18 min read

FBA Horror Stories: 44 Shocking Ways Amazon Sellers Have Been Stung

FBA Horror Stories: 44 Shocking Ways Amazon Sellers Have Been Stung

If you haven't uttered the famous seller phrase "I hate Amazon" then you haven't sold that much on their platform yet. Just about every experienced seller has suffered mentally at the hands of Amazon's ridiculous bureaucracy, tightening margins, endless fulfillment errors and black hat tactics from rogue competitors.

Experiencing a horror story as an Amazon seller is almost a right of passage today.

Yet this post isn't a scare tactic to push beginners away. The power of Amazon as a sales machine far outweighs the downsides and risks, but both new and experienced sellers need to be aware of all the things that can go wrong.

Bookmark this page and keep this list handy. We'll also be sharing reputable resources throughout this page to help you if (or rather, when) your Amazon seller account gets suspended.

Let's get started.

1. Hijackers Take Over Your Listings

Hijackers were much more common on Amazon some years ago yet still represent a moderate threat to new and established sellers. After all, there is much these hijackers can gain with little effort.

These hijackers can effectively steal your buy box and subsequent sales revenue, manipulate your listing and kick you off your own listing. Worst still, it's often a tedious process to get your own listing back.

Bindwise exists to monitor your listings 24/7 for hijacking attempts.

2. Fake Dangerous Products Reports

Some black hat sellers and competitors also create false claims stating that your product is non-compliant or dangerous which may trigger a safety check. It's likely your product(s) won't be available for sale until this check is complete which could take days or weeks.

Even if you're innocent, you might falsely be seen as having violated Amazon's terms of service and your entire Amazon account may be temporarily suspended. Always check if there are any certifications or test reports necessary for each item you list and be quick to respond to any reports.

3. Wrong Products Sent Due to Co-Mingling

Co-mingling refers to having your inventory mixed in with identical items by other FBA sellers or Amazon themselves. This allows you to ship products faster to customers as you are somewhat sharing space with other sellers.

However, it does mean that selling counterfeit items or products that fulfillment center staff have mislabeled can be sold in your name, leading to negative feedback, trashed reviews, excessive returns and another reason to be suspended from Amazon. Our advice? Avoid co-mingling. The upsides just aren't worth the risk.

4. Planting Negative Seller Feedback

One of the oldest tricks in the book is a competitor purchasing your product and leaving negative seller feedback. This reduces your account health, seller performance and places you at a higher risk of instant suspension.

Better yet - they can hire private companies to do this routinely to avoid any detection. These reviews appear 100% genuine with photos attached highlighting product defects, thereby leaving honest sellers with little to defend themselves.

5. Fake Product Review Mills

There are thousands of sellers who use various strategies to garner fake reviews on products rather quickly. This can be as simple as FB groups or more complex operations in 3rd world countries with multiple teams.

Source: Reddit

This is similar to the launch strategy that some sellers use today but one that is risky too, but highly beneficial to fill a listing with thousands of positive reviews and flood their honest competitors out of the market. Amazon previously had its own program called the Amazon Giveaways Program, though this was retired in 2019.

6. Products Damaged in Warehouse

Inventory becomes damaged in Amazon's warehouses all the time. Some examples include a forklift driver backing into a pallet of glassware or natural disasters causing the roof to collapse.

Source: CNN Business

Some sellers have also had their products damaged due to environmental factors. A friend of mine was selling unique chopping boards which split due to long-term storage in low humidity levels, and of course, this was only discovered later when delivered to customers.

7. Unclaimed Trademark and Patent Hijacking

Some sellers have been successfully selling for years without a trademark. The problem? Anyone can register that trademark and can then kick you off the product listing and could even claim your account and your products too.

Image credit: https://unsplash.com/@jeshoots

Trademark hijacking was a bigger problem in years gone by where Amazon pushed sellers towards Amazon Brand Registry. Becoming trademarked can be an expensive and time-consuming process (especially if you have multiple brands) but not doing so leaves you exposed to these morally-corrupt sellers.

8. Accusations of Counterfeit Products

At any time, a competitor can accuse you of selling counterfeit products on Amazon. They simply need to order the product and flag it as counterfeit upon delivery. You'll find this most commonly with DVDs, books and other media.

Luckily, Amazon's Brand Protection Report show they are attempting to protect both sellers and consumers:

Amazon blocked 10 billion attempted counterfeit listings in 2020—up from 6 billion just one year prior —and destroyed 2 million fake goods in its warehouses.

