Season 1, Episode 20

No Products, No Money

If you’re flagged for an authenticity investigation and aren’t able to get documentation deemed acceptable by Amazon, you’ll likely find yourself unable to get your inventory out of FBA OR get your funds disbursed. This leaves you stuck, with no product, no cash, and Amazon threatening to dispose of your inventory. Then what?

Show Notes

Transcript

Chris: [00:00:07] Hi, everybody. Welcome back to Seller Performance Solutions, our podcast to help sellers deal with that crazy thing called Amazon. I’m Chris McCabe, former Amazonian and current seller account consultant. And I’m here with Leah McHugh who works with ecommerceChris as well. And as a consultant to sellers who have numerous problems, I guess it’s becoming a widening net of things that people come to you for help for, right?

Leah: [00:00:36] I think at this point, maybe to say compliance. It seems to cover most of it.

Chris: [00:00:41] Exactly. Seller performance slash compliance. So we wanted to talk today about all the sellers who are trying to pull inventory out of FBA. They’re not even trying to resell those items. They’re trying to pull the inventory out because they were flagged for an authenticity investigation and they weren’t able to get documentation into Amazon hands, to my former teams. They’re being ground into dust by all these requests for verifiable suppliers, verified invoices, and nit-picky discussions about whether or not invoices look fabricated, whether or not there’s evidence for that. The bottom line is you can’t pull the inventory. They have that message in the email that they send to you saying you can’t even pull the inventory and it might be destroyed or disposed of if you can’t resolve it by a certain date.

Leah: [00:01:26] And they’re also in a position,  if the account is suspended due to inauthentic, then they also can’t get their funds. So you’re this kind of awful limbo or purgatory where you can’t get your funds, you can’t get your inventory and also your account or listing.

Chris: [00:01:41] We’re seeing a surge in people who, some of their accounts are suspended. Sometimes just their ASIN is suspended, but either way, they’ve got a lot of revenue tied up in the inventory and of course the funds are frozen. So if you’re suspended on the whole account, in, I would say most cases, it’s fair to say Amazon doesn’t disperse the funds after 90 days. I think it used to be a minority of cases. Now I would say it’s more than 50% of the people we talk to. If they can’t pass Amazon’s ever-changing universe of what an authenticity investigation is. Not only do they maybe not get the inventory back. They’re not getting their funds after 90 days.

Leah: [00:02:15] We’re also seeing that on the suspected IP cases, where the account was blocked for suspected IP. There isn’t even a complaint and Amazon is also not dispersing the funds there. And I wanted to ask you about that actually. Are you seeing the inventory being held on suspected IP cases as well? Or is it just in-authentic?

Chris: [00:02:32] Really any kind of infringement. I think I’ve seen people talking about copyright complaints. I don’t recall off the top of my head suspected  IP resulting in freezes of disposal orders or, removal orders that go to disposal, I should say. But that’s obviously next because people didn’t use to get suspensions for suspected IP on an account wide basis. And now they do as of 2021. Suspected IP infringement, you should just pile up in everyone’s account health.

Leah: [00:02:57] Well, and some of the ones we’ve seen have been pretty hilarious too, on the suspected IP. Where there was one, something was called Harry and they said something about styles.

Chris: [00:03:05] Dirty Harry style glasses attracted suspected IP bots for Harry styles, musician slash actor. So the bots have tons and tons of false positives. We won’t waste listener time , with the bots going wild and not being that accurate because I think Amazon knows that. I think they’re okay with it. They’re okay with a bucket load of false positives, they expect you to just know exactly how to appeal those. Even though their engineers probably need to tweak things and sit down with, again, members of my former teams spend a little bit more attention in time on fine tuning that process. So it’s not so disorganized and not so borderline unprofessional.

Leah: [00:03:42] The other side of that is that seller performance keep moving the goalposts. Now it’s not just, we need to verify your supplier. I’m asking people for their suppliers, supplier information, which I don’t know about most people’s suppliers, but most of the suppliers I’ve worked with do not want to give you their supplier information.

