Sellers can and will get in trouble on Amazon if important issues are violated. Reinstating your seller account is a time-consuming and stressful process. It’s best to be proactive and prevent your account from being deactivated, suspended or, worst of all, banned. We outline some key issues that can easily be avoided.

To learn more about increasing ranking on Amazon, read SEO on Amazon. Our post on Amazon Platforms outline the differences between FBA and FBM. For a guide on successfully introducing new products to the Amazon marketplace, please read our post on Competitor Analysis.

Getting in Trouble with Amazon: Introduction

Selling on Amazon can be a very lucrative venture for sellers. Success over the long term requires a combination of having a strong product, a structured marketing strategy, and efficient logistics. All of that effort, however, can be disrupted by Amazon if sellers, intentionally or not, neglect established rules and policies.

When it comes to priorities, Amazon prioritises the shoppers first and foremost over the sellers. If a seller account is shown to violate certain rules, Amazon can either suspend or deactivate a seller account. If issues are not resolved, seller accounts are banned from opening the account again. New account requests can also be denied.

Account suspension, for example, can lead to logistics nightmares. For sellers with inventory in Amazon warehouses, they risk their inventory being destroyed after 60 days of account inactivity. Account inactivity occurs when orders are unfillable. In the case of suspected fraud or abuse, Amazon will hold the funds in the accounts of suspended sellers. So, it is especially important to immediately resolve issues as they happen, or better yet, prevent them from happening. If the issues are not resolved or Amazon denies the appeal, the Seller account will be banned from selling on Amazon. In the case of denied seller applications, it usually indicates missing information or not meeting Amazon’s requirements as a seller.

In most cases, the above measures can be reversed if sellers put in the effort to resolve the problems. This post outlines the most common issues and how they can be fixed. The issues have been categorised as: customer misinformation, logistics errors, and prohibited activities.

Getting in Trouble with Amazon: Customer Misinformation

Inaccurate Content Information

In our blog post about creating a shopper-centric experience on Amazon, we stressed the importance of well-written product listing pages. This is particularly important since shoppers are unable to physically interact with the product they are shopping for on Amazon. All of the content and images must provide enough information for the shopper to make a well-informed decision.

An example of content misinformation could be the accidental omission of information about the power voltage of an electronic device. Inaccurate images may perhaps not show the dimensions of the product or how it can be handled by the consumer. The result of the inaccurate information provided to the shoppers is a high return dissatisfaction rate. The more products returned to Amazon, the more likely Amazon would start the procedure to penalise a seller account.

Misleading Reviews

Sometimes product lines will contain many variations (such as different colours or sizes). Product reviews for one variation will show up in all product listing pages for all products within the variation family. (Read more about variations in this article.) This can become an issue if products within one family have different features. With unclear or vague information in the basic content, customers reading the reviews may accidentally purchase the wrong product.

Competitors have been known to leave bad reviews for a competing product on Amazon, and sellers have been known to combine products of differing qualities under one variation family. These two serve only as examples of issues regarding reviews that lead to customer misinformation. The main issue lies in the fact that customers must be very discerning regarding the product they buy. Dealing with reviews as a seller can be particularly problematic. The sooner the reviews are addressed, the better, because they affect ranking and the seller’s reputation with Amazon.

Subpar Customer Service

Amazon is all about the shoppers, providing a quality shopping experience. Amazon will take measures to penalise a seller if shoppers continue to be unsatisfied with service. This can include dissatisfaction with the quality of communication with a seller, of the product or the shopping experience overall. It is crucial that Sellers pay attention to shopper communications—both indirect via reviews and direct via contact with the Seller—and react as quickly as possible.

Recap: Preventing customer misinformation

The key to preventing trouble with Amazon over these issues is to ensure that all content (text and images) are clear and contain all of the relevant information. If something is mentioned in a review, it must be reflected somewhere in the content. If the issue is regarding communication between the shopper and seller, take steps to improve the quality of customer service. With all of these improvements, the quality of your brand and your seller reputation on Amazon will be improved.

Getting in Trouble with Amazon: Logistics Issues

Logistics issues can wreak havoc with a seller’s performance metrics. It is important to watch the performance metrics, ensuring that any logistics issues are dealt with in a timely manner.

