Tuesday, January 17, 2017

Turnover Tuesdays - When You Are that Shady Seller

For those who are not familiar, I started a series a while back called Turnover Tuesdays. Every Tuesday I like to highlight one item that I have resold. This will include profitable and non profitable sales. I hope that there is always something to learn.

The previous posts in the series can be found at the bottom of this post.

The last couple of weeks was a very, very tough week with ups and downs.

The Ups

One of the distributors that I work with through a friend (BN) found a great deal on a certain item.  The rank was amazing and competition was scarce.  We had a decent track record with them so It was about 50% ROI.  Everything was great.  The one catch was that item in China.  The distributor took care of the logistics of bringing it over but it was a 2-3 month lag time.  Anything can happen in 2-3 months including plenty of competition and price erosion but I was excited.

After a couple months, they finally arrived. I sent them in and magic started happening.  There were 2 other sellers including BN at $25 with me but I still selling 20-30 every day.  I've never sold anything like it when it wasn't Q4.  I was making about $6 on each one so that is amazing.  After about a week, we were already ruing the fact that we were almost out.

The Downs

After about a week of selling I received a message from the manufacturer who was the other seller on the listing.  They claimed to have bought one of my units and said it was a fake.  It was a non branded, generic version of the item which I was trying to pass off as the real thing.  It came along with pictures showing a generic version and that they were going to report me to Amazon.

I sent the information to the distributor trying to figure out was going on and they assured me this must be a mistake.  The brand must be trying to bully me to stop selling.  They are authorized to sell and can provide a letter that everything is authentic with an invoice of the correct item that they bought so that the whole chain can be legit.

My first course of action was to increase my price to $20,000 a unit.  This would immediately delist my inventory so that no one else could buy.  Until I had that letter in my possession I didn't want to sell anymore.  In case the company reports me to Amazon, I needed to have that letter.

Afterwards I realized that I still had some of them at their warehouse. I asked them to open one.  That's when I got really concerned.  They confirmed that a mistake happened.  A big mistake.  The item was indeed the wrong item.  I was selling the wrong item.  Oh no!  I am that shady seller on Amazon selling the wrong item!

Damage Control

In a short period of time I had shipped out about 200 of them to customers.  What do I do now?

I first asked Amazon to transfer my inventory over to another listing (the correct listing) since it was mistakenly send in under the wrong listing.  That was both true and laying the groundwork in case there was an issue later.

I asked Amazon to cancel all the pending orders since I told them that customers would be getting the wrong item.  It took Amazon about 5 days to get back to me and they said 19 of the 21 orders I asked to cancel were already shipped out but they were able to cancel 2 of them.  Thanks Amazon.

The first question I asked myself was whether I needed to contact a lawyer.  Someone sent me this article about Amazon Suspensions from a lawyer who specializes in Amazon suspensions.  I was thinking about contacting them but instead decided to wait it out a bit to see what would happen.

Mistakes happen.  No one is perfect.  Fraud is a real problem.  If you can prove that an honest mistake has happened that will go a long way.  We constantly hear about mistakes that companies make.  I understand mistakes, it's how you deal with them that separates a good company from a bad company.

I decided that I needed to contact the purchasers and tell them what happened.  I know that I would a company to contact me if I bought the item and it wasn't what I thought I was buying.  I sent messages to all purchases saying that a mistake was made and that they can get a full refund if they are unhappy with the item.

I got quite a few people emailing me that they were unhappy with the item when they received it and were quite glad that I emailed them.  Customer service can go a long way and it hasn't wrecked my account.

The listing was shut down due to a "higher than normal return rate" which I don't care about currently since I don't want to sell them anyways.  I have about a 20% return rate.  Surprisingly it isn't 90%+.  I'm sure more are coming.

So far, the consequences haven't been severe.  Just some money down the drain.  My fears of a suspension, temporary or permanent, have been weighing on me especially with how well selling has gone in general but it just reinforces the importance of moving beyond Amazon at some point.

Week 64 - The Buy Box
Week 65 - Amazon Restrictions and the Future of Selling on Amazon
Week 66 - Fun with Inventory Reimbursements
Week 67 - Q4 Storage Fees
Week 68 - Start Your Own Listings
Week 69 - A Long Tail Sale and Calculating Storage Fees
Week 70  - Prices Always Come Back Except When They Don't
Week 71 - Past Performance is No Guarantee of Future Results
Week 72 - Automation Beyond Amazon
Week 73 - Some Quick Holiday Tips
Week 74 - Update on Miles vs. Cashback Opportunity Costs
Week 75 - Pricing for the 4th Quarter Madness
Week 76 - Returns, Returns, Returns
Week 77 - Reimbursement
Week 78 - Q4 for Accelerated Inventory Turnover
Week 79 - How it is Going Outside of Amazon
Week 80 - 2017 Goals
Week 81 - I've Violated All of My Rules