While Amazon holds the promise of the American dream for many, it has been a nightmare to some. We want to share some horror stories from Amazon sellers. But perhaps more important, we will teach you how to avoid these mistakes so you can avoid experiencing the horror firsthand.
Getting Banned from Selling
A particular seller had amazing stats on Amazon:
- 99% on-time delivery
- 98% positive feedback from consumers
- .11% defective product
- 0% cancellations
- 5 total A-Z claims (which were refunded)
Unfortunately for this seller, Amazon banned them from selling. The seller was charged over $500,000 in fees, Amazon froze his account, and the seller was forced to lay off a large portion of his staff.
Unfortunately, Amazon can ban sellers for reasons that are outside of their control. Some sellers are reported as having issues with product quality. Because Amazon favors the buyer when it comes to these cases, sellers might be out of luck.
There’s not much you can do in these cases. However, you can stay on top of negative reviews and poor quality reports. Also, consider selling on multiple platforms. If you are shut down on Amazon, you still have other streams of revenue.
Competitors Buying Your Inventory
Another Amazon seller was getting ready for the holiday season. However, a large quantity of one of her products was purchased before the holidays, which put that SKU out of stock.
At first, she was thrilled to have gotten such a large order! But that quickly disappeared. A competitor took over the Buy Box for that product because the seller was out of stock. Weeks later, that large order was returned. The seller didn’t make any money off of the large sale and missed out on holiday purchases.
You should be wary of extremely large orders. And if you get large returns, try to get to the bottom of the issue!
A seller logged onto Amazon one day only to find that her products and product imagery were being ripped off by another company. That company stole content, images, product numbers, everything.
It’s often extremely difficult to file complaints against other sellers, and these matters can take a long time to resolve. This long time frame means that you could be losing revenue for weeks on end thanks to a copycat.
One thing you can do, however, is purchase a copycat item for yourself and file an A-Z complaint. Hopefully, Amazon will take action, and you can get back to selling as normal.
Amazon Encroaching on Your Product
Not only do sellers have to worry about other sellers stealing their products and ideas, but they also have to worry about Amazon.
Sellers providing cables and SD cards on Amazon experienced this issue. Once Amazon saw that the niche was profitable, it began producing its own private label and selling the product. Because Amazon loves Amazon, their products were favored in the A9 algorithm, causing the original sellers to drop significantly in sales.
One way to prevent this nightmare is to diversify. Don’t rely on just one product. By having a variety of products on the market, you can reduce your chances of being driven out of sales due to Amazon’s private labels.
Not Knowing How Promotional Codes Work
In 2015, a new seller received an email from a customer asking if his order could be swapped with the same product in a different color. Of course, the seller said yes. Thinking that Amazon promo codes work like Shopify codes, the seller created a 100% off promo code for the customer to order the other color. He asked that the customer use it once and not share it.
A few days later, the seller logged into Amazon to find that he had sold $53,000 worth of that product. While some sellers might not think twice about this number, this seller knew something was off because he had only sold about 10 or 12 units per day.
The new seller was shocked to learn how Amazon promo codes actually worked:
“We display your promotion on the product detail page only when your offer wins the Buy Box. We do not guarantee that any particular seller’s listing will win the Buy Box.”
Although the seller contacted Amazon to stop the FBA orders from being fulfilled, Amazon was only able to cancel about 300 of the 1000 orders that were placed with the coupon.
Moral of the story? Sellers should read up on Amazon policies and procedures. Also, they should learn how to set up a promotional code correctly.
If you have your own horror story, we would love to hear it! And if you are currently experiencing some Amazon horrors of your own, we want to help! Reach out to one of our Amazon experts.
About the Author: Alyssa Ball has been working in digital marketing for several years. She graduated from Brigham Young University with her degree in English linguistics and is currently pursuing an MBA. Alyssa’s position as a content writer and keyword strategist at Nozani has allowed her to master both Google and Amazon SEO.