Amazon account suspension
If you're familiar with selling on Amazon you’ve heard the stories a dozen times online. Amazon accounts getting suspended left and right for a variety of reasons. From the obvious ones like terrible customer service to the more obscure and isolated ones, these account suspensions are definitely for real and it happens even to seasoned Amazon sellers.
One such incident happened to this guy who we'll just call "Josh". Josh had everything going for him until he hired his college buddy. As it turns out, this buddy of his previously had his own Amazon seller account which he thought he had successfully closed a few years back. Long story short, their accounts were both suspended after Josh granted his buddy access to his seller account with this buddy's email address still associated with the other account which apparently, wasn't closed yet.
While Josh was able to get his account reopened after appealing the decision, it took 40 days for his appeal to be granted. Forty days is no laughing matter especially for brands whose revenue (or at least a huge part of it) comes from Amazon sales. Can you imagine the potential impact if you had all your eggs in one basket? That is a huge amount of revenue loss and could very well affect someone's way of living negatively.
Josh may not be classified as a “big fish” but the reality is, account suspensions don’t just happen to smaller sellers. In fact, just over a year ago, a third-party seller who was considered to be in the top ten of US sellers also fell victim to account suspension.
Revenue loss because of account suspension isn’t the only disadvantage of having one seller though.
Potential risks of having a single seller on your Amazon Listings
Revenue Loss Due to Zero Amazon Sales
As discussed above, this is probably the most obvious and though your account may be reinstated, it doesn’t happen that quickly. Sometimes it takes days, sometimes it even takes weeks and if you’re not lucky, your account may even be suspended permanently.
Revenue Loss Due to BSR Drop
A suspended account can lead to different things. First, you’ll automatically be out of stock for a few products, which will then lead to revenue loss, and a notable drop in Best Seller Rank (BSR).
Even in the event that you get your stock back, the lower BSR can still result in lower sales, triggering a bad cycle that can be tough to break. You may eventually resort to spending more on PPC (Pay-Per-Click) in order to raise your BSR back but that’s easier said than done.
No matter how many sellers there are on a listing, smart sellers would still prefer to maintain stocks but when there’s only one, keeping in stock is the only option because you stand to lose revenue due to a drop in BSR.
Having a second seller is the perfect fail-safe against running out of stock regardless of any issues you may encounter on the supply end. To ensure that your products will remain in stock even if the numbers go down, sellers will need to keep a higher volume of stock for safety.
If your Amazon managing partner were to disappear tomorrow, who would handle all of your Amazon listings and sales? Sure, you can find "another" amazon seller tomorrow, but would they be the "right" Amazon seller? One who follows all company polices and represents your brand professionally.
The Pros of Having Less Sellers on Your Amazon Listings
If you heavily rely on third-party sellers in selling your products on Amazon, understanding how the number of sellers will impact various factors like brand equity, customer service, pricing, and sales is extremely important.
As a general rule, the more sellers you have, the less control you and your brand will have over content, customer service, promotions, advertising, and pricing. It does make sense then that brands who limit the number of sellers are actually making smarter decisions.
Here’s what you stand to achieve with limited sellers:
Consistent level and quality of customer service
Removes the need to work with a large amount of sellers, making promotions more consistent
Pricing control is made more simple
Easier control over content
All of these are much easier with fewer sellers in the fold, but with one or two cooperative partners in tow, it becomes very manageable.
The decision to have few or many sellers depends on your brand's mission and goals. I hope the talking points above help guide you in making the right internal decision necessary to help your company thrive in the ever growing online marketplace.