13 ms·

“Amazon is holding over 4.2M dollars, suffocating our business”

711 points by hippich 6y ago

55555 6y ago
This basically happens for a good reason. Basically, the potential scam is to sign up to a marketplace and list very popular products at lower prices than everyone else. Then ship empty packages or boxes full of rocks. The marketplace will pay you every few days, and if you are "shipping internationally" they won't figure it out for a few weeks. So trust is gained slowly. The real takeaway here is that this guy pays $5,000 USD per month to get a support rep on a platform he sells a million dollars a month worth of goods on, of which it already takes a decent percent, and the support rep can't even talk to anyone with any power. This is the dark side of monopolies.
- ethanwillis 6y ago
  Surely the scam doesn't last since 2013. Stop making excuses for Amazon, this isn't acceptable given the circumstances. There's no scam going on here and bringing it up is just a way to take blame away from Amazon and for what end?
  - 55555 6y ago
    I have had XXX,XXX funds locked and a business wrecked in this exact same way but I'm explaining why it happens. If they didn't do this, they would be exploited. The real issue here is that, because they're a monopoly, the customer service sucks, and they don't care at all to let you prove you aren't running a scam. To the sibling commenter: No, what Amazon is doing is not a legal requirement. Yes, they act like PayPal now.
    - ehnto 6y ago
      > If they didn't do this, they would be exploited Amazon are offloading their fraud risk onto random small businesses and the nuance of their platform gives the small business no recourse. In a fair platform, you could resolve something like this pretty easily. I'm sure you agree, but it's worth noting explicitly. It's not a stretch to imagine Amazon are allowing for this "bug" in their support system to remain because it saves them money.
      - ethanwillis 6y ago
        Yea that's really the question I have in the other reply I just left. Does it save them money? Maybe in the short term. Maybe even in the long term if the PR cost doesn't hit them at all. I think as people this is a reason where we need to hold them accountable by pushing our businesses back to platforms where we have more control, and pushing our selling habits back to those same platforms. I don't think Shopify is ideal, but I do think it's better for both sellers and buyers than Amazon.
      - nebulous1 6y ago
        > In a fair platform, you could resolve something like this pretty easily How? It seems that Amazon could provide better communication, but how would this situation be easily resolved?
        user5994461 6y ago
        Release a small fraction of the fund, let's say 30%, maybe limited to transactions deemed older/safer. It's trivial and it's enough cash flow for the vendor to continue operating until the next release. Amazon has two days delivery for most orders. They can quickly get customer feedback (product review, refund, shipping issue). They could even directly question customers "have you received product? Yes/No". They could easily determine that a vendor is legit if they wanted to, they do not need to hold funds for months.
        mcbits 6y ago
        What PayPal does or did (according to stories I read a while back) was freeze the funds and then simultaneously advertise a loan to the customer. So I guess we could subtract the interest rate charged by other lenders for that kind of loan from the rate that PayPal would charge, to get an estimate of the risk that PayPal believes it is mitigating when freezing people's funds.
        user5994461 6y ago
        Sounds odd for PayPal to do that (might be a US thing?). They're the one owing you money but you're the one who has to pay extra fee? The purpose of delaying was to prevent fraud and this achieves nothing to prevent fraud, the vendor can just take the loan and run away. If PayPal is confident enough to give a loan, they're confident enough to release some of the funds, but they prefer to force a loan on the account holder and get extra fees? I don't expect that going well in many jurisdictions. Consider the massive power imbalance and usually shorter legal timelines to close SME payments, that give more weight to the case.
    - ethanwillis 6y ago
      That's fair. What makes it so insane is they still get exploited on both the buyer and seller fronts. Really though the crux of the problem if they want to do this type of enforcement is they just need a better internal policy of expedited processing of reviews for accounts > some age && > amount of held funds. If they ramped up this current type of "enforcement" to deter fraud it's going to come with a PR cost.
    - rhizome 6y ago
      >If they didn't do this, they would be exploited. You're implying that the way they're currently doing it is the only possible way to deal with the problem.
      - stingraycharles 6y ago
        Exactly, the problem isn’t that they are protecting themselves against fraud, it’s the way they do it. There is so much low hanging fruit they could implement to do better than this, it’s inexcusable.
    - _red 6y ago
      >because they're a monopoly They're not a monopoly.
      - vermontdevil 6y ago
        They will after the COVID crisis eases.
      - 55555 6y ago
        Yeah, they're not a monopoly. And my business isn't a monopoly either. But, notably, not in quite the same way that they're not a monopoly.
      - bragh 6y ago
        Sure, they are not a monopoly yet when you look at the whole of e-commerce. But Amazon effectively is a monopoly for at least books and probably electronics, depending on where you live. Quoting from an article published in 2018: https://www.retaildive.com/news/amazon-beats-best-buy-as-top-electronics-retailer/521505/ https://www.retaildive.com/news/amazon-beats-best-buy-as-top... > 60% of every incremental dollar being spent online in North America is gong to one company — Amazon. No matter what you sell, Amazon is coming for you
      - ncmncm 6y ago
        They exercise monopoly power, by the law that makes them a monopoly. Getting the JD to enforce monopoly laws is a whole other problem
      - cambalache 6y ago
        In the same sense a giant Walmart in a 5000 people town is not a monopoly
    - stevespang 6y ago
      And PayPal got a nice fat class action suit against them for just this same crap . . .
    - didntknowyou 6y ago
      mind you shopify is acting the same way too. i get that they have to protect themselves, but when they hold all the money and power they have little incentive to resolve things quickly.
  - LatteLazy 6y ago
    I'd have though Amazon legal or their rep would have at least got something happening. But just Fyi, often fraudsters will buy or otherwise gain control of companies with long histories to commit fraud. They do this exactly because you'd assume a company in business since 2013 is legit. You see the same thing with old ebay accounts, people buy/hack them, suddenly start selling again and when it turns out all they mail is bricks in boxes it's too late, they took the money already. For tax evasion (and I'm sure also legit purposes) you can buy companies that have been setup, registered and had returns filled for years, and now look like real entities. They're called "Shelf" companies. Edit: I think they even do it the Sopranos. A guy has big gambling debts, they put a gun to his head and his company maxes out its credit with the bank and all its surpliers such that it will never be able to repay. The money goes to Tony and the bank/suppliers are left wondering why an established businessman ruined his own business and probably their's too. Criminals are clever and that makes everyone's lives more difficult...
  - paypalcust83 6y ago
    The two can happen simultaneously. Assuming a particular case is either one or the other either with algorithms without human review is arrogant, unprofessional, fascist, and lacks nuance. Making it convoluted and difficult to receive money owed is fraud, theft, and deception by design.
  - moltar 6y ago
    Scams do happen on established accounts too. Accounts get stolen. Accounts get sold on private forums and Facebook groups. Established sellers do go rogue sometimes too.
  - hlmencken 6y ago
    It's a huge shift in behavior. Outside of Covid-19 context something like this could have been a huge red flag. I'm sure people at amazon are working near as hard as anyone to respond to all of these changes. This was flagged and resolved by them in a day. I'm sure there are a lot of latent checks and balances that are there to catch things but when context changes need to be updated. In emergency times often the squeaky wheel gets the grease and I have no doubt Amazon is relying on customer feedback to point out less common problems that have arisen due to all the change.
- unethical_ban 6y ago
  As you said, they are paying $5,000 a month ($60,000/yr, they alone are paying 30-50% the salary) for an account rep whose sole job is to facilitate communication between customer and Amazon, and they are proving useless. If this is some sort of "suspected fraud, don't tip them off" then it is a really shitty way to handle it - and probably not legally required. Amazon is choosing to handle it this way. Sounds like Paypal - never keep your money in it a day longer than necessary. I don't know how Amazon Marketplace funds work, but this is a lesson never to trust Amazon with your money if you can avoid it.
  - thw0rted 6y ago
    This is probably the thing that bothers me the most about this story. Every couple of weeks there's another post about "Google de-listed my app from the Play Store", etc, and the common thread tends to be that there's a wall of powerless drones that act as the interface between the tech giant and the "tenant" (developer or seller). Contact support with a complaint, they say that you violated some nebulous policy and they can't give you the details of the violation, and all the tenant can do is shout into the void or hope to make enough noise rising up the ranks here at HN that somebody with actual power takes notice. So, it's chilling to see that Amazon has a system where you can pay a frankly astonishing amount for a "priority" rep, who you would think would have the power to actually get any issues addressed, and actually they're just as useless as the Tier 1 guy who read you the script about violating the terms of service.
- luckylion 6y ago
  How are they reacting that way for an established seller, yet they are apparently incapable of getting rid of the "don't buy via amazon, contact me at my email address first, I will reject all orders via amazon" scammers that put fake offers at half market price in? That sounds more like an intern clicking on a few things. If their scam-hunting-systems (which I'd reason are an important part) are fully automatic and that bad, it's a miracle how AWS works.
  - user5994461 6y ago
    It seems an established account is as likely as any account to sell a ton of ghost items and cash away the money. Consider if the vendor account gets hacked or the wife of the vendor pulls a stunt on him. The reward for fraud only gets bigger as the account is more trusted.
