In late July, Teikametrics hosted an event in NYC for elite FBA sellers who were interested in optimizing their Amazon business. Our guests were able to attend talks from panel of experts on how to use cutting edge analytics to grow their Amazon sales. We got such great feedback on the event that we wanted to make sure our blog readers got the chance to get the inside scoop on everything from the latest tips and tactics for FBA, to strategic insight on scaling your FBA operations. We hope you enjoy our Elite FBA Summit series!
As an Amazon seller, you may have had to experience the frightening ordeal of having a product suspended, or heard horror stories about this happening to another seller. You know the product you’re selling is legitimate, but all of a sudden Amazon sends you a warning due to buyer complaints of your product being counterfeit. Why is this happening and how do you solve it?
Often, this problem occurs because of commingled FBA inventory. This issue plagues many Amazon sellers, often without much explanation. Former Amazon merchant risk investigator, Chris McCabe, shed some light on this topic to teach you more about the risks of FBA, how to better control your inventory, and how to avoid suspension if any complications occur.
Let’s Talk About Commingled Inventory
What Is It?
Chris admits he didn’t know much about this topic until reading ‘The Everything Store’ by Brad Stone. In order to get a concrete definition, he asked several internal people at Amazon and ultimately boiled it down to “inventory that is recognized by UPC or EAN barcode.”
Commingling allows sellers to share inventory that exists under the same ASIN, within Amazon’s fulfillment warehouses.
What Are the Benefits?
- Commingled inventory allows sellers to keep order cancellation rates low by fulfilling with other seller’s inventory and letting Amazon’s FBA teams handle it the process. This can help prevent your seller metrics from being negatively affected through order cancellation or having to explain stockouts to a customer.
- You don’t have to deal with FBA labels and can pay Amazon to label items for you.
- Commingled inventory grants you closer proximity to FBA buyers, so you don’t have to worry about how far away you are. In theory, Amazon will be able to identify your inventory from another seller’s because they scan it in once it is received in their warehouse.
What Are the Risks?
- Once the product is set up in one of Amazon’s warehouses, you are not allowed to change your product listing. This includes bullets, titles, etc. Doing this will increase your risk of getting a policy warning from Amazon.
- Commingled inventory may result in buyer complaints if your orders happen to be fulfilled with inventory from other sellers that may be damaged or counterfeit.
- Any returns you receive from commingled inventory might have originally come from another seller.
- Commingling is not available for all categories. This includes media, CDs, DVDs, or VHS.
The Lifecycle of Risks With FBA
Amazon will review both the frequency and nature of any warnings that you receive. The cycle starts with a warning due to a customer complaint and typically lacks details, so it’s up to you to figure out what went wrong.
It’s imperative that the initial warning be taken seriously. In the case study we will be talking about later on, Chris’ client had an entire product line pulled from their Amazon store. Amazon’s product quality team will be interested in seeing your invoices to document the process of how each item got from the supplier to you, so have those items ready to send to them.
Before you respond to Amazon, you must scrutinize your relationships with vendors, any negative feedback claims you’ve received in the past, or anything on your end that could be interpreted as the reasoning for your item being deemed problematic. It can be hard to pinpoint the source of the issue unless you have one only order, know the exact time frame, and can narrow in on the specific buyer. However, if you are able to figure out why you received a complaint and can provide Amazon with the evidence, you may be able resolve the issue in a more timely and efficient manner.
If the issue doesn’t get resolved, it can end in suspension. Let’s say a couple of warnings came in, you weren’t sure what to do, and your account becomes suspended.
In order to resolve the issue with Amazon, you will need to provide them with product invoices as well as a plan of action (POA). The POA should detail what went wrong, the root cause, and how to fix it. It’s important to show Amazon that you’re on top of it – they don’t care about what you will do, they want to see what you’ve already done to correct what went wrong.
Remember, Amazon’s assumption is that the problem lies with you, and not with them or any of their systems.
- Labeling or stickering products is always recommended due to the fact it gives you the greatest control over your own inventory. Amazon charges a fee of $.20 per unit for this, but it might be worth incurring this fee in order to mitigate as much risk as possible.
