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Why Amazon Dropshipping Gets Suspended, How to Avoid it in 2022

June 7, 2022

Are you a dropshipper, wondering how to avoid Amazon dropshipping suspension? You need to follow the applicable Amazon policies exactly. Also, you must provide any documentation they ask for, like a letter of authorization. Ultimately, you’ll have to follow specific tactics, like seasoning your account over time, that will heighten your chances of staying off Amazon’s radar.

Let’s get into how you can protect yourself from Amazon account suspension while drop shipping.

Did You Receive an Amazon Dropshipping Suspension?

You’re not alone. In 2022, Amazon is suspending accounts of new dropshippers every day. 

This is their dropshipping policy.

All the money is made in dropshipping from retail store like Wal-Mart or Home Depot because they always have great deals.

However Amazon doesn't like products dropshipped from retailers because it can cause a lot of confusion for customers that thought they purchased from Amazon but when they get the product, the packaging, the invoice, the packaging slip all show that the product was shipped from Wal-Mart.

It was much easier to dropship on Amazon prior to 2020. That year, Amazon asked new dropshippers for an invoice from their supplier. This invoice needed to show that the seller had permission from their dropshipping supplier to sell the product they had listed on Amazon.

This is called letter of authorization.

How to avoid amazon dropshipping suspension
example authorization letter

Before this, a simple receipt would suffice. It was possible to dropship from retailers like Walmart, Home Depot, and others without having to worry. Now, that receipt wouldn’t cut it. Amazon stopped the seller accounts that couldn’t deliver the requested evidence. 

The only way to reopen the seller account involved uploading a letter of authorization from the intellectual property owner of the product. The owner might be the wholesaler, manufacturer, or middle man allowed to sell on behalf of the owner.

Documentation Galore: Do You Need a Tax ID Number or Resale Certificate to Dropship on Amazon?

This isn’t the only documentation that you’ll need to dropship on Amazon. Wholesalers and retailers alike might require a resale certificate before allowing you to sell their product. Sometimes, you need a business license, like an LLC, to get this certificate. 

You can learn more about this in our article: How to Dropship on Amazon Without Money: The TRUTH for 2022 (+ 5 Cost-Effective Strategies)

How to Avoid Amazon Suspensions to Your Dropshipping Business

1. Dropship from Approved Suppliers

Amazon doesn't like sellers dropshipping from retailers. Their issue? Your product cannot arrive at the customer’s door in any external packaging that identifies any other party besides you and/or Amazon. One option around this is to use an Amazon approved wholesaler. You can find them:

But remember, dropshipping has one of the lowest profit margins of other Amazon FBA business models. Margins are the best when you dropship from a retailer, and much smaller margins when using a wholesaler.

2. Season Your Amazon Seller Account Slowly

Amazon doesn’t trust new sellers. For the first 3 to 6 months, their seller performance team will watch your account for activity they don't like. A seasoned account is much less likely to receive requests from Amazon for letter of authorization.

Many dropshippers will first do the safe FBA model fo 3-6 months to create trust with Amazon. This is where you send product to Amazon fulfillment center and Amazon fulfills the order for you. Definitely not dropshipping so you need to invest in some inventories.

This is an example of how you can season your seller account in 3-6 months.

Do this by making a new Amazon account. List one item in the first month. In the second month, list a second product. Two weeks later, list your third. Upload a new product every two weeks for the first 3 to 6 months. Of course, this will limit your profits at the start. But, it may keep Amazon from asking for documentation. And, you will get used to handling customer service and order fulfillment at a sustainable pace.

A seasoned account allows dropshippers to continue to dropship from retailers like Wal-Mart or Home Depot without getting suspended.

Just know about the Amazon FBA start up costs because unlike dropshipping, there're more fees involved.

Dropshipping from retail stores becomes much safer once you have a seasoned account. No one knows how long this trick will work though.

But people still transition to dropshipping model because it provides a lot of easy money opportunities.

Find deals and list it for higher on Amazon. You don't even need to buy inventory. You can imagine the great flexibility of that.