    - luckylion 6y ago
      By that logic they should always freeze all accounts, because "they've not scammed up until now, which makes them more likely to scam in the next five minutes then ever before". It looks more like a simplistic trigger that somebody just threw in there that doesn't take e.g. Amazon's ability to fulfill FBA orders. And it looks like a terrible policy to just say "yeah, fuck the seller, shut them down, we don't do manual reviews of the decisions of some Perl script from a decade ago".
      - user5994461 6y ago
        I'm saddened that you don't consider these serious issues in the real world. I personally know a man who used to run a small company (not related to Amazon) and whose wife drained all the money away over a small period of time, as well as taking a few extra lines of credits, before vanishing. Thankfully scams are limited in time. Freezing funds for 30 or 60 days is an effective fraud prevention tactic. P.S. Of course in this case it's stupid and there should be a way to contact a human and release some of the funds.
        6y ago
- ehnto 6y ago
  > This is the dark side of monopolies. Tech monopolies are particularly good at it, online support tickets and "community" forums are fantastic decoys for real support.
  - seph-reed 6y ago
    > This is the dark side of monopolies. Oh; no introduction necessary. We go way back.
  - Aaronstotle 6y ago
    Google is one of the worst offenders, had a user tell me that Chrome deleted all of her passwords. Try to look up solutions online and all I find are tons of community forums with 60-80 posts each of people talking about how all of their passwords are gone and there is no solution/remedy offered to anyone.
    - deleted 6y ago
      [deleted]
    - ectospheno 6y ago
      Stop using chrome?
      - ehnto 6y ago
        It doesn't fix the problem, it just makes it no longer your own problem. Chrome is still one of the dominant browsers.
    - anticsapp 6y ago
      I had a weird positive experience with Google lately. An account rep messed up all my AdWords (I still call it that) campaigns and blew $900 on worthless mistargeted clicks on Christmas Eve 2018. My request for refund was denied, so I chargebacked and got banned (who cares). I need to use AdWords again next month so I reactivated the account and asked for another appeal. They immediately deleted the $900 debt and unbanned me.
- fizixer 6y ago
  I get that Amazon has created this "self-correcting machine" that makes sure certain constraints are met in terms of vendors and products and what not. And if a vendor is detected as violating some rule, they're "eliminated" and Amazon prefers not to have human intervention. But does Amazon share the full details of this "machine" with the partners/vendors beforehand who are going to be subjected to it? If I'm a vendor I'd like to know the exact rules of the game, down to the last if-then-else, no matter how complex, so I can at least have all the information to decipher what may have gone wrong, or how not to overstep. Sharing this information would only make it easier for both Amazon and the vendors.
  - 013a 6y ago
    And the fraudulent sellers would also love to have this information, so they can precisely step around every piece of logic Amazon's systems are enforcing.
    - fizixer 6y ago
      What I'm asking is not unlike how society works. The law of the land is publicly available and it's a right of every citizen to know the rules that they're expected to abide by. If someone reads all of the law and finds and exploits loopholes, did they really commit fraud? or is there something wrong with the law that needs to be fixed?
- _bxg1 6y ago
  > This is the dark side of monopolies. Is there a bright side?
  - burger_moon 6y ago
    People get same day delivery diapers. Apparently it's worth it.
    - fdajsklfj 6y ago
      Same day delivery of diapers that they probably won't even notice are sketchy counterfeits.
      - jessaustin 6y ago
        Does authenticity matter for a disposable excrement catcher? If they sold you diapers lined with broken glass, fraud would be the least of their crimes.
        youdonthavekids 6y ago
        Yes, the ability to hold enough pee without it leaking is something certain high quality nappies do far better than others. The ability to pull the moisture away from the skin as to reduce the chance of rash is done better by certain brands and I would hope the 'non-fakes' adhere to some sort of standard where the material doesn't affect the health of the skin as it's medically approved etc. If your comment is correct, we could just wrap old tshirts around my babies arse.
        mtrower 6y ago
        Well, you certainly could. Cloth diapers were once the standard (and are in fact still used by some).
        jessaustin 6y ago
- loeg 6y ago
  The vendor in question had been a steady seller with a 7 year track record. It's really hard claim to swallow that that is plausibly an exit scam, even to an extremely naive fraud-detection system.
  - toasterlovin 6y ago
    Seller accounts are bought and sold on the grey/black market.
    - loeg 6y ago
      I don't think that math adds up. Seller does $12 M/yr revenue with Amazon. How much is an exit fraud worth? I find it difficult to believe that anyone on the black market is willing to pay anything close to the discounted future earnings of a $12 M/yr revenue business just to pursue an exit scam for about a week.
      - slv77 6y ago
        There is also credit risk for an established business that maybe heading to bankruptcy. Amazon is essentially extending credit by paying sellers for items that may not have shipped. Given recent disruptions they are likely on high alert for credit risk as well.
        loeg 6y ago
        I don't think they need to hold ~4 months of average sales to cover that risk when ship times are a handful of days. AMZN seems to have been holding funds on sales that were not only already shipped, but delivered.
      - toasterlovin 6y ago
        5% margins, which are in the realm of normal, on $12MM/year would be $600k. If you didn’t ship $3MM worth of product, that would be five years of profit. But also: shit happens to people. They get into debt. Businesses go bad. There’s a reason Amazon has a system in place to flag and shutdown this pattern of activity. Maybe it was wrong in this case, but it exists for a reason. Chesterton’s Fence and all that.
- deleted 6y ago
  [deleted]
leoplct 6y ago
Write to jeff@amazon.com
- wjnc 6y ago
  They did, their lawyer did and their support rep did.
  - jawns 6y ago
    When I saw that their pricey support rep also emailed jeff@amazon.com on their behalf, I laughed out loud. Nothing says organizational dysfunction better than having a disempowered employee email the same last-ditch "please may a human see this" support email address that's given out to customers.
    - ImaCake 6y ago
      That seems like a nightmare job. I hope the rep gets paid well for their unnecessary misery.
    - woutr_be 6y ago
      > Nothing says organizational dysfunction better than having a disempowered employee email the same last-ditch "please may a human see this" support email address that's given out to customers. And yet it's all too common. I currently find myself "escalating" issues constantly because other people aren't helpful. Usually it's easy to go up the chain, to their manager, then that manager's manager, department head, ...etc But every so often you find yourself in a situation where the next step is upper management, then what do you do... (This is at a 90K+ employee company)
- searchableguy 6y ago
  Good thinking but they replaced the responder with cheap outsourced agents a while ago.
- ocdtrekkie 6y ago
  I am sure jeff@amazon.com is just pointing to a customer service department at this point, but it makes people feel empowered when they get an answer after sending to this address because they feel like they went over everyone's heads through a back door.
tester756 6y ago
>This was resolved and funds were released. Sorry I got capped on how many posts I could make and then didn’t circle back to this. Thanks for stepping in and helping out Pax!
pgrote 6y ago
12 hours ago the OP reported the issue was resolved. No further explanation except thanking Pax from amazon.
- unethical_ban 6y ago
  Just saw that as well. Pretty frustrating that they didn't add any detail.
  - Cthulhu_ 6y ago
    There may be a clause in their contract (or something they had to sign) where further communications or sharing details is disallowed or conditional to actually getting the money. TBH for 4.x million + continued business (12M a year at least), I'd shut right up myself. That's not just "your" money but all of your employees as well (with 200K shipments / month or however much it is they're likely operating a warehouse of their own)
    - salawat 6y ago
      How is it totally fine that a company should have enough leverage to blackmail you into shutting up and continuing to use their platform? I'd be sorely tempted to shout from the rooftops, hit up every VC I could, and move heaven and hell to break into their vertical just on principle at that point. Sometimes, not rocking the boat does more harm than good. Doing anything else is basically accepting the legitimacy of the practice. Don't get me wrong. I understand the inherent risk. I realize they have their business and employees to think of. However, taking the hush money and moving along just sets Amazon up to do it to someone else. It isn't "just business"; it's bad business, damnit and getting away with it lowers the bar for everyone because you're not willing to hold someone to account. If the next 5 businesses who catch Amazon out doing this type of thing carefully, documenting every detail, and take it to the authorities, you can bet there will be change. They may make more money than a small nation, but tie up non-trivial portions of it fighting tooth and nail against multi-national legal scrutiny, and I guarantee there will be traction gained. Anyway... End rant, andapologies. That type of thing makes my blood boil.
j-c-hewitt 6y ago
They do stuff like this all the time. Large sellers are treated like subhumans that do not deserve attention from an intelligent person at Amazon. You get bots and contractors making very expensive decisions. >Why would Amazon, in the middle of a pandemic squeeze a business such as ours so hard that we cannot get ANY of our funds for goods sold or to pay our people. I understand risk mitigation, but this is over the top. Please mods, help us! Amazon considers sellers to be a renewable resource that can be disposed of haphazardly at the whim of an automated system or a low level employee. Note that they also pay for an account rep, covering a significant portion of that rep's fully loaded salary, yet they are still unable to get timely information. You have to understand that even if you are on the larger side, in the top 10% of sellers, that Amazon still considers you expendable. Paid reps are very helpful but the cost is sort of absurd for what they wind up doing in high pressure suspension situations for nebulous or stupid/incomprehensible reasons. Unfortunately, they are trying to write to "Amazon legal" which does not exist to field seller problems. Writing to "Amazon legal" is indeed a black hole. The way to force a response is to file for arbitration.
- sandworm101 6y ago
  >> You have to understand that even if you are on the larger side, in the top 10% of sellers, that Amazon still considers you expendable. No. Amazon considers them a threat. Amazon itself is the largest of large sellers. Any profits made by an upstart large seller are profits that Amazon would rather be making itself.
  - foobarian 6y ago
    Even more cynical: Amazon considers them a valuable source of business intelligence and/or ML model training data.
  - j-c-hewitt 6y ago
    Sellers are more profitable and less risky overall because Amazon does not need to buy the inventory and they make a profit off of every interaction with the seller from transaction fees to storage fees to PPC ads and more. Amazon's vendor business sucks and is overall shrinking proportion of marketplace revenue.
ilamont 6y ago
The Amazon Seller forums are a great educational tool, and also a window into the frustrations that many 3PS are experiencing on the platform and off (such as issues that relate to UPS and USPS). There are lots of automated freezes on accounts, some legitimate (selling products from protected brands without permission) but lots of shutdowns for no clear reason and it's impossible to get an explanation from a human.
Bubbadoo 6y ago
Wait, this merchant sells $1MM/month and his business has no LOC (line of credit)? No lawyers? Something's not right here.
- FpUser 6y ago
  I am pretty sure they have LOC. I am also pretty sure that said LOC can be easily exceeded in a situations as the one originally described.
- rurp 6y ago
  The OP explains in the thread that their lawyer is already involved. I would guess that very few businesses in retail can float 100% of their costs with no income for weeks/months.
- 650REDHAIR 6y ago
  $1M/month with low margins won’t get you a $4.5m LOC in the best of times let alone a pandemic.
egypturnash 6y ago
Damn there sure are a lot of people blaming the victim in those replies.
- deleted 6y ago
  [deleted]
- grayed-down 6y ago
  Yeah, HN is a weird place. I got grayed out for saying Amazon desperately needed competition.
  - abiogenesis 6y ago
    If I were Amazon, I would certainly hire people/trolls/bots to participate in prominent online forums, such as HN. Edit: Now I'm getting downvoted too.
jbverschoor 6y ago
Almost looks like a bank. They do exactly the same shit
- chrisco255 6y ago
  And credit card processors as well.
pgt 6y ago
Amazon is the new Paypal.
grayed-down 6y ago
All the FAANGT's desperately need MORE competition
- HeyLaughingBoy 6y ago
  They'll get it as that acronym grows longer...
  - grayed-down 6y ago
    Ha! FAANGTY
ptero 6y ago
This is just an opinion without personal experience, but as others indicated you likely have been snagged by a bot; your case seems really clear cut and a review with a human should fix this quickly. The challenge is to get a human on your case. One option would be to give your rep a heads-up that in 24 hours you will ask your state representative (choose one which likes to bitch about Amazon or monopolies) for help. Or media. You like Amazon, blah-blah, but they are killing your livelihood. This has some risk that Amazon will retaliate and kick you out after releasing your money, but unless you seriously misrepresent your case they have way more to lose from publicity than you do. Good luck!
didibus 6y ago
I think engineers are partially to blame for these type of situations. I can just imagine the internal scenario, the rep escalated, there's some support ticket sitting on some engineering teams backlog somewhere. Rep can't do anything since it's all automated, have to wait for the devs to do something about it. The systems probably lack manual overrides, or other such measure. Maybe they were flagged for fraud, but somehow the payload got stuck in some error state somewhere, and now there's an engineer that needs to figure out how to get things moving again. To the engineering team, that's 1 error out of hundreds of thousands of requests per day. This is low severity. I guess my point is that, as an engineer myself, I often feel very disconnected from the users themselves. We see errors and issues as percentage of total traffic. Low number of errors, not important. We don't always stop to think, wait is there an actual person or business that relies on this for their livelihood? This one error, what's the impact to the user that depends on my systems? The same way that big corporations start to see users and employees as just a number, I think so do we often fall into this trap. We're always focused on the scale out, never the quality of service of individual requests. It always seems more important to launch in one more region, than to fix the hand full of errors and corrupted requests in the existing one.
- hippich 6y ago
  You can't blame engineers implementing the business logic defined by management. Current business logic appears to be something like "remove humans making decisions, implement algos doing the job, remove the ability to question that logic, in any not clear case pick safest for amazon option".
- londons_explore 6y ago
  A better way to look at this is to consider a webmail service. There are 20 engineers on the core dev team. There are 1 Billion customers. 99.9% of customers love the service. 0.1% fall into some bug, and need customer support to sort it out. 0.1% of those complaints are unusual and need an engineer to sort it by writing some code. Thats 1000 issues that require one of those 20 engineers. 50 each. It might take a day per issue, since these are the in-depth, real corner cases. Some will require re-architecting things to fix. You are the project manager of this webmail system. Do you spend 2 months of the entire teams productivity to help 0.0001% of the customer base, or do you ignore them and build some features for the other 99.9999%?
devy 6y ago
The OP said it was a velocity hold tripped up due to COVID19 situation that caused the sales to spike drastically. https://sellercentral.amazon.com/forums/t/amazon-is-holding-over-4-2-million-dollars-during-a-pandemic-suffocating-our-business/611187/73 https://sellercentral.amazon.com/forums/t/amazon-is-holding-... And got the attention and escalated: https://sellercentral.amazon.com/forums/t/amazon-is-holding-over-4-2-million-dollars-during-a-pandemic-suffocating-our-business/611187/148 https://sellercentral.amazon.com/forums/t/amazon-is-holding-... And then eventually resolved: https://sellercentral.amazon.com/forums/t/amazon-is-holding-over-4-2-million-dollars-during-a-pandemic-suffocating-our-business/611187/405 https://sellercentral.amazon.com/forums/t/amazon-is-holding-...
- vermontdevil 6y ago
  And now what? Will Amazon improve their business process to avoid future situations like this? (of course not)
  - sigzero 6y ago
    That's your opinion. You have no idea if Amazon will make changes or not.
    - jjeaff 6y ago
      Ten years of not fixing it is a pretty good indicator that they won't.
  - dbliss 6y ago
    My guess this will lead to a internal Correction of Error (COE) report and there will be some change to either reduce false positives or increase the velocity of addressing them by making some systematic change.
    - jjeaff 6y ago
      Ha! Amazon has had this velocity issue locking up legitimate funds for a decade. It's a feature, not a bug. They know it locks up funds for legitimate sellers but they don't really care that much about their 3rd party sellers and they get to retain a lot of cash for longer than usual anyway. It won't get fixed.
peter_retief 6y ago
Please support small business and real people. I keep reading stories of Amazon not paying fair wages and avoiding paying tax. This arrogance and disregard for small business is even more reason to avoid Amazon.
- hippich 6y ago
  Sellers sell where buyers go. Unfortunately, Amazon today represents a very-very large portion of online sales. And if you don't sell there, you lose. And convenience (I think? I don't think it is a place to find a best price anymore) looks like it takes over concerns over small business.
  - peter_retief 6y ago
    Maybe so but the customer is king and if more customers move away then maybe sellers will move as well.
    - hippich 6y ago
      You can bet sellers will move where customers go. Unfortunately, that is not happening, and if anything, during that virus time, Amazon appears to increase its positions (another interesting topic to discuss, btw).
xutopia 6y ago
Can you even speak to Amazon on the phone?
- hippich 6y ago
  In theory - yes, in practice, you speak with someone who has no authority and appears to be there solely for the purposes to be not helpful enough for seller to give up. Only once I was able to reach someone who was able to make a decision (which was made quickly, but I doubt I can repeat that when I need it again) EDIT: also when escalating (because their first layer of reps defense can not resolve the issue) and requesting a call, I got a very specific "we do not have capacity to call you".
hinkley 6y ago
I remember hearing advice years ago about how vendors give you more grace period to pay when you make regular payments but once they have to bug you about it then they eventually cut you to 30 days and then cash. It was impressed upon the other participant that you should make dead sure to pay your bills on time if you actually have the cash. Once they stop trusting you your cash situation just snowballs. It seems like that relationship becomes very topical when your retailer starts sandbagging on their end. Like the question shouldn’t be how many dollars, but how many days.
hippich 6y ago
Looks like mods noticed HN traffic and closed the topic. Wanted to ask how they resolved it in the end.
Neil44 6y ago
I'm amazed at how many of the respondents on the Amazon forum are taking Amazon's side. That's nuts.
- hippich 6y ago
  I was researching another issue we have currently, and saw a bunch of similar topics (funny how these were in the "suggested topics" block =)) I posted a few of these. What you noticed about negativity, I experienced myself on these forums, as well as noticed in all topics I viewed today. Not sure why that happens. Presumably, most if not all of the posters there are sellers facing similar challenges since such issues come up with both big and small sellers.
- sacks2k 6y ago
  It is nuts. Many people on the Amazon forum not only take Amazon's side, but try to shame you and blame you for your situation.
sacks2k 6y ago
I wrote about almost the same experience I had in a previous thread that happened to me a decade ago. In some seller categories, you are required to show Amazon where you purchased your items. The excuse is that they need to make sure they are authentic. While this may be the case, Amazon will most likely use this information to go around you and put you out of business. In the re-sale business, sources are your best guarded secret and competitive advantage. You aren't really building a business anyway. Amazon doesn't allow you to access any real customer information, you can't communicate outside of Amazon's communication channels, and you will get banned if you include any advertisements for your own business/website. When selling on Amazon, you could sell there for a decade and have nothing to show for it.
hippich 6y ago
From their SAS - Core program FAQ: "How many accounts does each account manager manage? Each account manager manages between 12-15 accounts. We limit the number of sellers that each account manager has in their book of business so they can focus on optimizing your account and helping you reach your business goals." So up to $900k/yr of the revenue made by each of such managers. Yet they are either nonresponsive or not helpful. Not sure what to think about that kind of business...
LatteLazy 6y ago
I'm always suspicious of these pieces. Their own comments say they do 1m a month is sales. But a 15 days hold has them at 4.2m? So their business went up by a factor of 8 overnight? Sounds like good reason to have a hold in place to be honest. Even top sellers under coronavirus have only gone up 6.5x haven't they? Plus who are they paying? Most businesses have 28day payment terms don't they? So 15 days in is a little early to panic. Plus everyone is dealing with coronavirus, so not getting a call back from Amazon for 2 weeks doesn't sound like the world ending...
- hippich 6y ago
  Our revenue is about $1m there. We are paying for everything upfront, wait for the sea freight to arrive, clear the custom, etc. Amazon also pays once every two weeks + keeps about two weeks of proceeds on hold on a rolling basis. That together with a spike in sales can easily crush if there are no fat cash reserves.
  - LatteLazy 6y ago
    Mind if I ask: how long between paying for goods and being able to send them to people? Does shipping take long? I'm sort of fascinated by these supply chains because by making things (say) a week quicker you get a week's worth of capital back. But if things slow down by a week suddenly you have to out a lot of capital back in. Its like a very high leverage position in finance would be...
    - toasterlovin 6y ago
      Here's what our capital requirements look like (we manufacture in Asia and sell on Amazon): 35 days in transit from Asia to U.S. West Coast + 60 days of safety stock + average of 14 days from when we sell to customer to when Amazon disburses funds. But the factory extends 60 day payment terms, so we need to cover 35 days of cost of goods sold (@ 50% of revenue) + 14 days of revenue. Or ~31 days of sales. I would say that we are probably in the typical range for a company that sources from Asia. If you source domestically, then you probably only need 30-45 days of safety stock, depending on lead times, but you might not get 60 day terms from your supplier.
amelius 6y ago
It won't be long until Amazon represents the entire market of many goods. At what point will we decide that the function of a market should be left to an independent regulator? Or that "selling stuff online" should be a utility?
- hippich 6y ago
  I think eventually it will break itself. Sellers facing such risks will add a significant premium for selling there. Also, even tho you are called a seller and bear all the risks, you do not even see the customer's address (for FBA orders). Meaning it is not seller's customer, it is an Amazon customer. So you are not building business, you are taking advantage of the temporal situation. In the long term such seller would build their own sustainable business and Amazon would become just one of channels, expensive one tho. As businesses expand other less risky channels, and 3PL solutions offer similar shipping service to prime, Amazon will no longer be a place to get a good price. And it is already often not a good place for trusted reviews or genuine products. Too bad some sellers like us who bought in, will be collateral damage in the process.
citizenpaul 6y ago
Yell, Wail, gnash your teeth. It won't matter. This is the issue with not owning your own business when you think you do. Amazon sellers are in reality just affiliates of Amazon and do not have control over their own business. This is the reason people pay marketing companies instead of living in the marketing companies platform.
newguy1234 6y ago
This is one of the reasons why I completely pulled out of amazon and now focus exclusively on ebay only. Amazon constantly screws over their 3rd party sellers.
tracker1 6y ago
I wonder if there are provisions against the seller adding a flyer to their sales packages pointing to their own website and including a link to a writeup on this? While I can understand the need for this type of action on Amazon's part... I do not feel that taking nearly 2 weeks to resolve this kind of situation is appropriate. They should have at least a 72hr max turn around for requests from paid account reps. I'm also not sure if Amazon is experiencing higher fraud rates than normal right now either... the silence is deafening.
- hippich 6y ago
  yes, they specifically prohibit that (adding flyers). The customers is Amazon's, not seller's (but all the risk is on the seller).
paypalcust83 6y ago
Corporate inverted totalitarianism at work. Corporations using the pandemic to ostensibly justify their poor service and ruinous treatment of others is what they do. They're not your friends and basing your business on them is a critical mistake like not owning the mineral rights to farmland.
jeffrwells 6y ago
I managed a $60M/yr amazon business and these kind of issues would happen on a monthly basis. We were on Vendor Central so we had a dedicated rep. He would avoid helping us however, and use the opportunity to force us to renegotiate our rates (so Amazon could have more margin). Then the issue would disappear. This happened so often we suspected these automatic issues were actually orchestrated to secure more margin. The Amazon rep told us that he had quotas to hit of new margin targets for us every quarter. We also consistently had issues of Amazon reporting under-deliveries and holding our funds. We shipped product in packages of (modulo) 8, and so they ordered in packages of (modulo) 8. When it arrived at the warehouse, they'd mark only 7 delivered, which is not feasible, sell the extra one and refuse to pay us for that 8th unit. This amounted to millions of dollars. I eventually tracked every single package we had ever shipped and presented evidence of this fraud to them. They offered to pay us 30 cents on the dollar if we signed a waiver forgiving the rest.
- hippich 6y ago
  I would certainly love to read more about your experience. Not sure if you are tied with some kind of NDA, but if you can share more - please post a complete story!
- pcurve 6y ago
  "The Amazon rep told us that he had quotas to hit of new margin targets for us every quarter." That is truly wtf.
  - toasterlovin 6y ago
    It's management by KPI. Possibly the greatest wealth generating mechanism ever created. The closest we have yet come to building the fabled paperclip maximizer of AI doomsayer fame.
- heimatau 6y ago
  > I eventually tracked every single package we had ever shipped and presented evidence of this fraud to them. They offered to pay us 30 cents on the dollar if we signed a waiver forgiving the rest. Did you get your full dollar? I don't see why you didn't get more, this is ripe for lawsuit.
robomartin 6y ago
A good friend of mine sold product on Amazon back nearly ten years ago. I got to have a pretty good look into the operation as he sought my advice on both business and technology issues. The best way I can describe what being a third party seller on Amazon is like is something like this: If you are interested in ending-up in the hospital with a massive heart attack, become a third party seller on Amazon. This is my opinion, of course, your mileage may vary. That said, the things I've seen defy description. Things like your entire product line suspended overnight without cause, recourse or a clear and immediately actionable path to recovery. Or how about your entire account being suspended and the Seller Support people you talk to are useless? And how about this one: How about people who never bought your product leaving negative one star reviews. Even better: People leaving reviews before they receive the product they purchased, then they cancel the order and it never goes out. I mean, think about it, as an example, say you buy a weight loss product. How can Amazon's software allow anyone, even an actual buyer, to leave a product review before they receive it? How can they allow it a week after they get it? Here's a nice one: You manufacture your own product (not a Chinese one-in-a-thousand-copies private label product). In other words, you are the sole source and the sole retailer of the product. Nobody else makes it and nobody else is authorized to sell it. Amazon has no protections against some scammer claiming they sell your product. What happens is someone buys from one of these scammers and either get a box full of rocks, something totally different or a bad quality copy of your legitimate product. Whats worse is you are left to answer for what happened and your reputation, seller and product scores suffer due to the bad reviews. Then there's the issue of no protection against competitors attacking your ads within Amazon. They have a pay-per-click system. You set a daily budget. Competitors will pay offshore click farms to click on the competition's ads while everyone in key markets are sleeping. By the time your potential customers wake up your ad budget is gone and you produce zero sales for your money. I could go on. He left the platform and got really good at running his own online operation. His stress level is a thousand percent lower and, more importantly, he knows his business isn't going to be shutdown overnight by some all powerful online retail god who could absolutely ruin him. I mean, these people are supporting families. The way Amazon treats legitimate third party sellers is just terrible. And they make so much money because of them.
- fludlight 6y ago
stevespang 6y ago
With this kind of money, why isn’t a lawyer involved? I agree, hire a lawyer with connections, one that can make Bezos life difficult, just like he made yours . . .
mrtweetyhack 6y ago
And they probably still stay with amazon
throwaway042620 6y ago
So even large accounts don't have an account rep they can call ? They still have to plead for help on the user forums ? Having no account reps seems petty and reckless. It's like Amazon is begging to be regulated.
peter_d_sherman 6y ago
Note to Future Self: I have to wonder if it wouldn't be a great business idea to find / gather all disgruntled Amazon shippers / sellers, then create some small-scale, yet large enough to get the job done, Amazon alternative... After all, "Where there's muck, there's brass", as the old expression goes, as Joel Spolsky reiterates in one of his essays: https://www.joelonsoftware.com/2007/12/06/where-theres-muck-theres-brass/ https://www.joelonsoftware.com/2007/12/06/where-theres-muck-...

