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Risk Management

The big question: Amazon gift cards

October 28, 2020 Leave a Comment

Discounted gift cards – even legitimate ones – are risky business

By: Lesley Hensell

Discounted gift cards. What’s not to like?

Everything. Because if you’re relying on discounted gift cards to buy your Amazon inventory you can find yourself in a risky situation. In this article we will discuss what is making discounted gift cards such a risky way to buy your inventory.

What makes gift cards risky

Discounted gift cards can come with lots of risks:

  1. Gift cards could be used for money laundering. Which makes them unappealing to Amazon.
  2. Sites can offer cards from members of the public. However, there is no way to ensure the validity of these cards, nor their provenance.
  3. Products that are bought with gift cards rather than a bank card or credit card, the seller cannot give proof of purchase.

Amazon gift cards

Operate like a legitimate business

If you’re addicted to this habit, stop for a moment and think about how large businesses operate.

They pay invoices using debit or credit cards, checks and wire transfers. They do not get inventory using discounted gift cards bought from strangers online.

Amazon doesn’t exist to allow wheeler-dealers to flip stuff. They want third-party sellers to operate like legitimate businesses. With excellent record-keeping, reasonable standards for invoices, payments, and bank accounts.

However it is equally dangerous for third-party sellers to purchase them with a buyer account that is potentially linked to their seller account.

Amazon’s risk management operations see this as a risky behavior that can be related to fraud or, worse, money laundering.

A better way to play with margins

So, instead of risking a seller account for a 2% or 3% discount, look for other ways to game the system and enjoy your selling account. Perhaps the best of these options is to purchase inventory with a debit card or credit card that offers rewards. Some business accounts provide 1% or more cash back. Others offer points for travel rewards, merchandise and more.

In conclusion

Purchasing discounted gift card may sound like a great way to save money. But they really can damage your credibility with Amazon!

Keep you account healthy. Need help? Ask Riverbend Consulting. or give us a call! 877-289-1017


Lesley Hensell

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 (18 and 12) who do most of the heavy lifting.

Filed Under: Account Health, Amazon, Amazon Appeal, Amazon seller, Amazon Seller Central, Appeal, Customer Serivce, General, Linked Account, Seller Central, Seller Fulfilled, Seller Performance, Seller Support Tagged With: Account Suspension, Amazon, Amazon account, Amazon appeal, Amazon seller, Amazon Seller Central, Gift cards, Risk Management

Buying 3P notes on your Amazon account? That is corporate espionage.

October 22, 2020 Leave a Comment

Amazon might not catch you, but blackmailers sure could

By: Lesley Hensell

For third-party sellers, dealing with Amazon can be frustrating and difficult. But that is no excuse to embrace corporate espionage. Unfortunately, a significant number of 3P sellers go down this road. This adds an unacceptable level of risk to their businesses. Buying 3P notes IS espionage. Before you completely dismiss this idea, think for a moment.

Have you been offered the notes on your Amazon account?

Have you paid a service or an Amazon employee for notations?

Or, have you heard about sellers paying for details on their competition?

All of these happen – daily. And all of them are subject to both criminal prosecution and civil litigation.

But is it really corporate espionage?

Yes, Virginia, these behaviors really are corporate espionage.

Here is why, Amazon’s data belongs to Amazon. In other words, this is critical business information regarding third-party seller accounts. This includes products, sales, risk management, payments, reviews, feedback and more. All of this data falls under the classification of trade secrets. Especially since Amazon promises to protect its third-party sellers from data breaches and prying eyes.

For example, here are some scenarios where 3P sellers have been known to acquire Amazon data – in direct contravention of the law:

  1. Purchasing Seller Performance notes on their own account. There are companies that openly advertise they will obtain these notes for you. The service providers have insiders they pay off at Amazon for this information.
  2. Buying competitor information. Sellers sometimes ask Amazon employees to give them data on their competitors, including sales volumes on specific ASINs.
  3. Buying Amazon 1P data. In the boldest scenarios, 3P sellers pay Amazon 1P personnel to find out about Amazon’s vendors and pricing on competitive items.

In all three of these cases, the data being purchased is clearly Amazon property. Therefore, buying it on the down-low is clearly illegal. Buying 3P notes is corporate espionage.Corporate Espionage

What can realistically happen to you if you buy Amazon data?

Technically speaking, a third-party seller buying and/or stealing Amazon data could be criminally prosecuted. Will they? Doubtful.

