Preventing Account Suspension for Online Arbitrageurs: 10 Critical Mistakes and How to Avoid!

Controlling the risk of OA leads.
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Navigating the online marketplace as an Amazon OA seller can often feel like walking on a tightrope, especially when one of your key concerns is the possibility of account suspension. Online arbitrage is a pretty straightforward business model. However, your path to success is strewn with pitfalls that could lead to account suspension and damage to your business. 

But don’t worry! The risk of suspension is reasonable; it’s a challenge that can be efficiently managed and mitigated with the proper knowledge and tools. This article will review ten common reasons for Amazon OA sellers’ account suspension, their root causes, and how to prevent them. 

Selling Counterfeit or Inauthentic Products:

As a highly customer-centric brand, Amazon prioritizes the safety and trust of its customers. Selling counterfeit or inauthentic products violates this trust and harms customers, not to mention it also infringes on the intellectual property rights of the brands involved. Therefore, Amazon has strict policies regarding selling these products and takes severe action against sellers who violate these policies.

Root Causes: 

  • Sourcing from unverified or untrustworthy suppliers
  • Not investing enough time and effort in verifying the authenticity of the products

Preventive Measures: 

  • Always source your products from trustworthy and reliable suppliers.
  •      Keep all invoices and receipts related to the purchase of your inventory. If Amazon ever questions the authenticity of your products, these documents will be crucial evidence.

Failure to Maintain Good Account Health Metrics:

Amazon uses several metrics to assess the performance of sellers. You can view your account health and metrics in Seller Central > Performance Menu. These metrics help Amazon ensure that sellers provide high-quality services and customer experiences. Maintaining these metrics within Amazon’s expectations can lead to Amazon seller account suspension because it indicates that the seller is not meeting Amazon’s standards. Some of these critical metrics include: 

  • Order Defect Rate: shows how well and often a seller can ensure a satisfactory shopping experience for customers. Sellers must maintain an ODR of below 1%
  • Cancellation Rate: the percentage of orders sellers cancel (measured for seven days). Sellers must maintain a cancellation rate of less than 2.5%
  • Late Dispatch Rate: measures the number of orders with shipping confirmation posted after the expected shipment date. It only applies to FBM and should not exceed 4%
  • On-Time Delivery Rate: represents the number of shipments delivered rightly within their estimated delivery dates. Sellers must maintain the OTDR above 97%
  • Valid Tracking Rate: (only applicable for FBM) calculates the percentage of total shipments with a valid tracking number in a given 30-day period. A VTR of above 95% is expected from sellers. 
  • Return Dissatisfaction Rate: reflects your customers’ satisfaction with their return experience. You must maintain the figure at less than 10%
  • Invoice Defect Rate: it enables third-party sellers to oversee the invoicing experience they provide to Amazon Business customers who demand invoices or receipts for tax and accounting purposes. Sellers must maintain an IDR of below 5%

Now, let’s find out the root causes and preventive measures you can take to ensure good account health on Amazon: 

Root Causes: 

  • Poor logistics management and inaccurate processes
  • Not responding promptly and helpfully to customer complaints

Preventive Measures: 

  • Use the FBA (Fulfillment by Amazon) instead of FBM (Fulfillment by Merchant) if you have the means. This way, most of your problems will be automatically resolved because Amazon handles order fulfillment. 
  • If you have no choice but to use FBM, estimate the shipping timeline accurately. If your estimations are unrealistic, your account health will be negatively affected. 
  • Regularly review your account health dashboard in Seller Central and address any issues before they escalate into account suspension.

Make sure to become proficient in how to improve Amazon account health.

Intellectual Property (IP) Complaints:

IP complaint problem for AMZ sellers.

Intellectual property (IP) complaints occur when unauthorized use is made of a brand or individual’s intellectual property rights. If a seller repetitively receives IP complaints on Amazon, this can lead to account suspension. However, there are ways to prevent getting IP complaints or resolve the issue if it occurs. 

Root Causes: 

  • Listing products that have a history of receiving IP complaints 

Preventive Measures: 

  • Use tools like IP Alert when sourcing products to manage any existing risks by checking the history of IP complaints on a product. If many sellers are currently offering the product and it hasn’t received an IP complaint in years, it’s relatively safe to go forward. 
  • Be prepared for any potential complaints. If you receive an IP claim, take it seriously and respond to the claim promptly.

