Amazon Seller News You Can Use – Is Arbitrage Changing?
Amazon Seller News You Can Use – Is Arbitrage Changing?
There’s a lot going on with Amazon right now. Amazon is getting closer and closer to shutting down retail arbitrage and online arbitrage on the platform. The customer dissatisfaction metrics are due to go live at long last in October. A new paid Seller Support program promises better support for those willing to pay. Sellers have discovered new tricks to manipulate seller reviews…and Amazon is catching them.
We are opening new markets in China and the UK to help sellers learn and implement best practices in their businesses including a conference on August 29 (ShenZhen, China) and on October 26 (London). We hope to meet our international clients!
Lesley will be speaking at SCOE. Cynthia will be speaking at ShenZhen (Seller Summit at the Sheraton) and Hong Kong, CES IV, the Feedvisor Conference in LA on September 12 and at the Retail Global event the next week in Las Vegas – please join us for dinner or drinks!
The End of Retail and Online Arbitrage?
Four reliable sources informed us that Seller Performance will no longer be accepting receipts as proof for anything. This has already happened in the groups that ungate categories and it has been slowly happening in practice at Seller Performance as they refuse more and more receipts from retailers (online and brick & mortar), even places like Disney.com or Coach or Nike outlet stores.
While we have seen this coming for a while, what surprised us was that the rumored planned date for implementation is “sometime in October.” If true, that’s awful news as it would be happening right before the holiday sales season. What’s yet to be seen is how Amazon plans to enforce this new policy. It could be disastrous as many sellers have already sent inventory to FBA for Q4 that they purchased from retail stores. This gives sellers very little time to shift gears to wholesale or private label.
Officially, Amazon stated that there are no “immediate term plans” to change how they accept receipts. This is the difference between a casual conversation and what a public company will say out loud before they are ready. My hope is this also means that we are looking at Q1 next year rather than Q4. Regardless, it is my opinion, based on observation and working with the seller performance team that this change IS coming.
Why is Amazon moving in this direction? To protect the customer experience. Basically, they don’t consider items bought retail and resold to be
By shutting down arbitrage, they will also have fewer complaints from rights holders and big brands. Goods will likely be in better condition as many will be shipped in pallets.
Regardless of WHEN it happens, here’s the implications for sellers as we see them today:
- More buyers will go to eBay as they realize it is the only platform for USED, COLLECTIBLE, discontinued and hard-to-find/exclusive NEW goods normally only found in retail stores.
- Long-tail sales items will disappear from the platform.
- Sellers will be taking a high risk if they sell USED media on the platform. Used items will decline.
- It will be harder for sellers to start an Amazon business because more capital will be required.
- It will be even easier for evil sellers to take RA/OA sellers down. We expect there will be a lot of bad behavior for a while.
- Brand restrictions will increase and become even more common. Sellers will need to be pre-approved for many, many brands and prove they are buying from authentic sources as a matter of course.
- OA/RA sourcing and scanning tools won’t be needed. This will be a financial blow to the industry.
This is based on what we know today. Things may change. It is possible that Amazon won’t actually start suspending on this new rule until next year (that would be so nice). In the past, they warn in Q4 and suspend in January. Let’s hope that is true.
- Make sure all your inventory is perfect, pristine and packaged properly for rugged travel.
- As long as you never get inauthentic or counterfeit claims, you should be OK.
- If you get an inauthentic claim and it is your first claim, Amazon will likely forgive you even though they won’t accept your receipts. If you get a claim, you will need to remove your other RA/OA inventory at that time.
- If you’ve gotten three or more inauthentic/counterfeit claims in the past year, you will want to consider moving your inventory through another channel like eBay once the changes take place. You may not have any chances left. You can still use Amazon to fulfill your off-platform sales.
- Sell off your RA/OA inventory as quickly as possible or move it to another platform.
- Find new sources from wholesalers/distributors or directly from the manufacturer. Make sure all invoices are detailed and your sources are legit.
- Understand that USED books, CDs, DVDs, etc. are susceptible to inauthentic claims same as NEW items. Most USED sellers don’t have good receipts let alone invoices.
What About The First Sale Doctrine?
The first sale doctrine says that you are allowed to resell items you bought in stores and other places and that brand owners can’t stop you from doing this since you paid retail when you bought the item. If you buy Coach bags from the outlet store and resell them, that’s arbitrage and is perfectly legal.
Just because it is legal, doesn’t mean Amazon has to allow you to do it on their platform. All it means is that the rights holders can’t stop you from re-selling goods you bought from these sources. Coach can’t forbid you from reselling a Coach bag you bought at their store.
