This post is by Chris McCabe, owner and founder of ecommerceChris, LLC, an Amazon seller account consultancy.
Dropshippers and arbitrage sellers on Amazon can’t catch a break.
Things have changed in the last several months to make life even tougher for resellers trying to maintain a successful account. The number of sellers contacting me after they have been suspended due to a lack of adequate supply chain information has been multiplying every week.
We have tracked so many cases like this throughout 2019, that we now wonder why sellers continue to use these sourcing methods at all. Sellers like these, with weak supplier info or who lack invoices, need to modify their business models, and fast.
View Top Amazon Seller ToolsWhy does Amazon ask sellers for invoices and other sourcing information?
We’ve known for a long time now that Notice of Claimed Infringement teams have the job of protecting Amazon from legal liability, due to IP or counterfeit claims.
How do they do it? By demanding sourcing information from sellers, early and often. Buyer complaints of inauthenticity, however, aren’t the biggest trigger for these requests anymore. You should worry more about two other parties in the ecosystem: Amazon itself, and the brands that pester them to remove your listings.
Anyone who doesn’t have an invoice for items they have listed on the site now faces requests for very specific supplier information, and Amazon will quickly deny reinstatement if they don’t get it. Why the change? Amazon needs reassurance that you won’t cause future infringement claims that drag them into the fray. They’re also creating programs like Project Zero to avoid being caught in the middle.
Why is Amazon suspending people BEFORE there’s a sale?
It’s extremely common now for Amazon to suspend sellers for potentially inauthentic items before they sell the products at all. Grief-stricken posts appear on seller forums and Facebook groups concerning the lack of fairness around these preemptive suspensions.
Unfortunately, fairness doesn’t really come into it. Experts, myself included, tend to agree that Amazon shoots first, and asks questions later. They’d rather suspend the account straight away, and then look at your plans to spare them from the counterfeit claims and worsening liability that might come later.
This isn’t going away anytime soon. You will continue to be asked by Amazon for invoices, proof of authenticity, and letters of authorization or other details. This is very difficult, if not impossible, for sellers who source products by dropshipping, retail arbitrage or online arbitrage.
If Amazon demands that sourcing occurs a certain way to satisfy their need to protect IP rights ownership AND to reduce counterfeit claims, then how can you continue to rely upon a model they reject? You cannot, and need to change it.
Is it OK to buy from other Amazon sellers?
Sellers who buy from other Amazon sellers, and expect to show their order history as proof of authenticity, run into trouble often.
Surely you can show them orders from an Amazon seller, since Amazon vets their own resellers, right? Not really. Showing that you bought it on Amazon vs. eBay or Alibaba won’t make much difference. Amazon won’t assume the responsibility of “clearing” their sellers to supply you. You need to vet them just as you would any other supplier.
Do brands have to make a test buy before filing a claim?
In theory, Amazon must require a test buy before taking action, as that is etched into policy enforcement SOPs. In practice, if you contact Notice-Dispute teams and tell them over and over that the brand never bought the items from you, and therefore cannot prove the items are fake, you’ll get ignored.
Notice teams are a big part of Amazon’s ever-expanding communications black hole. They continually send the same messages that say the same thing each time, asking you to contact the brand to retract their claim.
Unless you enjoy getting stuck in that endless cycle of repetition, make sure you don’t list or sell products from brands that have “weaponized” these processes. No seller should be accused of selling fake products without evidence, but you also can’t expect Amazon to have your back when accusations like this fly.
Why does this affect dropshippers and arbitrage sellers more than others?
Over the past couple of years, much ink has been spilled covering the end of retail arbitrage, online arbitrage and dropshipping as effective models for sourcing products to sell on Amazon. These type of sellers report ASIN and account suspensions more often than sellers with conventional product supply chains, and the documentation that comes along with it.
For arbitrage sellers, the main problem is not the lack of a business invoice, as Amazon’s Product Quality and Notice teams still accept retail receipts as proof of authenticity. It’s that they have no contact with the brand or an approved distributor, so there is no way for them to produce an authenticity letter on their supplier’s letterhead, signed by a sales manager or an owner.
Dropshippers have even less to show. At least arbitrage sellers have a receipt, but dropshippers have no invoices or other verifiable supplier details on hand when they list their products. Amazon wants to see where you bought the items before you sell anything. This is pretty incompatible with the dropshipping model, which is all about buying from your supplier only after you have received an order from your customer.
