Wondering if you're making any Amazon new seller mistakes that are costing you business?
After nearly six years of helping Amazon sellers get reinstated, we’ve seen some unusual cases at eGrowth Partners. Unfortunately, we also see a lot of the same types of cases over and over again.
These are our current top 10 reasons sellers get in trouble with Amazon. These Amazon new seller mistakes happen to all sellers—new and seasoned. They:
- Don’t take verification seriously
- Buy inventory from Inauthentic sources
- Don’t follow Amazon’s guidelines for setting up new listings
- Don’t pay attention to buyer complaints
- Open multiple accounts without permission
- Manipulate reviews
- Sell unsafe and/or poor-quality products
- Don’t protect their intellectual property or other’s
- Don’t perform to Amazon’s standards
- Don’t pay attention
Read more on these common Amazon selling mistakes, why they happen, and how to avoid them below.
If you’re asking how to sell on Amazon or improve your sales, make sure you start by fixing these Amazon new seller mistakes first!
10 Most Common Mistakes Amazon Sellers Make
1. They don’t take verification seriously
This is Amazon’s first defense against bad actors (criminals, poor performers and those who intentionally behave badly on the platform). They are very tough about it. Verification affects new sellers but also established sellers who are opening accounts in new markets like the UK or EU.
Unfortunately, they don’t tell sellers just how important it is, that they will actually be calling to verify your information, and what will happen if the seller fails: you are banned from the platform for life and cannot try again with another business.
It’s serious but they send you a bland email that states “We are doing an account review and want some additional business information from you.”
They are very strict and won’t accept anything less than perfect paperwork. You may think you know that means, but I promise that you don’t.
I’ve seen sellers be rejected by details as small as inconsistent comma use.
They do provide guidance in Amazon Seller Central (search “help” for “verification”) but it is incomplete. I have given presentations and written articles about it, but sellers still find themselves confused or on the wrong side of Amazon. Here’s what I recommend:
- Read Amazon’s verification guidelines as if your account depended on it
- Make sure all your company addresses are in your seller account
- Make sure your seller account settings are completely up-to-date in every aspect
- There can be zero markings on your documents, not words, notes, stamps, checkmarks, weird pen marks – nothing
- You must make PDFs of every page of your bank statement, credit card statement and utility bill, even the stupid ads, and fine print. Put all pages of each statement into its own PDF
- Label your document clearly – “bank statement My company” or “Water utility My company”
- You must scan in the PAPER version of these documents, not a digital download. Digital statements will be automatically rejected
- Your bank statement, credit card, and utility bills must have activity on them. If you just opened that bank account, go buy some supplies so your statement will show activity and money in the account in the first statement. If there’s no electricity use on your statement, for example, that’s a huge red flag to them that your business is a front
- Prepare in advance. It can take weeks to get all your paperwork in order sometimes – especially if you must request paper statements or update your documents to reflect your current business, your current married name, etc.
- Work with a professional. This is self-serving, I know, but it breaks my heart every time I tell a seller I can’t help them once they have failed verification. There are no second chances.
2. They buy inventory from inauthentic sources
When I started selling in 2010 you could basically throw anything in a box and sell it on Amazon. They never asked for receipts or invoices. It was the wild west of online selling.
Today you can get suspended for selling inauthentic or “suspected infringement” items if you do not have an invoice showing that you bought directly from the brand, an authorized distributor for the brand, or from a known retail partner of the brand.
Today, Amazon best sellers who are successful long-term do their due diligence and source from authentic sources.
If you are asked to prove authenticity and you don’t have an acceptable invoice or receipt, you will not be reinstated. This includes used items as well. Sellers who are buying textbooks from thrift stores and library book sales are at great risk of losing their accounts. Sellers who are buying from the gray market are a disaster waiting to happen. Don’t buy from liquidators (unless it is a closeout from the brand itself) and be very careful with your drop-ship partners.
