by Justin Hoopes, owner Think BIG
In my 10 years selling on Amazon and consulting with other sellers, I have encountered several circumstances of sellers with good intentions getting shut down. To avoid making the same mistakes, detailed below are the different circumstances that led to their store getting shut down and what the implications were.
Operating Multiple Stores
You must have approval to own multiple stores. Amazon associates stores by the EIN on file, by credit card on file, and by bank information on file. If you have multiple companies selling on Amazon, make sure they truly operate as separate entities.
Pricing Errors
I had an employee shift the rows on a pricing spreadsheet and we uploaded the wrong prices for thousands of items. Amazon detected an anomalous change in sell rate and closed the store for my protection. It saved me from thousands of orders I would have needed to cancel (we got about 180 orders in 5 minutes before Amazon shut off the account) but it still took 4 weeks to get the store reopened.
Fake Reviews
Amazon has taken a zero-tolerance stance on artificial reviews. Amazon is VERY quiet about how they police review violations. From what we can decipher, Amazon probably deem reviews as artificial if you left the review, a family member left the review, an account with the same credit card as you left the review, a lot of people who leave reviews get refunded afterwards, a lot of people leave reviews after using a discount code, a review is left by a person that is known to leave fake reviews, or if you send review requests and encourage 5 star reviews. If you are deemed in violation, Amazon will shut you down abruptly and they will not consider your appeal or give any kind of explanation. If you cannot afford to have your store permanently shut down, don’t even think about manipulating reviews. There are plenty of legitimate ways to generate momentum on Amazon.
Counterfeit/Trademark Claims
Complaints happen even if you only sell 100% legitimate products. If you get too many un-addressed claims your store will get shut down and you will need to prove that you bought original product. The best thing to do is keep your order receipts so that you can prove you’re selling legitimate products and address any complaints quickly. It typically takes 3 to 6 weeks to get a store reopened so don’t ignore unaddressed claims or complaints.
Have Listings for Restricted Products
Years ago, we listed a bunch of drop ship products in a store I helped set up, but never actually added inventory to the listings or sent them live. There were gun holsters in this long list of drop ship products and Amazon deemed the holsters a restricted product and closed the listings for this product. The inactive listings stayed in the account for a couple of years and then one day Amazon shut down the account without notice for selling restricted products. Weapons and Health/Beauty are the categories where Amazon is constantly shutting down restricted products. We have found the best course of action is to delete a listing every time you get a removal of restricted product notice. Make sure you delete the SKU each time you see one of these notices and you’ll likely be ok. You also need to put in place a mechanism to ensure you don’t relist a restricted item accidentally.
High Order Cancellation Rates
This is a very common reason for getting shut down along with a high rate of late shipping. If you can’t ship on time and don’t have good inventory control, you should plan on developing a Fulfilled By Amazon (FBA) program. You can appeal this type of closure with a good plan of action but if you get shut down multiple times it will be permanent.
Poor Seller Review Ratings
This is probably the most common way to get shut down and new sellers are the most vulnerable. You may not feel that the negative reviews are justified but Amazon may not agree. The best way to keep your review rating high is to use the FBA program. When an order is FBA, Amazon takes responsibility for order fulfillment and consequently you can have most negative feedback struck from your product. You should also regularly monitor feedback to see what it is about. A lot of negative seller feedback is about the product itself which you can request be struck. Plan to check your feedback on a regular schedule and submit requests to remove negative feedback. What remains cannot be removed and the best way to prevent these is good old fashioned Customer Service. This means the customer is ALWAYS right and you need to communicate well. You are busy, but don’t be abrupt with customers: give them exactly what they request and consider it the cost of doing business. For example, I sell shoes on Amazon in my store and I can’t be profitable selling shoes on Amazon if I offered free return shipping, but it is my policy that 100% of those that contact me about return shipping get it for free.
Marketplaces are the future of commerce. Every independent retailer can and should be selling on Amazon; don’t let inexperience get you shut down before you get the chance to experience the full potential of Amazon.
Justin Hoopes, Ph.D. started his career as a scientist but started building businesses part time in graduate school. With the help of Amazon, these stores now do millions of dollars in sales each year and he has turned his attention to supporting other retailers through Think Big Sites: a marketing firm focused on helping small business succeed in the digital age.