Without any doubt, Amazon.com is the largest online platform for e-Commerce sellers. However, along with the growing number of Amazon sellers, there are more fraud cases happening, and many sellers in Amazon FBA have to bear huge losses.
But, if you are properly guided and have the right knowledge, the chances of you falling into such scams will be very less. You must understand these scams and make sure to avoid them in order to save yourself from any huge troubles.
In this article, we will discuss some of the most common Amazon FBA scams and provide you some suggestions on how to avoid them. But first, let’s understand why Amazon FBA business is so important and why it is increasing day by day.
Chapter 1: Why Amazon FBA Is Important for Your Business?
Amazon is known as one the world’s foremost e-commerce companies, where sellers and customers make transactions from products. For sellers, there are two options:
FBM – fulfillment by the merchant; which means you as the seller have to do all things from storing products to packing to shipping to customer service.
FBA – fulfillment by Amazon; in this case, Amazon does all this stuff for you.
We’ll be talking about the FBA aspect today. It’s basically a service where your products and merchandise are stored in Amazon’s ‘fulfillment centers’ i.e. warehouses. If a customer wants to buy your products, the shipping, packing, and customer service are done by Amazon on your behalf.
This means that you as a seller get certain advantages that could prove beneficial for your business. Some of these advantages are as follows:
1. You can handle large quantities through Amazon FBA
Amazon has large and spacious fulfillment centers where they store your merchandise. Since space is not an issue, it means that Amazon can store a large number of goods in their centers, which would otherwise be impossible for you to do on your own.
Furthermore, shipment of larger cargo is also made possible, as delivery is also done through Amazon. Hence, large quantities of goods can be handled in every way.
2. Optimize your supply chain by Amazon Fulfillment Service
As a seller, keeping the supply chain smoothly connected is a hassle. You have to hire companies for packing cargo, for delivery services, and for customs brokers (for international shipping). It can be challenging to keep track of all these things; it also takes a lot of time and energy, not to mention having to deal with each separate payment for each service.
Amazon FBA comes in handy for such troublesome tasks. That means you don’t have to contact all these different services yourself; Amazon FBA does it for you. This saves time, effort and you don’t have to deal with the separate payment issue. Ultimately this optimizes the supply chain for you.
3. Amazon FBA will assure the security of your Goods
If you’ve ever had to store your products in your own warehouse, you know how hard it is to maintain security. There are always concerns about theft and having to hire security personnel. In addition, you might have to worry about whether your products will stay free from damage or not.
Amazon FBA again comes to the rescue by making sure that security concerns are completely eliminated by keeping your products in their safe and secure fulfillment centers. There are no risks of theft and product damage.
4. Better customer experience through Amazon Artificial Intelligence systems
Amazon has an advanced AI system that is catered towards enhancing customer experience. A better customer experience means good news for the sellers as well.
One of the AI systems is designed to figure out how many potential customers a new product can attract. So if you’ve listed a new product, it can help you predict the sales. This means you can make a business strategy to adapt to the situation.
5. Amazon FBA stores can be sold to other entities
If you want, you can sell your entire store and inventory to other sellers or businesses. This of course is made convenient by Amazon FBA as all your products are in one place, and there is no hassle with the paperwork and transfer.
This also limits the risks of Amazon scams and frauds, as you can trust Amazon FBA with the whole process.
Chapter 2. Leaking Account Information of Amazon Sellers (3 Scams)
Before you sign up to be an Amazon FBA seller, you need to be aware of some Amazon scams. Most of the Amazon scams are due to fierce competition on Amazon FBA, which can lead to one seller sabotaging another.
There are certain Amazon scams that attempt to leak your account info such as:
Scam 1: The “Get-Rich” Scam in Amazon FBA
One of these is the ‘get-rich Amazon scams, which is when the scammer sends an advert or a link to some suspicious site showing himself as a representative of Amazon.
The site requires you to enter your Amazon account info. Of course, it can also proceed via Amazon scam calls. As a result, the scammer gets your information and can use it for wrong means.
If your account gets hacked by this method, the scammer can do anything possible, including stealing your financial information or causing problems for customers and other sellers to obstruct your business. This can get you banned from Amazon FBA.
Scam 2: The Credit Card Scam in Amazon FBA
You might get Amazon scam calls where the scammer pretends to be from Amazon FBA and asks for your credit card information. They might do it in the guise of verification of credit cards. If you give away this information, then your finances are in serious danger.
