Seller Loses $50,000 in 3 Days as Amazon Takes Down Bestseller Item

Nick

April 11, 2022

We talked with an Amazon seller. Let’s call the seller Kimmy Erik, or KE for short.

Amazon took this seller’s best-selling product down because someone claimed they had an allergic reaction—it could as well have been a competitor or just any frivolous tire-kicker.

In only three days, Amazon’s action hit KE’s business hard enough to bleed losses of about $50,000.

Amazon can feel like a maze of rules filled with government and internally imposed regulatory bottlenecks. And it’s choking businesses hard.

Sometimes, those rules are anything but clear to the seller. Heck, those rules are not even effective in helping the seller or Amazon, for that matter.

Stick around, and you’ll find out why KE lost five figures in three days, how Amazon is enabling a toxic seller environment, and how you can respond before it hits your business.

Value and Impact of Event

Cost $12,000 daily plus other real costs and opportunity costs. Came to About $40,000 to $50,000 in three days.

What Happened

Amazon took down a seller’s bestseller item because one customer complained of an allergic reaction even though this product had sold many thousands.

Takeaways

Here are the key points of this interview.

What Amazon should do better

  • Make processes clear for sellers and don’t leave ambiguous, loosely interpreted rules and regulations
  • Collaborate with sellers instead of arbitrarily taking their products down for unverified claims which could come from competitors or frivolous buyer claims
  • Make proactive requests. If a product needs paperwork or certifications, let buyers know ahead of time.
  • Give sellers time to respond to issues instead of automatically pulling their products down
  • Improve the accuracy of Amazon algorithms
  • Provide dependable compliance requests and cooperate with sellers to comply with those requests
  • Be more transparent to sellers

What sellers can do to prepare for Amazon’s highhandedness

  • Prepare documentation that may be requested even if Amazon doesn’t ask or require you to get such documents
  • Respond as quickly as possible when Amazon requests any documentation
  • Join a reliable Amazon seller community like MDS to get assistance and advice from successful sellers who have been through your situation

Voice of the Seller

Here’s my chat with KE.

1. Amazon took down your bestseller item for an unverified allergic reaction claim. Tell us about this experience.

It happened back in February. The experience was pretty simple, but in some cases like this one, you’re not warned at all.

The listing is just automatically taken down. So you don’t have any time to fix anything. You don’t have time to try to prevent it from going down. It just goes down right away.

This happened back in February, as I said. And when that happens, Amazon’s going to request quite a bit of information from you.

So, for example, they’re going to request safety or testing data which they’re not very clear about. They also give you a form to fill to actually help get your listing backup.

In this case, this listing was only down for three days, and that’s as fast as you can get back up.

Sometimes it takes two weeks or three weeks sometimes. We’re not alerted at all. We just find out that our listing is inactive and have to open a case. In this instance, we actually had them alert us the moment they took it down, which was actually kind of nice.

2. In the time it took to get your products back up eventually, on estimates, how much money did your business lose?

This is a product that sells about 300 units a day at about $40. So just doing the quick math, 300 times 40 is about $36,000 in sales, just on the time that it was down.

Obviously, once we came back from that period, there’s costs that aren’t easily quantifiable. The time it took us to rank this product back up is one cost. Some of the wasted PPC spend that we had on this product while it was down is another.

The fact that we had inventory sitting in Amazon’s warehouses for three days. You know, there’s a few dollars more there that we have to pay in storage fees because we were not selling items.

We lost $12,000 in sales a day, times three days. It was probably around $40,000 in sales, maybe $50,000 at the high-end.

3. What should Amazon have done differently? What would you have done if you were in Amazon’s shoes?

That’s a tough one. As angry as I am about it, I understand.

It obviously is a hard situation when you have tens of millions of listings. Most likely, I think Amazon should probably roll it back.

And if they want certain paperwork or certain certifications or tests on specific products or categories, then they should require that upfront.

For example, if they want all toys to have a specific certification, they should make it clear that all current toy listings need to have that certification by a certain due date.

