Sellers beware. Amazon has begun holding funds for a growing number of sellers. Even more frightening, the path to recovering that money is long, difficult and expensive.
We’ve seen all manner of reasons that sellers’ funds are being permanently attached:
- Violations of terms of service, such as selling prohibited products. Particularly hard-hit are sellers who have offered vaping equipment and accessories.
- Products that are allegedly counterfeit/inauthentic.
- Fake or manipulated invoices. Even the editing of a date can get a seller busted.
- Poor invoices with suppliers that cannot be verified, leading to concern that products are counterfeit/inauthentic.
- Code of conduct violations. This is a broad category, which Seller Performance can use and/or abuse to ban sellers from the platform.
Here’s what happens. Amazon suspends a seller account for one of these reasons. The seller is given a chance to appeal. When the appeal is submitted, they almost immediately receive a denial, as well as a notice that funds are being held. After some time passes, the seller is given an option to appeal for funds – but that typically involves the same burden of proof as an account reinstatement. Therefore, the likelihood of success is low.
Can this happen to anyone? Unfortunately, yes. But there are simple, common-sense steps you can follow to protect yourself.
- Don’t sell prohibited products. The folks selling vaping equipment and accessories knew they were breaking Terms of Service. (If they didn’t, they weren’t paying attention.) Some of these sellers try to use the argument that vaping products are legal in their states. Newsflash: Amazon doesn’t care. They expect you to follow their rules, and their rules are clearly stated on the web site. The same goes for marijuana-related items. Just because it’s legal in your state, doesn’t mean Amazon wants the liability of you selling it.
- Upgrade your sourcing. Risk management is a big part of your sourcing strategy – or should be. To safeguard your account – and your funds – you need trustworthy vendors. A recent client bought inventory on a liquidation web site simply because the invoice said “authentic” for Apple and Samsung items. But common sense says you need a reliable chain of custody to be sure your inventory is the real deal.
- Manage invoices as though your life depended on it. Because your selling life does. For every purchase, make sure you have complete and thorough documentation – invoices with clear information about your supplier, thorough contact information for you, and a full description of the product you bought. If you have receipts, scan them. Document every dollar spent, and be ready to provide the information at a moment’s notice.
- Keep it clean. All but the most angelic sellers have been tempted to break the rules. Maybe you’ve wanted to ask a customer to review a negative review. Perhaps you’ve wanted to buy out a competitor’s inventory so you can raise your prices. There are as many ways to break terms of service as there are lost units in Amazon fulfillment centers.
If you do find yourself in these circumstances, you can be successful against Amazon. Our best advice:
- Hire a pro. Yes, this sounds like self-service advice coming from a reinstatement professional. But certain cases definitely call for an experienced company. Why? You will not get reinstated on the first try, nor through Seller Performance. You need escalations, a compelling explanation, and an impeccable plan of action.
- Settle in for the long haul. This is not a problem quickly solved. It can take a month or more to run the gamut of escalations.
- Be ready to produce documentation. Your consultant will need a lot of records and information to help unlock your funds.
- Go the appeals route first. It’s tempting to head straight for arbitration. But remember, because you must abide by Amazon-written Terms of Service, Amazon holds all the cards. Try an account appeal, followed by a funds appeal. Arbitration comes last.
Do you have questions about Amazon’s Terms of Service? Need help clarifying rules or setting up better systems? Riverbend Consulting can help. Contact us.
By Lesley Hensell
Lesley is Partner at Riverbend Consulting, she offers practical know-how to improve retail performance. Lesley’s experience with Amazon compliance gets accounts back up fast.