This could lead to the scammer making purchases from your credit card and potentially obstructing business by buying illegal items. This again can lead you to be banned by Amazon.
Scam 3: The Fake E-mail Scam in Amazon FBA
The scammer pretends to be from Amazon FBA and asks for your account information and private data.
A seller reported receiving an Amazon scam email that looked very professional and authentic. It said there was a problem with the seller’s account information. There was a link included in the email; if clicked on, it led to a page that asked for the seller’s sign-in information.
Once leaked, the scammer can obstruct business, causing a ban for you from Amazon and resulting in a big loss for your business.
Chapter 3. Scamming by Manipulating Reviews on Amazon FBA (3 Scams)
One of the most common Amazon scams is review manipulation. The main idea is that the reviews on your products or the reviews on your competitor’s products are artificially manipulated to affect your listing status and credibility. Here are some of the ways:
Scam 4: Getting Fake Positive Reviews on one’s own Products by Amazon sellers
Some sellers get a large number of fake positive reviews on their products, by using multiple accounts, by asking acquaintances, or paying others to do so. Suppose your competitor and you both sell the same type of product, and your competitor gets more positive reviews using the wrong means.
An Amazon FBA seller reported that another one of the sellers has up to a thousand fake positive reviews on their products in just one month of business. The seller reported the scammer to Amazon but action has not yet been taken.
In this case, your competitor’s listing will go up and more people will buy from him; your business will be badly affected. Customers won’t buy from you.
Scam 5: False Negative Reviews on Competitors’ Products by Amazon sellers
Similarly, as above, some sellers will try to give you more negative reviews to sabotage your reputation as a seller. Consider again that your competitor uses multiple accounts to leave bad reviews on your products.
They will order the products from you and will give bad reviews by acting as a real customer and user of your product.
Now your product will be down-listed and customers will lose trust in you as a seller. Few people will buy your products.
Scam 6: Intentionally giving a lot of Fake Positive Reviews to Competitors
Another Amazon scam is when competing sellers intentionally leave a very large number of positive reviews on your products. This means that Amazon will take notice and think that you have created fake reviews.
This means Amazon might take down your listing. And customers will notice the fake reviews, you will lose credibility and sales. Taking downlisting is the biggest disadvantage than having fewer people buying the product as mentioned in Scam 5. This scam gets your listing closed which is a huge loss.
Chapter 4. Amazon FBA Scams Carried Out Through Ads (1 Scam)
Some Amazon FBA scams are carried out through the sponsored product ads that you pay for.
Scam 7: Sponsored Ad Scams
If you’re also availing of the advertising service, then you can be the victim of the sponsored ad scams. Every time a customer searches for something related to your product, your sponsored ads will show up as well.
If customer clicks, you’ll have to pay an amount (price-per-click). The scam is that your competitors can click on your Sponsored Ads in order to cost you money.
They do this on weekends mostly when sales are higher so you don’t notice as much. This increases your spending, disturbs your budget, and decreases your conversion rates.
Chapter 5. Abusing the Listings on Amazon FBA (5 Scams)
Scammers will also utilize the product listings for scamming the sellers. They can do this in various ways:
Scam 8: Hijacking the Product Listing in Fulfillment by Amazon
There is a product page for each of the products you sell on Amazon; this is the product listing. A common Amazon scam is when some other seller ‘hijacks’ your listing by also posting an offer under it i.e. they also pretend to be a seller of that product. They basically convert your listing into their own listings.
A seller complained that their product page was hijacked by some other sellers who kept selling their low-quality and cheap products under the original seller’s brand name for a few months.
This did a lot of damage as many of their negative reviews on their product page were actually meant for the scammer’s products, so the seller’s credibility and sales were seriously affected.
This of course affects your listing and can divert your sales to the scammer. The customers will also not be happy if they buy the product from the scammer and this might affect your reviews. This is especially harmful if you have highly-rated listings.
Scam 9: Copy of your products being sold in Amazon FBA
If you’re a seller and you’re trying to establish your brand name by selling unique and new products, then having fake copies of your merchandise sold on Amazon FBA will be a huge blow to your business.
The Amazon FBA scam proceeds as follows: you are trying to sell an original product at some price level reflective of the product. But then some other seller either makes or buys a counterfeit of the product, and tries to sell it on Amazon for a cheaper price.
An Amazon FBA seller reported that a customer returned their products because it was fake. The fake product was in fact sent by another FBA seller who had counterfeited the original seller’s products.
This means that your product will potentially be less popular and will lose sales if the counterfeit is not detected by customers. Also, it can affect your listing.