Amazon has the right to not accept receipts as proof of authentic. After all, they have no way of knowing for sure where the other stores got their merchandise.
What about you? Do you see other implications? Have questions? My mind is still processing all this. Ask your questions below and I’ll try to answer them.
Colleagues who attended the Women’s Conference in Seattle this week indicated that Amazon still seemed supportive of the RA/OA model. I imagine this is true. What we’ve learned in our work with Amazon is that Seller Performance is different from the rest of the company. It is quite possible for one group to not know what is happening with another.
Paid Seller Support Program
At the women’s conference this week, Amazon rolled out some interesting ideas. One of them was a paid Seller Support Plus program that will allow you to escalate your issues for $400 a month. Here’s what they said:
Seller Support Plus (SS+): A value-added service that gives you access to an experienced single point of contact (Seller Success Manager) to simplify your selling experience and allow you to focus on your business.
For a monthly subscription fee of $400, you will be able to escalate important issues to your Seller Success Manager for advanced troubleshooting and time-critical resolutions. By understanding you and your unique business, the Seller Success Manager will seek to remove persistent technical barriers and offer coaching opportunities during the course of your escalations. For more information, please send any questions to [email protected]
I was able to find out more today and basically, this is still Seller Support which means they can’t help you with Seller Performance issues like suspensions, listings take downs, policy violations, etc. They will forward your email to seller performance and act as a “liaison.” I have not seen that be particularly helpful in the past. It is possible that these guys have a special queue with seller performance, but I wouldn’t bet my account on it. They will help you get ungated and get a faster response from Seller Support.
In addition to the subscription service, they are offering basic training for new sellers for $100 to help them understand FBA, creating listings and stuff like that. They have three different training modules (each $100). In listening to the description (we talked with one of their coaches), it is VERY basic. I think this will be helpful for new sellers but not anyone who has been selling for a few months unless you have a gap in your business like creating new listings.
Dissatisfaction Metrics To Go Live
Since last year Amazon has been tormenting sellers with the metrics of customer dissatisfaction rate and return dissatisfaction rate. At first they were going to go “live” in January, then February and then May and now…October. We’ll see if they really mean it. I’m glad they waited because a lot of my clients were failing the two metrics for lack of enough responses to make a statistically valid ratio of negatives to positives.
Assuming this intel is correct, what does it mean to you? If you are a MF seller it means that you need to really be on top of these metrics. If your metrics are poor now, think about how you can bring them up by October. In other words, how can you get happy, happy customer responses?
We’ve been helping some of our MF clients to create customer service templates that encourage buyers to leave positive responses or at least not to leave negative ones if they are unhappy. You can contact us at [email protected] to learn more. It is part of our Get Clean Stay Clean services.
Product Review Manipulation Still Rising
We continue to see sellers suspended for using product review companies that violate Amazon policy – even when the reviews are off the Amazon platform. Amazon is very serious about cracking down on paid reviews of any kind, fake reviews, overly enthusiastic reviews, those that are written before the buyer gets the product and reviews that don’t use the disclaimer. As an example of what Amazon is suspending for, in the past few weeks we’ve seen sellers who hired writers to create hundreds of fake Amazon buyer accounts and write fake reviews.
This kind of behavior led directly to Amazon’s new rules about reviewers in that they CANNOT leave a review unless they have bought at least one full-price product on the platform for more than $5.00. One client had literally thousands of reviews from people who opened an account JUST to leave a hyped-up review for their product.
While those examples may seem obvious, sellers need to know that ANYTHING that smacks of gaming the system is suspect. AMZ Tracker has been directly named in numerous suspensions but that hasn’t changed their business practices. This is a letter they sent their sellers recently. See if you can spot the problems:
I know that all the analytics in the world won’t help if you don’t have any sales or reviews for your product. That’s why we set out to create the ultimate review network for you. We knew that AMZ Tracker wasn’t enough. We knew we had to help our users kick start their sales and reviews, so they could start climbing the ranks and begin making money with their products on Amazon.
We’ve created an ethical review network for paid subscribers called Amazon Review Trader where you can offer heavily discounted and free products in exchange for reviews.
This is the perfect way to get reviews when you’re just starting out. We literally have thousands of potential reviewers just waiting to review your product. These reviewers have the freedom to leave any type of review they want, but 99% of them will always leave 4 and 5 star reviews.
We monitor our reviewers’ profiles, and boot them out if they leave too many negative reviews.We only want reviewers who are eager and upbeat about trying new products.