In fact, it’s also unlikely they would be civilly sued by Amazon. Instead, Amazon would probably block their selling account and permanently hold their funds.

Can this happen? Yes. Amazon has busted employees on three continents for selling data. When they did so, they worked hard to discover which sellers were buying the information and blocked those accounts. They also held very large dollar amounts that were never disbursed.

Scenarios that have played out for many Amazon sellers.

Nobody talks about these scenarios as it falls under the heading of blackmail.

A Seller Support employee, for example, may be on the phone with a seller. They dangle the idea of providing competitive information, notations and the like. (Keep in mind that they likely don’t have access to much – if any – of this information.)

For instance, they will ask for payment and provide some information. Then later, the Seller Support rep demands more money, allegedly for “hot” information. If the seller refuses, the rouge Seller Support rep threatens to turn them in to Amazon and get them suspended, or to otherwise harm their account.

In conclusion, if the fear of breaking the law isn’t enough reason to avoid these tactics, perhaps the fear of blackmail will be. Stay safe. Keep it legal.

Above all, if you have questions about how to keep your account safe? Give us a call at Riverbend 877-289-1017


Lesley Hensell

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 (18 and 13) who do most of the heavy lifting.

Filed Under: 3P, Account Health, Amazon, Amazon Appeal, Amazon seller, Amazon Seller Central, Blackmail, FBA, General, Seller Central, Seller Fulfilled, Seller Performance, Seller Support Tagged With: 3P, Amazon, Amazon account, Amazon appeal, Amazon seller, Amazon Seller Central, Blackmail, Corporate espionage, Risk Management, Seller Support

Amazon is not out to get you – the seller

October 19, 2020 Leave a Comment

No, Amazon is NOT targeting sellers

By: Lauren Barbera

I get it. You’re chugging along, happily selling and following (to the best of your knowledge) Amazon’s policies. Then…

BAM!

Your Account Health Dashboard starts lighting up like the skyline on the Fourth of July.

Your Performance Notifications start piling up.

It can feel like Amazon has you in their crosshairs and have taken time out of their day to focus on making specifically YOUR life difficult.

While still alarming and frustrating, I can assure you that your Seller ID wasn’t pulled out of a hat to be the focus of Amazon’s enforcement arm for the day. Amazon is not targeting sellers.

Let’s go through some of the reasons when and why Amazon enforces policies, and why that can feel like a tsunami wave at times.

 

Bad press leads to an overreaction or rushes the technical end of Policy and Enforcement Teams

Amazon hates bad press. The Risk Mitigation teams (i.e. the Policy arm behind the enforcement teams) are hard pressed to move fast when bad press unearths a vulnerability in Amazon’s policy and policing of Third-Party Sellers or the catalog.

Are these Risk Mitigation teams generally full of smart, thoughtful people? Yes. Are they staffed with incredibly talented software engineers? Absolutely. However, asking multiple teams to roll out new enforcement (which entails a manual audit, code creation, creating externally facing policy, and training front-line investigators) in a matter of 24-72 hours is error prone. Amazon has a Leadership Principal called “Bias for Action” and rolling out half-baked policy or enforcement changes on a tight timeline is the lived version of this philosophy.

 

Amazon is not targeting your account!

Enforcement “Bots” and other policies are rarely reviewed for possible abuse by bad actors

Have you ever gotten a slew of fraudulent Notices of Claimed Infringement from non-existent “Rights Owners”?

Have you had your products taken down and received warnings because a competitor has found which keywords to leave in feedback or Product Reviews to game the system?

It feels like an overwhelming battle to convince Amazon that these actions are due to malicious intent for a reason. Amazon built these systems with the underlying belief that those parties complaining are honest. It’s rarely- if ever- considered as to if the system used to police third party sellers can be used in a manner for which it was NOT intended.

In my time working for these teams I do not recall a single internal policy that require investigators evaluate the veracity of the complaint or the honesty of the complainant.

 

Bad apples spoil the barrel

Amazon knows that, when a buyer is burned by a Third Party Seller, they buy less over the course of their “Customer Lifetime”. So, they try to focus on preventing dissatisfied customers by looking at past bad actor Sellers and use their behavior to try and predict when other sellers might “go bad” and put friction in place in an attempt to weed out the bad guys. The problem with this “shoot first, ask questions later” method is that a LOT (and I mean a LOT) of bad-guy behavior prior to actually engaging in bad deeds looks an AWFUL lot like standard selling behavior.