High Order Defect Rate (ODR)

A seller’s Order Defect Rate (ODR) increases when a shopper receives a defective product and reports it to Amazon. Amazon will penalise the Seller when the ODR goes above 1% of all orders.

High Pre-Fulfilment Cancel Rate (PFCR)

Pre-fulfilment cancelations occur when the seller has to cancel an order due to stock or other issues. Amazon will penalise the seller when such a rate goes over 2.5% of all orders. Note: If the level of supply is lower than the demand, unfulfilled orders lead to an increase in the PFCR.

High Late Shipment Rate (LSR)

Late shipment occurs when products are shipped/delivered beyond the time frame the seller indicates when the shopper places the order. Inaccurate tracking information can also impact the LSR. When the LSR goes over 4%, Amazon will take measures to penalise the seller. Note: Sometimes there can be issues with FBA delivery. In this case, it is absolutely critical that sellers contact Amazon immediately, as Amazon will need to resolve these issues. Amazon will handle the costs of replacement and delivery and can retract negative reviews related to FBA issues.

Recap: Preventing logistics issues

To prevent trouble with Amazon over these issues, it’s crucial to keep a watchful eye on the account metrics. Done on a weekly basis, these checks can help ensure that any issues are addressed as soon as they occur. This helps sellers not only improve their reputation with Amazon, but also their reputation with shoppers as quality sellers.

Getting in Trouble with Amazon: Platform Violations

Amazon is strict about penalising seller accounts that have violated Amazon platform policies. Some examples of these violations, other than any criminal activity, include having multiple seller accounts and unlicensed dropshipping.

Multiple Seller Accounts

Amazon does not allow a seller to have multiple seller accounts unless there is a legitimate business justification. This can be if a business owns multiple brands and must maintain separate businesses for each. Another case would be if you are a manufacturer and produce products for two distinct, non-competing companies. The reasoning behind this rule is to prevent sellers from having multiple accounts to sell competing products and control pricing.

Unlicensed Dropshipping

Dropshipping is a business practice in which a business does not physically have the product they are selling. When a product is sold on Amazon (or any other ecommerce platform), the seller will notify a third party, who will then handle the shipping of the product directly to the consumer. Sellers reduce overhead costs by outsourcing the procurement, storage and shipping of products to a third party (e.g., a supplier). Amazon requires dropshippers to prove they are the Seller of Record (SoR), meaning that they own the products they sell.

If Amazon sees that the seller is not the SoR, dropshipping can be determined to be unlicensed. Amazon also insists that the products be shipped with the seller’s labeling. It is not permitted for the product to be shipped with a different company’s label on the packaging. This makes it look as if it was shipped from another retailer, and not the seller.

Other Violations

Violating intellectual property. Such as using another brand name or copyrighted material without permission. One such example is using trademarked names in marketing material, such as “Velcro” (and “Lycra”, among others). The brand owning the trademarks will file a trademark infringement claim against anyone who violates it.

Selling counterfeit items. Such as items that are “replicas” of an item that is registered under Amazon’s Brand Registry program by another seller.

Product review manipulation. Such as providing incentives for people to leave a positive product review (in exchange for a free product, for example). On the other hand, competitors may leave negative product reviews for a competing product to drive the rankings down. This is harder to prove, however, and requires more finesse to solve.

Recap: Preventing issues with platform violations

First and foremost, pay close attention to Amazon’s Policies and Guidelines. These are updated regularly and sellers will receive emails with the updates. Take the time to review them to ensure you are still complying with their requirements. Make sure you review intellectual property policy. If you are registered with Amazon Brand Registry, read up on how to protect your brand. You will be better prepared in the case that action is taken against you (by either Amazon or a competitor).

Conclusion

In many cases, issues with Amazon may be common sense—do not launder money or commit fraud, for example. Some of the issues with Amazon, however, are more subtle. In these cases, it is very important to be as educated on Amazon’s platform policies as possible.

It is also important to pay attention to the account metrics at least on a weekly basis. This is to ensure that such metrics as ODR, PFCR and LSR do not increase. Watching account metrics and product reviews will also give sellers an indication where problem areas may be. In these cases, it is possible to catch the problems before they escalate. Take quick action, whether it be changing content descriptions or getting in touch with Amazon directly.

Following these tips and keeping yourself educated will help you stay out of trouble with Amazon.