If you don’t have at least 15 reviews (or more for more competitive niches) with an average of a 4 star rating or higher, you could be suffering as a result.
Check out Amazon Review Trader now in your AMZ Tracker paid account, so those analytics start showing GROWTH in sales!
To your Amazon success,
AMZ Tracker Team
Our postal address: 20th Floor, Central Tower,, 28 Queen’s Road, Central, Hong Kong
Several things to note: 1) they seem to be moving away from AMZ Tracker to a new service that seems to be the same; 2) they kick out reviewers who leave negative reviews; and 3) they guarantee 4- and 5-star reviews. All of these are against Amazon’s terms of service. I have no doubt we’ll be seeing suspensions shortly from this new entity. Because they are located in Hong Kong, it is hard for Amazon to go after THEM, but they are certainly able to go after the sellers who use them. Beware. Amazon has recently started suing sellers as well as service providers.
What everyone needs to understand about product reviews is that Amazon can see EVERYTHING. The data they have is breathtaking. It is pointless to lie or try to fool them about your reviews. When they ask for your non-compliant reviews, they already know the answer – they just want to see if you will be honest about it.
There are other reviewer groups that have the same rules as AMZ Tracker and we’ve had clients suspended for using private Facebook groups to giveaway product. While the client’s post may have been compliant, the instructions to the reviewers in the group by the administrator was not.
Be very careful who you work with. Don’t take anyone’s word for it that they are compliant. Instead, compare their programs and reviewer messages to Amazon’s terms of service. Ask questions. Find out what they are telling their reviewers. Be suspicious of anyone who offers you “guaranteed page one” and other rosy promises. To get you there probably involves gaming the system or manipulation of the platform as Amazon calls it.
People ask us constantly who we recommend. There is enough gray language in Amazon’s TOS about reviews that I can’t declare that any company is 100% compliant and so I don’t name names or make guarantees. However, there are plenty of companies who are clearly NOT compliant. We see their customers suspended over and over again.
If you plan to use a service, be sure you see everything that they say to their reviewers and that their process meets Amazon TOS for giveaways and discounted products. Remember that paid blogs are not acceptable to Amazon and they are tracking them. Next, if reviewers are coerced or “encouraged” to contact the seller first before leaving a negative review, get away from that service as fast as you can.
In case you missed them, here’s links to my previous blog posts on product review services. The second one has a comparison chart: Safe Product Review Program and More About Product Review Programs.
New Product Review Audit Service for PL Sellers
Because we’ve had so many suspended sellers for product reviews, we’ve created a proprietary software solution and approach to help identify which reviews are non-compliant in our clients’ accounts. This is especially helpful for our clients who are suspended because we can give Amazon a detailed list of non-compliant reviews and tell them WHY they are non-compliant. It goes a long way to getting our clients reinstated.
For clients who are not suspended but are concerned that their reviewers may not be following policy, we have an on-going audit service where we check their reviews each week for compliance. It is part of our Get Clean Stay Clean services.
If you are interested, send an email to: [email protected] We don’t have official sign up forms yet but will get back to you. Pricing is based on the number of orders you’ve had over the past 3 months.
International Events in China and UK
Cynthia will be in China at the end of August speaking at a huge Amazon seller summit on Monday, August 29 at the Futian Sheraton in ShenZhen and at a special Amazon sellers’ meet-up in Hong Kong on August 31.
Register to attend this free conference now – seats are filling up. An all-star lineup of speakers includes WorldFirst, Wal-Mart, Jet.com, SlickDeals, Anker, SellerLabs, Marketplace Ignition, MerchantWords and much more!: Cross Border Trade eCommerce Seller Summit
In addition to these awesome conferences, you will find us traveling the US over the next two months:
- Seattle – SCOE. Lesley is speaking on the latest suspensions from Amazon. Use code CYNTHIA for $175 off! Join Lesley for dinner at the exciting Crow restaurant downtown. RSVP required.
- Nashville – CES IV. Cynthia is talking about risk management in your Amazon business. Join her and Lesley both for dinner at Flyte restaurant downtown on the strip! RSVP here. Space limited to 20.
- Los Angeles – Feedvisor conference. Cynthia is talking about the latest challenges facing high-volume sellers with Amazon suspensions. Sign up here for a $75 discount! (First 20 signups only. Expires 8/28/16) Use CODE LAVFC75.
- Las Vegas – Retail Global conference. Sign up for $100 discount with code: STINE100. We will be co-hosting a meet and greet happy hour and dinner Thursday night Sept. 22 with the ScannerMonkey group. Register here – it’s free!
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