fact). By getting brand registered sellers will have editorial control over their listings and can stop other sellers from changing the words. However, they can still sell on the listing. Amazon’s new Exclusives program allows you to keep other sellers off your listings. Sometimes Amazon will gate a seller’s brand in response to counterfeit behavior by bad actors. This is excellent since you get the gating benefit of Exclusives without paying for it. It also means you may have to get brand approval for your own brand which seems kind of crazy, but at least you know you’ll pass!
Brand registry
-By getting ALL brands registered whether or not they are sellers on the platform Amazon wil/l be able to better weed out the real deal from the imposters. Brand registry requires proof in multiple forms. My prediction is we will see this process become more difficult this year. If you are not yet brand registered, you should do it now. I believe you will also see a lot more major brands joining Amazon’s brand registry to gain control over their listings. A LOT of inauthentic complaints to Amazon come from the rights holders.
Inauthentic takedowns
– Amazon’s number one tool and the most excruciating. My clients often mistakenly think they are being targeted by a competitor when they get an inauthentic complaint and can’t find buyer claims on their account. This is not true much of the time. A lot of times it is a bin check by Amazon where THEY are concerned that your product might be fake or bought from an inauthentic source like retail arbitrage or liquidation (the faded, crumpled, dirty, scuffed products are a dead giveaway). Or it may be that they’ve gotten enough complaints about other sellers on your listing that they have decided to verify all sellers on that listing. If you don’t have invoices, we can still generally get you back BUT you can’t sell those products anymore. Often Amazon will gate you for that brand as well.
Suspensions
– The big stick. It is my prediction that while current sellers will be grandfathered from verification, suspended sellers may have to get verified before they can sell again if they were suspended. At some point ALL sellers will be verified (Cynthia’s opinion). They’ll focus on new sellers and bad actors first but eventually they’ll ask everyone to provide documentation. If you are a good seller without problems with Amazon, it might be years from now. Get your house in order NOW if you are using your Mom’s credit card or don’t have all the paperwork I mentioned above.
Seller segmentation
– in the past Amazon treated all sellers equally. This started to change last year. This is very good news for sellers with a long history of problem-free sales on the platform. They will get the benefit of the doubt more, they’ll find it is only a listing that is suspended, perhaps, rather than their whole account. In disputes their version of events will hold greater weight. Newer sellers and those with a history of violations will find themselves banned much quicker. We’ve already had to re-think the services we offer the Chinese marketplace because we can’t get them reinstated for claims that we routinely fix for our western clients. They get fewer chances, basically.
International prosecutions
– Amazon is aggressively pursuing criminal cases against certain bad actors and cooperating with law enforcement worldwide. In addition, we saw them start to sue bad actors in 2016 – a trend that I predict will increase in 2017.
The past couple of weeks have seen a rash of suspensions for sellers violating Amazon’s review policies (still!) by asking for positive reviews, telling buyers what to say in reviews, asking for reviews from buyers who got a discount and more.
I’ll write more about this later.
Why Does Amazon Consider These Guys Bad Actors?
1) FAKE REVIEWS ERODE BUYER TRUST ON THE PLATFORM,
2) THERE ARE LEGAL ISSUES WITH THE FCC AT STAKE – FALSE ADVERTISING TO NAME JUST ONE AND
3) THEY ARE MANIPULATING THE SYSTEM -AMAZON’S SYSTEM! – TO GIVE THEMSELVES AN UNFAIR ADVANTAGE.
If you are still pushing the envelope and trying to get around Amazon’s rules, you are risking your account. We’ve seen some very large accounts lose their selling privileges permanently over this. No one is safe.
Please note that I indicate my opinion (vs public policy from Amazon) by “I believe, I think, I predict, should” and similar words. Algorithm tweaks for enforcement of policy are usually implemented without warning and some of our knowledge is based on suspensions we’ve seen.
WHERE IS EGROWTH PARTNERS?
We love meeting with our clients and readers when we travel! Like last year we will be hosting get-togethers when we are in town and hope that you can join us. Here’s a few of our upcoming conferences and trade shows where we will be speaking/attending:
ORLANDO – The Un-Conference by Kelly Loach and Elisabeth Thompson Feb 23-26. Please join Cynthia for brunch at Hash-A-G0-Go on the 26th if you are in town!
NASHVILLE – Catalyst March 6-8. Cynthia will be attending. No special event but would love to say hi during one of the conference-sponsored happy hours!
PHILADELPHIA – The Seller’s Conference (formerly SCOE) March 7-10. Lesley Hensell will be speaking. Dinner will be at the Panorama Wine Bar again. Last year’s was THE BOMB and Lesley hopes to see many of you there again!
LAS VEGAS – ASD and PROSPER March 18-24. Cynthia, Peter and Lesley are hosting a special meet and greet for our clients, colleagues and friends on Monday the 20th at the W Resort bar: The Living Room.
FORT LAUDERDALE – May 18-20. Steve Chou’s private label conference Seller’s Summit. Stay tuned for dinner plans while Cynthia is in town.
