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The biggest fear of the Million Dollar Amazon Seller is losing seller privileges, don't live in fear!


A recent survey by Web Retailer and Feedvisor[1] reported that for 66% of sellers generating more than $1 million of annual sales from Amazon, the biggest concern was Amazon taking away their seller privileges; a clear indication of the importance of this market-place for successful businesses. Some 61% of all Amazon sellers shared the same fear.

Amazon’s number one priority is to reinforce buyers’ trust in its marketplace; unsurprising perhaps as 44% of all items on Amazon worldwide come from third-party sellers[2] - and their sales are growing faster than those of the host site. The ultimate sanction Amazon has against sellers who flout its strict selling policies and performance standards is to suspend their account; an action taken increasingly in 2015. Indeed, an estimated 10% of sellers were suspended last summer, according to a recent article in EcommerceBytes[3] and the feeling is that this is unlikely to decrease in the near future.

So what do you have to do to have your selling privileges revoked?

Transgressions tend to fall into one of three main areas:
 
  • Sale of restricted products
Products offered for sale on Amazon.com must “comply with all laws and regulations and with Amazon's policies.” Details of restricted product categories, and restricted products within allowed categories are set out on Seller Central.
 
  • Violation of Amazon’s selling policies
Amazon prohibits a number of seller activities in order to maintain a selling platform that is “safe for buyers and fair for sellers of both products and services.” The list is quite lengthy, but to give a flavour, it includes:
  • Attempts to divert transactions or buyers
  • Inappropriate email communications
  • Buyers and sellers communicating outside of Amazon’s buyer-seller messaging service
  • Operating multiple seller accounts or opening up a new account under a new name after you have been suspended
  • Manipulation of ratings, feedback, or reviews
  • Misuse of sales rank
 
  • Not meeting Amazon’s required  performance standards
Poor seller performance is one of the most likely reasons to have your account suspended. Amazon has established seller standards across a range of metrics to increase the trust and confidence buyers can expect in their third-party transactions. Amazon stipulates that sellers should be working toward achieving and maintaining a level of customer service that meets the following seller performance targets:
 
  • Order defect rate: < 1%
  • Pre-fulfilment cancel rate: < 2.5%
  • Late shipment rate: < 4%
 
 

Since getting an account suspension revoked is an uncertain and time-consuming process to go through, what preventative measures can you take to ensure you don’t fall foul of Amazon’s rules? We focus on three areas here; but individual instances discussed in online seller forums are also informative.

 
1.  Beware the complexity of Amazon’s category/product restrictions
 
Make sure that the products you are planning to list don’t fall within a restricted category, or a restricted product type within an allowed category. For example, the sale of some major brand products may be restricted because of concerns of counterfeiting – or because they are not authorised by the brand owners for sale on the Amazon marketplace: Apple and Mac cosmetics are examples here.  And some products may need Amazon pre-approval before you can list: certain products within the software category, for example.
 
Details of restrictions appear on Seller Central, so do your homework thoroughly before you list and if necessary, seek the necessary pre-approval from Amazon. If you list without doing this, you risk a warning and removal of the listing by Amazon. Do not ignore any warnings; if you do not remove or if you relist, Amazon is very likely to suspend your account.
 

2.  Amazon’s selling policies: Play by the rules

And of course, make sure you know upfront what the rules are! Little sympathy is expressed in online forums for sellers bemoaning account suspension with the excuse – ‘I didn’t know’.
Here are three typical infringements of Amazon’s selling policies which frequently result in account suspension.
  • Selling the same products from two Amazon accounts
If you have a legitimate business reason for requiring a second account, you must apply directly to Amazon for this. If you have had your account suspended and you set up a new one, be warned, it will be detected and Amazon will close it down immediately.
  • Manipulating product reviews
Amazon made review policies even more stringent recently, following ‘unethical’ practices by sellers of private label products in particular flooding their listing with positive reviews. The new warning reads: “You may not intentionally manipulate your products’ rankings, including by offering an excessive number of free or discounted products, in exchange for a review.”

This does not mean that you should avoid seeking reviews altogether; after all, they are a key element in the buying decision. But be aware of this latest stipulation and if your reviewers bought the product at a steep discount – make sure that this fact is clearly stated in the reviews.
  • Diverting buyers or transactions away from Amazon.com
Amazon does not tolerate sellers, who are also selling on other sites, ‘guiding’ prospective buyers away from Amazon.com to other marketplaces or proprietary sites; including the use of links, videos or images that could be construed as doing this. If you value the business you’re doing through Amazon, don’t do this!

