As a customer, Amazon undoubtedly has made our life easier with prompt deliveries and customer care services. But it’s not the same for the sellers on Amazon.
Sellers often become a victim of Amazon's unfair rules and treatments. The sellers don’t take enough time to take a comprehensive look at what's going on behind the screen because of the tempting ads, and the trust Amazon has earned (somewhat speciously).
Amazon makes the listing processes for the sellers stress-free and straightforward. But what they don’t show you is the amount of competition you’re going to face. And to make the seller’s condition worse, there are Amazon's strict rules and deplorable (at best) support system.
Yes, you can still sell and make money on Amazon but not without facing the ugly sides of it and having more than one route to market in your arsenal. Let’s take a look at what you as a seller will face on Amazon.
What Does Amazon Do to Murder Small Business Sellers?
The most common issues that the sellers face are account suspension with little to no chance of getting it back and Amazon actively supporting Chinese corporations and their shady, dishonest (not to mention utterly illegal) tricks and scams.
Sellers have to constantly live in fear of getting their accounts blocked or suspended with no warning. No matter how careful you are with your product’s authenticity and details, sometimes it’s just not enough.
Account suspension will harm your sales, kill the equity in your listings and eventually, you won’t be able to sell on Amazon anymore until your account is restored. And for the ugly part - the appeal and reinstatement process is road strewn with automated emails, bots, careless replies from staff in the Phillipines and India and utterly unhelpful and incompetent phone staff.
Many panic waking up to totally crazy account suspensions. The first action they take is to carefully and diligently create a case on Amazon with all the details, only to receive an email - after who knows how long - saying Amazon is 'looking into it'.
While Amazon is to 'looking into the matter', expect to waste days, weeks and even months because they’ll ask you to appeal for the account just to deny the appeal and close the case. That’s how it ends—no happy ending for sellers.
Moving on to the obnoxious act of Amazon protecting the Chinese corporations.
Amazon’s mission has always been to provide the customers the lowest price possible, and the Chinese factories can make that happen. That's why Chinese sellers are regularly protected whilst monopolising page 1. Dont believe me. Search any given product and click on the right hand side where it says 'sold by'.
Chinese corporations produce the cheap products in mass quantities, supply them to Amazon, and remove the American businesses whom they are also selling to from page 1. This act ensures that Amazon gets more happy customers and maintain their up to 30% fullfillment and listing profits. Hence these Chinese corporations are continuously doing business on Amazon under their protection.
Amazon is brutally and actively killing small USA based sellers. They care little for their local seller's (customers') needs. As a seller, you have practically zero control over your small business' success merely using Amazon's PPC (Pay per click) system. Why? Because the very same Chinese factory you trusted is selling the same product they sold you at a loss to build rank and monopolise page 1 where they will get their organic sales.
Amazon Allowing Black Hat Tactics? Yep.
The number of black hat tactics on Amazon has increased in recent years. The sellers can do nothing about it to protect themselves, and Amazon authority could not care less about supporting USA based small business sellers.
They’ll allow these unjust incidents to happen to honest sellers whilst putting them through an obstacle course of red tabe that results in no finish line of success.
Let’s introduce you to the three biggest black hat tactics that Amazon allows.
1. False reviews.
There are $5/ hour services available for freelancers to post fake reviews in China. The Chinese hire them to destroy any hopes of competition. One negative review from these people can cause severe damage to your listing and drive the rating down significantly leading to unviable advertising costs and eventually, a suppressed listing.
Besides these nefarious freelancers, some citizens receive offers like free products and bonuses if they leave a higher rating on a review. Craigslist displays posters promising to pay $10 for every 5-star rating. But don't think YOU will get away with it. It's not the same for a small business trying to get a foothold - they are watching YOU very closely. Amazon is actively driving authentic US sellers out of business and turning a blind eye to Chinese sellers doing 30k - 100k a month because, well, they get up to 30% of that from their fees. There are even cases where the product you haven’t even sold a unit will get negative reviews. Google it now!