Manipulating Customer Feedback:

Customer feedback is critical to Amazon, as they guide potential buyers’ decisions and foster trust in the marketplace. Therefore, any form of manipulation or dishonesty regarding customer feedback is strictly prohibited. If you fail to adhere to this policy, Amazon will remove the feedback. Repetitively manipulating feedback and ignoring Amazon’s warnings can lead to account suspension. 

Root Causes: 

  • Getting seller feedback while failing to adhere to Amazon’s policies (e.g., offering incentives in exchange for feedback, asking friends and relatives to leave positive feedback, etc.) 
  • Creating fake positive reviews to inflate one’s product ratings and boost a product’s image
  • Sellers agreeing to buy each other’s products and write positive reviews

Preventive Measures: 

  • Play by the rules! Don’t create fake feedback or offer incentives.
  • Familiarize yourself with Amazon’s guidelines regarding customer reviews/feedback and ensure compliance.
  • If you use a third-party service to manage feedback, ensure it complies with Amazon’s policies.
  • It’s OK to ask customers to leave reviews/feedback, but don’t try to influence the content.
  • Be patient! Building a collection of positive reviews take time, so avoid trying to accelerate the process.

If you’ve received an unfair review or feedback, you can check out our guide on how to remove negative feedback on Amazon

Multiple Seller Accounts:

Creating multiply Amazon seller account.

Amazon’s policy prohibits sellers from operating multiple sellers accounts to prevent unfair competition, maintain an even playing field for all sellers, and discourage dishonest practices such as evading previous suspensions. Violating this policy can result in suspending all of the seller’s accounts.

Root Causes:

  • Attempting to bypass restrictions or suspensions by opening new accounts
  • Trying to spread risk between multiple accounts
  • Opening various accounts for different business models (for example, one for online arbitrage and another for private label)

Preventive Measures: 

  • Adhere to Amazon’s policies and avoid having multiple seller accounts.  

Failure to Respond to Performance Notifications:

Amazon sends performance notifications to inform sellers about issues that may negatively impact their accounts – including warnings about policy violations, customer complaints, or request for additional information regarding a specific listing. This ensures that all sellers adhere to Amazon’s standards and provide excellent customer experiences. If sellers ignore or fail to address these notifications promptly, Amazon may suspend their accounts.

Root Causes: 

  • Not receiving or overlooking notifications
  • Not responding to the notifications or not treating them with the urgency they require leads to delayed or no responses.

Preventive Measures: 

  • If you use an email address for your Amazon account other than your primary one, import the former on the latter and assign a label to it to ensure you don’t miss important emails. 
  • Keep a regular check on your Amazon Seller Central account for any notifications.
  • Always respond to Amazon’s notifications as soon as possible. If a notification identifies an issue, take corrective action immediately.
  • If you forget to respond to the notifications, use task management tools like Microsoft To Do. 

Violation of Amazon’s Communication Guidelines:

Amazon has strict policies regarding communication to maintain a respectful, secure, and positive environment for buyers and sellers. According to Amazon’s guidelines, you are allowed to send messages that fall into the following categories: 

  • Necessary Permitted Messages: communication necessary to complete an order with a customer or to respond to an inquiry (for example, if there is a problem with the shipment, a return request, or a partial refund) 
  • Proactive Permitted Messages: messages sent by the seller which are generally not responses to an inquiry or question – for example, resolving an issue with an order, returns-related questions, invoice requests, review requests, scheduling delivery for a heavy item, and the requirement for additional information to complete an order. 

In each case, you may only message customers who have contacted you or purchased your products. The communications must be sent via Amazon Seller Central, and your 17-digit order number must be included.

Root Causes:

  • Sending unnecessary or unwanted messages to customers outside of order completion needs
  • Offensive, aggressive language, or promotional content in communications
  • Sharing your email, phone number, or other contact information with buyers
  • Attempting to use Amazon’s communication system to promote other businesses or direct customers to external websites

Preventive Measures: 

  • Always professionally communicate with customers.
  • Do not share personal contact information with customers or attempt to move communication off Amazon’s platform.
  • Only communicate with customers when necessary for order completion.
  • Do not use Amazon’s platform to promote other businesses or websites.