If they want to see that paperwork—if that paperwork needs to be renewed once a year—Amazon should just make it clear. So the issue is, there’s no clarity.

A customer can say, “Hey, I had an allergic reaction.” And sometimes, that can take a listing down. Sometimes it won’t.

Sometimes it could be serious, and sometimes it’s not. If a customer is allergic to peanuts and buys peanuts on Amazon and has a reaction, should the listing go down?

And even the paperwork Amazon asked to be filled in the compliance documents, you can fill that in, but that doesn’t necessarily prove the product is safe at all. The actual tests that I submitted are not that relative to this issue.

I’m happy my item got back on, but I don’t see how this solves anything:

Amazon said, “A customer had an allergic reaction. We know you sold hundreds of thousands of this unit. We’re going to pull your listing. Will you submit some paperwork?”

And we did submit paperwork, and it’s a genuine test on the product. But in actuality, this test really doesn’t have anything to do with a customer being allergic to the product.

They did not ask for a test to confirm the materials it was made of. So we did not submit that— even if we did—I don’t think that would solve anything.

So the whole process seems like it’s not really solving anything.

If they want certifications, they should make it clear with sellers at the beginning and give them time to get those certifications or those test requirements.

4. Essentially, Amazon should have been proactive about this. If they really had a need for some paperwork, they should have asked for that ahead of time?

Yeah, that’d be my recommendation. And they tried to be this way. They tried to be proactive with another big issue on Amazon, like pesticides, but they went about it completely incorrectly.

EPA, from my understanding, requires Amazon to have some products classified as pesticides, and Amazon’s algorithms have just been out of control. There was no clarity, though. The full issue comes back to clarity.

Amazon’s not telling sellers what they want. They’re just saying, “Hey here’s some random paperwork, maybe check some of your products. They might be good. They might not.”

You know, two years later, after they rolled out pesticide rules, there still really is very little clarity. A lot of sellers are still getting emails on old listings, and they’re very vague.

So I think what almost all sellers are looking for is a direction to know exactly what Amazon wants, and we’ll do that.

And we’d prefer to do it proactively instead of being reactive on it.

5. Do you think Amazon might be doing this on purpose?

No. I think it’s a lack of organization and processes and algorithms that don’t work correctly. I don’t think it benefits Amazon in any way. I just think they’re not able to control it and organize it correctly.

6. Do you think Amazon could be doing better than this?

Oh yeah. They could barely do any worse. So there are a million ways to do better.

To breach a little further away from the subject:

You know, better customer service, better seller support. It’s just pretty atrocious.

So that’s a starting point; offering premium support to sellers and not trying to fleece some for $3,000 to $5,000 a month for service. That should be standard.

That would probably solve a lot of these issues.

The issue is everything is segmented at Amazon. There are no answers to questions that sellers have. And that’s an issue here.

I submitted some paperwork that they asked for when a customer claimed they had an allergic reaction, and I submitted the paperwork they asked for, but it really was not related to the issue.

If Amazon wanted sellers to take these seriously, they should be proactive about it. I also believe when we [sellers] have issues like this, to be able to contact the customer and collect the product, for example, or collect information from the customer—maybe there needs to be a way to do that.

If a customer says they have an allergic reaction to a product personally, we should be able to:

  • Know what customers have in that reaction
  • Be able to contact them
  • Be able to take that product back
  • We’d want to be able to test it

If that customer had any information for us they were willing to share, that would be good information.

Obviously, currently, we don’t get that. When I was alerted of this issue here, I was not given any details on this where I could contact the customer and try to get more information.

I think that’s something that needs to happen if Amazon actually wants us to improve the safety of products.

7. How does this make you feel about Amazon’s relationship with sellers?

I’ve never felt great about it, but at the end of the day, they’re one of the largest companies in the world. So they must be doing something right. But you know, the treatment of sellers, it’s not fair; but there’s not really any cards sellers have to play.

If we don’t like it, we can go sell on another marketplace. Even a large seller of $10 million, $20 million, $30 million a year, Amazon’s not going to miss that.

So, you know, the treatment is pretty, pretty unfair, and it comes back to no real transparency on Amazon.