It is against Amazon’s rules to buy from another online retailer and then have them send the package to your buyer. I see this all the time. The seller lists a product on Amazon and then fulfills it with a product from eBay or Walmart, etc. So, if all you have is a receipt from eBay you are out of luck.
As a general rule, if you are buying from/through Alibaba, they will not accept your invoices. This is because of the high volume of counterfeit goods that are sold through all of Alibaba’s platforms.
3. Don’t follow Amazon’s guidelines for setting up new listings
We’ve seen Amazon crackdown recently on listing errors. This is where a listing is not set up properly in Amazon’s system – either accidentally or by design – and the seller violates one of Amazon’s many listing policies or guidelines.
Amazon is very specific about everything from how long your title can be, where you must give the name of the product, what is a correct variation of a product, and much more. We are regularly correcting seller listings and it is a pain in the butt for everyone involved, involving ugly flat files (monstrous spreadsheets) and attention to detail that is exhausting.
Sellers used to only be held accountable for the listings they created – and that is still the bulk of suspensions – but they can be held responsible for the listings created by others if they list their products on them and the listing is incorrect.
Whether you are a newcomer to Amazon who hasn’t even opened a seller account or a long-standing seller, you should read Amazon’s guidelines, restrictions, and policies regularly – at least once or twice a year if not more.
They change/evolve and every word of what is in Seller Central is considered part of the contract we sign with Amazon. Many of my clients haven’t read their contract, let alone Amazon’s policies. It is one of the biggest Amazon new seller mistakes that leads to a lot of suspensions out of ignorance.
Amazon doesn’t accept, “whoops!” as a valid reason for reinstatement, either. You can find these answers through a google search if you don’t have an account yet. You want to look for the Amazon Seller Agreement, Amazon restrictions, Amazon category-specific policies, Amazon reviews policy, and Amazon Seller University. All of these will be helpful to you.
4. Don’t pay attention to buyer complaints
Amazon’s algorithm is regularly scanning your seller account for trigger keywords from buyers. They are searching reviews, your buyer-seller messages, and the return reasons buyers give. They are looking for indications of product quality problems, safety concerns, bad expiration dates, counterfeit/inauthentic goods, and mismatches between the listing and what the buyer receives in the mail.
The best way to head off these kinds of suspensions is to review your returns report weekly. You will want to go back 60 days because Amazon looks for patterns. One complaint won’t necessarily affect your account, three in two days will. You want to download the spreadsheet – not review it on the screen – for the complete buyer notes. Sort the spreadsheet by ASIN and look at what buyers are saying about your products.
Anything that is not a normal return reason (“changed my mind,” “color doesn’t match my living room,” “doesn’t fit,” etc.) should be looked at more closely. We call these “negative returns” because they may trigger a suspension.
If you have a product that has a 2% or greater return rate for any reason, you should be concerned and looking at why.
Some categories like clothes and electronics normally have higher return rates. Look up what’s expected for your category in Seller Central. The default is 2%.
If you see a product listing that is getting a lot of returns or has complaints, Amazon expects you to fix it.
Find out why the product is being returned and fix it or they’ll suspend the listing. Common reasons include poor product quality, poor packaging, and a listing that needs better pictures, better description, etc. If you can review your reports weekly and make changes as needed, you can avoid many suspensions. We do these for our retainer clients and have actively prevented thousands of possible suspensions.
5. Open multiple accounts without permission
A linked account is when Amazon detects another account linked to your identity that you (or a member of your company) opened without permission. Amazon only allows one account per seller unless you get permission first.
Linked accounts are serious because they will suspend you and it is hard to get back. Setting up multiple accounts is a common black hat tactic done by bad actors, so Amazon is rigid about this policy. We see linked accounts come up during verification a lot and it usually means the seller will be rejected and banned from ever selling again.
The best way to avoid this suspension – beyond the obvious – is to search your memory and those of your employees and business partners to see if one of them had a seller account in the past. It could be as innocuous as selling off old textbooks in college.
