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How to Avoid Losing Your Amazon Business Overnight

There’s nothing like getting your Amazon business up and running successfully, only to see it disappear in a puff of smoke. In fact, Amazon sellers lose their seller accounts ALL THE TIME. Sometimes temporarily, often permanently.

Some sellers get suspended or banned for legitimate reasons like selling counterfeit goods or violating Amazon’s terms of service. But sometimes Amazon makes mistakes. And sometimes other sellers use dirty tactics to take out the competition.

Suspended sellers occasionally manage to convince Amazon to reinstate their accounts. But Amazon often won’t even listen to evidence in their defense.

So it doesn’t matter if you’re a 7-figure seller, an upstanding company that would never break the rules, or even baby Jesus himself. You could lose your entire business overnight.

Moral of the story: Don’t put all your eggs in one basket because that basket can literally disappear in the blink of an eye.

Amazon business loss

Real Life Examples of Amazon Sellers Getting Screwed

Amazon sellers get screwed every day. Here are a few examples:

+ After a slew of customers reported exploding hoverboards, Amazon cracked down on safety issues. So shady sellers started buying their competitor’s products, setting them on fire and posting pictures of the “exploding” products in the reviews. Amazon quickly banned a ton of legit sellers for selling “hazardous” items.

+ One seller trademarked his products and registered his brand with Amazon, but a competitor then trademarked the seller’s name. They were able to hijack his listings and steal tens of thousands of dollars worth of sales.

+ Shady sellers pay random internet strangers to create thousands of fake reviews every day. The sophisticated ones have people leave dozens of five-star reviews for a competitor over a short time period. Amazon then suspends or bans their competitor for review manipulation. Boom, competition eliminated.

+ More and more sellers are signing up to commingle inventory (where Amazon pools together the same products sold by different sellers), including counterfeiters. So even if a customer orders from a legit seller, they sometimes receive a knockoff product. If the buyer reports it to Amazon, the seller is suspended or even banned depending on the whims of the Amazon gods.

Even if you’re lucky enough to avoid that mess, legit Amazon customers report incorrect information to Amazon all the time. They’ll report you for selling used items as new because the packaging got damaged during shipping. Or for selling products that are “not as described” because even though the description said “color: blue,” they thought it would be red.

Confused Amazon customers

But most often, they’ll report you for selling defective products because they want to return the product without paying return shipping. Get enough of those reports and Amazon will ban you permanently.

Why You Need Your Own Online Store

You may be fortunate enough to never get your seller account suspended. But if you’re only selling on Amazon, you’re leaving a ton of money on the table.

Amazon strictly prohibits sellers from sending customers emails related to marketing communications of any kind. So you can’t encourage repeat purchases or notify customers of new products or sales.

A study of 9 billion campaign emails found that the average revenue per recipient is $1.17. A buck and some change doesn’t sound like much, but if you can grow your email list to 1,000 people, that’s an extra $1,000 per month in your pocket.

Another study found that email marketing offers an ROI of $44 for every $1 spent. Don’t miss out on all that extra cash by limiting yourself to selling just on Amazon.

Remember, people who buy stuff on Amazon aren’t really buying from you. They’re buying from Amazon. Lots of buyers don’t even realize that there are multiple sellers on the same listing. They just see the buy box and think that’s what Amazon charges for the product.

If you want to build customer loyalty, people need to know your brand exists. Building your own online store means creating a brand – a cohesive identity – that appeals to your target market. If you provide a great shopping experience and excellent customer service, you’ll build brand recognition AND customer loyalty.

Ecommerce customer experience

You Can Still Take Advantage of Amazon

Selling on your own site doesn’t mean you have to stop selling on Amazon. And even if you DO want to stop selling on Amazon, you can still use them for storage and order fulfillment.

Using Amazon’s Multi-Channel Fulfillment service means you can take advantage of their world-class fulfillment network, competitive shipping rates and virtually unlimited storage space while building your own ecommerce empire.

It simply makes good business sense to exploit those resources while minimizing your risk.

Conclusion

Selling on Amazon has plenty of advantages, but it also comes with some mega-huge disadvantages that could take down your business overnight. Diversifying is the key to mitigating that risk and increasing revenue.

It’s super easy to diversify with Shopify and our apps. You can set up your own site and automate both inventory management and order fulfillment in an afternoon if you’ve got all your ducks in a row.

So what are you waiting for? Reduce the chance of your business going up in a puff of smoke before it’s too late.

About the Author

Gennifer is the Marketing Manager at ByteStand, where she lives and breathes customer service education while sipping coffee in her pajamas.

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