 
3.  Keeping on top of your seller performance metrics

You need to make sure that you don’t ‘drift’ into an account suspension; particularly through poor order defect rate (ODR) metric. You need to be constantly monitoring performance against the expected Amazon targets, and where these dip, finding out what has led to buyer dissatisfaction.  The seller performance scorecard is intended to give you a summary of how you are doing at any point with respect to customer satisfaction:

Good: meeting Amazon’s target for that metric

Fair: not currently meeting target; immediate steps should be taken to improve  performance

Poor: not meeting target. Continued performance at this level may result in the removal of selling privileges: identify the source of the problems and take corrective action asap. 

According to Amazon, “many problems are short-term and easily corrected.” If you don't meet the target for a performance category, you will be notified by Amazon and normally given 60 days in which to rectify problem areas – unless you have committed a serious selling policy violation, in which case your account will be suspended immediately.
 
So what should you be doing – preventatively, and as a matter of urgency, if you have been ‘yellow-or red-flagged’?
In arriving at your ODR figure, Amazon calculates the percentage of your orders with negative feedback, an A-to-z Guarantee Claim or a service credit card chargeback. You need to:
 

Improve feedback scores


In Amazon terms, feedback of a 3-star rating is considered ‘neutral’ and is lumped along with 2-stars and 1-stars for the algorithm. So you need to be getting feedback of 4 or 5. Monitor your reviews carefully and address/resolve any unsatisfactory ratings. Look out for recurring problems and address these promptly too. Be more proactive in generating positive feedback too – for example by emailing customers immediately after a purchase. This will ensure that any negative comments will have less effect on your ODR score. And make sure your customers are aware that a 3-star review does not do you any favours.

 

Be proactive in addressing order problems


If you are seen to be working with your customers to resolve issues, you should avoid most A-to-z Guarantee claims – and Amazon is aware of your efforts.
 
 

Keep service chargeback rates to a minimum

 
A chargeback occurs when a customer contacts their bank or credit card company to dispute the charge for an order that they placed on your website, for a variety of reasons including: 
 
  • Non-receipt of the product;
  • Product defective, damaged, or not as described;
  • Credit card was stolen or used without card-holder’s consent.
 
While Amazon Payments is responsible for any payment-related fraud chargebacks, such as stolen credit cards, you can reduce the chance of ‘not delivered’ or ‘damaged’ claims according to Amazon, by:
 
  • Using a shipping method with a tracking number;
  • Using delivery confirmation (signature required;
  • Keeping full records of the date the order was shipped, the shipping method used, and any available tracking information for at least 6 months.
 
 
Apart from the all-important ODR, you need to monitor your on-time shipment and customer response time metrics just as carefully. Don’t forget to do the routine things, such as confirming that orders have been shipped: if you fail to tick this box in ‘Your Orders’, and they build up, you risk being ‘yellow-flagged’ by Amazon.
 
And, when it comes to responding to customers about an issue, Amazon expects a contact response time of within 24 hours, applicable to weekends too. And these should be “high-quality” responses, i.e. not just an automated message, so make sure that there is always someone available to respond – ideally the same day.

 

Be aware that product quality is now included as a metric


Keeping abreast of Amazon’s performance metrics is sometimes easier said than done.
Amazon uses an algorithm to calculate seller metrics and suspend the accounts of those who don’t make the grade. Sellers are aware of the targets to be achieved (as listed earlier); however Amazon does ‘tweak’ this algorithm from time to time – as it did last year apparently to include product quality issues[4]. No warning was given to sellers, some finding themselves suspended despite previously having had excellent performance metrics. ‘Good product quality’ means that the item received is in perfect condition and in the condition the customer expected. When this doesn’t happen, the seller will see complaints about ‘sold as new, but used’ or ‘counterfeit’.

If you are unfortunate enough to receive a warning from Amazon about an ‘item quality complaint’, respond immediately, by looking into the complaint seriously and  reviewing past complaints, returns or poor feedback left for that particular item. Keep Seller Support up to date with what you are doing and the preventative steps you are taking to prevent similar problems happening in the future. You may need to change supplier, delivery method or packaging. You may need to update the item description on the listing.Be warned, if you continue to sell the item and quality complaints persist, you could ultimately have your account suspended.

If the end result of account suspension for those operating unethically or against Amazon’s rule is a stronger marketplace for both buyers and sellers, then this is a laudable goal. However, erroneous suspensions do occur. In the next article, we look at what you need to do to appeal against account suspension.
 

 
 
[2] The Guardian, 23 June 2015
[3] How to Avoid Amazon Seller Account Suspensions, Ina Steiner, EcommerceBytes, 26 Jan 2016
[4] How to Avoid Amazon Seller Account Suspensions, Ina Steiner, EcommerceBytes, 26 Jan 2016

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