If you find previous seller accounts, your first strategy should be to re-open one of the old accounts and repurpose it for your new business. If you can’t do that, you don’t have access to your student email anymore, etc., then you need to get Amazon’s help FIRST.
If you are a brand setting up a brand registry, set up the registry but not the seller account. Contact the brand registry people and ask for their help. Explain the situation and they should be able to help you set up a legitimate account and legitimately link your old and new accounts, so you don’t get suspended for linked accounts.
If the damage is already done and you are in verification, you need to explain what happened.
Provide as much information to Amazon as possible about the old account – most especially the email address that was used to open it and ask them for their help. This is a hard one to recover from and I recommend that you not go it alone. You’ve got just one chance to fix it.
6. Manipulate reviews
Amazon has come down hard on all forms of review manipulation over the past couple of years.
Things you might not think about are policy violations. I recommend you start there – Amazon’s policies – and then spend some time in the forums and Facebook groups to see the many ways sellers violate these policies.
As a new seller, don’t ask for a review unless you have thoroughly read and understood Amazon’s policies.
Don’t have your friends and family leave reviews. Amazon knows and will take you down.
Be skeptical of tips and “tricks” to get more reviews and anyone who says, “this is all white hat.” I’ve listened to those presentations and podcasts/webinars and most of them are in violation of Amazon policy. There are services and deal groups designed to help brands get more reviews on their products. Vet them carefully. Many of them are in violation of Amazon’s policies and get sellers suspended.
You cannot incentivize reviews in any manner.
This includes discounts, coupons, gift cards, rewards points, or any form of payment in cash or equivalent. Don’t just believe a vendor if they say, “it’s compliant!” This is your account at stake and my client base is filled with sad sellers who were misled or mistaken.
You cannot do anything to mess with another seller’s reviews or rankings in any way including “upvoting” and “downvoting” reviews on their listings or leaving a review of any kind – positive or negative – on their products.
7. Sell unsafe and/or poor-quality products
If you’d seen what we’ve seen on the platform in terms of unsafe and expired products you might never buy from Amazon again.
The first step to safe products is yours. You need to make sure you are buying directly from the brand or authorized distributor. You should look at every product you sell. Are there certifications on the package? Is the manufacturer’s address on the package? Is the product following international labeling guidelines? That’s step one.
Step two is to make sure that when you send it to Amazon there are at least six months before it expires. You will have to dispose of that product when it gets to 90 days to expiration so you don’t want to buy or sell more products than you can sell in the time frame.
If you are the brand/manufacturer of the goods, you need to have your products tested every batch by a professional lab/outside party. In addition, your packaging must have all the relevant certifications on it. If it is an item with an expiration date, that must be clear on the package. You need to follow all laws in the country for which you will be selling that product.
If your listing gets suspended for safety issues, you will need to provide proof that your products are safe. You will need all the components or ingredients tested. You will want to check ingredients against the FDA database to make sure none of them are considered unsafe (do this before you go into production on your product).
If you are importing from China or another country, you need to have quality control inspections by a local outside party BEFORE a single unit is shipped to you. If your defect rate is higher than 2%, don’t allow the goods to be shipped.
You must start thinking about quality and safety long before you ever sell your product on Amazon or your mistake could be very expensive.
8. Don’t protect their intellectual property or other’s
Ever since Amazon opened Brand Registry to allow brands to enforce their rights on the platform, it has been a real cluster. Sellers suddenly realized they had to brush up on IP law in order to survive. The best way to avoid IP complaints – or at least to recover quickly if they are made against you – is to buy from authorized sources or, if you are the brand owner, to make sure your products are not infringing on someone else’s design or utility patent before you offer them for sale on the platform.
Make sure your trademarks are registered with Amazon immediately because bad actors have been known to register other company’s trademarks as their own and then kick the real owners off the platform for infringement. The array of dirty tricks played with IP are breathtaking and could be a book by themselves.
If you think filing a trademark and protecting your IP is “too expensive,” be prepared to lose it.