No clarity on a lot of issues, and we’re left guessing, and there’s no one that has to really answer to these issues. So, we just kind of have to sit back and wait. A lot of people can have similar issues where you’re looking at two weeks, four weeks, or six weeks.

It could be a competitor attack. I was never able to figure that out. There are no resources for us to figure that out, and I don’t see Amazon wanting to share anything to help us figure that out.

8. Have you had any other negative experiences with Amazon? How did they resolve it, and were you satisfied?

Yeah, we open a couple thousand cases a year, so I’ve had plenty of experiences. I’ve had products pulled for all kinds of crazy issues.

I’ve had a customer claim they received a different product and that one customer out of 30,000 shut my listing down. It took Amazon weeks to fix it.

They had to send somebody from their fulfillment center to check my products instead of listening to common sense that could have solved the issue.

Another big issue on product suspensions with Amazon is them marking items as used and suspending listings, claiming that we are selling used items. That’s just a broken system.

What happens a lot of the time when sellers send the product [to Amazon]. FBA sells it to a customer, the customer then returns the product used and Amazon, themselves relists that product as new.

And then they blame us for it. Even though we have account settings that tell them not to relist these returns—those are pretty common at the end of the day.

All issues I do have with Amazon have been solved over the years. But it is a lot of wasted time. A lot of wasted resources. And hundreds of thousands, if not millions in lost sales, that will never get back.

One of the most effective ways to solve some of these issues, and everyone seems to be on this lately, is to take to social media. Twitter is an effective platform.

Nobody wants to go there. But that seems to be quite the effective platform to get issues like this solved, but all of these issues are extremely time-sensitive; that’s where you’re going to run into trouble.

Sometimes it takes weeks. Sometimes it takes months.

Of the thousands of cases we open a year with Amazon, we have some that go longer than six months without getting solved. And we eventually just kind of give up on those.

There’s a lot of room for improvement.

9. What’s your advice to sellers who are having a similar experience right now?

Well, they’re definitely going to have this experience. If they’re going to sell enough products, if they’re going to continue to grow, there’s no way to not have this.

You have to somehow try to keep your cool and continue to be able to sleep at night when you’re losing tens of thousands or hundreds of thousands in revenue. But also act urgently, act fast, do everything you can.

As I said, Twitter’s a highly effective model now. It’s kind of ridiculous. I’m not saying it’s right, but a lot of people have to use Twitter. A lot of people are messaging random Amazon employees on LinkedIn, just trying to get somebody to listen.

My advice is, cursing someone or being an ass out of desperation isn’t going to help, but reaching out everywhere, on every channel that you have every tool at your disposal, could make a difference.

A lot of people believe, “Oh, I should just get a selling account manager and pay him $3,000, $5,000 a month, that’ll solve everything.” You’d think so, but from my experience, that doesn’t solve everything. It doesn’t solve a lot of things, and there’s still a waiting period.

The time you have to wait is the important part.

These issues are going to happen. It’s just, how can you try to prevent them? And then, when they do happen, how can you solve them as fast as possible?

10. Are you doing anything to stop a recurrence of this event?

We’ve had a lot of random events happen over the years. We do things now to try to gauge what’s going on with our products. We’re in the middle of getting quality control on our products. We’re looking to do an insane amount, more of quality control.

We’re looking to get certifications, even ones that don’t need materials tests.

So we know what materials products are made of, and we can supply that if this happens again. We have that test and can be back up in three days instead of being back up in two weeks or three weeks.

There’s a lot going on. Your listings can get attacked by competitors by having keywords inserted in them. We use third-party software to track some of these changes.

We use third-party software to track reviews and to see if negative reviews are getting upvoted. We use third-party software to look at our PPC to try to detect click fraud—once again, coming from competitors.

There’s not a lot of advice I can give on how we can prevent these things from happening; you just have to try to solve it fast.

The terms of service and the reason we have terms of service are the rules that Amazon has there. They’re always changing, and they’re pretty vague and unclear, and that’s why they’re very hard to follow.