2. Fake product claims.
The Chinese competitors go around buying your product in bulk or small portions, and then they return it, claiming to have received a faulty product. This way, you run out of stock on Amazon, and the sale you targeted is over by the time you’re reinstated. This way, Chinese sellers are constantly hurting local / small businesses. Don't even bother trying to state your case on Amazon. Someone in the Phillipines or India will simply throw it in the 'too hard basket' (after all, Amazon is paying them $3 or so an hour), or just destroy you with automated emails before closing your case.
3. Fake trademark violations.
This is another widely used technique for dishonest sellers to compete against the top merchants. Amazon’s algorithm instantly identifies such 'counterfeits', and your account can be suspended under the “guilty-until-proven-innocent” vetting system. There’s nothing you can do here except wait for your account to be restored, and in the meantime, the unscrupulous sellers grab all the sales and all the money you invested on advertising to get your product ranking turns into sunken losses.
Amazon is well aware of such corrupt acts, yet they don’t bat an eye; instead, they harbor these corruptions and trivialise acts of communism. The black hat tactics are causing significant damage to the small US citizen sellers, even leading them to go bankrupt.
Let’s Hear Some Amazon Horror Stories From Sellers
We have done some digging and present you with the worst experiences of Amazon sellers.
Let’s start with Kevin Chen, a health and beauty product seller.
Kevin’s hair growth products had been doing very well with four to five-star ratings since the beginning of their business. Suddenly one day, they saw several unverified one-star reviews appear killing their star rating.
The reviews are so obviously fake as you cannot EVEN FIND the review!
These criminals didn't stop at posting the reviews only. They also messed with the comment sections of the reviews as well, upvoting bad feedback and downvoting positive feedback with their army of Amazon 'buyers'.
So, Kevin decided to tackle it legally, got an attorney, collected evidence, data, and sent a two-page letter to Amazon. He tried all three sources - jeff@Amazon.com, sellerperformance@Amazon.com, and Amazon.com.
After taking all these steps, he only got a reply - after about two weeks - saying that Amazon would take care of it. Then came the waiting period. After waiting for a while, Amazon got rid of one review and closed the case. This kind of carelessness clearly demonstrated to Kevin that Amazon doesn’t intend to help small, local and honest sellers like him.
But it's not just Kevin. An unimaginable amount of USA small business sellers on Amazon are going through the same situation without getting any proper solution at all. I personally sunk $7000 advertising into my own first product only to be attacked by copiuos negative reviews, before having my listing oppressed.
Chris Nowak for example was accused of marketing counterfeit products which he manufactured himself; type that into Google if they haven't censored it by now (We can't link away from our blog or Google will penalise this blog. Yes believe it or not amazon, Facebook and Google are all in cohoots.
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4. Amazon Takes a Enormous Chunk Out of The Seller's Profit Margin
If you still want to try out your luck as a seller, let me tell you how Amazon takes a humongous share of the seller’s profit.
When you become a seller on Amazon, there are specific fees that you have to pay. Not to mention that you must keep your product’s price lower than a Chinese wholesaler and sink thousands into your listing for any hope of ranking on page 1 (If you manage to survive aforementioned communist attacks)
So, you pay the fees, set the lowest price, and try to make a good profit out of it - it doesn’t happen.
Here’s simple math for you.
As a seller on Amazon, you have to pay 15% of the sale. Now, let’s say you have 20-25% profit on a product and 15% of it goes to Amazon; you’re barely left with 5-10% profit. If that sounds “okay” to you, know that other fees are included, like FBA storage fees.
Now, in case your production cost goes higher, or there’s a new tax you have to pay, you can calculate the rest for yourself.
10 x shipping costs in the last 6 months ring a bell?
Conclusion
Don’t be disheartened, though. There are people out there fuighting the good fight. While it’s challenging to tackle everything on Amazon, it’s not impossible to stay as a top merchant, making a profit every month. You just can't rely sole on amazon PPC despite what the plethora of Amazon 'gurus' tell you.
There are some strategies to survive and thrive as an Amazon seller.
There include giving proper reseller rights to honest dropshippers, having your own ecommerce website, Facebook page and community, Instagram account, influencer deals and promotions and of course, having an effective brand story that customers connect with.
Philanthroshop's brand story is simple. We manage all of our own brands for our customers. We only sell for USA businesses. And we created this website to do just that.
Shop our brands now.