Providing Forged or Manipulated Invoices

Manipulated Invoices on Amazon.

Sometimes, Amazon asks sellers for invoices when they want to list a product. Providing forged or manipulated invoices means the seller is misrepresenting the authenticity or source of their product, which violates Amazon’s policies and can lead to account suspension. 

Root Causes: 

  • Trying to bypass Amazon’s requirements by forging or manipulating invoices to appear as authorized sellers 

Preventive Measures: 

  • Keep clear records of your transactions, invoices, and purchase orders to provide legitimate and authentic documentation when necessary. 
  • Regularly audit and review invoices to identify any discrepancies or potential issues. 

Poor Shipping and Packaging Practices:

Amazon strives to provide a superior customer experience in all aspects, including the delivery process. If sellers consistently fail to deliver packages on time, ship incorrect items, or package items poorly, leading to damage, they may receive warnings or face account suspension.

Root Causes: 

  • Inadequate packaging materials resulting in damage to products
  • A disorganized inventory leads to the wrong items being shipped
  • Inefficient shipping process resulting in delays
  • Lack of coordination or misunderstanding with third-party logistics providers or couriers

Preventive Measures: 

  • Use the FBA model instead of FBM if possible.
  • Invest in high-quality packaging materials to ensure the safety of products.
  • Use an inventory management system to ensure accurate shipping of items.
  • Create an efficient shipping process that ensures orders are sent out quickly and correctly.
  • Choose reliable third-party logistics providers.
  • Keep an eye on your shipping performance metrics on Seller Central, and maintain good standing with Amazon.

Neglecting Customer Returns and Refunds: 

As part of its customer-centric approach, Amazon has robust policies regarding returns and refunds. If a seller neglects or refuses to handle returns or refunds under these policies, it can result in complaints, negative reviews, and, ultimately, account suspension.

Root Causes: 

  • Ignoring or delayed response to customer return requests
  • Refusing to refund purchases even when the customer has a valid reason

Preventive Measures: 

  • If a customer has a valid reason for a return or refund based on Amazon’s policy, ensure that you honor it.
  • Respond promptly and professionally to customer return/refund requests.

Final Thoughts

Account suspension is a formidable challenge that OA sellers face in the Amazon marketplace. It’s an unwanted disruption that could halt the steady flow of business and ruin the seller’s reputation. However, it’s not unmanageable or unavoidable.

With the knowledge of potential pitfalls and how to prevent them, sellers can avoid account suspension and shape a sustainable business that respects the platform and its customers. By staying informed and proactive, you can ensure your Amazon FBA business continues to thrive in the marketplace.

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  1. Retail arbitrage on Amazon offers flexibility and scalability, allowing sellers to start small and gradually expand their inventory and sales.

  2. Amazon’s customer reviews and ratings provide insights into product quality and buyer preferences, aiding your decision-making process in retail arbitrage.

  3. The fulfillment options offered by Amazon, such as FBA, make the reselling process streamlined and hassle-free.

  4. The seller support resources provided by Amazon, such as educational materials and customer service, help resellers navigate challenges and succeed.

  5. With retail arbitrage, you can develop valuable skills in product research, pricing analysis, and market evaluation, which can be applied to other online selling ventures.

  6. By staying informed about market trends and leveraging Amazon’s data, resellers can make informed decisions and source profitable products.

  7. The thrill of discovering profitable products during retail arbitrage keeps the business exciting, as you constantly search for new deals and uncover hidden profit potential.

  8. With retail arbitrage, you can develop skills in negotiation and relationship-building, as you establish connections with physical retailers and wholesalers.

  9. The seller tools and analytics provided by Amazon enable you to track your online arbitrage performance, monitor profit margins, and optimize your sourcing strategies.

  10. The reselling model on Amazon encourages innovation, as you constantly seek new products and strategies to stay ahead in the competitive marketplace.

  11. The FBA program provides sellers with access to Amazon’s advanced fulfillment technology, ensuring accurate and timely order processing.

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