Have you ever been asked to supply evidence of your identity? Perhaps evidence that a new product you have added to your listings is genuine even before you have made your first sale? Well, those bad guys are to blame. Somewhere, a bad guy has used a false or stolen identity and has sold a fake version of your widget.

Amazon is constantly playing catch-up to those bad actors while trying to predict the future so that the same bad guy behavior does not repeat simultaneously. Make no mistake, the Enforcement and Policy teams have little to no concern how these proactive measures might hurt your business. Their ONLY goal is risk mitigation (e.g. reducing bad press) and a positive buyer experience. All of this is measured with metrics, like “reducing complaints about product condition by X% Year over Year”. There are NO metrics within the enforcement arms that look at, “Sellers that Abandoned Amazon after enforcement.” In fact, sellers that DO end up abandoning Amazon are generally assumed to be bad guys that Amazon has somehow scared off.

 

Technical Timelines often have coinciding launches

Amazon typically does not coordinate enforcement launches between different enforcement groups to ensure that they do not overlap. The Safety team doesn’t care if or when the Seller Fulfilled Prime team launches enforcement and vice versa. And, like nearly all business, big product (e.g. enforcement) launches are scheduled quarterly. In addition, there are several periods of “Code Freeze” at Amazon, meaning that there will always inevitably be teams that launch changes RIGHT at the last minute concurrently.

In conclusion, while we know that this doesn’t remove any frustration, we do hope that it sheds some light on why it can feel like policy infractions are doled out inconsistently and in waves. Rest easier knowing Amazon is not targeting sellers.

 

Do you feel like you’re being hit with a policy tsunami? We at Riverbend are here to help! Give us a call at 877-289-1017


Lauren Barbera

Lauren helps clients find real-world, scalable solutions to their problems and translates them through the Amazon lens. Lauren worked for Amazon for nearly 12 years, first in Seller Performance Operations, then on the business teams managing Seller Performance programs. She tirelessly worked to address authenticity, fraud, money laundering, and condition, all while providing front-line support to Amazon executives via high-level escalations.

Filed Under: Account Health, Amazon, Amazon Appeal, Amazon seller, Amazon Seller Central, Appeal, Customer Serivce, General, Linked Account, Seller Central, Seller Fulfilled, Seller Performance, Seller Support Tagged With: 3P, Amazon, Amazon account, Amazon appeal, Amazon seller, Amazon Seller Central, Amazon Seller Performance, Risk Management, Seller Support, Third-party

Inventory sourcing: What is your risk profile?

November 10, 2017 Leave a Comment

“Retail arbitrage is dead.”

By Lesley Hensell

That refrain has echoed across Amazon seller conferences, newsletters and Facebook groups for a year. The loudest cries rose during Nike-gate, when Amazon suddenly – and without warning – gated certain sellers, preventing them from selling specific Nike ASINs. We’d like for you to look closer at inventory sourcing.

But Nike-gate was not an obvious crisis to everyone. Some sellers remained ungated. Others lost all of their Nike ASINs. Still others could sell some of their Nike items, but not others.

Unfortunately, from outside of Amazon’s hallowed walls, nobody can be sure exactly what it all means. Even inside of Amazon, there is disagreement about gating, how it should be rolled out, to which sellers, and more.

That leaves average sellers asking some basic inventory sourcing questions that demand answers:

  • Should I stop retail arbitrage?
  • Should I stop online arbitrage?
  • Why can other sellers get away with these strategies, while Amazon is targeting me with ASIN or account suspension?
  • Why are some so-called Amazon gurus warning everyone to stop arbitrage completely, while others are still building and selling arbitrage software?

In our view, these questions do not have a single answer. Rather, the choices surrounding arbitrage depend upon the individual seller’s resources and risk profile. Inventory sourcing.

Anatomy of a risk profile

Once upon a time, sellers felt confident and secure with their Amazon accounts. Today, Amazon is viewed as a riskier proposition. While sellers can control a wide range of inventory sourcing factors, some variables remain out of their control:

  • Shady Amazon customer complaints
  • FBA warehouse issues
  • UPS, USPS and other carrier challenges
  • Product quality surprises

In addition, RA and OA have their own specific set of risks. Here are scenarios we have seen:

  • Amazon refuses to accept RA or OA receipts – but with no rhyme or reason. For example, one seller might have a Walmart.com invoice accepted, while another does not.
  • Seller Performance complains because long receipts are photographed/scanned/cut.
  • OA suppliers don’t provide invoices in the format Amazon requires.
  • RA and OA items garner intellectual property complaints – both valid and fake.
  • Branded items purchased via RA or OA are suddenly gated, leaving a seller with excess inventory and no way to offload it or recoup costs.
  • RA and OA items may have been shelf pulls or customer returns, and customers rightly believe they were old, damaged or used.

