How Amazon Inventory Sourcing Methods Affect Inauthentic Suspensions

Around 2014, Amazon began citing “inauthentic items” within their suspension notices. This new term was accompanied by an updated inventory sourcing policy. For the first time, sellers had to show where they obtained their inventory in order to get their accounts reinstated. Prior to this point, suspensions mainly centered around product compliance (used sold as new, not as advertised, expired, etc.) and account performance metrics (order defect rate, late shipment rate, cancellation rate, etc.). Inauthentic item suspensions ushered in a new era for the marketplace as inventory sourcing became the main factor in account compliance.

Most sellers employ one or more of the following inventory sourcing methods:

• Manufacturing/Outsourcing the manufacturing of inventory (brand owner)
• Purchasing inventory from manufacturers/authorized distributors
• Purchasing inventory through wholesale/liquidation/closeout sources
• Purchasing inventory through retail arbitrage
• Purchasing inventory through online arbitrage
• Not purchasing inventory until an order is placed by a customer (drop-shipping)

Since the sourcing method is the primary factor affecting the difficulty of the case during an inauthentic suspension, the following article focuses on these 6 common sourcing methods and ranks them by case difficulty (least to most difficult).

What is an inauthentic item?

In Amazon jargon, an inauthentic item is an item that doesn’t meet Amazon’s authorization qualifications. This broadens the scope of what inauthentic means beyond the standard dictionary definition: “anything that pretends to be something it’s not”.

By redefining the term, Amazon has created a great deal of confusion. For example, sellers always ask us, “why am I being accused of selling fake merchandise when these items are authentic?”. Simply put, it’s because Amazon has ascribed their own meaning to the word.

Therefore, if the item isn’t authorized based on Amazon’s criteria, it’s automatically considered inauthentic. Because of this, it’s important to understand how sourcing methods affect the probability of resolving inauthentic suspensions.

Pro Tip: Regardless of the sourcing method, always submit original invoices, receipts, and proof of purchase when documents are requested by Seller Performance. If any changes are made to the documents that are submitted to Amazon, this can result in a “forged/manipulated” suspension. Forged/manipulated suspensions are much more difficult to resolve.

6 Common Inventory Sourcing Methods 

Manufacturing/Outsourcing the Manufacturing of Inventory (Brand Owner)

If a brand owner receives an inauthentic suspension based on their own branded item, the inauthentic suspension usually pertains to something else regarding the item. Typically, what’s needed to resolve the case is to provide all the relevant documentation verifying the affiliation with their brand.

In order to get reinstated, we recommend doing the following:

• Gather the documentation commonly requested by Amazon for brand owners: “brand owner, provide a copy of the brand registration certificate, and business license or personal identity card.”
• Submit the requested documentation along with a compliant appeal plan.

Pro Tip: After the account is reinstated, we recommend registering for Amazon Brand Registry 2.0 to make the brand official on Amazon. This will help prevent similar complaints from being filed against the brand and reduce the chance of another inauthentic suspension.

Purchasing Inventory from Manufacturers/Authorized Distributors

This type of sourcing method involves purchasing inventory from the manufacturer (verifiable by Amazon), directly from the brand owner, or an authorized distributor of the brand. Purchasing inventory using one of these methods increases the chance for reinstatement since the seller is likely authorized to resell the items on Amazon. If the seller isn’t authorized to resell the items, the authorized sourcing method will help the case.

In order to get reinstated, we recommend doing the following:

• Gather the information and documentation commonly requested by Amazon: “Copies of invoices, receipts, contracts, delivery orders, or authorization letters from your supplier issued in the last 365 days. The quantity of items shown should match your inventory.”
• To expedite the reinstatement process, make sure to keep all invoices organized so they’re ready when Amazon requests proof of authenticity.
• Submit the requested documentation along with a compliant appeal plan.

Pro Tip: Contact the supplier associated with the products included in the suspension notice immediately after the notice is received. Inform the supplier that Amazon may call them to verify authenticity. If Amazon calls the supplier and they are unable to confirm specifically requested information, the case will be more complicated, and there will be significant delays.

Purchasing Inventory Through Wholesale/Liquidation/Closeout Sources

This type of sourcing method involves purchasing inventory from wholesale stores, liquidation companies, or closeout locations. These sources are usually unauthorized by brand owners to sell items for resale on Amazon. Due to this, they won’t be able to provide any type of proof of authenticity if requested by sellers.