Scam 10: Switching Categories on Amazon FBA
The “bestseller” label is a very competitive and sought-after tag on Amazon. It can increase sales by up to 60%. So if you’re a best seller on Amazon FBA, beware of this scam: some sellers will try to get this best seller tag by switching the category where the competition is.
This means that some competitors will collaborate with Amazon’s catalog team to try to switch your products into a different category.
This means that you will lose your bestseller tag, which will affect your sales badly. It could even decrease them by 60% as that tag is highly valuable.
Scam 11: Violating the Listing Policies of Amazon by giving false information to buyers
Sellers are responsible for correct listing information of their products, like listing their products in the correct categories. While this is an FBA scam in which buyers usually are the victim, however, you as a seller should also be aware of it.
It is possible that a scammer who has your account information can purposely violate your listing information to try to get you banned from Amazon.
Of course, this will get you bad customer reviews, account bans, and possibly issues with continuing to use FBA warehouses.
Scam 12: Malicious claims by 3rd Party scam
Sometimes a third party, possibly a competitor, will try to send emails to the sellers and try to make claims against the seller. For example, they may make claims of infringement against your products that are in the FBA warehouse. They might email this to you and to Amazon FBA.
Case study 1:
An Amazon FBA seller bought goods from a Chinese company and stored them in FBA warehouses; they had been selling the same products for some years, but later they got an email from a third party accusing them of infringement. They also sent it to Amazon. As a result, some of those products got banned.
Another FBA scam under the malicious claims by 3rd party is when the third party pretends to speak on behalf of Amazon to get private information about your inventory.
Case study 2:
A seller reports he got an email from a third party, who claimed to represent Amazon FBA and asked for very confidential information about the seller’s inventory.
Any sort of third-party claims can sabotage your business by getting your products or account banned. Therefore never give any kind of personal information to anyone either by email or call.
Chapter 6. Amazon FBA Scams during the Delivery and Refund Process (4 Scams)
Finally, the last types of scams in this blog are the scams that happen during the delivery. You need to be wary of the Amazon scams that can occur during the delivery process.
Scam 13: The Failed Delivery Scam in Amazon FBA
Some scammers will act as customers and order the products from your Amazon store and then will complain to Amazon FBA that they did not get the items even when the items did get delivered.
In this case, they might get some benefits like free items or refunds. So you have to bear extra amazon costs and loss on your sales. However, Amazon is working on creating new systems to make sure such kinds of scams are caught and the true sellers are not punished.
Scam 14: Demanding Extra Charges in Amazon FBA
A third party might pretend to be from Amazon FBA and ask for extra charges while delivering to any location.
Amazon FBA does not ask for extra charges for delivery but if you don’t know any better, you might give money to these scammers.
Furthermore, when you send products to FBA for storage, sometimes the scammer third party will charge for more products than you’re sending. This will again cost you extra expenses and loss on sales.
An FBA seller sent 3 parcels to the inventory but got charged for 4.
It might be possible that inside people of the warehouse are also involved in such scams with the 3rd party. However, Amazon team works hard to find solutions to such scams so that they can prevent such scammers from hurting the sellers.
Scam 15: Drop Shipping Amazon FBA Scam
Dropshipping is prohibited on Amazon. The FBA scam is as follows: a scammer will pretend to be a customer, buy your product and then sell it on some other e-commerce site like eBay for a much higher price.
A seller wrote on the Amazon seller forums that he has been getting scammed by a customer who is actually a drop shipper, and is using the seller’s brand registry.
The customer markets the Amazon seller’s products on his own website and when the order is placed, he will place the order to the Amazon seller and then after receiving, ship it to his customers.
In this case, since the scammer has customer protection, it will be very hard to get your product or money back, so you might lose potential honest sales to scams.
Scam 16: Replace & Refund Amazon Fulfillment Scam
Another common Amazon scam is the replace and refund scam. The customer will buy the product from you, and then request a refund by replacing the product with an old and damaged piece, so he gets a full refund but you get a faulty product back. This is very easy to do on Amazon FBA as the return and refund option is made much easier and quicker by FBA.
A seller reported that the customer complained about a defective product that was actually not defective. The seller approved the customer’s refund request. The customer then sent the defective pair to Amazon FBA and asked for a refund as well, which he got.
Of course, this will cause losses to your profits and may affect your sales if the customer also writes bad reviews.
Chapter 7: Ways to Keep Yourself Safe from Amazon FBA Scams
While there are potentially dangerous Amazon FBA scams you can be a victim of, there are several measures you can take to protect yourself from them.
