800lb Gorilla: The Dangers of Selling on Amazon

800lb Gorilla Amazon

This post is by Travis Romine, an ecommerce growth consultant at Sharp Commerce and previous owner of ParadiseFibers.com. He consults for online retailers throughout the US on building high performance ecommerce businesses, growth strategy and digital marketing. Sign up for Travis’s weekly ecommerce tips at sharpcommerce.com.

There’s no doubt that Amazon will continue to gobble up an incredible chunk of online retail in the coming months and years. Amazon has a huge audience with 54 million users of their Prime service alone!

As an ecommerce merchant, how can you best use this channel to your advantage but also protect your company?

For most B-to-C retailers I consult with, I recommend selling on Amazon as a general rule. A properly created Amazon listing will get your brand and product in front of a giant group of consumers ready to buy. However, there are some significant risks to using Amazon as your main or only selling channel.

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Getting Kicked Off Amazon

What happens if you get kicked off Amazon for a technicality? That’s right, Amazon can suspend you and kick your entire inventory off for a handful of reasons. Once you are suspended, it can be very difficult to recover from, time consuming to get your account re-activated, and can crush your business. Here are a few ways Amazon can kick you off:

  • Late fulfillment – That’s right, if you have too many late shipments for any reason you can suspended.
  • Re-direction of a customer off Amazon – Yup, if you accidentally watermark an image with your website, include a link to your website in the description or even just reference your website that’s all it takes for listing removal or account suspension.
  • Late or ignored Amazon email messages – If your late getting back to customer questions or complaints through Amazon, you’re toast. Also remember that if you include an external hyperlink to your site in these messages you’ll likely get suspended.
  • Duplicate ASIN/product pages – If you list the same item under multiple ASINs you can get suspended. Amazon has a very strict policy on duplicate product pages in general.
  • A-to-Z Guarantee claims – If you have many unsatisfied customers using the A-to-Z Claims issue as their “last resort” with returning an item/getting a refund you can get suspended.
  • Selling at a lower price – Amazon requires you to sell at the same price you do on your webstore. Amazon will suspend you for offering better deals on your webstore.

These are only the top ways to get kicked off Amazon, scared yet?

Even a temporary API connection error that doesn’t update tracking numbers can get you kicked off Amazon. How can you protect your company against Amazon throwing you overboard on a whim?


A common thread with my most successful clients is diversification. Selling through many channels besides Amazon reduces the liability of Amazon suspension. It also helps smooth out overall sales if other channels are temporarily performing poorly.

Selling through multiple channels also allows for valuable market data and baselines. For example, if a particular SKU is performing well on Amazon but not well on your webstore, you might need to work on the product page SEO, checkout process or product page presentation.

It’s very dangerous to put all your eggs in the Amazon basket. Serious online retailers at the very least should have a comprehensive webstore independent of the Amazon channel.

Can your webstore compete with Amazon?

It’s a David and Goliath scenario, but yes, there are ways to keep up with and even outshine Amazon. Here are a handful of strategies I’ve personally used successfully (in my former ecommerce business) and have put into play for my clients.

You are investing in Amazon – Many sellers experience the power and profitability of moving high volume through this channel. Don’t kid yourself, you are building Amazon’s brand, email list and customer base for them. At any time, another seller with more buying power may find your supplier, undercut you, and even use your listing and image through the same ASIN!

I’ve also seen Amazon use various tactics to chew up and spit out wholesalers using Vendor Central. This is where Amazon buys at a distributor price from wholesalers/manufactures for direct sale under the Amazon brand. The excitement from the initial Amazon PO fades quickly when merchants see their products being sold at heavy discounts.

Personality – Purchasing from Amazon is a plain vanilla experience. Take advantage of this by personalizing the user experience (UX) on your local webstore to excite your customers and set your webstore apart. Create a “staff picks” section with overview of contributors and bios. Use verbiage throughout your descriptions and articles that matches your demographic and company culture. Interlink your blog articles with appropriate product pages for added punch.

Product presentation – Amazon presents all of its listings basically the same way. Take advantage of this weakness by using a custom template to display your products optimally. Some high end webstores will allow custom templates that can be assigned to each product type to optimize UX. Some common examples are detailed info on compatibility, specs, application and presentation of these elements.

Authority – Amazon is a solid source for items if you know what you want. But what if you have questions about which product fits your needs? Take advantage of this Amazon limitation with in depth staff reviews and applications of your most popular and newly released products on your blog.

In-the-box marketing – When shipping your local webstore orders, include some marketing materials to increase the customer engagement and lifetime value. As a best practice, Amazon frowns on this as it sends the customer to you for their next sale. Add an attractive one-time use coupon, flier on upcoming promotions/showcase of popular items, or a paper catalog if you have one.

Keep specialty products special – Don’t list your really special, hard-to-quantify products on Amazon. These are products that customers are seeking you out for and Amazon doesn’t have access to. This may not make sense in all scenarios but it’s something to strategically consider depending on supply and demand. Carefully deciding which products to keep exclusive to your local webstore can be an advantage, especially if your site has enough rank and traffic to fill the general demand in the marketplace.

Prompt customer service – Many online retailers selling on their own webstore as well as Amazon, deal with Amazon questions and shipments first. Amazon scares retailers with threats of account suspension. This tactic results in Amazon questions and shipments taking priority over local webstore orders.

Amazon can’t answer the phone – This seems simple but presenting your phone number loud and proud and actually answering the phone greatly increases customer confidence. It’s simple, it works and Amazon can’t do this.

To combat this: make sure your staff knows to treat all inquiries and shipments with the same intensity as Amazon. And yes, you’re likely going to need to up your game with your customer service to make that work. Also implement a solid CRM system and live chat to respond to customers quickly and improve the customer experience.

