On May 21, 2020, an Amazon seller — we’ll call him Bill — sat at his kitchen table, sipping his cup of coffee, preparing for his day, when his phone pinged. His Amazon team lead was letting him know that his top selling Amazon listing was suspended.
The listing had been suspended due to a customer reporting that his top selling product on Amazon (a bottle of supplements) was not properly sealed. It turns out that the reason for suspension was not at all the fault of Bill or his team. Amazon had put customer-returned product back into circulation, and an Amazon team member had failed to notice that a customer had actually already opened the returned bottle.
As a seller of his own products on Amazon, Bill’s day to day company revenue was directly tied to his listings on the platform.
Luckily, Bill was enrolled in SafeGuard, a program that protects a brand from lost Amazon revenue. (In essence, it acts somewhat as Amazon seller suspension insurance, because it also helps if your entire seller account is suspended.)
Bill’s chose to keep their Amazon sales in house, but fortunately he was prepared for the ASIN suspension with SafeGuard.
With the help of SafeGuard, he was able to keep his Amazon sales coming in for the four days it took him to reinstate his listing. He sold a total of 2,825 units during that time. Had he been a sole seller on Amazon, his company would have lost out on $94,389.72 in revenue, leading to a direct financial blow of an estimated $49,917.75 in profit.
Want to avoid the same financial loss? Let’s dig into the program that helped save Bill’s business almost six figures in revenue. First, some background.
“Before working with SafeGuard, [ASIN suspension] was always in the back of our mind, and I spent more time than I’d like to admit refreshing Seller Central.”
Brands Face Unique Risks When Selling on Amazon
The risks of getting a product listing (ASIN) or Amazon seller account shut down are significant.
Just because you haven’t been a victim (yet), doesn’t mean you won’t become one. There are countless horror stories about Amazon suspensions. It even happens to Amazon’s own branded products. Sometimes it’s due to malicious competitors, other times by a brand’s lack of awareness of how Amazon interprets their Terms of Service (which Amazon purposefully leaves vague).
Immediate Drop in Revenue
If your listing isn’t live on Amazon, you don’t make sales. And when you are the sole seller on your listings, your account itself becomes a single point of failure.
“Before working with SafeGuard, this was always in the back of our mind,” Bill said, “and I spent more time than I’d like to admit refreshing Seller Central.”
Many Amazon sellers have encountered a time when they haven’t had access to list their products. Those who haven’t experienced a suspension still know there is a real risk their listings could get shut down overnight, for no fault of their own.
ASIN suspensions occur every day. Sometimes the reasons are obvious. Many times, they’re not as clear cut leaving the brand playing defense as they try to solve the problem.
If you’ve been selling on Amazon for any length of time, you won’t be surprised that suspension appeals don’t happen quickly. It can take days, weeks, and sometimes months to get your seller account back open. For most eCommerce brands, that’s an eternity. Bill’s ASIN suspension above could have cost him six figures. Imagine what over a month off of Amazon would have done to his business.
Long Term Hit to Revenue
Suspended ASINs will lose their Best Seller Rank (BSR), and there’s no guarantee the BSR will be the same once the ASIN is reinstated. (In fact, you should expect it not to, as this Case Study on Going Out of Stock and Losing Rank on Amazon outlines).
Since BSR acts somewhat like a flywheel, this can have a much longer term impact on your sales. When your ASIN is reinstated, you should expect to see a drop in the sales velocity you worked so hard for.
To get it back, there’s a good chance you’ll need to invest significantly in advertising.
A Competitor Hijacks Your Listing
Competition on Amazon can be brutal. There are many ways competitors can hijack your listings:
- A competitor can buy your inventory and then report it as defective or counterfeit, prompting Amazon to shut down your listing to verify supplier invoices and your account
- A competitor can leave a large volume of positive reviews, prompting Amazon to shut down your account for fraudulent activity
- A competitor can hire a brand to copy your products, taking over or hijacking the listings before claiming to Amazon that they have the real listing prompting the takedowns of the true rights owner (this is one reason we strongly encourage all brands to register their trademark with Amazon)
- A competitor can buy your product then makes a false complaint about safety concerns, requiring the seller to get independent third-party testing to prove the product is safe before it can be sold again
The dangers of being a sole Amazon seller goes on and on. Each of these has the ability to wreak havoc on your brand reputation and revenue.
