The Risks of Selling on Amazon
It's easy to sell on Amazon right now. All you have to do is identify a product with a good profit margin, put this product on Amazon and wait for the product to be sold… That's it.
There are dozens of special courses and lessons for those who want to sell on Amazon right now. As such, we can easily say that there are hundreds of thousands of people who want to sell on Amazon.
In this context, we cannot ignore that there are some risks involved in selling on Amazon.
When it comes to Amazon, two different thoughts prevail:
Stuck in the Amazon wave as far as you can go
Caution is required, long-term thinking and not relying solely on Amazon.
Things might be great right now, but if you don't have a B and C plan, your Amazon adventure may be over soon.
In this respect, it would be ideal to sell at least 25% of your products from your own website.
In this article, we will focus on what you need to be careful about when selling on Amazon and the dangers of selling on Amazon.
1.Your Amazon Account Can Be Closed In An Instant
If you do research on Amazon on Google, you can see that many entrepreneurs' Amazon accounts are closed overnight.
This person may have violated Amazon's terms of service, listed a fake product without realizing it ...
There is only one main conclusion that comes from the conversations with many people whose Amazon account has been closed: The risk of the Amazon account being closed is very high, and the Amazon account may be closed unexpectedly.
One of the things that cause the Amazon account to be blocked is the majority of negative comments about product quality. Even sellers who sell more than $ 100,000 per month can have their accounts closed.
One of the vendors interviewed made $ 1.5 million in sales over the past two years, and his account was closed for violating product quality policy. Although this person sells more than 8000 products every year, only 6 people complained that the product was sent in poor quality or out of order. In addition, a very small customer base "ad and product do not match." made the comment. The seller states that he sends zero products to everyone and there is never a conflict between the advertisement and the product.
Let's take a look at Amazon's product return policy:
"When returning a product through the Online Returns Center and the reason for the return is not Amazon's fault; return shipping fee is deducted from the seller. "
As you can see, Amazon always favors the buyer. Many of the customers know that they will not pay any shipping fee when returning the product, so returning the product and saying "It came out of order, it did not arrive as I expected." is more willing to make comments like.
For example, Ahmet Yılmaz wants to return a product he bought and does not want to pay the shipping fee for the return. So why not mark the product as "broken, not matching the ad"? If he makes such a statement while returning the product, he pays nothing and the whole penalty is on the seller's back.
Let us state that the seller we mentioned above received 98% positive comments and canceled 0%.
Even if we do not know exactly why this person was blocked, let us state that this person borrowed $ 180,000 and the product of $ 350,000 remained in stock.
In summary, it is not the right approach to completely lean on sites such as Amazon and eBay. These and similar e-commerce sites may block your account for reasons you have never noticed before. In this context, take care to diversify your income sources instead of connecting them to a single platform. Pay attention to selling on your own e-commerce site and e-store. So nobody can block you.
2. Amazon May Force Prices Down
Even if you sell products of your own brand on Amazon, you are not completely free to set your own prices.
Amazon's robots scan hundreds of thousands of websites every day to collect product and price information.
If Amazon finds the price of the product you sell high, it has the right to prevent you from selling.
If you read the terms and conditions of Amazon in detail, you can see that it clearly states that the products you put on Amazon should not be higher than other sites.
In addition, if you have reduced the price of your products during a sale week, for example, Amazon may not allow the price increase.
For example, one of the sellers interviewed states that they made a huge discount on their products in order to have the opportunity to sell. However, we can easily and sadly say that a product that is sold excessively discounted will provide almost no benefit to the seller in terms of gain.
3. Amazon Can Force You to Sell in "Vendor Central"
There are two ways to sell on Amazon.
In the first, you sell as a third party seller. You can check your products, stock and ads. Being a third party seller on Amazon is the ideal way to sell because you have complete freedom in advertising and marketing. This method is also called "Seller Central" system.
You also sell in "Vendor Central" as a first party seller on Amazon. As an Amazon seller, your products go directly to Amazon's warehouses. In other words, you send your goods to Amazon and Amazon has a say in everything else.
The experiences of Amazon sellers who switch from Seller Central to Vendor Central are not very pleasant because Amazon does not sell, list and market these products as carefully as the real owner of the product.
