Amazon account reviews & preparing for Christmas

By Chris Dawson August 14, 2010 - 12:22 pm

It might be early in the year to be thinking about selling on Amazon in the run up to Christmas. However if you’re not already trading on Amazon you’ve probably only got a couple of weeks left, if you want your trading account to be in good order to take advantage of the holiday season.

What’s prompted me to write about Amazon is a call from a friend who’s been hit with an Amazon “Velocity Limit and Account Review”. Amazon conduct reviews when sales volumes or inventory are not supported by sufficient buyer feedback or an established history. The reviews are a routine part of Amazon’s commitment to improving the customer experience (or to put it bluntly to make sure that buyers won’t be let down by under-performing sellers).

During the account review withdrawing funds from Amazon are temporarily suspended. Although typically the review will only take a few days if you supply all the information requested, it’s a worrying time for any seller. Most sellers should have sufficient working capital for it not to be a problem, but naturally an unexpected review raises concerns arise around how long funds will be held for and how it will affect cash flow, especially when the amount runs into thousands of pounds.

I spoke to Amazon to find out more about the account reviews and they told me that once review is over there are a number of possible outcomes. The seller might at best be restored to a normal disbursement of funds, or for example they may be limited to withdrawing funds once every 14 days. It’s worth noting that even if you can only withdraw funds every 14 days it’s not a rolling reserve – when you make a withdrawal you can expect to receive all funds up to and including payments made the day before.

If Amazon still have concerns over your account in some circumstance there may be a 30 day disbursement period or, for some sellers operating in particularly sensitive categories or with no track record of selling off Amazon, there may in rare circumstance be a rolling reserve applied.

It should be remembered that this is nothing abnormal in the payments industry. eBay and PayPal typically hold funds for new sellers for up to 21 days or when positive feedback is received and have rolling reserves for higher risk sellers. Anyone with a merchant credit card agreement will be aware that it’s some time before payments from customer reach their bank account.

So what can you do to get ready for Christmas? Well the first thing is to get your account set up and start selling on Amazon today, the ramp up in sales on Amazon starts right at the beginning of October. Allowing time for listing integration and the accumulation of feedback (which helps conversion as well as disbursement of funds flexibility) there is a big benefit in registering within the next 1-2 weeks. The quicker you ramp up your sales the quicker you’ll trigger an account review (if it’s necessary) and the quicker you can get back to business as usual.

It’s also worth remembering that some categories on Amazon (such as Toys) are gated and have restrictions on new sellers. If you miss the cut off point (typically in September) for selling your first products in these categories you won’t be able to list in them until after the holiday season.

Finally there are two ways that you can set your Amazon account up. There is a self service option where you simply visit Amazon and set your account up online, but for businesses a better option is the assisted process where you’re talked through the process with Amazon’s business account managers.

A big advantage of the assisted process is that you’ll have a named contact within Amazon who you can turn to for help if you later run into an account review or need any other assistance in the early days ramping up your Amazon business.

Amazon are keen to recruit quality sellers and want to help them to be successful and ensure that sellers are set to maximise sales over the coming months. If you’d like assistance to create and launch an Amazon account in time for Christmas peak you can email them at [email protected]

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