This is where it gets interesting. The onus is upon you to prove your innocence which may be a lengthy process to get your account reinstated. Traditionally, Amazon has been very slow to deal with the thousands of genuinely counterfeit sellers, some of which still sell on the platform today.

9. Faked Bulk Buys and Returns

Imagine waking up one morning and having dozens of purchases from one individual. Or better yet - having someone ask for a bulk discount for their organization and the promise of future orders.

But now imagine the heartache of having all of these returned on day 29. This is a popular strategy used to hold up your inventory in Q4 to allow your competition to own the space on page 1. To fix this, you can set a maximum of 2 items per customer just as many big box stores do.

10. Products Re-Categorised As Adult Toys

Another cunning trick by competitors is to re-categorize your best-selling products to adult toys. This means your products and images may be suppressed from search results.

Customers also won't be able to see your products in their recommended section. Why? Imagine a customer is on their lunch break in the office, is browsing Amazon, and shows your product in their recent search history. This would make for an embarrassing moment.

11. Competitors Change Your Product Photos

Once Amazon hijackers take over your listing, they can change your photos to theirs. Likewise, they might also make slight changes to your photos while sending out generic or counterfeit products so you won't instantly smell their scent.

To fix this, add as many photos as possible and specific product details including your unique branding and packaging. This will form part of your evidence when submitting a complaint with Amazon, but also deters any lurking hijackers seeking easy prey.

12. Receiving Staff Miscounting Inventory

While many distribution centers use high-tech machines for inventory counting, some still rely on manual counting and scanning. And sadly, it's not uncommon for wholesale and private label sellers to fall short on units during receiving.

Source: Reddit

Apart from transitioning to FBM, either in-house or via a 3PL, there are very little sellers can do to remedy this issue. You can ask Amazon for a re-count, although there are sometimes fees associated with this request.

13. Unlimited Amazon Coupons

This one personally stung me in early 2020. After an unsuccessful product launch, I decided to offer 99% off via coupons to selected Instagram influencers to use my product. Unfortunately, the coupons weren't one-time-use only and I had my entire inventory (500+ units totaling $30,000) sold out in mere minutes.

I called Amazon right away who believed this was a scamming attempt and promised to cancel all the orders immediately, much to my relief.

Yet later that day...Amazon shipped every order where the products were then re-sold over the following weeks at their RRP. To this day Amazon still denies any wrongdoing.

14. Threats from Overseas Sellers

Overseas sellers (including Indian and Chinese sellers) often threaten Amazon sellers who are doing extremely well. As competitors, they make threats of buying fake negative reviews to get you as the seller kicked off Amazon.

Source: Amazon Forums

These threats often come via Seller Central and there is little Amazon can do as these individuals use a different account. However, it's worth saving these messages as evidence should they go through with their threats.

15. Late Product Check-Ins

With the current supply chain crisis, some products are being checked into Amazon up to 2 to 3 months after arriving. Staff shortages can be attributed to The Great Resignation as well as staff recovering from sickness at home.

Source: Reddit

It's often difficult to resolve this issue once your products are in the warehouse. One alternative for future orders is to use a 3PL who can drip-feed your products to Amazon's fulfillment centers on demand while allowing extra time for contingencies.

16. Competitors With Dozens of Linked Accounts

Amazon does permit sellers to have more than one seller account, provided the brand and associated products are reasonably differentiated. But some dominating sellers have stretched this rule a long way.

Some sellers have dozens of accounts associated with one parent company and effectively 'own' the first few pages for popular product searches, most commonly for cheaper household products. This effectively stops any competitor from having a chance to compete while Amazon happily collects seller fees.

17. New Accounts Being Instantly Suspended

We understand the euphoria of buying your first Amazon course, signing up for a keyword tool and ordering some samples. You feel excited to embark on this new journey that so many others have already walked.

Unfortunately, that high wears off almost instantly when you are suspended merely 3 minutes after setting up a new Seller Central account. The appeals process can be lengthy, frustrating and confusing, but we found Ryan from OSE to have some excellent appeal letters.

The key point here is: Don't give up!

18. Lost and Missing Shipments

In addition to the coupon issue mentioned earlier, I've also had a shipment go missing some years ago. My freight company had proof it was delivered while Amazon denies that the package was delivered, with myself stuck in the middle.

While you can get insurance on freight, you aren't covered if the package is marked as delivered. Unfortunately, sellers are simply at a loss if this happens. In my case, this was a $7,000 loss which was devastating as I had only just become profitable.

19. Competitors Reporting Non-Compliant Listings

Rogue competitors routinely go through their competitor's listings to find non-compliant issues and raise these directly with Amazon. The strategy is to get their competitors kicked off the platform and own more of the keywords with little work.

Ensure your listings follow Amazon's extensive policies and guidelines plus any product-specific regulations such as warning labels and certifications. It's best practice to audit your product line every 6 months, either in-house or through a 3rd party consultant, given that regulations do get routinely updated.

20. 5-Star Review Bombing

Imagine if you suddenly got a flurry of 5-star positive reviews on Amazon. You might suddenly feel a sense of optimism, but that feeling may not last.

You see, Amazon detects unusual spikes in positive reviews. Some competitors will use the 5-star review bombing strategy so you won't realize that Amazon is merely moments away from shutting down your account.

Worst still - it's hard to prove your innocence since from Amazon's point of view, nobody would purchase 5-star reviews on products that they don't own...right?

21. Ever-Increasing Shipping Costs

The current supply chain crisis means that shipping costs have spiraled out of control. So much so that container rates have more than tripled:

The cost for a container from Shanghai to Rotterdam passed the $10,000 threshold in late May and has continued to rise. It reached $12,795 this week, according to Drewry. That’s up nearly 600% from a year ago.

What does mean for Amazon sellers? Well, consumers on Amazon are typically price-sensitive and aren't likely to pay more to cover your shipping costs. This is more true if your competitors purchased excessive stock prior to the price rises and can hold their retail prices lower, forcing your product to be priced higher to be profitable.

22. Amazon Placing Used Items Back Into Inventory

Amazon's warehouse staff has sometimes placed used items back into inventory. There are times when used items can be sold (as is the case with textbooks), and other times when items such as camera cases can be re-listed as new.

Yet Amazon sellers can find themselves in trouble for selling used products such as shavers on the platform through no fault of their own. This is where, depending on what you sell, you'll want to monitor your returned stock closely.

23. Piggybacking on Inactive Listings

It's uncommon for sellers to monitor their inactive listings which makes for the perfect opportunity for dirty competitors. It's simply a matter of searching for listings that are out of stick or inactive and hopping on the listing.

In this example, multiple sellers are piggybacking off one listing.

Your listing for a garden product could be converted into adult toys without your knowledge. Fortunately, that's where Bindwise can monitor these on your behalf.

24. Sellers Overcharged With No Recourse

Jump into any Facebook group or Reddit thread with experienced sellers and chances are you'll find sellers who have been overcharged. In many cases, there is no recourse or refund on the excessive fees.

Luckily, there are companies like Bindwise who are actively auditing seller accounts for Amazon fees overcharges.

25. Purchasing Vendor Central Accounts

This is one of the most brazen and evil attempts we have come across at Bindwise. Some Amazon employees have quietly been helping those with Vendor Central accounts in the past, for an additional fee of course.

Amazon.com Inc. is fighting a barrage of seller scams on its website, including firing several employees suspected of having helped supply independent merchants with inside information, according to people familiar with the company’s effort.
Source: The Wall Street Journal

By purchasing Vendor Central accounts on the 'black market', sellers are able to become wholesalers and gain direct access to individual product listings. This means your listing can be sabotaged very easily with little protection, apart from Brand Registry.

26. Amazon Competing with 3rd Party Sellers

Amazon going head-to-head with 3rd party sellers used to be a widely discussed conspiracy theory, until the WSJ did an investigation:

In one instance, Amazon employees accessed documents and data about a bestselling car-trunk organizer sold by a third-party vendor. The information included total sales, how much the vendor paid Amazon for marketing and shipping, and how much Amazon made on each sale. Amazon’s private-label arm later introduced its own car-trunk organizers.

AmazonBasics products probably evolve as a result of accessing seller information. Fortunately for most Amazon business owners, this is of little concern since Amazon only seeks to launch low-margin and high-volume products.

27. Incorrect Cubiscan Dimension Readings

Amazon uses very sophisticated and automated machines in their distribution centers to calculate carton sizes and weights, however, this isn't a perfect system. If it's out of calibration, then you'll be overcharged for excess freight.

