How to Avoid Amazon Vendor Chargebacks

Amazon Australia will launch in 2018, by most accounts. The company already has a website for businesses to qualify as the first Amazon Australia sellers. Sellers make up the bulk of Amazon Marketplace sales. However, if the company follows its pattern, Amazon Australia will eventually include Amazon Vendor, the invitation-only supplier program. Amazon Vendors enjoy some advantages over Sellers, but also face particular penalties for failing to comply with Amazon rules. We thought this would be a good time to talk about how those fees, or chargebacks, affect Amazon Vendors worldwide. So, what are they, and how can you avoid Amazon Vendor chargebacks?

Get Orders Right, or Face Amazon Vendor Chargebacks

If you want to become an Amazon Vendor, you have to get Amazon to invite you. In this and other senses, Amazon acts the same way big retailers do. Thus, when you become an Amazon Vendor, you sell products to Amazon, not to Amazon’s customers. Amazon Vendors can make more money than sellers in two ways. First, they can potentially sell at a higher volume. Secondly, with Amazon buying their inventory, vendors lower their stock carrying costs. This makes Amazon Vendor Central a potentially lucrative sales channel in the way selling to Walmart or other big retailers can be. Similarly, as with those other retailers, suppliers will have to be careful to avoid Amazon Vendor chargebacks.

What Kind of Chargebacks Face Amazon Vendors?

Let’s say you start selling to Amazon as an Amazon Vendor. This means that when an order comes in, Amazon requires you to respond, fill and deliver the order in particular ways.

As an Amazon Vendor, you will incur fees if you don’t:

  • Acknowledge Amazon purchase orders within a specific time-frame.
  • Alert Amazon in time to change the status or quantity of purchase orders.
  • Label cartons correctly.
  • Send Amazon shipping notices in time.
  • Deliver orders within stated time frames.

Cin7 Helps Avoid Amazon Vendor Chargebacks

Amazon makes communication key to vendors getting their orders right. This means Amazon Vendors must receive and send order-related documents using an industry-standard electronic communication protocol known as EDI.

Historically, Amazon Vendors would track their inventory with one system, process orders with another, and handle EDI communications with a third. Not only did this require multiple steps and extra administration to process sales and track orders, it cost more to maintain these separate systems. The vendor would pay a specialist company to set up and test the EDI software. This could take months and cost thousands. Moreover, the vendor would pay a monthly maintenance fee to keep the line to Amazon open, and a fee for every document they transmit through that line.

With Cin7’s Amazon Vendor integration, vendors can track stock, automate order processing, and comply with Amazon’s rules using one integrated cloud-based solution. Cin7 saves Amazon Vendors money and makes their operations more efficient.

On A Related Note: Cin7 to Hold Amazon Events in Australia

Cin7 recently held a breakfast conference in Auckland for New Zealand retailers. The Are You Amazon-Ready didn’t just attract retailers from around New Zealand to hear expert Chris Wilkinson speak. It also garnered a bit of media attention.

So, we’re taking it on the road. Cin7 will host similar breakfast conferences for Australia resources. Join us and special guest Brian Walker (Founder and CEO of Retail Doctor Group) in Sydney on Monday, 9 October, and Melbourne, on Thursday 12 October.

Stay tuned for the details.

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