Israeli Amazon Vendors Complain of Jump in Number of Blocked Sales

Experts point to faulty enforcement of new rules and a spring housecleaning by the company

משרדי אמזון
Mark Lennihan/אי־פי

Hundreds of Israelis who sell their products on the Amazon website have found themselves blocked in recent weeks, in large part because the giant online retailer erred in implementing a new U.S. regulation on pesticide sales, experts have told TheMarker.

They said the number of Israeli resellers blocked – which is part of a problem that is affecting thousands worldwide – has been exacerbated by a housecleaning Amazon traditionally undertakes in the spring.

The result has been a double-blow to resellers, many of whom have found themselves blocked out of the site for as few as two days or as long as a month, leaving them with unsold inventory and losses.

For Israeli and other third party vendors ,Amazon is like a virtual government. It’s a gateway to a worldwide market of hundreds of millions of customers, it provides the infrastructure they need to make sales, delivers orders, collects taxes in the form of fees, arranges payments and enforces its own rules and regulations.

Although Amazon sells its own products, most of what is for sale on its site are third party vendors selling new and used products through its Amazon Marketplace. The reseller community numbers about six million globally, and they compete for clocks and sales. Their combined sales in 2018 were nearly double the sales by Amazon itself.

“Blocking by Amazon is nothing unusual – it blocks resellers for all kinds of reasons, whether it’s because a customer complains that he got a used product, or because of a large number of returned orders or the vendor doesn’t meet Amazon policy terms,” said Or Shamosh, CEO of Seller Appeal.

Shamosh’s firm helps Amazon vendors, as well as businesses working with Google, Apple, Facebook, PayPal and Alibaba who have been hurt by changes in the companies’ terms of service.

“Every once in a while they will suddenly step up enforcement. It happens every year, but what’s happening now is we’ve seen a rise in the number of blocks due to the convergence of two events – an accident and tougher enforcement.”

The accidental part arose from a ruling by the U.S. Environmental Protection Agency that banned the sale of pesticides by non-U.S. citizens. In response, said Shamosh, “Amazon blocked products based on keywords, such as an anti-bacterial towel can be mistakenly marked by the word ‘bacteria.’ It created massive problems.”

Dvior Cohen, a partner in “Amazon in a Click,” an Israeli-based trading community that counts more than 14,000 resellers, said the problem was made worse because it came as the online retailer began its annual check on resellers in April and May.

The aim is to eliminate vendors who use fake product reviews or unusual increases in sales, all of which the company deems to be market manipulation. Amazon does the housecleaning ahead of the fourth quarter when it posts peak annual sales ahead of Christmas, Cohen explained.

Amazon doesn’t release figures on resellers but based on figures from eBay, another e-commerce site, Israelis are major online sellers. eBay said at the start of 2018 that some 60,000 Israelis had sold products on its site as well as on Amazon and other sites.

About half had turnover of up to 100,000 shekels ($27,700) per month, some of them brick-and-mortar stores that also sell online, along with other pure online retailers. Another 20,000 are people probably selling part-time and registered sales of 200-550 shekels a month.

Cohen said small vendors often got into Amazon’s crosshairs because of their uneven sales.

“I’m getting a lot of noise from my [reseller] customers who are being blocked for all kinds of reasons, for example, Amazon sees that someone is selling 20 items a day for six months and suddenly it sees sales jump to 100 a day. That lights up a red light for them,” he said. “But it doesn’t have to be anything illegal. It could be you started a marketing campaign without thinking it through and boosted sales so much that you get blocked.”