Source: Reddit

Always check your Amazon charges and ensure you are being charged correctly for your dimensions and subsequent shelf space - or set up Bindwise alerts for this. You can also request a manual check through Seller Central should the Cubiscan machine be overestimating your carton dimensions.

28. Suppliers Competing With Sellers

Overseas suppliers have traditionally remained detached from consumers due to the language barrier, but today it's significantly easier to skip the 3rd party sellers and sell directly on Amazon. Some sellers aren't aware of non-compete agreements while others don't even value the paper they're written on.

In this example, factories are beating established RC brands such as Traxxas and Arrma

What's even more frightening is that some suppliers will go a step further - lodge trademarks and utility patents in countries like China, Taiwan and Vietnam with your brand name. While it doesn't stop you from selling in western countries, this does effectively stop you from being able to source the product you're selling at a reasonable price.

29. Constant Pricing Wars

Sellers offering generic products are notorious for their famous race-to-the-bottom on pricing. That consistent pricing war leaves very little profit or any space for competitors to enter the market.

This practice is most commonly played out by sellers overseas. They may only need a 5% to 10% margin to be satisfied and if you choose the wrong product on Amazon, you may fall victim to launching only a mildly profitable product.

30. Multiple Seller Account Violations

Starting multiple seller accounts without permission is one way to get yourself completely shut down, as-is suffering multiple violations on a single seller account.

You can certainly open as many seller accounts as you need, but you need to ask Amazon for permission first. We previously wrote a guide about multiple Amazon seller accounts while the official Amazon guide is official details here.

31. Amazon Staff Shifting to Corruption

Amazon warehouse and seller support staff traditionally have been paid lower than one might expect. This leans towards their potential to take on additional 'payments', as the WSJ also reported:

The practice, which violates company policy, is particularly pronounced in China, according to some of these people, because the number of sellers there is skyrocketing. As well, Amazon employees in China have relatively small salaries, which might embolden them to take risks...In exchange for payments ranging from about $80 to more than $2,000, brokers for Amazon employees in Shenzhen are offering internal sales metrics and reviewers’ email addresses, as well as a service to delete negative reviews and restore banned Amazon accounts, the people said.

One well-known individual within Facebook groups and podcasts - Ed Rosenberg - was part of a group who allegedly paid more than $100,000 for commercial bribes to Amazon employees. This article blew up in late 2020.

While the practice was used to help 3rd party sellers in having their accounts reinstated in a timely manner, the same process could be used to take down competitors with ease.

32. Very Low Product Storage Limits

Q4 and the early days of COVID-19 had storage limits imposed on Amazon fulfillment centers and rightfully so. However, those storage limits don't end there.

Some sellers have had limits placed on their seller accounts for a lack of sales volume, or simply for unknown reasons. Some claim they have been penalized for poor account health or selling seasonal products.

33. False Product Defect Claims

A competitor may jump on the opportunity to make false claims about your product by highlighting fake defects. From there, they'll raise this with Amazon which puts your Amazon business at risk.

A good example would be an RC boat where the product is bought new, the internals become swapped for cheaper components, and later sent back looking like new. Any competitor can then easily demonstrate to Seller Central how your RC boat breaks within minutes. You would need to prove to Amazon that your supplier purchase order uses a different part or material to get reinstated.

34. True Product Defect Claims

On the flip side, a competitor can make true defect claims. This is even more immoral while making the process of proving innocence even more difficult.

A great example product would be an electric heater that causes a fire as it was simply being used too close to towels. This goes on to cause damage to a customer's home and they sue for damages and make a genuine report to Amazon.

35. Incorrect Amazon PPC Data

According to threads on Facebook and Reddit, Amazon was reporting incorrect data for seller's PPC campaigns. Amazon has denied this but sellers are skeptical.

Source: Reddit

If it is true, this means you may be relying on incorrect data when running PPC campaigns, lowering your profit and making successful product launches even more challenging.

36. Using Incentivised Reviews

One way you can be caught out is by using product inserts requesting a 5-star review. This is a strong case of suspension or termination by Amazon as per their anti-manipulation policy which states:

Customers trust that they can shop with confidence on Amazon. Reviews provide a forum for sharing authentic feedback about products and services – positive or negative. Any attempt to manipulate reviews, including by directly or indirectly contributing false, misleading or inauthentic content, is strictly prohibited.

Likewise, your competitors may purchase a bulk lot of your products, insert a review card into each requesting 5-star reviews and then send your products back otherwise untouched and ready for sale.

A few weeks later they can claim you're asking for reviews and Amazon themselves can even prove it. This is a very nasty strategy and you'll have little recourse here.

37. Missing Certifications and Insurance

Whether by mistake or by purpose, many sellers forget about mandatory certifications and insurance policies. Baby products, for instance, require public liability insurance, but for the time being at least, Amazon doesn't always police this rule.

It's best to ensure you have the right certifications or standards in order depending on your product. Some examples include electrical ratings for power tools, load-bearing tests for recovery straps, and medical certifications for health products.

38. Unprofitable PPC Campaigns

Keeping a daily eye on your PPC campaigns is important to avoid overspending and sucking your profit margins dry, or spending in the wrong places and missing out on potential conversions.

At the same time, a larger issue is choosing the wrong products where your competitors are able to outspend your monthly budget.

39. Amazon Using The Wrong Product Labels

Amazon's inventory team may mistakenly place the wrong product labels on your product if you choose to have their team prep and pack your products.

When this happens, it's often difficult to reverse. We recommend labelling to be done by your supplier, 3PL team or even at home if possible.

40. Faded Shipping Labels Due to Friction

Some suppliers simply print a single shipping label on a laser printer with A4 paper. Not only can the salty air at the ports destroy this, but so can the sun and friction with other cartons, thereby leaving your goods stranded with no delivery address.

To solve this, dictate in your purchase contract that your suppliers must always use a thermal printer for shipping labels. They can also place an additional label loosely inside the box.

41. Lost or Missing Inventory

Earlier we mentioned missing shipments as a risk, but did you know that millions of items in Amazon's warehouses go missing every day? Funnily enough, this can be a great thing!

Source: Amazon

If Amazon loses your inventory, then they're liable for payouts and you likely won't be charged FBA fees. You will lose the ability to gain more reviews but your Amazon business will (temporarily) be more profitable.

42. Suspensions During Peak Selling Periods

Some rogue sellers ramp up their attacks on competitors just before and during peak selling periods such as Prime Day, Black Friday and mid-December. This is by design so they can own the first page for the bulk of their product keywords.

While you do have to be on alert all year long, it's wise to keep a lookout during these periods. An easier option is Bindwise which monitors your listings 24/7.

43. Damaged Goods in Enroute to Customers

Amazon sends countless goods out of their warehouses each day to customers around the country and the world. And these goods could be damaged at any time.

This could be caused by the most obvious issues such as breakages in transit or truck crashes. Or this may be caused by damage through other goods, such as another seller's motorcycle oil leaking on the unique kitchen apron you're selling.

44. ASIN Errors and Vanishing ASINs

When submitting a new product to Amazon, you're either going to be creating a new ASIN, or matching another one. Amazon already holds data on established products, and errors can occur when sellers provide attributes that don't match their own. These are common errors 8441, 8542 and 8566.

At the same time, ASINs can easily go missing or be suppressed from public view. There is a multitude of reasons for suppressed listings including not having a product description or brand information.

Frequently Asked Questions

Why do people stop selling on Amazon?

Sellers sometimes take a break temporarily or permanently from selling on Amazon FBA for common reasons including unprofitable products, hijacked listings, missing or damaged inventory and high competition from China.

How does someone hijack Amazon listings?

It's relatively easy to hijack an Amazon listing by clicking on the Sell on Amazon button on a product page that is below the Buy Box. This makes it a very popular (yet controversial) strategy to get started selling on Amazon and make quick profits off established brands.

How can I protect myself from Amazon hijackers?

Styling your Amazon products with a logo, branding, unique packaging, registering your trademark, and using Amazon's Brand Registry program are some of the best ways to stop hijackers. Bindwise can monitor for hijackers 24/7 with instant alerts.

Are there lots of horror stories about selling on Amazon?

Sadly, yes. There are thousands of Amazon FBA sellers globally who have experienced frustration and the horror of financial losses through this sales channel.  Amazon as a marketplace isn't for the faint-hearted.

In Closing

Annnnndddd....we're done.

That's one exhaustive list of FBA horror stories.

And we're sure that some may not start or continue selling on Amazon in 2022, but don't get discouraged. One of the biggest threats are hijacked listings.

Bindwise was created to help sellers detect hijackers and piggybackers.

Create a free Bindwise account and get started today.