Are you a Bob or a Gary?

Consider two different sellers. Bob has all of his eggs in the Amazon basket. He recently quit his job to sell on Amazon full-time, and he’s focused solely inventory sourcing thru retail and online arbitrage. Bob spends his time scooping up popular items at large retail chains, dollar stores and closeout warehouses. If his account were to be suspended, Bob would find himself with no income to support his family.

Gary has a highly diversified portfolio of income streams. He sells from a brick-and-mortar store. His two Amazon selling accounts feature completely different items: one focuses on hot toys found at retail stores, while the other carries only private label goods. Gary recently launched a Shopify store, and he already sells on eBay and Jet.

Which seller is likely to be more concerned about the risks of retail arbitrage? Or, conversely, which seller needs retail arbitrage more to achieve his financial goals?

There are no right or wrong answers here. What if Gary’s profitability hinges on his RA toys? What if Bob has tried multiple times to break into wholesale and private label, but has not yet been successful?

Understand your company’s risks

Each seller must think through their own risk profile when deciding whether to pursue RA and OA as sourcing strategies. Consider each of the points below, and your risk tolerance for retail and online arbitrage will become clearer:

  1. Certain categories present higher risks for RO/OA sellers. Amazon is cracking down on specific categories that are at higher risk of inauthentic items being sold. Beauty and electronics immediately spring to mind.
  2. Some brands present higher risks as well. There is a reason that Amazon’s gating push started with Nike. It’s a highly counterfeited brand with relatively expensive items. The more luxurious or expensive the brand, the more likely an Amazon customer will make a counterfeit claim – and RA/OA receipts may not cut it with Seller Performance.
  3. Some RA/OA sources are more legit than others. Amazon is more likely to accept receipts and invoices from retailers with solid chains of custody for their merchandise. For example, Walmart and Target tend to have strong direct relationships with manufacturers, and their distributors are expected to provide only authentic goods. In contrast, discounters like TJ Maxx and Marshall’s buy liquidation deals. There is no proof of the chain of custody for these items. (Think Coach bags at a discounter – are you sure they are real? Will Amazon believe they are real?) This even applies to your favorite drug chains. CVS, Walgreen’s and Rite-Aid score those awesome endcap deals from liquidators.
  4. RA/OA items can be shelf pulls and customer returns. A well-known shoe store fills its online orders by having its retail outlets ship items to the customer from right off the floor. Often, these shoes are in polybags and taped together – no box and no tags available. How many times were those shoes tried on? Do they have paper in the toes? Other large retailers have similar policies. Even if items ship from the warehouse, some of the stock may be shelf pulls that were used and returned by customers.
  5. Is Amazon your only stream of income? If Amazon is the only way you replenish your personal bank account, minimizing risks probably makes sense.

If you’re married to RA/OA, with no plans for divorce …

Some sellers feel the rewards of RA/OA greatly outweigh the risks. The margins can be excellent, and inventory turn can be rapid. It’s also a great way for new sellers to enter the world of Amazon sales. If you’re one of these folks, consider the following suggestions:

  1. Choose retailers that eschew liquidation. When inventory sourcing you need to buy brand-new merchandise. Not liquidation lots.
  2. Pick sources that Amazon is likely to see as its equal. Amazon gives credit to the big boys. It is unimpressed by dollar stores and their cousins.
  3. Inspect, inspect, inspect. Even high-end retailers accept returns and then put them back on the floor. Make sure the coffee maker is coffee-free, the curling iron is hair-free, and the cosmetics are sealed.
  4. Choose brands and categories that are less likely to raise eyebrows. Yes, that high-end scarf may have great margins. But without an airtight chain of custody, is it really worth risking your account?
  5. Understand Amazon’s condition guidelines. Shelf wear matters. Amazon customers expect items to be brand new and defect-free. Even a bumped package can spell trouble.
  6. Build multiple streams of income. Sell on other platforms. Create an approved second Amazon account for your private label offerings. Flip houses. Develop a service business. Do something to ensure you will still have revenue if Amazon takes out your seller account.

Filed Under: Amazon, Inventory Sourcing Tagged With: FBA Warehouse, Inventory, Liquidation, Nike, Online Arbitrage, Retail Arbitrage, Returns, Risk Management, Shelf Pulls, Tips

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