3. Buy an Aged Account

If you don’t want the hassle of seasoning your account, you can also buy an aged account. Amazon will already trust an aged account. Find Amazon sellers through online marketplaces, like EmpireFlippers, business brokers, Facebook groups, or entrepreneur events. Here’s what an excellent account looks like:

  • At least 6-12 months of selling history
  • 1.5 years of selling history is optimal
  • Sold $100K or more
  • Expect to spend around $4K-$5K

Unfortunately, this is another tactic in Amazon's grey area. Typically, you can’t just transfer accounts to another person. You will need to purchase the seller’s business first, at which point Amazon wants you to start a new seller account. But, if the ownership of the business doesn’t change, you could be added as a user. Here’s how the Amazon policy breaks it down:

amazon policy

If you can purchase an aged account, you can start dropshipping on Amazon immediately. Amazon (most likely) won’t ask you for any letters of authorization.

SUMMARY: What More You Can Do To Avoid Having Your Amazon Account Suspended

To avoid having your Amazon account suspended, you must either:

  • Have the requested letter of authorization, or

  • Avoid pushing Amazon to ask for the letter. By using aged seller accounts that are much less likely to get the request for a letter of authorization.

What Can You Do If Your Amazon Seller Central Account Gets Suspended?

You can follow all the strategies to avoid suspension on Amazon and still get blocked from your funds. If it happens to you, follow these steps:

How to find the spot within Amazon that you can appeal your account:

Go to Amazon Seller Central, Seller Central>Performance> Performance Notifications> location suspension notice> Appeal. Create an appeal outline prior to contacting Amazon.

What is an Amazon Appeal Service and How Can It Help You Get Reinstated Quickly?

This service is seller support that handles your Amazon appeal. This is a person and/or company, like Appeal Wizards. They will work to:

  • Figure out the reason for suspension,
  • Write your appeal letter, and 
  • Create a plan of action. 

Some services will also give you advice on how to avoid suspension occurring again in the future. If they cannot help you, you can also hire a lawyer that specializes in Amazon account suspensions. 

Last, if you don’t want to spend the extra money on an Amazon appeal service, you can attempt to reopen your Amazon store yourself.

 When you get the account suspension notification:

  • Respond within 24 hours. This will show Amazon that you are active and serious.
  • Acknowledge what you did, even if it wasn’t intentional. Don’t pretend to be clueless- this makes you seem less professional.
  • Explain what happened. For example, you might tell them that your wholesale supplier ran out of product, so you had to use a retailer.
  • Share a recovery plan that explains how you will correct the issue.
  • Describe how you will prevent the issue from occurring in the future.
  • Keep the letter brief, but include a few reasons detailing how your store is an excellent part of the Amazon marketplace.

Even with your own attempt, an Amazon appeal service, and/or a lawyer, there is no guarantee that you will win your Amazon account back. Even information in the best Amazon dropshipping courses won't be able to give advice on your exact situation. So, you will need to decide: is Amazon dropshipping worth it? check out Amazon Dropshipping Review: Worth Trying? or Bad Business?

Conclusion: Do These Tactics Guarantee How to Avoid Amazon Dropshipping Suspension?

Not entirely. These tactics simply minimize the chance of Amazon suspension. No matter what you do on Amazon’s platform, they ultimately have control. And, there is no A to Z answer that guarantees a successful appeal.

Failing to provide a letter of authorization isn’t the only way you can suffer Amazon seller suspension. It can also occur if:

  • Your late shipment rate is too high
  • Your Amazon product does not match its product listing exactly
  • You have too many customer returns
  • You accidentally sell a restricted product
  • Your supplier runs out of inventory
  • Any of your Amazon seller performance metrics aren’t up to their stringent standards

In the end, this won’t last long term. You will always watch over your shoulder for an imminent suspension. One wrong move, and Amazon will suspend your account and withhold your funds for 3 months or more. But, if you're willing to operate in this way, it can be a lucrative business model.

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