Chris: [00:03:59] That looks like a joke and it looks like a 13 year old wrote that message. You’re at the point now where almost all the messages they send out are extremely unprofessional and basic. Your suppliers, supplier. A lot of resellers will not be able to get their suppliers, supplier, supply chain, documentation, less their middleman be cut out of the equation. We understand Amazon loves cutting out all sorts of middlemen. That’s what they’re trying to orient the whole marketplace around cutting out middlemen. Unfortunately, if they view the seller themselves as the middleman, then that’s a problem.

Leah: [00:04:31] So it makes it that much more difficult for sellers to prepare for these when they keep changing, what is  acceptable documentation and what is not.

Chris: [00:04:39] It’s an unfair ask and it becomes a question of unfair competition. We keep hearing rumors of antitrust investigation swirling. If it hurts their motivation to reinstate your listing, because they keep asking you for things you can’t provide. Maybe it’s just in their benefit to do so for their own bottom line and not for yours, because how many asks for invoices have we seen where the invoice is from an authorized distributor? Sometimes the invoice is from the manufacturer themselves and Amazon will say ‘looks fake’. Did a manager review that investigator’s decision and determine, yeah, that’s a right call. That definitely looks fake. No. One person out in a blizzard of contacts and emails decided, yeah, it looks fake. I’m going to skip it. I’m going to move on to the next one because there’s no reliable auditing going on for the quality of those investigations. It’s painstakingly obvious at this point that there’s really no management going on of self performance-related work inside those walls.

Leah: [00:05:33] We were also seeing other cases where that copyright infringement or something like that, where they’re asking for a letter of authorization from the brand owner. But the proof that making the complaint, isn’t the brand owner of the product because of the copyright. So it doesn’t even make sense to have a letter of authorization at that point because the product isn’t owned by that brand and you keep getting that same stock as once over and over. And , really the only way to resolve those is to escalate it because you just get stuck in this loop of them asking you for information that isn’t applicable to the situation.

Chris: [00:06:05] We’re not saying you shouldn’t ever contact support to try to delay or stall a disposal order. If you wake up to this reality, very close to the disposal order date, we’re not to try anything to delay that.  It’s opening a case if it’s escalating it, whatever you need to do. But, just be prepared that Amazon’s going to be doing to inventory what they’ve already been doing to funds, which is freezing things for longer than you’d like, or maybe for on a permanent basis. Which is very, very alarming. But we’re seeing that they say, look, some of your items may be inauthentic and it may not be because you receive buyer complaints that the items were fake or counterfeit. It may simply be because you listed something, it never sold. You never had an order for it, but you lack what they consider to be sufficient and acceptable supply chain documentation to prove a hundred percent that it’s legitimate inventory and legitimately sourced. Or they accept your invoice. But for some reason don’t like your supplier or don’t like their website, and then they won’t let you pull the inventory. Predispose a lawyer for that reason. So they’re just expanding their zone of power over your stuff and your money at that point.

Leah: [00:07:14] And I’m not sure if this is just SOP’s gone wild or if this is actually part of Amazon’s plan, but it is something.

Chris: [00:07:21] That’s what my question was to you.  What’s the why here? What do you think the motivation is? This is just not scalable. Don’t care. No time to look at it.

Leah: [00:07:31] I think it’s a combination. I think it’s a combination of SOP’s gone wild and managers being told that we need to fix this counterfeit issue and no real oversight into the results.

Chris: [00:07:41] They’re definitely under the gun to fix counterfeit because all the wonderful initiatives they’ve announced over the years, project zero and the transparency program. There’s still tons and tons of counterfeit being sold on the site. So they’re going to continue to receive that pressure. The problem is how do they respond to it? And actually who at Amazon’s responsible for managing that process? Because the results we see are either we’re going to sweep all of you up and just sort you out later, who’s got acceptable supply chain documentation, and who doesn’t. We won’t make it complaint based. We’ll just look at everybody. Or, it’s just the inconsistency. We always see the hit or miss of, well, you got a complaint and it doesn’t really say anything, but we’re going to put that in the in-authentic bucket because some of your items may be in authentic. And at that point you’re asked for things that you provide. Most sellers we work with have that documentation. It’s just that more and more of them are seeing. Declined or rejected or they call account health reps and account health reps say, yeah, I don’t even know why they rejected this. It’s just been rejected. They say it’s not verifiable. Or the invoice might be missing something, but I can’t even tell you what it is because it’s not annotated on your account. So it’s become this screwy circus of incompetence.