It should be noted that Amazon is forcing third-party sellers (Seller Central) to switch to first-party vendor (Vendor Central), as this way Amazon gets more profit.
4. Amazon Can Steal Your Data
In early 2019, Amazon employees in China and India were caught stealing information from Amazon sellers. This information is mainly sent to independent vendors to gain an unfair competitive advantage.
Again, on the black market, Amazon Vendor Central accounts, that is, product listing information of other people, are sold.
Accordingly, the information of an account with an A + rating is sold for $ 550.
Amazon Vendor Central accounts allow wholesalers to edit other people's product ads, so this method sabotages the ads of sellers who are taking care of their own business.
In short, Amazon is growing so rapidly that such corruption is inevitable.
5. Other Vendors May Impersonate You
Let's talk about an incident that happened to one of the sellers: 1 year since he started selling on Amazon, this seller checks his ads one day and realizes that one of the products he sells on his website has been put on Amazon without his permission.
Upon examining the event more closely, it turns out that a person named "bee" copied the images and information of all products on this website and sold on Amazon.
The victim sends an e-mail to Amazon and an automatic response is received: This person is asked to prove that each product belongs to him.
Because such an answer is a world chore, this person reaches out to the person who sells his products without his permission, and the matter is closed.
But what will happen if this person named "bee" doesn't come to an agreement? The main owner will have to labor for months to prove that 400 different products belong to him.
While it is very easy for a customer to complain about a seller on Amazon, it is much more difficult for a seller to complain about another seller.
6. Other Vendors May Stick to You Like a Tick
It's rare for product information to be copied and stolen on Amazon, but it's extremely common for other sellers to stick to you like a tick.
Even if you sell your own brand's products with Amazon product number, other sellers may cut prices with fake products on your advertisements.
For example, let's say you are selling special woven napkins. You named these napkins your own brand. Linen Co. You sell these napkins as a brand. Another vendor can get ahead of you by selling lousy and low-quality napkins under your brand name.
The customer buys this product and may even comment on your advertisement on the grounds that he does not like the quality of the product. Which is the worst case scenario. In other words, while your products are of good quality, another seller can sell products on your behalf, and the customer who buys poor quality products can take the anger out of it.
7. The Devil's Genius Tricks You Will Not Think
We often see some malicious sellers on Amazon sabotaging other sellers. The fierce competition on Amazon causes a product that has started to perform slightly well, sabotaged by dozens of malicious people.
Unfortunately, in this part of our article, we will talk about "tricks that even the devil would not think of".
A. Binding Goods In Stock
In November 2018, a seller had 100 A products in stock. A buyer ordered 95 items and this sold out all of the seller's items in stock.
Of course, this sounded like a wonderful thing at first. It was not possible to add new products to the stock until January.
But what happened next? Another seller gained the opportunity to sell (buy box) for this product A, as this seller did not have any goods left in stock.
Buy box: In cases where the same product on Amazon is sold by more than one seller, the listing (product advertisement) is not reproduced. Instead, it shows how many vendors sold the product. The buy box indicates who will sell this product when the product is added to the basket by the buyer.
95 products purchased from this seller were returned after 4 weeks. In other words, the person who bought 95 products basically sabotaged the sales opportunity of this seller.
In short, the system is this: Someone comes and buys all your goods. Since there is no product left for you, the "Buy" button on the product page, which allows you to buy directly, disappears. Your products are then returned and you cannot sell within the time until the return.
B. Changing Product Images
If you are not selling the products you sell on Amazon under your own brand name, you should be wary of other sellers altering your product images.
You don't even get a notification when a seller changes your images. For this reason, you have to constantly check your product images.
A lot of bad things can happen to you when your product images are changed without your knowledge. If you are selling product A, a completely unrelated product B image can be uploaded to your ad.
When the seller receives product A from you and opens the package, when it encounters product B, it gives you a negative comment and wants to return the product.
The best way to deal with this situation is to establish your own brand and sell your products through that brand. Many new entrants to Amazon ignore branding, which has various prerequisites such as name registration and website creation, but it is necessary to pay attention to these three paperwork.
C. Consciously Poor Commenting
Did you know that there are thousands of people who consciously comment negatively on your products for money? Amazon is trying to eliminate this situation, but such events are still happening.