711 points by hippich 6y ago

This basically happens for a good reason. Basically, the potential scam is to sign up to a marketplace and list very popular products at lower prices than everyone else. Then ship empty packages or boxes full of rocks. The marketplace will pay you every few days, and if you are "shipping internationally" they won't figure it out for a few weeks. So trust is gained slowly. The real takeaway here is that this guy pays $5,000 USD per month to get a support rep on a platform he sells a million dollars a month worth of goods on, of which it already takes a decent percent, and the support rep can't even talk to anyone with any power. This is the dark side of monopolies.

ethanwillis 6y ago
Surely the scam doesn't last since 2013. Stop making excuses for Amazon, this isn't acceptable given the circumstances. There's no scam going on here and bringing it up is just a way to take blame away from Amazon and for what end?
- 55555 6y ago
  I have had XXX,XXX funds locked and a business wrecked in this exact same way but I'm explaining why it happens. If they didn't do this, they would be exploited. The real issue here is that, because they're a monopoly, the customer service sucks, and they don't care at all to let you prove you aren't running a scam. To the sibling commenter: No, what Amazon is doing is not a legal requirement. Yes, they act like PayPal now.
  - ehnto 6y ago
    > If they didn't do this, they would be exploited Amazon are offloading their fraud risk onto random small businesses and the nuance of their platform gives the small business no recourse. In a fair platform, you could resolve something like this pretty easily. I'm sure you agree, but it's worth noting explicitly. It's not a stretch to imagine Amazon are allowing for this "bug" in their support system to remain because it saves them money.
    - ethanwillis 6y ago
      Yea that's really the question I have in the other reply I just left. Does it save them money? Maybe in the short term. Maybe even in the long term if the PR cost doesn't hit them at all. I think as people this is a reason where we need to hold them accountable by pushing our businesses back to platforms where we have more control, and pushing our selling habits back to those same platforms. I don't think Shopify is ideal, but I do think it's better for both sellers and buyers than Amazon.
    - nebulous1 6y ago
      > In a fair platform, you could resolve something like this pretty easily How? It seems that Amazon could provide better communication, but how would this situation be easily resolved?
      - user5994461 6y ago
        Release a small fraction of the fund, let's say 30%, maybe limited to transactions deemed older/safer. It's trivial and it's enough cash flow for the vendor to continue operating until the next release. Amazon has two days delivery for most orders. They can quickly get customer feedback (product review, refund, shipping issue). They could even directly question customers "have you received product? Yes/No". They could easily determine that a vendor is legit if they wanted to, they do not need to hold funds for months.
        mcbits 6y ago
        What PayPal does or did (according to stories I read a while back) was freeze the funds and then simultaneously advertise a loan to the customer. So I guess we could subtract the interest rate charged by other lenders for that kind of loan from the rate that PayPal would charge, to get an estimate of the risk that PayPal believes it is mitigating when freezing people's funds.
        user5994461 6y ago
        Sounds odd for PayPal to do that (might be a US thing?). They're the one owing you money but you're the one who has to pay extra fee? The purpose of delaying was to prevent fraud and this achieves nothing to prevent fraud, the vendor can just take the loan and run away. If PayPal is confident enough to give a loan, they're confident enough to release some of the funds, but they prefer to force a loan on the account holder and get extra fees? I don't expect that going well in many jurisdictions. Consider the massive power imbalance and usually shorter legal timelines to close SME payments, that give more weight to the case.
  - ethanwillis 6y ago
    That's fair. What makes it so insane is they still get exploited on both the buyer and seller fronts. Really though the crux of the problem if they want to do this type of enforcement is they just need a better internal policy of expedited processing of reviews for accounts > some age && > amount of held funds. If they ramped up this current type of "enforcement" to deter fraud it's going to come with a PR cost.
  - rhizome 6y ago
    >If they didn't do this, they would be exploited. You're implying that the way they're currently doing it is the only possible way to deal with the problem.
    - stingraycharles 6y ago
      Exactly, the problem isn’t that they are protecting themselves against fraud, it’s the way they do it. There is so much low hanging fruit they could implement to do better than this, it’s inexcusable.
  - _red 6y ago
    >because they're a monopoly They're not a monopoly.
    - vermontdevil 6y ago
      They will after the COVID crisis eases.
    - 55555 6y ago
      Yeah, they're not a monopoly. And my business isn't a monopoly either. But, notably, not in quite the same way that they're not a monopoly.
    - bragh 6y ago
      Sure, they are not a monopoly yet when you look at the whole of e-commerce. But Amazon effectively is a monopoly for at least books and probably electronics, depending on where you live. Quoting from an article published in 2018: https://www.retaildive.com/news/amazon-beats-best-buy-as-top-electronics-retailer/521505/ https://www.retaildive.com/news/amazon-beats-best-buy-as-top... > 60% of every incremental dollar being spent online in North America is gong to one company — Amazon. No matter what you sell, Amazon is coming for you
    - ncmncm 6y ago
      They exercise monopoly power, by the law that makes them a monopoly. Getting the JD to enforce monopoly laws is a whole other problem
    - cambalache 6y ago
      In the same sense a giant Walmart in a 5000 people town is not a monopoly
  - stevespang 6y ago
    And PayPal got a nice fat class action suit against them for just this same crap . . .
  - didntknowyou 6y ago
    mind you shopify is acting the same way too. i get that they have to protect themselves, but when they hold all the money and power they have little incentive to resolve things quickly.
- LatteLazy 6y ago
  I'd have though Amazon legal or their rep would have at least got something happening. But just Fyi, often fraudsters will buy or otherwise gain control of companies with long histories to commit fraud. They do this exactly because you'd assume a company in business since 2013 is legit. You see the same thing with old ebay accounts, people buy/hack them, suddenly start selling again and when it turns out all they mail is bricks in boxes it's too late, they took the money already. For tax evasion (and I'm sure also legit purposes) you can buy companies that have been setup, registered and had returns filled for years, and now look like real entities. They're called "Shelf" companies. Edit: I think they even do it the Sopranos. A guy has big gambling debts, they put a gun to his head and his company maxes out its credit with the bank and all its surpliers such that it will never be able to repay. The money goes to Tony and the bank/suppliers are left wondering why an established businessman ruined his own business and probably their's too. Criminals are clever and that makes everyone's lives more difficult...
- paypalcust83 6y ago
  The two can happen simultaneously. Assuming a particular case is either one or the other either with algorithms without human review is arrogant, unprofessional, fascist, and lacks nuance. Making it convoluted and difficult to receive money owed is fraud, theft, and deception by design.
- moltar 6y ago
  Scams do happen on established accounts too. Accounts get stolen. Accounts get sold on private forums and Facebook groups. Established sellers do go rogue sometimes too.
- hlmencken 6y ago
  It's a huge shift in behavior. Outside of Covid-19 context something like this could have been a huge red flag. I'm sure people at amazon are working near as hard as anyone to respond to all of these changes. This was flagged and resolved by them in a day. I'm sure there are a lot of latent checks and balances that are there to catch things but when context changes need to be updated. In emergency times often the squeaky wheel gets the grease and I have no doubt Amazon is relying on customer feedback to point out less common problems that have arisen due to all the change.
unethical_ban 6y ago
As you said, they are paying $5,000 a month ($60,000/yr, they alone are paying 30-50% the salary) for an account rep whose sole job is to facilitate communication between customer and Amazon, and they are proving useless. If this is some sort of "suspected fraud, don't tip them off" then it is a really shitty way to handle it - and probably not legally required. Amazon is choosing to handle it this way. Sounds like Paypal - never keep your money in it a day longer than necessary. I don't know how Amazon Marketplace funds work, but this is a lesson never to trust Amazon with your money if you can avoid it.
- thw0rted 6y ago
  This is probably the thing that bothers me the most about this story. Every couple of weeks there's another post about "Google de-listed my app from the Play Store", etc, and the common thread tends to be that there's a wall of powerless drones that act as the interface between the tech giant and the "tenant" (developer or seller). Contact support with a complaint, they say that you violated some nebulous policy and they can't give you the details of the violation, and all the tenant can do is shout into the void or hope to make enough noise rising up the ranks here at HN that somebody with actual power takes notice. So, it's chilling to see that Amazon has a system where you can pay a frankly astonishing amount for a "priority" rep, who you would think would have the power to actually get any issues addressed, and actually they're just as useless as the Tier 1 guy who read you the script about violating the terms of service.
luckylion 6y ago
How are they reacting that way for an established seller, yet they are apparently incapable of getting rid of the "don't buy via amazon, contact me at my email address first, I will reject all orders via amazon" scammers that put fake offers at half market price in? That sounds more like an intern clicking on a few things. If their scam-hunting-systems (which I'd reason are an important part) are fully automatic and that bad, it's a miracle how AWS works.
- user5994461 6y ago
  It seems an established account is as likely as any account to sell a ton of ghost items and cash away the money. Consider if the vendor account gets hacked or the wife of the vendor pulls a stunt on him. The reward for fraud only gets bigger as the account is more trusted.
  - luckylion 6y ago
    By that logic they should always freeze all accounts, because "they've not scammed up until now, which makes them more likely to scam in the next five minutes then ever before". It looks more like a simplistic trigger that somebody just threw in there that doesn't take e.g. Amazon's ability to fulfill FBA orders. And it looks like a terrible policy to just say "yeah, fuck the seller, shut them down, we don't do manual reviews of the decisions of some Perl script from a decade ago".
    - user5994461 6y ago
      I'm saddened that you don't consider these serious issues in the real world. I personally know a man who used to run a small company (not related to Amazon) and whose wife drained all the money away over a small period of time, as well as taking a few extra lines of credits, before vanishing. Thankfully scams are limited in time. Freezing funds for 30 or 60 days is an effective fraud prevention tactic. P.S. Of course in this case it's stupid and there should be a way to contact a human and release some of the funds.
      - 6y ago
ehnto 6y ago
> This is the dark side of monopolies. Tech monopolies are particularly good at it, online support tickets and "community" forums are fantastic decoys for real support.
- seph-reed 6y ago
  > This is the dark side of monopolies. Oh; no introduction necessary. We go way back.
- Aaronstotle 6y ago
  Google is one of the worst offenders, had a user tell me that Chrome deleted all of her passwords. Try to look up solutions online and all I find are tons of community forums with 60-80 posts each of people talking about how all of their passwords are gone and there is no solution/remedy offered to anyone.
  - deleted 6y ago
    [deleted]
  - ectospheno 6y ago
    Stop using chrome?
    - ehnto 6y ago
      It doesn't fix the problem, it just makes it no longer your own problem. Chrome is still one of the dominant browsers.
  - anticsapp 6y ago
    I had a weird positive experience with Google lately. An account rep messed up all my AdWords (I still call it that) campaigns and blew $900 on worthless mistargeted clicks on Christmas Eve 2018. My request for refund was denied, so I chargebacked and got banned (who cares). I need to use AdWords again next month so I reactivated the account and asked for another appeal. They immediately deleted the $900 debt and unbanned me.
fizixer 6y ago
I get that Amazon has created this "self-correcting machine" that makes sure certain constraints are met in terms of vendors and products and what not. And if a vendor is detected as violating some rule, they're "eliminated" and Amazon prefers not to have human intervention. But does Amazon share the full details of this "machine" with the partners/vendors beforehand who are going to be subjected to it? If I'm a vendor I'd like to know the exact rules of the game, down to the last if-then-else, no matter how complex, so I can at least have all the information to decipher what may have gone wrong, or how not to overstep. Sharing this information would only make it easier for both Amazon and the vendors.
- 013a 6y ago
  And the fraudulent sellers would also love to have this information, so they can precisely step around every piece of logic Amazon's systems are enforcing.
  - fizixer 6y ago
    What I'm asking is not unlike how society works. The law of the land is publicly available and it's a right of every citizen to know the rules that they're expected to abide by. If someone reads all of the law and finds and exploits loopholes, did they really commit fraud? or is there something wrong with the law that needs to be fixed?
_bxg1 6y ago
> This is the dark side of monopolies. Is there a bright side?
- burger_moon 6y ago
  People get same day delivery diapers. Apparently it's worth it.
  - fdajsklfj 6y ago
    Same day delivery of diapers that they probably won't even notice are sketchy counterfeits.
    - jessaustin 6y ago
      Does authenticity matter for a disposable excrement catcher? If they sold you diapers lined with broken glass, fraud would be the least of their crimes.
      - youdonthavekids 6y ago
        Yes, the ability to hold enough pee without it leaking is something certain high quality nappies do far better than others. The ability to pull the moisture away from the skin as to reduce the chance of rash is done better by certain brands and I would hope the 'non-fakes' adhere to some sort of standard where the material doesn't affect the health of the skin as it's medically approved etc. If your comment is correct, we could just wrap old tshirts around my babies arse.
        mtrower 6y ago
        Well, you certainly could. Cloth diapers were once the standard (and are in fact still used by some).
        jessaustin 6y ago
loeg 6y ago
The vendor in question had been a steady seller with a 7 year track record. It's really hard claim to swallow that that is plausibly an exit scam, even to an extremely naive fraud-detection system.
- toasterlovin 6y ago
  Seller accounts are bought and sold on the grey/black market.
  - loeg 6y ago
    I don't think that math adds up. Seller does $12 M/yr revenue with Amazon. How much is an exit fraud worth? I find it difficult to believe that anyone on the black market is willing to pay anything close to the discounted future earnings of a $12 M/yr revenue business just to pursue an exit scam for about a week.
    - slv77 6y ago
      There is also credit risk for an established business that maybe heading to bankruptcy. Amazon is essentially extending credit by paying sellers for items that may not have shipped. Given recent disruptions they are likely on high alert for credit risk as well.
      - loeg 6y ago
        I don't think they need to hold ~4 months of average sales to cover that risk when ship times are a handful of days. AMZN seems to have been holding funds on sales that were not only already shipped, but delivered.
    - toasterlovin 6y ago
      5% margins, which are in the realm of normal, on $12MM/year would be $600k. If you didn’t ship $3MM worth of product, that would be five years of profit. But also: shit happens to people. They get into debt. Businesses go bad. There’s a reason Amazon has a system in place to flag and shutdown this pattern of activity. Maybe it was wrong in this case, but it exists for a reason. Chesterton’s Fence and all that.
deleted 6y ago
[deleted]

