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Amazon sellers frustrated with suspension policy

By Spencer Soper, Bloomberg
Published: September 4, 2016, 6:01am

Andy Ayers was walking to his car in a Big Lots parking lot — shopping cart brimming with cereal, dog treats and Always brand feminine hygiene products he planned to resell for a markup on Amazon.com — when he got a phone alert that his account had been suspended.

“I thought, ‘Oh Crap. Perfect timing,’ ” said Ayers, 32, of Athens, Ga.

An Amazon shopper had complained that one of Ayers’ products wasn’t authentic. Ayers disputed the claim and provided receipts to back it up. But about two weeks had passed by the time his account was reinstated, and the downtime cost him sales.

“I wasn’t doing anything shady,” said Ayers, who estimates he’ll sell $500,000 worth of goods on Amazon this year. “It seems there are a lot of Amazon sellers who aren’t doing anything wrong and are getting punished. There’s an arbitrary nature to it.”

He has plenty of company. Attendees at an annual gathering of online merchants in Seattle in August said merchants are “living in fear” that they’ll be kicked off the site.

Most Amazon customers probably don’t realize that almost half of all items sold on the site come from third-party merchants. That means a set of kitchen knives could have been plucked from a Wal-Mart bargain rack in Nebraska by a mom-and-pop business looking to profit from a little retail arbitrage.

Amazon relies on more than two million merchants like Ayers to keep its website and warehouses stocked with an assortment of goods no brick-and-mortar store could ever match. But the company’s relentless focus on customer service means that when Amazon receives a complaint it’s the shopper — not the merchant — who typically gets the benefit of the doubt.

“We treat sellers like customers,” said Erik Fairleigh, a company spokesman. “The perfect seller experience is seamless self-service that allows the seller to independently run their business. If a seller needs to contact us, we have Seller Support associates available … worldwide, including support for urgent issues with a response in an hour or less. Sellers have available to them at any time many comprehensive tools and services to reach and interact with our Seller Support team.”

But Ayers and other sellers maintain Amazon is too quick to suspend its business partners and too slow to review their appeals, cutting off their primary revenue source, leaving them saddled with inventory. That ties up thousands of dollars in Amazon accounts until the issues get resolved, they say. As a result, many are reducing their reliance on Amazon by placing some of their merchandise on other sites, including EBay Inc., one of Amazon’s chief rivals.

“Any complaint from any buyer or manufacturer can result in a seller suspension, and their livelihood stops,” said CJ Rosenbaum, a New York attorney who said he’s helped hundreds of sellers navigate the suspension appeal process in the past several months. “Mom-and-pop businesses can’t make the mortgage and big businesses can’t make payroll.”

Sellers say the suspension process is guilty-until-proven-innocent, forcing them to prove complaints are unwarranted or pledging to make improvements to get selling privileges reinstated. They also say that the email appeal process wastes time and energy, and they often field the same request, often vague, seeking additional information without specifying what’s wanted.

New consultants

The tension between Amazon and its sellers was on full display at the Seattle conference, which attracted 100-plus merchants and vendors. The suspension process has given rise to a cottage industry of lawyers, former Amazon seller account investigators and veteran online merchants who charge up to $3,000 to help sellers navigate the mysterious suspension appeal process.

Consultant Lesley Hensell to lead an afternoon session on “hot button suspensions.” She and her partner noticed the business of helping sellers deal with Amazon suspensions pick up a year ago, and they now have a 30-person team working on it. “Amazon is getting harder and harder to persuade,” she said. “There’s no consistency. It’s all by email with different people handling the case. This isn’t how business partners are supposed to act. If I’m your business partner and you’re unhappy with me, I’d hope I could speak with you about it.”

Amazon is clear in its seller policies that its rules can change at any time, taking effect immediately. Sellers are informed about changes via email and other notifications.

Amazon’s view of the perfect customer experience is one that is completely automated with no person-to-person interaction. Someone orders something online, and it arrives on their doorstep. Any additional interaction — a complaint or a return — is considered friction that indicates a problem. Sellers maintain this policy is unrealistic and fails to recognize that some shoppers lodge unwarranted complaints to get refunds when they are simply having buyers’ remorse.

EBay has grappled with similar complaints from its marketplace sellers and last year relaxed its rules in an effort to make amends. Consultants for online merchants encourage sellers to get inventory on eBay and other platforms so their business isn’t crippled by an Amazon suspension.

That’s what happened to Emad Abukheit, who spent several years building a $2 million business selling mostly health and beauty products on Amazon before his account was suspended in March. Customers complained that products they purchased were expired, damaged or not as advertised. He submitted a plan of action to improve operations in his North Carolina warehouse, but Amazon kept requesting additional information and saying his account remained under review without making a decision.

He hired Chris McCabe, who once investigated sellers for Amazon and now runs a business helping sellers get reinstated. Frustrated with the lack of response from Amazon, Abukheit filed a complaint with the Better Business Bureau in April. About two weeks later, he received an email from Amazon that his account would not be reinstated.

Abukheit said he had to cut 10 warehouse employees and estimates the suspension cost him $600,000. He is shifting inventory to EBay and other online platforms but said sales are slower. He was frustrated since a handful of complaints put him out of business when he has sold thousands of products on the site. “It’s been a nightmare,” he said. “They were our partner. You can’t just put your partner out of business.”

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