Over the years, we have learned that the brands who choose to be the sole seller of their products on Amazon do so because, they want to maximize profits and maintain control.
When you are the sole seller on your listings, your account itself becomes a single point of failure.
Protection Strategy 1: Maintain Control Over Your Brand
As a sole Amazon seller, it may seem you have the most possible control over how your brand is represented on the platform.
However, that perception isn’t a reality.
Bill found that out when his listings were taken down due to Amazon’s own return procedures. That ASIN suspension was out of his control.
Take a look at Amazon’s confusing Terms of Service, and you’ll quickly realize why Bill’s experience isn’t as uncommon as it should be. Their terms aren’t exactly intuitive, which can result in suspensions that can seemingly come out of left field.
Simply selling on Amazon forces you to relinquish quite a bit of control because your business is in their hands – and the hands of their ever-changing algorithms.
So as a sole Amazon seller, do you simply add another seller on your listings?
Well, that’s where things get sticky — adding other sellers to the mix can result in you having less control. (This is especially true if you don’t vet the other sellers and end up with MAP violators etc.)
You need to be certain that any other sellers you work with are trusted partners.
By adding a trusted second seller via a program like SafeGuard, you’re able to maintain just as much control as you have today.
Instead of being left on your own, you’ll be left with a backup plan in case one of your listings gets shut down. It gives you a bit of breathing room as you appeal to Amazon to get your listing back online.
Protection Strategy 2: Maximize Your Cash Flow by Eliminating the Sole Seller Approach
When your brand is the sole seller on Amazon, you don’t have to split revenues or profits with other sellers. However, in the case of ASIN or seller suspension, this can also result in lower overall profit.
Maximized cash flow is an understandable desire, and unfortunately a sole seller approach is not a sure way to maximize this. When Amazon shuts down your account (or your ability to sell one of your products), they’re simultaneously shutting down your ability to generate revenue. Full stop.
The best way to combat this risk is to authorize a second seller. SafeGuard allows you to bring on a second seller with only minimal impact to revenues and profits (more on this in the How SafeGuard Works section below).
A second seller authorized to share the buy box alongside you for a limited amount of time results in minimal impact on your cash flow (at best). If your ASIN or accounts is suspended, you have a backup listing that can continue to sell.
In the worst case scenario (“worst” being that you don’t end up with an ASIN or account suspension), SafeGuard has a small impact on revenues and profits. At best, SafeGuard can actually result in increased revenues and profits (as it did for Bill).
Had Bill not had a backup option in place, his cash flow would have stopped cold. The faucet would have turned off and no dollars would have flowed into his business while his listing was suspended. Instead, Bill had a backup plan that allowed him to continue to bring in sales during this time.
You Must Have a Plan to Protect Your Brand’s Amazon Presence
Trying to maintain control so you can maximize your cash flow by continuing to operate as a sole seller is downright risky. As Bill saw, it can cost you tens or hundreds of thousands of dollars in sales.
“It’s so important to have a Plan B because anything can happen,” Bill said. “There is no predicting what can happen.”
How SafeGuard Works
In order for your products to stay in stock during a suspension or out of stock period, TLK Sourcing will maintain stock equal to or greater than the amount expected to sell during a typical product lead time (the time between TLK Sourcing placing an order and that order being received by Amazon).
For example, if your lead time (including Amazon receiving time) is 2 weeks, and you sell 100 units per day, TLK would need to have 1,400 units in Amazon’s warehouses to ensure that sales could continue without interruption.
TLK sets their price above yours (typically 20% higher) so that when shoppers visit the Amazon listing, by default they will see and purchase product from you. Instead, TLK’s inventory just sits in Amazon’s warehouses, ready to be sold in the event that your selling privileges were to be suspended.
Once per quarter, TLK matches your price and reorders inventory.
This means that the impact on your share of the buy box (and your profits) is minimal – for two weeks of every quarter you earn wholesale margins vs Amazon retail margins.
In other words, we’ll actively work with you to maintain control and cash flow.
Is your brand a candidate for the SafeGuard program? We want to hear from you. Contact us to get the protection plan started for your business.