Sellers typically purchase items in bulk from these types of sources and receipts rarely include an itemized account of the order. This creates a problem for sellers when they need to submit receipts to Seller Performance for review.

In order to get reinstated, we recommend doing the following:

• Gather the information and documentation commonly requested by Amazon: “Copies of invoices, receipts.”
• Make sure to submit original invoices even if they’re obtained from unauthorized sources.
• Submit the requested documentation along with a compliant appeal plan.

Pro Tip: Kindly request an invoice or itemized proof of purchase for future orders instead of the bulk receipts that are typically received from these types of sources.

Purchasing Inventory Through Retail Arbitrage

Retail arbitrage is a method of obtaining inventory by purchasing items from retail stores (Walmart, Best Buy, etc.,) and reselling the merchandise on online marketplaces. This is also the sourcing method that built the Amazon marketplace and was used by most sellers prior to the surge of inauthentic suspensions.

When retail arbitrage sellers get suspended for inauthentic items, they’re often reluctant to provide proof of purchase to Amazon because they think Amazon won’t accept retail receipts, online store invoices, or order confirmations. Amazon will accept all the above if they are accompanied by an adequate appeal plan.

In order to get reinstated, we recommend doing the following:

• Gather the information and documentation commonly requested by Amazon: “Copies of invoices, receipts… The quantity of items shown should match your inventory.”
• Make sure to submit original receipts even if they’re obtained from unauthorized sources.
• Submit the requested documentation along with a compliant appeal plan which includes significant business modifications.

Pro Tip: Start reviewing inventory today to get a head start. When the sellers’ inventory includes big brand-named products obtained using retail arbitrage methods, the account is very vulnerable to a potential inauthentic suspension. It’s best to remove these brands until proper authorization methods are secured.

Purchasing Inventory Through Online Arbitrage 

Similar to retail arbitrage, online arbitrage involves purchasing items from websites and reselling the merchandise on online marketplaces. Sellers usually purchase items from big retail websites (walmart.com, bestbuy.com, etc.) and marketplaces (amazon.com and ebay.com). In cases where inventory is purchased from alibaba.com, aliexpress.com, other Asian websites, unknown websites, or Amazon international marketplaces, the case will be more difficult to resolve.

In order to get reinstated, we recommend doing the following:

• Gather the information and documentation commonly requested by Amazon: “Copies of invoices, receipts… The quantity of items shown should match your inventory.”
• Make sure to submit original purchase orders even if they’re obtained from unauthorized sources.
• Submit the requested documentation along with a compliant appeal plan which includes significant business modifications.

Pro Tip: Vet websites before purchasing inventory. Keep in mind that smaller websites are typically harder to deal with if there are any issues. Reach out to the website before purchasing merchandise to confirm whether they’ll be a good choice. 

Not Purchasing Inventory Until an Order is Placed by a Customer (Drop-Shipping) 

Drop-shipping sellers list items to their Amazon inventory without ever having the products in stock. Once a customer places an order, the seller buys the item from their source, and the item is shipped from the source directly to the customer.

There are two main types of drop-shippers: those that have relationships with authorized suppliers and those that use retail/online arbitrage. If the seller purchases items from an authorized source, their relationship with the supplier will help their case. Sellers using arbitrage methods to source their inventory will have a much harder time making progress in their case.

The major issue for drop-shipping sellers is the fact that they can get an inauthentic item suspension even if the item has never been sold. Simply listing an item to their inventory gives Amazon the right to request proof of authenticity. In this situation, since the seller only purchases items after they’re sold, they’re unable to provide any proof of purchase.

In order to get reinstated, we recommend doing the following:

• Get ready to start stocking inventory.
• Submit a compliant appeal plan which includes significant business modifications.

Pro Tip: Start looking for more reliable options now while the account is still active, and work towards an approved method for sourcing inventory to legitimize the account.

Conclusion

By evaluating your sourcing method and applying the tips provided by Sellercare, you can reduce the chance of receiving an inauthentic suspension. We always recommend erring on the side of caution when it comes to inventory. If you have any doubts about an item, remove it from your inventory until you can confirm that it is compliant.

If you have any questions related to suspension prevention, or any other performance or suspension related matters, contact Sellercare.

Pro Tip: It is best to consult a professional such as Sellercare if you receive an inauthentic item complaint/suspension. In most cases, significant changes need to be made to seller account logistics, inventory, and sourcing before the appeal is prepared.