Travis Romine
Travis Romine


Amazon is absolutely ruthless and will not rest until they devour every last scrap of the ecommerce pie and really any damn pie it can find.

Amazon is however a slow ship to steer and smaller niche companies with focus, culture, and strategy can still outmaneuver this beast in many areas.

Keep in mind, all of the performance strategy above will not only provide some advantages over Amazon, but will have your company soaring above your competitors, and customers singing your praises.

9 comments on “800lb Gorilla: The Dangers of Selling on Amazon

  1. Selling at a lower price – Amazon requires you to sell at the same price you do on your webstore. Amazon will suspend you for offering better deals on your webstore.

    This is NOT applicable in Europe as anti competition bodies launched an investigation into this practice of price parity 3 years ago. Please ignore that paragraph.

    1. As far as I am aware Amazon have ignored the EU ruling as it hasn’t actually been enforced as such. Japan are also currently investigating Amazon for the same reason.

      Frankly I would take the line that if Amazon find you undercutting your Amazon prices with, say, your website prices they will find a way to suspend you anyway. Remember it’s their site so they don’t really need a reason to kick you off. If they want you gone, you’re gone. I know of a business with over £2 million Amazon turnover in the UK who got kicked off and they’re not even sure why.

  2. I have mentioned this in the past but I think it is always worth highlighting. Amazon’s FBA, Fulfilment By Amazon, is a system where you send your bulk stock to Amazon’s warehouses then they ship your items for you at much reduced rates when they sell.

    It has lots of benefits, including genuinely increasing your sales as you can offer a lower price based on the shipping savings and you get the Buy Box a lot more often, which puts your listing at the top of the pile.

    However one very little known fact is that if you get kicked off Amazon you will be charged PER ITEM to get your stock back. I lost my Amazon account and had nearly 2,000 small, low value items to recall and it cost me almost £1,400 (around $1000) at the time. Worse, I didn’t get everything back, almost £300 ($500) worth of stock was missing and my claims fell on deaf ears.

    There is virtually no way you can get anywhere with them if you have a problem. I have heard many stories of sellers losing their accounts and not even getting paid the money Amazon hold from sales, although I did get paid minis those fees for returning my property.

    Incidentally it took almost three months to get back the stuff I did get. And the reason I lost my account? I was repeatedly targeted by competitors who constantly reported me for selling fake goods, leaving negative feedback and filing A-z claims for items not received. I was selling GENUINE mobile phone batteries, gave proof of my source and even had a letter from a major company confirming the samples sent to them were genuine. A large UK police department were among my regular customers. But all to no avail. I battled for almost 9 months and although I got a little help from Amazon eventually, after constantly pushing them to accept I was being deliberately targeted, I can only assume they eventually gave up having to deal with the constant reports I was filing and no doubt it was using up a lot of their staff time. So beware, you might think it’s bad when sales are poor but I eventually lost because my sales were among the best in the sector and was targeted for that reason.

    I also noted that Amazon started to sell a lot of the products I was doing well with, and often concocted a reason to “suspend” my products if I tried to undercut them. It’s extremely difficult (but not totally impossible) to get bank on Amon, though not with the same business and suspensions are rarely overturned so use Amazon with caution, not as a way to build a long-term sustainable business, and concentrate on building your own site. You will eventually make more profit for much less outlay anyway and as long as you keep Google’s search algos happy there is a lot less risk and stress.

  3. This was quite a useful post. As a fairly new seller here I know very well the pain of losing selling privileges and I want to do all I can to avoid that here. Thanks Travis.

  4. The entire purpose of the Marketplace is so Amazon can find which products sell well and sell it themselves. They’re simply using 3rd party sellers as market research for expanding their very own catalog. We’ve had manufacturers that we sold customized goods for call us repeatedly about the constant phone calls from Amazon asking about our store in particular and trying to work out deals to take the product line from us. It was impossible to grow on that marketplace because within 1-2 months of finding a great selling item, Amazon WILL contact the manufacturer and sell it themselves. They’ll even sell each item at near break even just to suffocate their own sellers. And forget about adding NEW items to their catalog, their search engine will prevent your goods from even showing up unless you do you own offsite marketing to direct traffic to Amazon to get sales.

    1. Btw, our store was bringing in 7 mill the previous year, on track for 10 mill then we started seeing Amazon get really aggressive with undercutting our best selling products and eventually we were kicked for “counterfeit goods”, we didn’t FBA anything, shipped directly from manufacturer, but as we were listing on a product listing where someone else was selling counterfeit goods, they count a strike against every seller on that listing. So while we had proof we had legit products, sell on the wrong listing where someone else is selling garbage and they’ll tally those strikes against you as well… This caused everything to become unstable and our store collapsed.

  5. Great article Travis!

    Putting too many eggs in Amazon’s basket can be a dangerous strategy!

    We always urge our clients and partners to have a diversified multi-channel strategy, with a strong e-Commerce presence to help build the brand, cast a wide net, and win the second order.

    It’s easy enough to connect all of the major channels together, once you find good partners (shameless plug here) for the strategy and technology integrations.

  6. Amazon is not the place to build a sustainable brand for your company. It is the place to build Amazon’s brand. You are paying to provide them with inventory and fulfillment logistics, market research, customer service manpower,… You can make a quick buck from exposure to their traffic, but there is no long game with them

  7. I completely agree. I never rely just on Amazon, I spread my sales around. But Amazon seems to have some top traffic. Once I was banned, it completely killed my income. I had contacted Auction Essistance to see if they were able to get me reinstated, but turns out my account was an indefinite one. They were however, able to set me up with a new account, but there is no telling if Amazon will ban this one too.

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