leoplct 6y ago

Write to jeff@amazon.com

wjnc 6y ago
They did, their lawyer did and their support rep did.
- jawns 6y ago
  When I saw that their pricey support rep also emailed jeff@amazon.com on their behalf, I laughed out loud. Nothing says organizational dysfunction better than having a disempowered employee email the same last-ditch "please may a human see this" support email address that's given out to customers.
  - ImaCake 6y ago
    That seems like a nightmare job. I hope the rep gets paid well for their unnecessary misery.
  - woutr_be 6y ago
    > Nothing says organizational dysfunction better than having a disempowered employee email the same last-ditch "please may a human see this" support email address that's given out to customers. And yet it's all too common. I currently find myself "escalating" issues constantly because other people aren't helpful. Usually it's easy to go up the chain, to their manager, then that manager's manager, department head, ...etc But every so often you find yourself in a situation where the next step is upper management, then what do you do... (This is at a 90K+ employee company)
searchableguy 6y ago
Good thinking but they replaced the responder with cheap outsourced agents a while ago.
ocdtrekkie 6y ago
I am sure jeff@amazon.com is just pointing to a customer service department at this point, but it makes people feel empowered when they get an answer after sending to this address because they feel like they went over everyone's heads through a back door.

tester756 6y ago

>This was resolved and funds were released. Sorry I got capped on how many posts I could make and then didn’t circle back to this. Thanks for stepping in and helping out Pax!

pgrote 6y ago

12 hours ago the OP reported the issue was resolved. No further explanation except thanking Pax from amazon.

unethical_ban 6y ago
Just saw that as well. Pretty frustrating that they didn't add any detail.
- Cthulhu_ 6y ago
  There may be a clause in their contract (or something they had to sign) where further communications or sharing details is disallowed or conditional to actually getting the money. TBH for 4.x million + continued business (12M a year at least), I'd shut right up myself. That's not just "your" money but all of your employees as well (with 200K shipments / month or however much it is they're likely operating a warehouse of their own)
  - salawat 6y ago
    How is it totally fine that a company should have enough leverage to blackmail you into shutting up and continuing to use their platform? I'd be sorely tempted to shout from the rooftops, hit up every VC I could, and move heaven and hell to break into their vertical just on principle at that point. Sometimes, not rocking the boat does more harm than good. Doing anything else is basically accepting the legitimacy of the practice. Don't get me wrong. I understand the inherent risk. I realize they have their business and employees to think of. However, taking the hush money and moving along just sets Amazon up to do it to someone else. It isn't "just business"; it's bad business, damnit and getting away with it lowers the bar for everyone because you're not willing to hold someone to account. If the next 5 businesses who catch Amazon out doing this type of thing carefully, documenting every detail, and take it to the authorities, you can bet there will be change. They may make more money than a small nation, but tie up non-trivial portions of it fighting tooth and nail against multi-national legal scrutiny, and I guarantee there will be traction gained. Anyway... End rant, andapologies. That type of thing makes my blood boil.

j-c-hewitt 6y ago

They do stuff like this all the time. Large sellers are treated like subhumans that do not deserve attention from an intelligent person at Amazon. You get bots and contractors making very expensive decisions. >Why would Amazon, in the middle of a pandemic squeeze a business such as ours so hard that we cannot get ANY of our funds for goods sold or to pay our people. I understand risk mitigation, but this is over the top. Please mods, help us! Amazon considers sellers to be a renewable resource that can be disposed of haphazardly at the whim of an automated system or a low level employee. Note that they also pay for an account rep, covering a significant portion of that rep's fully loaded salary, yet they are still unable to get timely information. You have to understand that even if you are on the larger side, in the top 10% of sellers, that Amazon still considers you expendable. Paid reps are very helpful but the cost is sort of absurd for what they wind up doing in high pressure suspension situations for nebulous or stupid/incomprehensible reasons. Unfortunately, they are trying to write to "Amazon legal" which does not exist to field seller problems. Writing to "Amazon legal" is indeed a black hole. The way to force a response is to file for arbitration.

sandworm101 6y ago
>> You have to understand that even if you are on the larger side, in the top 10% of sellers, that Amazon still considers you expendable. No. Amazon considers them a threat. Amazon itself is the largest of large sellers. Any profits made by an upstart large seller are profits that Amazon would rather be making itself.
- foobarian 6y ago
  Even more cynical: Amazon considers them a valuable source of business intelligence and/or ML model training data.
- j-c-hewitt 6y ago
  Sellers are more profitable and less risky overall because Amazon does not need to buy the inventory and they make a profit off of every interaction with the seller from transaction fees to storage fees to PPC ads and more. Amazon's vendor business sucks and is overall shrinking proportion of marketplace revenue.

ilamont 6y ago

The Amazon Seller forums are a great educational tool, and also a window into the frustrations that many 3PS are experiencing on the platform and off (such as issues that relate to UPS and USPS). There are lots of automated freezes on accounts, some legitimate (selling products from protected brands without permission) but lots of shutdowns for no clear reason and it's impossible to get an explanation from a human.

