There are a lot of things that can go wrong on an Amazon customer’s journey.
Products may not meet expectations. