Effective immediately, we will begin to separate from clients who appear to be attempting to subvert Amazon’s TOS, including but not limited to:
- Buying books listed as new from vendors that do not meet the standards for first sale doctrine (e.g. eBay sellers)
- Buying books that we can see based on the invoice that were listed as used, but recording the expected condition on your spreadsheet as New.
- Upgrading our inspection conditions. (honestly, this is beyond the pale)
It pains me that I have to send a mass email about this. But I have a stack of emails in my inbox with notes from the staff saying “Talk to So-and-So about this” and I’m tired of typing. So, everyone gets an email, and if I’m not talking about you, feel free to ignore it.
What Is Happening
We have several intertwined threads of bad strategy here, and they all come down to wanting to sell books as New on Amazon.
One of our oldest blog posts deals with why that’s a bad idea, but bad ideas have a tendency to respawn. Because it looks like such a good deal on the surface.
Here are some of the scenarios we’ve seen:
- Buying UVG books, listing them as N on the spreadsheet, hoping they’d be passed/graded as New
- Buying ANY book, then changing conditions after they’d been graded, to ship them in as New (in one memorable case, we had some car books covered in literal birdcrap, which had clearly been stored in someone’s garage, upgraded by the seller in question from UA or Unshippable.)
- Ignoring the graded condition on the spreadsheet altogether, sending in a shipment of imaginary grades (mostly New) as if we don’t have the books here and know exactly how rough they look.
- Buying what we call “Ebay New” (i.e., only an eBay seller would have the cajones to call that New) then insisting that WE must be wrong– the seller SAID IT WAS NEW.
- Insisting on documentation of Not-Newness (New is the part that YOU have to prove, grasshopper)
- Drowning us in returns when any of the above doesn’t work
Initially, we thought this was mostly wishful thinking on the part of the sellers. My staff would leave notes on the spreadsheet, or Christina would pass on a long explanation from the staff. But they kept coming. And coming.
Eventually I concluded that some numpty “Amazon guru” must be giving this advice. I haven’t found out who– but if I find out I’m going to sneak into his house and leave shrimp in his curtain rods.
Because it’s true that the margins are MUCH better on New books. And that’s because New books don’t get discounted enough to flip if they’re selling well. Therefore authentic New-to-New flips are correspondingly rare.
Why this is bad for your seller account
Hardly anyone reads the TOS. It’s dense on purpose. But you can use this as a rule of thumb: would Amazon approve? Then it’s probably against the TOS. Amazon is nothing if not transparent about their aims — the BEST customer service, selection, and experience, so that the customers won’t go anywhere else, ever.
Amazon is already not thrilled by flippers. They tolerate them up to a point, but they’re especially strict about Used-Sold-As-New and Authenticity claims.
Ask a retail flipper how stressful it is coming up with the receipts when Amazon sends you a Scary Email ™ demanding proof that you’re selling what you claim to be selling.
We used to see these challenges a LOT more when Amazon didn’t have everyone gated out of Cengage/McGraw/etc, and clients lost every single one. Sometimes they lost that listing, and sometimes they lost the whole account. But. They. Lost.
And that’s selling Used Books. Books that you are fully allowed to sell (except for when certain legal firms are trying to earn their retainers.)
You do that with New books?
Ebay receipts don’t count. Amazon receipts don’t count (unless you bought directly from Amazon itself, which is a different TOS violation). “They have a website saying books are New” doesn’t count (BookDepot is an example of that. They deal in seconds and publisher remainders, which are specifically disallowed by Amazon to sell as New.) You need to buy from the publisher, a REAL distributor, or from a retailer of New Books (like a Powells or a Barnes).
Because I know some of you have experience in non-book arbitrage, and are therefore passingly familiar with First Sale Doctrine, HERE is a good explanation of why Amazon doesn’t accept some eBay rando’s word that a book is really truly, shucks-would-i-lie-to-you New. It comes down to the fact that even if you could (you can’t) prove that no one read the book in question, you can’t guarantee it’s in “New condition” since everyone in the chain couldn’t have treated the book with the same care the original publisher did.
“Courts have held the First Sale Doctrine does not apply where a reseller fails to abide by a company’s quality controls. The rationale being that while a reseller may have initially purchased a genuine product, if the reseller does not handle, store and ship the products under the same conditions as the brand, then the product received by the ultimate end-user is no longer genuine.”
Is this an unfair standard? Maybe. Does Amazon care? No. Amazon doesn’t like gray areas. If making it against the rules is what it takes to prevent gray areas, that’s what they’ll do.
Why this is bad for CVAP
Individual sellers tend to come with the assumption that we can just tweak our systems to conform to their priorities. And maybe, if we were one of those HUGE prep centers with four clients all doing truckloads of wholesale stock, we’d be able to do that. But there are hundreds of clients.
The only way for us to be profitable is to be extremely routine and process driven. Here’s what breaks that process– in Lean terms, these are “Waste”– efforts and attention for which we are not paid.
- Returns in excess of 1% – We charge a nominal fee for returns, but it in no way covers our costs. It’s a way to account for the number of returns a seller uses, and clients are tracked according to their revenue. We expect new sellers to cause a higher number of returns because they are learning. But after several months they get graded as well. We typically reach out and coach people who are exceeding their limits (for example, people who hate to sell UA) and work with them to find a mutual solution. But there’s no mutually agreeable compromise when people are making dozens of returns a week.
- Educational/Interventional emails/notes in spreadsheet – This is technically waste but we view it as an investment. Clients are typically thankful for the notes, and we have a client who stops causing other types of waste. Everyone is happy. But when we have to write too many notes and emails, it feels like “No one ever listens to us. We should just ship them anyway and let their account get cancelled.” This is tremendously bad for morale, because the team prides themselves on their care for client accounts.
- Unshippable Documentation – Sellers trying to boost their margin selling New are not just upset at our “undergrading”; the suppliers they bought from ALSO want to know how it is we don’t think their precious books are New. The amount of back-and-forthing this causes is tremendously wasteful, especially because if YOU can’t prove to US it’s new, you definitely can’t prove it to Amazon. But somehow all the work this causes fall to us anyway.
- Outbound Troubleshooting – Imagine this: You’re holding a roll of FNSKU labels all marked as new, and you’re standing in front of a stack of Used books– some of which aren’t even shippable! You built the shipment and all the listings yourself– what could have happened here? Well, what happened is that someone snuck in behind the Grader and CHANGED all the descriptions, and now they’re all wrong. Or, the client wrote his own listings and sent them to the warehouse like that. Do you know what Amazon calls listings that in no way match the inventory? Fraud. We protect our clients up to a point, but there’s only so much time we’re willing to waste on protecting people from their own dumb decisions.
- The Overall Drag of Not Getting to Perform at a High Level – Have you ever been a part of a team that is really cooking? Like a winning basketball team or the back-of-house staff during a restaurant rush? Now imagine getting petty little roadblocks put in your way. Missed deliveries. Dishes not where they’re supposed to be when you need them. Someone mixing up the tickets wrong. It’s INCREDIBLY frustrating, and even more so since you know what it’s like to be at the top of your game. All you want to do is go to work and be awesome at your job AND YOU CAN’T because other people aren’t holding up their end of the “doing things properly” stick.
Why we’re acting now:
Previous to this dramatic uptick, there would be a single client here or there who would think this was a brilliant loophole (we see a lot of these brilliant loopholes from people who don’t fully realize that Amazon has seen ALLLL the loopholes and has taken pains to close them programmatically.)
When we realized what was happening, we would coach the client, explaining why this was a bad idea. In nearly all cases, the client would correct their strategy. In a few cases, people quit Amazon rather than tolerate the lesser ROI of Used books. In either circumstance, it stopped causing us issues.
What has happened now is that when we coached people, some people used us to get better at subverting TOS. They absolutely would return everything that we said weren’t in New condition. Things that had invoices that clearly said “Used.”
Not only did they pass the costs of trying to subvert the TOS back on us, it was tremendously bad for morale– my staff all fully understand when clients are trying to be sneaky.
As a result of all this added waste, we were dramatically less profitable this past textbook season than we were in the past. All that increased labor and drag goes somewhere — revenue plunged for the same amount of labor.
In the same way that sellers will periodically go through and purge unprofitable inventory, we have identified the types of sellers– and more importantly, the types of selling strategies– that cause us to be unprofitable. Unlike books that have tanked, however, the clients can change their strategies, and we can continue making money together.
What we don’t want to do is raise our prices.
We understand that sellers are extremely cost-conscious, especially as fulfillment costs increase. It would have a negative effect across all our sellers instead of just the couple dozen people who are following this bad guru advice. No, what we have to do is work more efficiently, and that means cutting waste.
I’m not sure how I’m going to make this a policy that people understand coming in — it’s easy to explain “No un- inventoried pallets” in a line or two, but I can’t say “No New-to-New flips” because we have several clients doing them properly and with great success (or at least I assume to great success, since they have been clients for some time.)
But in the short term, I am putting everyone on notice with this extremely long newsletter so that it’s all typed up in one place for easy reference.
All the best,
Shanna & Team CVAP
- For anyone who is new and still waiting for subuser authorization, Amazon is being EXTREMELY tetchy about this — where before our user accounts could hold access ~150 accounts, now it only allows 20, and each new user account must have a new phone number not in use on any other Amazon account. As you can imagine, working through these new hurdles is slowing down our acceptance of new invites, and we are working on refining our (increasingly complex) SOP.