Bubbadoo 6y ago

Wait, this merchant sells $1MM/month and his business has no LOC (line of credit)? No lawyers? Something's not right here.

FpUser 6y ago
I am pretty sure they have LOC. I am also pretty sure that said LOC can be easily exceeded in a situations as the one originally described.
rurp 6y ago
The OP explains in the thread that their lawyer is already involved. I would guess that very few businesses in retail can float 100% of their costs with no income for weeks/months.
650REDHAIR 6y ago
$1M/month with low margins won’t get you a $4.5m LOC in the best of times let alone a pandemic.

egypturnash 6y ago

Damn there sure are a lot of people blaming the victim in those replies.

deleted 6y ago
[deleted]
grayed-down 6y ago
Yeah, HN is a weird place. I got grayed out for saying Amazon desperately needed competition.
- abiogenesis 6y ago
  If I were Amazon, I would certainly hire people/trolls/bots to participate in prominent online forums, such as HN. Edit: Now I'm getting downvoted too.

jbverschoor 6y ago

Almost looks like a bank. They do exactly the same shit

chrisco255 6y ago
And credit card processors as well.

pgt 6y ago

Amazon is the new Paypal.

grayed-down 6y ago

All the FAANGT's desperately need MORE competition

HeyLaughingBoy 6y ago
They'll get it as that acronym grows longer...
- grayed-down 6y ago
  Ha! FAANGTY

ptero 6y ago

This is just an opinion without personal experience, but as others indicated you likely have been snagged by a bot; your case seems really clear cut and a review with a human should fix this quickly. The challenge is to get a human on your case. One option would be to give your rep a heads-up that in 24 hours you will ask your state representative (choose one which likes to bitch about Amazon or monopolies) for help. Or media. You like Amazon, blah-blah, but they are killing your livelihood. This has some risk that Amazon will retaliate and kick you out after releasing your money, but unless you seriously misrepresent your case they have way more to lose from publicity than you do. Good luck!

didibus 6y ago

I think engineers are partially to blame for these type of situations. I can just imagine the internal scenario, the rep escalated, there's some support ticket sitting on some engineering teams backlog somewhere. Rep can't do anything since it's all automated, have to wait for the devs to do something about it. The systems probably lack manual overrides, or other such measure. Maybe they were flagged for fraud, but somehow the payload got stuck in some error state somewhere, and now there's an engineer that needs to figure out how to get things moving again. To the engineering team, that's 1 error out of hundreds of thousands of requests per day. This is low severity. I guess my point is that, as an engineer myself, I often feel very disconnected from the users themselves. We see errors and issues as percentage of total traffic. Low number of errors, not important. We don't always stop to think, wait is there an actual person or business that relies on this for their livelihood? This one error, what's the impact to the user that depends on my systems? The same way that big corporations start to see users and employees as just a number, I think so do we often fall into this trap. We're always focused on the scale out, never the quality of service of individual requests. It always seems more important to launch in one more region, than to fix the hand full of errors and corrupted requests in the existing one.

hippich 6y ago
You can't blame engineers implementing the business logic defined by management. Current business logic appears to be something like "remove humans making decisions, implement algos doing the job, remove the ability to question that logic, in any not clear case pick safest for amazon option".
londons_explore 6y ago
A better way to look at this is to consider a webmail service. There are 20 engineers on the core dev team. There are 1 Billion customers. 99.9% of customers love the service. 0.1% fall into some bug, and need customer support to sort it out. 0.1% of those complaints are unusual and need an engineer to sort it by writing some code. Thats 1000 issues that require one of those 20 engineers. 50 each. It might take a day per issue, since these are the in-depth, real corner cases. Some will require re-architecting things to fix. You are the project manager of this webmail system. Do you spend 2 months of the entire teams productivity to help 0.0001% of the customer base, or do you ignore them and build some features for the other 99.9999%?

devy 6y ago

The OP said it was a velocity hold tripped up due to COVID19 situation that caused the sales to spike drastically. https://sellercentral.amazon.com/forums/t/amazon-is-holding-over-4-2-million-dollars-during-a-pandemic-suffocating-our-business/611187/73 https://sellercentral.amazon.com/forums/t/amazon-is-holding-... And got the attention and escalated: https://sellercentral.amazon.com/forums/t/amazon-is-holding-over-4-2-million-dollars-during-a-pandemic-suffocating-our-business/611187/148 https://sellercentral.amazon.com/forums/t/amazon-is-holding-... And then eventually resolved: https://sellercentral.amazon.com/forums/t/amazon-is-holding-over-4-2-million-dollars-during-a-pandemic-suffocating-our-business/611187/405 https://sellercentral.amazon.com/forums/t/amazon-is-holding-...

vermontdevil 6y ago
And now what? Will Amazon improve their business process to avoid future situations like this? (of course not)
- sigzero 6y ago
  That's your opinion. You have no idea if Amazon will make changes or not.
  - jjeaff 6y ago
    Ten years of not fixing it is a pretty good indicator that they won't.
- dbliss 6y ago
  My guess this will lead to a internal Correction of Error (COE) report and there will be some change to either reduce false positives or increase the velocity of addressing them by making some systematic change.
  - jjeaff 6y ago
    Ha! Amazon has had this velocity issue locking up legitimate funds for a decade. It's a feature, not a bug. They know it locks up funds for legitimate sellers but they don't really care that much about their 3rd party sellers and they get to retain a lot of cash for longer than usual anyway. It won't get fixed.

peter_retief 6y ago

Please support small business and real people. I keep reading stories of Amazon not paying fair wages and avoiding paying tax. This arrogance and disregard for small business is even more reason to avoid Amazon.

hippich 6y ago
Sellers sell where buyers go. Unfortunately, Amazon today represents a very-very large portion of online sales. And if you don't sell there, you lose. And convenience (I think? I don't think it is a place to find a best price anymore) looks like it takes over concerns over small business.
- peter_retief 6y ago
  Maybe so but the customer is king and if more customers move away then maybe sellers will move as well.
  - hippich 6y ago
    You can bet sellers will move where customers go. Unfortunately, that is not happening, and if anything, during that virus time, Amazon appears to increase its positions (another interesting topic to discuss, btw).

xutopia 6y ago

Can you even speak to Amazon on the phone?

hippich 6y ago
In theory - yes, in practice, you speak with someone who has no authority and appears to be there solely for the purposes to be not helpful enough for seller to give up. Only once I was able to reach someone who was able to make a decision (which was made quickly, but I doubt I can repeat that when I need it again) EDIT: also when escalating (because their first layer of reps defense can not resolve the issue) and requesting a call, I got a very specific "we do not have capacity to call you".

hinkley 6y ago

I remember hearing advice years ago about how vendors give you more grace period to pay when you make regular payments but once they have to bug you about it then they eventually cut you to 30 days and then cash. It was impressed upon the other participant that you should make dead sure to pay your bills on time if you actually have the cash. Once they stop trusting you your cash situation just snowballs. It seems like that relationship becomes very topical when your retailer starts sandbagging on their end. Like the question shouldn’t be how many dollars, but how many days.

hippich 6y ago

Looks like mods noticed HN traffic and closed the topic. Wanted to ask how they resolved it in the end.