- If you must avoid stickering, try selling private label items that no one else will be selling.
- Also, try sending smaller shipments into Amazon and replenish quickly. Of course, there is more risk as well as cost associated with this method, however, you might have peace of mind knowing that if you experience an issue with Amazon you won’t have to recall thousands of items to figure out what’s wrong with your inventory.
Case Study: Seller Listings Removed by Amazon’s Product Quality Team
Several months ago, one of Chris’ clients had their listing suspended on one of their top selling items. They were experienced Amazon sellers and always played by the rules, so they were shocked to learn that Amazon’s product quality team had received a complaint about their item being counterfeit. It’s important to note that they even appeared as an authorized reseller of the item on the manufacturer’s website.
Even though they ran a tight ship, this client found themselves in hot water with little to no communication coming from Amazon. The first email they received stated that their listing had been removed due to customer complaints, and if they did not adhere to Amazon’s policies it would result in the permanent removal of their Amazon selling privileges:
Understandably, Chris’ clients were shaken at the notion that their selling privileges would be revoked and sought out his help. Chris recommended that the first step following this eye-opening email would be to immediately remove that ASIN from their inventory until the issue had been resolved. Taking this action is crucial in order to reduce the odds of receiving a second warning.
Chris reached out to Seller Support in order to find out if his client’s particular issue involved commingling of inventory, and to get details on the exact complaint that had been filed.
Here is the response he received from Seller Support:
Seller Support’s response informed Chris that while they didn’t receive any bad reviews, he would have to take his inquiry to a separate team, called Seller Performance. Chris knew from experience that contacting Seller Performance can be difficult. It’s essentially a general queue for merchants, and they are always responding to a backlog of thousands of queries.
Trying to pinpoint the source of the issue, Chris’ clients informed him that they were “99% sure it involves commingled inventory.” This usually happens to them when other sellers ship in counterfeit (and cheaply made) products as authentic and they get shipped as their own.
This was a helpful start for Chris to present their case. However, he needed to find out as much relevant information from his client as possible before writing to Seller Performance, so Chris asked them the following questions:
- What might prompt a buyer to complain about the item?
- How do we establish the provenance of the item?
- Were there any past complaints on that particular product line?
His clients informed him that each product that passes through FBA goes through a rigorous QC process. In addition, counterfeit items are easy to identify, as they usually come in plain anti-static bags, are sloppily made, have higher failure rates, and lower customer satisfaction.
After gathering and presenting this information to Seller Performance via email, Chris was met with an automated response that indicated his inquiry was 4,000th in the queue of appeals and he would receive an actual response in 3 weeks. He then followed the automated response up with more details. Chris let Seller Performance know that his client had so far lost over $8,000 in sales and that the website of the product line in question includes an acknowledgement of his client as a genuine reseller.
Finally, 19 days after Chris’ initial email to Seller Performance he received this response:
While Chris emphasized that he couldn’t be 100% sure what he did to get his client’s product line reinstated, he knew he would speed up their case by complying with Amazon’s request to provide as much information as possible and prove that they were reputable.
As an Amazon seller, hopefully you never have to experience this happening to any of your products. However, in the chance that it happens to you it’s in your best interest to provide all invoices you have, any proof that you are a genuine reseller of the product, and all documents that show how the product got from the supplier to you, in order to make your best case to present to seller performance.
About The Presenter
Chris McCabe is a former Amazon merchant risk investigator with a passion for helping sellers navigate the byzantine world of Amazon’s bureaucracy with insider knowledge. After several years evaluating merchant account performance for Amazon’s Transaction Risk Management teams, Chris left to apply his skills as a seller account consultant. He is a tireless advocate and support source for Amazon merchants with various marketplace pain points.
Top Amazon sellers trust Teikametrics for a data-driven approach to scaling their businesses for growth. Founded by a former multi-million dollar Amazon seller, Teikametrics offers FBA inventory management software, repricing, and marketing services.