Recalls for new and established products happen too often and can have serious consequences. In some cases, product recalls have destroyed brands and companies. If you sell online, you need to be aware of product recalls.
This is especially if you source your goods through retail or online arbitrage (RA/OA). To contain the recall risk, your team should document all product recall actions, including customer, user, distributor, and public communications.
If the manufacturer or supplier is responsible for the recall, reach out to them immediately to understand why they recalled the product and how they plan to address the issue.
Track all costs you incur due to the recall for future insurance claims or claims against component manufacturers or suppliers.
Finally, work with government regulators to send follow-up notices to distributors, customers, and product users and ensure you keep copies of the notices. Staying on top of recalls can help you avoid legal action or even selling a product that harms someone. It can also absolve you of any wrongdoing if the manufacturer or supplier was aware that the product was not up to standard but still sold it.
Let’s learn about product recalls and how to protect yourself below.
Why should sellers be aware of product recalls?
While most businesses have quality control procedures to lessen or prevent the chance of a recall, it can still happen. Product recalls mainly happen to protect people. So, why should you be aware and stay on top of product recalls?
When a recall happens, it’s usually because someone found out that the item can hurt someone or make a person sick or, in a worst-case scenario, already has. The recall could also result from an issue that affects how the product works or might create legal problems for the manufacturer.
As an Amazon seller, you likely source your products from suppliers. Understand that less-than-savory suppliers will not disclose that an item is recalled. Because of that, always ensure that you get your products from genuine suppliers with a proven track record.
To appear well-stocked and on top of business, some slow-moving retail stores may not remove recalled items from the shelves quickly enough. In such a case, the chances of you being sold the same items are high.
If you buy recalled items without proper vetting, you risk getting stuck with unsaleable items, thus incurring significant losses in the end.
Amazon has put a lot of policies in place to protect its integrity. Because of that, they are not afraid of taking drastic measures against sellers who threaten that integrity. Selling recalled items will reflect negatively on your seller account and might even lead to your Amazon suspension.
As you can see, vetting your supplier and the items you are buying to sell is one of the measures of protecting yourself from legal action and Amazon suspensions. On top of that, your brand might not recover if word gets out that you are dealing in recalled items, whether knowingly or unknowingly.
How can sellers protect themselves from product recalls?
As an Amazon seller, you must have processes in place to vet items for product recalls. One of the best ways of doing that is knowing what kind of recalls exist in the first place. Usually, the US government has three types of involuntary product recalls where the company or manufacturer is forced to take their products back or withdraw them from the market.
Food and drug recalls
These recalls relate to products people ingest like beverages, food, and drugs. Such recalls are enforced by the Food and Drug Administration (FDA) and the US Department of Agriculture (USDA).
USDA regulates the safety of meat, poultry, and egg products, while the FDA regulates other foods, beverages, drugs, and medication. The FDA regulates 80% of the US food and drug supply, including packaged goods, seafood, dairy, human drugs, veterinary medication, and pet food.
The National Highway Traffic Safety Administration (NHTSA) handles all vehicle-related recalls. The agency sets and enforces motor vehicle and equipment safety performance standards and conducts highway safety programs. NHTSA also investigates motor vehicle safety defects and sets and enforces fuel economy standards.
Other product-related recalls
All other products are under the Consumer Product Safety Commission (CPSC) jurisdiction. They include consumer products like child safety seats, cribs, toys, household items, and fireworks.
Usually, recalls issued by the CPSC result from customer complaints. Sometimes, the agency will also recall items if the product manufacturer reports defects in the product that they believe may cause injury or violate specific mandatory standards.
Generally, the primary roles of the Consumer Product Safety Commission include:
Working with industries in developing voluntary product standards
Issuing mandatory standards companies should abide by
Enforcing product standards, issuing recalls when necessary, and even banning certain products
Responding to all consumer complaints and inquiries regarding product standards and recalls
Educating consumers through the media or government channels
Conducting independent research on potential product hazards
Sometimes, individual companies might issue voluntary recalls. This usually happens if a company detects safety or quality issues with a product already on the market. Companies do that to avoid legal problems and to protect their brand image. They will issue press releases asking consumers to return the products already purchased. For involuntary recalls, government agencies issue alerts on their websites.
How can sellers find out if there is a product recall?
Ignorance is no defense.
Always do your due diligence when purchasing products for sale on Amazon. The last thing you want is to buy recalled items only to end up causing illness or injury to consumers. If that happens, the legal repercussions will come down hard on you. In addition, the brand you’ve worked so hard to build will be in jeopardy.
How can you know if a product has been recalled?
Spend a few more days researching the products you are about to purchase for sale rather than having to deal with government agencies and Amazon investigators for selling recalled times.
Some of the most recalled items include child safety seats, toys, food, cosmetics, and medication. If you’ve never sold such products before and are considering buying them, do research first. How?
A quick Google search of the product name should provide enough information to determine whether to go ahead with the purchase. The results will have specifics over the product recall in the past years plus the most recent recall, if any, exist.
Government agencies like USDA, FDA, CPSC, and others have a wealth of information regarding recalled products. Usually, when products are recalled, the agency will have all that information in its database. The data will include recalls in the past years of the same brand.
If you buy your products from a supplier, ask them about the measures they have implemented to ensure that their agents aren’t selling recalled products.
Big companies, brands, and even online sellers are not safe from product recalls. As an Amazon seller, you must do your due diligence to avoid selling recalled items. Having an Amazon FBA business means constantly working to build your brand and image to increase sales.
But all that work can come tumbling down if you violate policies regarding product recalls. Do your research to ensure that the product you’re selling has not been recalled.
Do you need help navigating a product recall? Riverbend Consulting can help! Contact us to help you navigate product recalls.
Lesley is co-founder and co-owner of Riverbend Consulting, where she oversees the firm’s client services team. She has personally helped hundreds of third-party sellers get their accounts and ASINs back up and running. Lesley leverages two decades as a small business consultant to advise clients on profitability and operational performance. She has been an Amazon seller for almost a decade, thanks to her boys (19 and 13) who do most of the heavy lifting.