Neil44 6y ago

I'm amazed at how many of the respondents on the Amazon forum are taking Amazon's side. That's nuts.

hippich 6y ago
I was researching another issue we have currently, and saw a bunch of similar topics (funny how these were in the "suggested topics" block =)) I posted a few of these. What you noticed about negativity, I experienced myself on these forums, as well as noticed in all topics I viewed today. Not sure why that happens. Presumably, most if not all of the posters there are sellers facing similar challenges since such issues come up with both big and small sellers.
sacks2k 6y ago
It is nuts. Many people on the Amazon forum not only take Amazon's side, but try to shame you and blame you for your situation.

sacks2k 6y ago

I wrote about almost the same experience I had in a previous thread that happened to me a decade ago. In some seller categories, you are required to show Amazon where you purchased your items. The excuse is that they need to make sure they are authentic. While this may be the case, Amazon will most likely use this information to go around you and put you out of business. In the re-sale business, sources are your best guarded secret and competitive advantage. You aren't really building a business anyway. Amazon doesn't allow you to access any real customer information, you can't communicate outside of Amazon's communication channels, and you will get banned if you include any advertisements for your own business/website. When selling on Amazon, you could sell there for a decade and have nothing to show for it.

hippich 6y ago

From their SAS - Core program FAQ: "How many accounts does each account manager manage? Each account manager manages between 12-15 accounts. We limit the number of sellers that each account manager has in their book of business so they can focus on optimizing your account and helping you reach your business goals." So up to $900k/yr of the revenue made by each of such managers. Yet they are either nonresponsive or not helpful. Not sure what to think about that kind of business...

LatteLazy 6y ago

I'm always suspicious of these pieces. Their own comments say they do 1m a month is sales. But a 15 days hold has them at 4.2m? So their business went up by a factor of 8 overnight? Sounds like good reason to have a hold in place to be honest. Even top sellers under coronavirus have only gone up 6.5x haven't they? Plus who are they paying? Most businesses have 28day payment terms don't they? So 15 days in is a little early to panic. Plus everyone is dealing with coronavirus, so not getting a call back from Amazon for 2 weeks doesn't sound like the world ending...

hippich 6y ago
Our revenue is about $1m there. We are paying for everything upfront, wait for the sea freight to arrive, clear the custom, etc. Amazon also pays once every two weeks + keeps about two weeks of proceeds on hold on a rolling basis. That together with a spike in sales can easily crush if there are no fat cash reserves.
- LatteLazy 6y ago
  Mind if I ask: how long between paying for goods and being able to send them to people? Does shipping take long? I'm sort of fascinated by these supply chains because by making things (say) a week quicker you get a week's worth of capital back. But if things slow down by a week suddenly you have to out a lot of capital back in. Its like a very high leverage position in finance would be...
  - toasterlovin 6y ago
    Here's what our capital requirements look like (we manufacture in Asia and sell on Amazon): 35 days in transit from Asia to U.S. West Coast + 60 days of safety stock + average of 14 days from when we sell to customer to when Amazon disburses funds. But the factory extends 60 day payment terms, so we need to cover 35 days of cost of goods sold (@ 50% of revenue) + 14 days of revenue. Or ~31 days of sales. I would say that we are probably in the typical range for a company that sources from Asia. If you source domestically, then you probably only need 30-45 days of safety stock, depending on lead times, but you might not get 60 day terms from your supplier.

amelius 6y ago

It won't be long until Amazon represents the entire market of many goods. At what point will we decide that the function of a market should be left to an independent regulator? Or that "selling stuff online" should be a utility?

hippich 6y ago
I think eventually it will break itself. Sellers facing such risks will add a significant premium for selling there. Also, even tho you are called a seller and bear all the risks, you do not even see the customer's address (for FBA orders). Meaning it is not seller's customer, it is an Amazon customer. So you are not building business, you are taking advantage of the temporal situation. In the long term such seller would build their own sustainable business and Amazon would become just one of channels, expensive one tho. As businesses expand other less risky channels, and 3PL solutions offer similar shipping service to prime, Amazon will no longer be a place to get a good price. And it is already often not a good place for trusted reviews or genuine products. Too bad some sellers like us who bought in, will be collateral damage in the process.

citizenpaul 6y ago

Yell, Wail, gnash your teeth. It won't matter. This is the issue with not owning your own business when you think you do. Amazon sellers are in reality just affiliates of Amazon and do not have control over their own business. This is the reason people pay marketing companies instead of living in the marketing companies platform.

newguy1234 6y ago

This is one of the reasons why I completely pulled out of amazon and now focus exclusively on ebay only. Amazon constantly screws over their 3rd party sellers.

tracker1 6y ago

I wonder if there are provisions against the seller adding a flyer to their sales packages pointing to their own website and including a link to a writeup on this? While I can understand the need for this type of action on Amazon's part... I do not feel that taking nearly 2 weeks to resolve this kind of situation is appropriate. They should have at least a 72hr max turn around for requests from paid account reps. I'm also not sure if Amazon is experiencing higher fraud rates than normal right now either... the silence is deafening.

hippich 6y ago
yes, they specifically prohibit that (adding flyers). The customers is Amazon's, not seller's (but all the risk is on the seller).

paypalcust83 6y ago

Corporate inverted totalitarianism at work. Corporations using the pandemic to ostensibly justify their poor service and ruinous treatment of others is what they do. They're not your friends and basing your business on them is a critical mistake like not owning the mineral rights to farmland.

jeffrwells 6y ago

I managed a $60M/yr amazon business and these kind of issues would happen on a monthly basis. We were on Vendor Central so we had a dedicated rep. He would avoid helping us however, and use the opportunity to force us to renegotiate our rates (so Amazon could have more margin). Then the issue would disappear. This happened so often we suspected these automatic issues were actually orchestrated to secure more margin. The Amazon rep told us that he had quotas to hit of new margin targets for us every quarter. We also consistently had issues of Amazon reporting under-deliveries and holding our funds. We shipped product in packages of (modulo) 8, and so they ordered in packages of (modulo) 8. When it arrived at the warehouse, they'd mark only 7 delivered, which is not feasible, sell the extra one and refuse to pay us for that 8th unit. This amounted to millions of dollars. I eventually tracked every single package we had ever shipped and presented evidence of this fraud to them. They offered to pay us 30 cents on the dollar if we signed a waiver forgiving the rest.

hippich 6y ago
I would certainly love to read more about your experience. Not sure if you are tied with some kind of NDA, but if you can share more - please post a complete story!
pcurve 6y ago
"The Amazon rep told us that he had quotas to hit of new margin targets for us every quarter." That is truly wtf.
- toasterlovin 6y ago
  It's management by KPI. Possibly the greatest wealth generating mechanism ever created. The closest we have yet come to building the fabled paperclip maximizer of AI doomsayer fame.
heimatau 6y ago
> I eventually tracked every single package we had ever shipped and presented evidence of this fraud to them. They offered to pay us 30 cents on the dollar if we signed a waiver forgiving the rest. Did you get your full dollar? I don't see why you didn't get more, this is ripe for lawsuit.

robomartin 6y ago

A good friend of mine sold product on Amazon back nearly ten years ago. I got to have a pretty good look into the operation as he sought my advice on both business and technology issues. The best way I can describe what being a third party seller on Amazon is like is something like this: If you are interested in ending-up in the hospital with a massive heart attack, become a third party seller on Amazon. This is my opinion, of course, your mileage may vary. That said, the things I've seen defy description. Things like your entire product line suspended overnight without cause, recourse or a clear and immediately actionable path to recovery. Or how about your entire account being suspended and the Seller Support people you talk to are useless? And how about this one: How about people who never bought your product leaving negative one star reviews. Even better: People leaving reviews before they receive the product they purchased, then they cancel the order and it never goes out. I mean, think about it, as an example, say you buy a weight loss product. How can Amazon's software allow anyone, even an actual buyer, to leave a product review before they receive it? How can they allow it a week after they get it? Here's a nice one: You manufacture your own product (not a Chinese one-in-a-thousand-copies private label product). In other words, you are the sole source and the sole retailer of the product. Nobody else makes it and nobody else is authorized to sell it. Amazon has no protections against some scammer claiming they sell your product. What happens is someone buys from one of these scammers and either get a box full of rocks, something totally different or a bad quality copy of your legitimate product. Whats worse is you are left to answer for what happened and your reputation, seller and product scores suffer due to the bad reviews. Then there's the issue of no protection against competitors attacking your ads within Amazon. They have a pay-per-click system. You set a daily budget. Competitors will pay offshore click farms to click on the competition's ads while everyone in key markets are sleeping. By the time your potential customers wake up your ad budget is gone and you produce zero sales for your money. I could go on. He left the platform and got really good at running his own online operation. His stress level is a thousand percent lower and, more importantly, he knows his business isn't going to be shutdown overnight by some all powerful online retail god who could absolutely ruin him. I mean, these people are supporting families. The way Amazon treats legitimate third party sellers is just terrible. And they make so much money because of them.

fludlight 6y ago

stevespang 6y ago

With this kind of money, why isn’t a lawyer involved? I agree, hire a lawyer with connections, one that can make Bezos life difficult, just like he made yours . . .

mrtweetyhack 6y ago

And they probably still stay with amazon

throwaway042620 6y ago

So even large accounts don't have an account rep they can call ? They still have to plead for help on the user forums ? Having no account reps seems petty and reckless. It's like Amazon is begging to be regulated.

peter_d_sherman 6y ago

Note to Future Self: I have to wonder if it wouldn't be a great business idea to find / gather all disgruntled Amazon shippers / sellers, then create some small-scale, yet large enough to get the job done, Amazon alternative... After all, "Where there's muck, there's brass", as the old expression goes, as Joel Spolsky reiterates in one of his essays: https://www.joelonsoftware.com/2007/12/06/where-theres-muck-theres-brass/ https://www.joelonsoftware.com/2007/12/06/where-theres-muck-...