by Renaud Anjoran
Many small businesses plan to buy products in China and sell them on Amazon as a Third Party Seller. It can form the basis of a strong, profitable business. But there is very little tolerance for quality issues.
We did a simple simulation of the impact of a serious quality problem (50% of defective products) on the importer’s profitability.
This simulation is based on the assumption that you get the goods in your warehouse and that you check 100% of them.
However, most Amazon Third Party Sellers I have met told me they deliver the products directly to Amazon’s fulfilment centers. In this case, they can expect to receive this type of message from Amazon:
Hello from Amazon.
We are writing to let you know we have removed your selling privileges and placed a temporary hold on any funds in your seller account.
We took this action because your order defect rate (ODR) does not meet Amazon’s performance target of less than 1%. The ODR metric is based on A-to-z Guarantee claims, negative feedback, and chargebacks.
How to avoid such a situation?
Depending on the size of your orders, you need to work with a certain type of factory:
How to find out what type of factory you are in contact with? By auditing them. I strongly recommend to read How Factory Audits, Inspections, and Lab Tests Fit Together.