Something went wrong in the supply chain! A batch of Amazon sellers’ accounts were blocked

Recently, a number of Amazon sellers’ accounts were blocked, their funds were frozen, and their chances of appeal were slim. This was a huge blow to some people, forcing them to lay off employees or even file for bankruptcy.

The sellers who were affected this time all had problems with their supply chain channels. Several of the sellers purchased goods from the same supplier at the same time. Some people directly pointed out that there was suspected to be a list of "risky suppliers" within Amazon.

For trade sellers, the selection of suppliers is crucial. How can they avoid pitfalls in this link?

A number of sellers were blocked due to selling problematic products

Millions of sellers around the world make up Amazon's third-party market. Some sellers take the private label route and sell household goods, clothing or sports equipment under independent brands. More sellers get goods from suppliers and are nicknamed "middlemen" or trading sellers in the industry.

An industry insider said that domestic trade sellers account for more than 90%. If there is a problem with the seller's supplier, the seller's account will face the risk of being blocked.

According to CNBC, a group of Amazon sellers have had their accounts blocked recently because there was a problem with their supply chain. Amazon believes that the products sold by the sellers are "stolen". The platform's email reminded sellers : "We took this action because your account provided inappropriate products and may have been used to engage in deceptive or illegal activities."

The sellers whose accounts were blocked said that the problematic products were all purchased from suppliers, including Breville espresso machines, Keurig coffee machines, Levoit humidifiers, LG computer monitors, SharkNinja mops, vacuum cleaners and appliances.

Frank , who was targeted this time , joined Amazon two years ago. His account was blocked in March this year because the platform determined that he was selling stolen goods. Frank was puzzled because Amazon did not tell him which of the many products sold were suspected of being stolen, nor did it provide any details.

Coincidentally, the other four sellers had similar experiences as Frank at almost the same time.

One seller spent more than $500,000 to purchase air fryers, food processors and espresso machines from suppliers. In March, Amazon suspended his account for allegedly selling stolen goods, and he was unable to find out which products were problematic after contacting multiple parties.

Another seller was frozen for $17,000 by Amazon on May 6 after Amazon sent a list of dozens of products that violated its policies.

Amazon said : “Amazon does not allow sellers to list stolen goods, and we work closely with law enforcement, retailers, and brands to stop bad actors and hold them accountable, including withholding funds, terminating accounts, and making referrals to law enforcement.”

Sellers have no way to appeal, and hope is slim

Because they don’t know which products have problems, the sellers whose accounts have been blocked are anxious. They want to appeal but don’t know where to start.

One seller said that Amazon provided limited information and he was unable to identify the problematic products and suppliers. In order to save his account, he had to investigate on his own and try to check among the many wholesalers, defunct businesses and distributors that supplied them.

Currently, apart from providing receipts and documents to Amazon, sellers are almost powerless and have little hope of getting their accounts appealed back.

After their accounts were blocked, some sellers were under tremendous pressure. Some of them had to lay off employees or even file for bankruptcy. "To be honest, this is a disaster for us. Now we dare not purchase products," said a seller.

It is understood that sellers need to provide documents such as driver's license, tax number, invoice and bank statement when appealing. Amazon should notify sellers within five working days whether they have passed the review. However, many sellers said that the platform often has no news for several weeks.

A former Amazon employee who helped sellers appeal against account suspension said: "You go from the position of being guilty to being proven innocent. If you can prove that the platform is wrong, it is possible to restore your account. But sellers whose accounts are suspended are generally unable to provide sufficient evidence because the suppliers do not cooperate."

Does Amazon have a list of “risky suppliers”?

Frank, a seller whose account was blocked , said that one of his suppliers was KZ, a large wholesale and distribution company. When he contacted Amazon about the blockage, a customer representative told him that KZ had been included in an internal list of "risky suppliers." However, Amazon refused to disclose whether such a list existed.

Last December, a KZ warehouse in Huntington Beach, California, was raided and several pallets of Dyson vacuum cleaners, TP-Link routers, Ninja blenders and Breville espresso machines were seized. A few weeks later, law enforcement conducted a similar raid on the warehouse of one of KZ's customers.

Frank is not sure whether his ban has anything to do with KZ's product.

For sellers, selling on Amazon is a highly competitive business with low profits. They need to pay Amazon high storage, transportation fees, customer support and advertising fees, etc. Even so, the platform cannot protect sellers from being cheated by suppliers.

While Amazon offers a free program called Account Health that’s designed to protect merchants from immediate suspension, its Seller Central website says it can immediately close an account “if we believe you have engaged in fraudulent, deceptive, illegal, or other harmful activity.”

How can sellers avoid being cheated by suppliers?

This account suspension incident also reminds sellers that they must not be careless when cooperating with suppliers and should pay attention to the following points:

First, vet the supplier. Find out where the product is coming from, as resale products are often bought and sold by several people before they are put on the shelves.

Second, conduct on- site inspections. Several sellers who were affected said that they purchased during the epidemic. Due to travel restrictions, they could not meet with suppliers, so they contacted them online. Suppliers asked sellers to pay attention to their information. In the information column, suppliers would advertise what products they have, product prices, etc. The names of these channels include "Amazon Wholesale", "Bulk Sales" and "Amazon Discounts".

After the epidemic is relaxed, online purchases are still continuing. Sellers who want to go to the supplier's warehouse to check the inventory may find that they cannot buy hot-selling products because they will be snatched away by their competitors.

When purchasing online, sellers are also tempted by suppliers to act quickly, otherwise the discount will be gone or the product will be sold out quickly. Consumer electronics and small kitchen appliances are the most popular in this procurement channel, and sellers will order hundreds of thousands of dollars worth of products from suppliers.

Third, be wary of problematic suppliers. The sellers whose accounts were blocked contacted each other through a chat group, and in June this year, when they shared details of their blocked accounts, they discovered a problem: at least three sellers purchased computer monitors, air fryers and other products from the same supplier.

For many trade sellers, supplier procurement channels are crucial, which not only affects product sales, but also involves account security issues.

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