The Horror Stories of Selling on Amazon – Getting Seller Central Account Closed Without Notice

In recent years, we’ve seen and heard an alarming number of horror stories regarding Amazon, Etsy and other marketplaces closing sellers accounts / shops – often times for no understandable reason! Yes, it’s true, sometimes a sudden closure without any reason given!

We decided after having our own negative experience with selling on Amazon and hearing about clients with similar issues on Etsy, to post a few horror stories about both platforms.

If these quick stories don’t encourage you to open your own e-commerce store, nothing will!

Before we go on to the story telling, it’s a good thing to note that when you use these platforms for selling your merchandise, it is equivalent to building your house on someone else’s land. If you build your empire on borrowed land, it’s also borrowed time since at any point that empire can come crashing down with a click of some overzealous Etsy admin or crabby customer service person at Amazon. So just think on that a while, then think about the up side of having a backup plan or at a minimum trying your own shop or e-commerce site.

First, We’ll start with a story that is from personal experience. I find those make the best story time!

We’ve been selling on Amazon and using Fulfillment by Amazon (FBA) for over a decade in various capacities. We have started and grown large e-commerce companies in part because of our ability to reach a different customer on Amazon. As Amazon sellers, we’ve had product manufactured and warehoused at Amazon as well as used the service of drop ship vendors over the years, mostly in very Niche markets.

With this particular venture, we were selling a mix of some crafting supplies and tools along with specialty printer supplies to support the craft industry (inks, paper, etc). After having the opportunity to purchase a quantity of printer inks from the manufacturer (Xerox) for some models that were discontinued, we decided to jump on the opportunity and acquire the ink to sell on Amazon. There were so few sellers that it was a no brainer and the clientele using these printers was largely in the crafting business and having a hard time finding these inks.

Perfect, right?

Not so fast.

After spending a lot of time and money getting these inks and labeling to FBA standards, we shipped them to Amazon and they started immediately selling. Before we knew it, thousands of dollars worth of this ink had sold! We knew it was a good choice to take the risk to buy this leftover product directly from Xerox.

Then comes that dreaded email. “Your selling privileges have been suspended by Amazon until further review”  “we believe you are selling counterfeit merchandise”

The email goes on and on about shaming us for selling “counterfeit” merchandise.

Surely this is a mistake, I thought.  Nothing more than a few emails and proof that we purchased this from Xerox, and this will be solved.

Wrong.

Emails went unanswered for weeks. Funds were never distributed. The one or two replies we got back were “Your account is terminated and we may keep your funds to compensate customers who purchased the counterfeit merchandise”

WHAT!?  (and a few more colorful words tossed around)  What the ACTUAL &[email protected]!

To make matters worse, Amazon stated that we must remove all other product at our expense immediately or it will be destroyed. We had literally just sent in thousands of products and were traveling on the other side of the globe for 2 months without access to any facility to return these products.

SO there we were, sitting by a pool on what was to be a vacation trying to sort out what to do about all the products, all the money being held and just dumbfounded over the lack of response or consideration.

Of course it’s clear that there are millions of sellers on Amazon and they cannot be expected to answer every question for every seller every day of the week. But when you have a long time seller like we were with a perfect track record and everyone making money, you would think they would verify the fact the products were in fact not “counterfeit”.  But no, they have no interest.

After a few weeks of trying to sort this out without any positive resolution, we realized the only option was to have the highest value products returned to a friend or family member and have the rest go into a land fill (nauseating, right?).

So what happened to our Amazon account and our money, merchandise, etc?

First of all, it’s unfortunate but competition out there on Amazon has gotten very nasty. Competing sellers are buying an item from another seller and claiming to Amazon that it is counterfeit. Amazon immediately assumes the worst and the original seller is shut down. Great for the competition, right? Sure, until it happens to them.

So we can only presume that one of the other sellers of this hard to find ink was a bit annoyed that we were offering it at 20% less because of our purchase arrangement. So they chose to take the dark path of having us shut down with fake counterfeit claims. Knowing good and well that Amazon would never verify the authenticity of the product and with no risk to the competitor.

As for the merchandise? We got a few thousand dollars worth of product back thankfully. But the rest was destroyed as it was too expensive or difficult to have it returned and salvage it.

Oh, the money they were holding? The THOUSANDS OF DOLLARS they just decided to hold on a false claim from a competitor? Shockingly one day nearly a year later, we got a notice from our bank that Amazon made a deposit.

This was good for us, but it doesn’t work out that well for everyone. Some people have had 6 figures in sales held by Amazon indefinitely or have never seen the held funds.

Lesson learned, and we will never do business with Amazon again. However, that’s not necessarily the right business choice for many people. Amazon can literally make the little guy rich. Sometimes nearly overnight. While our problem with Amazon is personal to our business, I realize and encourage others to try selling on Amazon with a few caveats. Mostly, be able to prove your source of product while obviously not foolproof like our particular story, it helps. People that do incredibly well often times sell private label products where there is no competition therefore there are no snipers out to get them (yet). There are many stories of people coming up with a small product and having it made overseas and selling millions of dollars worth on Amazon. So, go for it!

But remember, always have your own e-commerce shop, just in case!

 

As for Etsy – check out part TWO

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