1. Do Not Provide Account Information to unknown emails
The first step is to protect your account information. Whether it’s a suspicious ad or an email that’s asking for your account information, please make sure that it’s actually from Amazon. Do not reply to any unknown or spam emails. You can usually tell these apart by looking at the content of the email.
To do this make sure that any email you receive is verified as an email from Amazon; the email address will always end with @amazon.com. You can also contact Amazon directly to confirm if they did send an email to you and if they asked for your account information, to be extra safe.
2. Activate Two-Step Verification in Amazon FBA
To protect against scams, Amazon FBA has a built-in feature that provides an extra layer of security. This is the two-step verification feature for the login process.
That means that when you log in, Amazon will send you a verification code via text, call, or authenticator application, depending on what you choose. You will only be able to login if you enter the correct code.
This means that if your account gets hacked by scammers, they won’t be able to log in. Plus you’ll immediately find out that someone else is trying to use your account; you can report this to Amazon to recover your account. So make sure that you enable this safety feature in your account.
3. Go through the Reviews
Competition between sellers on Amazon FBA can be tough, which often manifests in review manipulation. Competitors sometimes manipulate the reviews on your account to sabotage your business.
Make sure to check the reviews on your products regularly. If you notice that there are a large number of negative reviews or too many positive reviews, then it can be a problem.
Make sure to monitor them, and report them to Amazon for investigation if you feel that reviews are fake and not from true customers.
Furthermore, you can also investigate the reviewers on your own and try to figure out if they’re purposely sending fake reviews.
4. How to Deal with Third-Party Scammers
Whether it’s the scammer pretending to represent Amazon FBA or its delivery services, and whether they ask for personal information, information about products, or for money, it is important to always verify who the party is.
So before giving out any information to any third party, always make sure that you contact Amazon FBA to verify if the third party is legit or not. If not, then don’t respond to the third-party claims and report them as well.
5. Always Know How to Deal with Customer Scams
Customer scams like drop shipping, return and refund, and failed delivery can be troublesome to deal with since Amazon has a buyer protection policy. So it is up to you to be extra careful when dealing with fake customers. If there is a failed delivery scam, contact FBA to ensure that the delivery was made in order to avoid paying for it later.
For any drop shipper customers, there is the option to report them to Amazon for violation of guidelines, so take up the complaint with Amazon and be sure to report any suspicious buyers.
6. Track your FBA Competitors
In order to avoid scams, it is very important to keep track of your competitors. It doesn’t mean that all your competitors are scammers but you need to be cautious.
For this purpose, it is wise to keep in mind who your immediate competitors are. So if any of the scams do occur, you can start by investigating your competitors. Be sure not to malign anyone though. Just keep the information in mind and stay up-to-date.
Chapter 8. Frequently Asked Questions About Amazon FBA Scams
1. What do the Scammers do with your Information?
Scammers can do a number of things with your information:
Hack your account
Sabotage your sales
Commit financial frauds
Steal your money
Fake your products
Affect your listings
Get your account banned
2. How do I Identify a Fake Seller?
A fake seller may have a lot of positive reviews on their product listings. There might also be false information on the products, with incorrect grammar and spelling mistakes. There could be links to other sites. And the product prices may be unbelievably low.
3. What are the signs that the Seller will deliver a Subpar Product?
The price of the product is too low or too good to be true. The product images are badly taken so you can’t see the quality. The delivery time is too long. The reviews on the product listings are mostly negative.
4. Does Amazon FBA have Safety Systems in Place?
Amazon FBA does take strict measures to ensure the safety of your products in the inventory. That means damage and theft control is in place while products are in inventory. While packing extra care is taken to ensure products are not damaged. Shipping is also handled very carefully as well.
And as for safety measures against scams, there are few general guidelines that sellers are advised to follow.
And there are also certain features where you can report the customers or sellers who are involved in scams, if you like this article we also have scams about Alibaba, you can check Alibaba Scams now.
If you’re a new or potential Amazon FBA seller, you might be wary of using Amazon’s FBA service now due to all these Amazon scams that are out there. There is loss of sales and money, loss of credibility, and account ban at stake.
However, there is no need to worry. About these Amazon FBA scams, with a bit of caution and research, you can avoid these scams. Just be sure to follow our guidelines for safety measures. Always keep your account information private and be careful about malicious competitors and reviews.
With these right tools and right choices, you can avoid scams and remain worry-free on your Amazon FBA business.