Season 1, Episode 76 


You Need Better Sourcing

Arbitrage and Dropshipping are becoming outdated on Amazon but sellers are still using these methods, inevitably getting their accounts suspended. In this episode, Chris & Leah discuss why these sellers need better sourcing models before it’s too late.

Show Notes


[00:00:07] Chris: Hey everybody, this is Chris McCabe, Seller Performance Solutions podcast with Leah McHugh. Leah, how you doing?

[00:00:14] Leah: Good, thanks. How are you, Chris?

[00:00:15] Chris: Good. Today I wanna do a really quick one about we’re being inundated with all the dropshippers who have been suspended. We’re getting lots of complaints about account suspensions from people who are still doing online arbitrage, retail arbitrage.

As well who are getting all their receipts rejected. Why are their receipts rejected from Walmart, Home Depot, Costco, whatever. That’s been a trend for years. I don’t know if there’s a bunch of courses out there still teaching dropshipping or arbitrage, but clearly Amazon’s pairing back and thinning the herd with reselling.

They’ve been doing this for a long time with the drop shippers I understand they just sort of nuked all those accounts. Thousands and tens of thousands of them. We can do a second version of this podcast that’s a little bit longer in terms of how Amazon can suddenly flip a switch and decide to suspend dozens of thousands of accounts within a summer. But just for today, I want everyone to understand if you are suspended for drop shipping, there are certain things you must do, they are are non-negotiable. You can’t try to argue you way, debate your way with Amazon out of it, and if you don’t do those steps right, you’re not coming back.

 We’ve seen a lot of sellers suspended for related because they try to open a new account. They’re new sellers, they’re newbies, they’re new sellers. They say, Well, we bought this course. Taught us drop shipping. It didn’t tell us any of this stuff. I usually now say, Well, what course?

Who runs it? Where did you find it? And they throw all this stuff at me that I’ve never heard of. Well, if I’ve never heard of it, it means the people running the course are taking your money without any real expertise, not, not much else to say there. In terms of appealing this, tell Amazon a lot more than just that you’ve abandoned dropshipping. I think at this point, word is out that you have to get rid of dropshipping. 

[00:01:56] Leah: I don’t know. I still have had this conversation with people that don’t know that they have to change their sourcing model.

[00:02:01] Chris: Well, they’re violating the policy. It’s a policy violation. They’re not the seller of record on the documentation inside the packaging.

But let’s face it, even if you are the seller of record, even if you’re not violating the letter of the law of the drop shipping policy, Amazon’s trying to exterminate dropshipping, right? I mean, it’s clear to everybody. So if you can turn the page, if you can show that you’ve invested real money in a viable sourcing model, a different business model, you’re buying from authorized distributors, you have those receipts, you have those invoices in hand, and the suppliers have verifiable websites.

Hopefully the website shows that that supplier is an authorized distributor of the brand. Then you can write a plan of action, then you can appeal. Then you can take the first or second step towards healing this and getting reinstated, because Amazon sees that you’ve abandoned what they didn’t want you to do, and you’ve embraced what they do want you to do, right?

[00:02:51] Leah: Yeah, and I think that’s probably the hardest part, is finding those new and better suppliers, because I think the whole appeal for a lot of people of these models is that it’s very little barrier to injury and doesn’t require a lot of initial investment. So going from that to sourcing wholesale from authorized distributors can be a little bit of a jump for some people. But you know, you definitely need to do that rather than rushing to appeal without showing Amazon that you are now going to have better sourcing going forward, which is the mistake we see a lot of people make. 

[00:03:29] Chris: Or they want to say, Well, we were new. We didn’t know. Guess what? Amazon doesn’t care how new you are.

They don’t care if you were ignorant of the rules or the policies just because you were new. If anything, putting that in your plan of action makes Amazon uncomfortable with reinstating you as a seller because they think you’re too much of a novice to understand how Amazon works. If you start blaming the course you bought, or the guru you listened to on YouTube, whatever it was, again, they think you are gullible.

They think you don’t understand who you should trust and who you shouldn’t. That definitely shouldn’t go into your plan of action. Leah and I have both read POAs from people who are making all kinds of excuses for botching this, none of that works. That’s why all of these appeals are getting denied.

[00:04:09] Leah: You can’t blame your employees either. 

[00:04:11] Chris: Right. We hired VAs overseas who were managing our whole business for us. We didn’t know what they were doing. They didn’t know what they were doing. Waving a flag saying, You handed off the responsibility for all of your business to a VA overseas, or not a novice VA. A VA who bragged to you about how many accounts they manage or not. It’s all very unimpressive and, and it looks unintelligent to Amazon and it’s not a business model that they want to entertain on their site. So be extremely careful not only with making these initial mistakes, because you definitely don’t get a free pass on your first mistake, be very careful what you put in the appeal itself.

Because we’re also seeing so many people getting denied over and over before they even contact us. Hopefully they’ll hear this podcast first before they make those initial mistakes. You’ve already bungled the sourcing model and the selling process on Amazon. You’ve gotten yourself suspended.

Don’t add to that layers of mistakes and errors by by sending in terrible faulty appeals. That would be my brief words of advice. We’ll do a second episode covering this, but this was a short one for today, just to stop so many people from believing so many courses and so many ridiculous ideas. Leah and I don’t have time to go through all these videos and look at all these articles telling people to do these, get rich quick, set it and forget it, wind it up and let it go business schemes, none of them have anything to do with responsible selling on Amazon. And I won’t speak for you Leah, but I’m kind of tired of veering those stories. 

[00:05:40] Leah: Yeah. I would actually like to do a rant next time we do a ran episode about how there is actually a correct way to drop that nobody seems to be doing on Amazon. And yes, that sounds like click bait, but it’s also true there is, there is a different form of drop shipping that is the legitimate way to drop ship, of course, that no one in our space seems to be aware of. 


[00:06:00] Chris: That’s why there’s a drop shipping policy on Amazon, it can be properly followed. This will be part one. My rant. Part two will be Leah’s rant within the next few weeks. So thanks again for listening and please if you have any questions around the right way to appeal, the wrong way to do it. Let us know. We’re happy to help. See you next time.

Hosts & Guests

Chris McCabe

Leah McHugh


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