13 Jan What is Amazon Suspension Insurance and Why Do You Need It?
If you’re a seller on Amazon, you know that even the thought of having your listing taken down and your account suspended is nerve-wracking. Unfortunately, many sellers don’t plan ahead for the possibility of a suspension and are usually left scrambling to have their accounts reinstated while payments are frozen, and sales have stopped.
Why Accounts Get Suspended
There can be a number of reasons why a seller account gets suspended such as the following:
- Late Shipment Rate
Your late shipment rate must be under 4%. Amazon calculates the rate over 10- and 30-day windows. For Amazon’s full late shipment rate policy, click here.
- High Order Defect Rate (ODR)
Amazon defines Order Defect Rate (ODR) as “a key measure of your ability to provide a good customer experience. It includes all orders with one or more defects represented as a percentage of total orders during a given 60-day time period.” Negative feedback, an A-to-Z Guarantee claim that is not denied, and credit card chargebacks are all types of order defects that contribute to a high order defect rate. In order to prevent suspension, Amazon recommends that sellers maintain a 1% or lower ODR.
- High Pre-Fulfilment Cancellation Rate (CR)
According to Amazon’s Seller Central, “the Cancellation Rate (CR) is all seller-cancelled orders represented as a percentage of total orders during a given 7-day time period. CR only applies to seller-fulfilled orders.” If you have a high Pre-Fulfilment Cancellation Rate (above 2.5%), Amazon may suspend your account due to poor inventory management.
Violating Policies or Safety Concerns
- Selling Items That Are Prohibited
There are a number of items that are not allowed to be sold on Amazon. This list may include things like vehicle tires, loose batteries, and alcohol. So, if you’re looking for a place to sell that organic, sage-infused vodka that your sister’s boyfriend gave you last Christmas, you’ll need to find another marketplace.
- Selling Used Items as New Items
It should go without saying, but Amazon requires that new items must be completely new. Selling a slightly used pair of your son’s holey gym socks as “new” is a sure-fire way to get your seller account suspended.
- Complaints About Product Safety
Any item that could have serious safety concerns is probably one to avoid selling on Amazon. This could include items that pose some danger if used incorrectly, such as chainsaws or items that can start any kind of fire.
- Listings That Do Not Match the Description
Your product listing has to be 100% accurate, so avoid selling any item where the description is inconsistent with what the actual item is. This would include that designer bag you list as a “Michael Cors” original.
- And more
What is Amazon Suspension Insurance?
Amazon Suspension Insurance can cover expenses incurred while your seller account is temporarily suspended, such as loss of income and costs associated with retaining a professional to assist with the reinstatement proceedings. The insurance functions much like traditional coverage for a physical storefront, which would cover loss of income in the event your brick and mortar suffered a fire or a natural disaster.
The cost of obtaining Amazon Suspension Insurance is low compared with most insurance policies and is one that can protect you from losing a large sum of money.
Why Would I Need Amazon Suspension Insurance?
Unfortunately, reinstating a suspended Amazon account can take several weeks. During this time, your pending payments are frozen, and you won’t be able to continue selling. Amazon Suspension Insurance covers your daily financial loss until the claim is resolved and your account is reinstated. Although you may have a perfect rating, sometimes all it takes is one customer complaint to shut down your business.
Amazon Suspension Insurance gives you peace of mind and helps you save your reputation and prevent you from incurring a major financial loss.