Leah: [00:08:51] And it seems,  it’s a lot more likely that listings are going to be taken down and the process for getting them back seems to be getting slower and slower. Not even more appeals. It’s the response times. Every time I get a time frame for response, it gets longer and longer.

Chris: [00:09:07] As a former employee, I’m embarrassed about what’s going on. And I haven’t lived there, worked there for years. What’s going on is embarrassing. And the people responsible should be embarrassed. Professionally embarrassed. Because the account health reps don’t know. They give you shoddy advice. They guess. Sometimes they totally spin you around in circles for half an hour and then send you down the wrong path, the wrong direction. The people who are, and they’re not the ones who are reviewing your appeals for yes or no, in terms of acceptance. The people who are responsible for that are declining things without reason. And is that just them guessing? I don’t know. Is that just their poor training, lack of auditing of their, the quality of their work? I don’t know. But it’s resulting in more appeals required by seller’s. So more time, more energy, more effort spent on that. And then on top of that, like you were saying, Leah, it takes them forever to answer, to begin with.

Leah: [00:09:59] Even escalating. Now it’s often quite quick, the response that we’ve delegated this, but then once it’s been delegated, you’re waiting days or weeks for executive seller relations to even resolve it there. So all of the teams are slower. It’s not just one team. And then you pick it up for the next one. And then your problem is solved. Everything is taking longer. Everybody is backed up.

Chris: [00:10:20] It just, it all has that copy and paste automation field without the oversight.  We are praying that that’s not where things were going under Andy Jassy next month, but it’s been going this way for a while. It’s just that, I don’t think I’ve seen it like this. So much inventory is being disposed of simply because investigators won’t properly review and read what’s sent to them in an appeal.

Leah: [00:10:40] I do wonder in terms of the funds holds how they account for that in their financials when they just never give the seller their disbursement. It’s a publicly traded company. Their financials are public information. Put that as a line item in the book.

Chris: [00:10:54] Our audience might be a little less interested in how Amazon represents it at the all hands meetings. But it’s a good question. And it’s an interesting point.  You’d expect anyone who, anyone in the media, who attends these quarterly, all hands and, earnings reports is what I’m trying to say.

Leah: [00:11:10] Because I understand that you’re not supposed to make a profit off of counterfeit items, but neither is Amazon. But they’re not, that money is not going back to the customer. If they have a counterfeit item being sold, it’s staying in Amazon unless the customer opens an a to Z claim. So I’m just curious how those funds are accounted for in Amazon’s books..

Chris: [00:11:31] The permanent funds hold is not new. That’s two years old now, and we don’t know any more now than we did two years ago. We do know it’s resulted in a huge increase in the arbitration cases. So if Amazon’s sick of sellers taking them to arbitration, which maybe they’re not. Then, if they want to reduce that load, then they could certainly just disperse people their funds after 90 days, unless there’s confirmed counterfeit, unless there’s confirmation that definitely, barcode level confirmation, Hey, these are fake barcodes. These are fake items. Unless they have that in hand, why are you so guilty unless proven innocent. Now, on the other hand, I do encourage all sellers to maintain and have at the ready, as much supply chain documentation as you can, even for your own stuff. By the way, private label brand sellers, because a lot of private label brands are being accused of inauthentic and counterfeit too, just by their competitors. And they need to have this stuff ready. So, no one’s really safe from maybe having their inventory destroyed because their invoices keep getting rejected. And if you’re a private label brands and you’re sourcing from a factory in China that has really bad invoices for you. These days, it’s nothing for Amazon to sweep those aside and say, these are worthless. We don’t care if you’re private label, we don’t care if you registered new trademark. We don’t care if you’re in brand registry, we don’t like your invoice. We don’t like your supplier. Have a nice day, get this inventory. Some real documentation or you have to worry about a disposable order. That’s what’s new.

Leah: [00:12:57] Or just them nodding, accepting specific suppliers who are legitimate suppliers, but Amazon has just decided no.

Chris: [00:13:05] And we know this is kind of a wild chaotic episode because this is a wild, chaotic topic, which is a little bit crazy and alarming even to us. And we’re pretty much numb the most of this at this point. Any questions on it? Reach out to us at ecommerceChris. Thanks again, Leah, for joining me for this conversation and I’m sure we’ll be talking about this topic again.

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