Simply put, your competitor makes different people buy the products you sell. Then he asks these people to give negative comments on the grounds that the product is fake and damaged.
Amazon bots can also analyze these negative comments and close your account suddenly.
Many real buyers do not use terms such as "fake, illegal" when commenting. Real buyers ask for a refund or indicate their disappointment with the product.
If you see a comment with words such as "fake, fake, illegal", you can understand that this comment was written on purpose.
The best way to deal with this situation is to deal with it immediately when negative feedback comes in. So you should be ready to do everything in your power to solve the problem of negative comments.
Amazon records the conversations between buyer and seller and grades sellers based on how quickly the seller deals with the customer. In other words, if you do not take care of the customer immediately, if you return to the customer after 1 week, your account may be closed.
Another way is to prove your product is genuine. In any case, this will result in mud being thrown on you even though you are innocent.
D. Consciously Good and False Commenting
In addition to deliberately and maliciously giving negative comments, there are also those who give excessive positive comments. The positive review is good, of course, but Amazon scrutinizes accounts that have received an unusually positive review and looks for a mechanism.
So if the A product you sell gets 100 5 stars within a week, Amazon realizes that this is abnormal and out of order and closes your account.
As a result, if you get an unusually positive comment, it will be very difficult to prove your innocence.
E. Making a negative comment by requesting a refund
As an Amazon seller, it is important to keep some metrics in your account above certain levels and not fall out of favor with Amazon.
If you get too many returns, too many positive or negative reviews in a short time, your account is in danger of being closed.
For example, a quality account should look like this, according to Amazon:
Negative review: 6% or less of all reviews
Customer response time: less than 24 hours
Return rate: less than 3%
Malicious Amazon sellers sometimes buy different products from you and use the return-bad review combination at the same time.
A major product return and encountering negative reviews will cause Amazon to feed negative thoughts to your account.
In this case, there is not much you can do. All you have to do is deal with the complaints one by one and balance these negativities by getting enough positive comments.
If you suspect manipulation of your account, you should report this to Amazon. You have 90 days to deal with negative reviews, and if an event is detected during this period, nothing will happen to your account.
F. Sending Poor Quality Products
During times of busy shopping, such as holidays and New Year's, a seller managed to rank in the top 3 in a category where competition was high with a single product, and managed to earn more than $ 10,000 a month by selling a single product.
The average rating for its product was 4.5 stars and everything was fantastic. One day, this seller saw their sales dwindle as if with a knife, and realized that another seller was selling the same product for less. In other words, this person's "buy now" button called the Buy box was removed from the product page.
But this seller had designed his products in such a way that it is extremely difficult for another seller to sell the same product. As a result, he ordered a product from the person selling it for less and realized that the product he was selling was a bad copy.
Although he reported the situation to Amazon, Amazon did nothing. At the same time, people started to write negative comments on his account due to bad copy.
As a result, the manipulating vendor's account was closed, but the damage it caused was permanent.
For this reason, the seller, whose sale was sabotaged, learned that he should no longer rely entirely on Amazon, and that he should focus on selling through his own website.
G. Registering Your Amazon Name
Serious sellers on Amazon mostly establish their own brands and sell products with this brand. It signs up to Amazon's brand list and prints its own brands and logos on its products.
However, this practice is not as common as it seems.
For example, let your Amazon account name ABC. You can establish two brands under the name ABC. X brand and Y brand. Lots of people start brands with X and Y but miss branding ABC.
As a result, malicious sellers register your account name, ABC, and make it their brand, and eventually take away your account.
Malicious sellers who seize the name registration right will also take over this account and eliminate the real seller.
All in all, selling on Amazon is wonderful and very easy. Therefore, there are many unseen risks. The sooner you realize that selling on Amazon has both advantages and disadvantages, the better for you.
Therefore, remember not to put all eggs in the same basket.
When selling on Amazon, the platform is not yours. You are not actually the owner of your own brand. Amazon can kick you off the platform as soon as it sees fit.
So if you are selling on Amazon and intend to sell, be aware of these three issues:
Spend some of your time building your own site and selling it here as well.
Avoid products with excessive competition, as malicious people are very active around them.
Build your own customer base and brand in no time.