Carefully read all of Amazon’s policies and examples relating to intellectual property because even if you did not create a listing – you are merely selling on one previously established – you are responsible.
If the listing you want to sell on is violating trademark, you need to either fix it before listing or you need to create a new listing. You cannot just create a new listing, however, if the product you are selling already has a listing with the correct UPC code. In those cases, you need to work with the catalog team to get the listing fixed.
If you get too many infringement complaints in a six-month period, Amazon will suspend your account and it is very hard to recover from infringement suspensions. Your best bet is to be proactive. Also, please be aware that you cannot just go to another platform and sell your items from the United States even if all the packaging is in the correct language (like going to Canada or the UK). In the EU/UK, brands can take you down for “parallel imports.” While in our country we can sell goods under the first sale doctrine, that law does not apply to sales in Europe.
IP is a landmine for many new and established sellers and the sooner you can learn about the best practices, the less likely you will have problems.
9. Don’t perform to Amazon’s standards
A lot of new sellers run afoul of Amazon’s performance standards because part or all of their inventory is merchant fulfilled. If that describes you, then you need to study Amazon’s requirements very carefully and have a team that can deliver for you.
The most common performance mistakes we see relate to late shipments, insufficient tracking data, canceled shipments, and high return rates due to damaged packages. You must meet your commitments no matter what. This may involve a weekend crew and extra warehouse workers in busy times. Very few new companies (unless their sales are small) can handle Amazon’s requirements.
If your carrier is delivering packages late, it is your fault. I recommend to my clients that they do not use USPS, for example, unless they are paying for expedited shipping. We tend to see a lot of suspensions in late December/early January for poor shipping performance from USPS over the holidays, for example.
If it is “too expensive” to ship a product with expedited shipping, then that item should be sent to Amazon for FBA. If that makes a product unprofitable, then stop selling the product on Amazon.
10. Don’t pay attention
Lastly, many of my clients are suspended because, at heart, they aren’t paying attention. This is actually one of the top causes of many other new Amazon seller mistakes.
They’ve not read Amazon’s policies in a while; they aren’t keeping an eye on their returns and they are inadvertently violating trademark, or they thought they were OK because they were buying from an authorized source. They aren’t looking at their listings before they sell them. Their products are violating the law in some way whether it is not labeling them properly or including ingredients that aren’t allowed, or not getting them tested properly.
Amazon is no longer a place where you can just send in products and sell.
You must have business and warehouse practices that meet exacting standards. You must keep clean copies of everything from invoices to your utility bills and be prepared to give them to Amazon at any time. You must understand local and international laws. You must be aware of intellectual property laws and how you might be violating them.
If this sounds like a lot, IT IS.
Amazon is not a platform for a casual or lifestyle seller. Not anymore. You have to devote time to educate yourself. You have to have money to pay for tests and to package your products properly. You have to be very serious about your business, no matter its size. You need to make sure your products have really good profit margins – not only because that’s the point of selling, but because you will have expenses related to compliance and returns and you need to build them into your prices or you will fail.
Anyone who tells you selling on Amazon is easy is trying to sell you something.
All that being said, it is still one of the most amazing platforms in the world for building wealth. Serious sellers do seriously well. I have clients who not only are selling millions of dollars a year on Amazon, they are making profit margins of 30% or better. If you go into it with the right business mindset, this dream is achievable for many sellers, not just a few.
Want to learn more? Find more tips from ecommerce pros.
Cynthia Stine is the founder and owner of eGrowth Partners – one of the oldest and most trusted consultancy firms for Amazon sellers. She started selling on Amazon in 2010 and consulting in 2012. She’s the author of a popular blog and two best-selling and internationally awarded books – including “Suspension Prevention: Get Reinstated and Protect Your Amazon Seller Account.” She is working on her third, “Dirty Seller Tricks” due later in 2020. Her company helps sellers resolve a wide range of problems with Amazon from suspensions to PPC ads to brand enforcement.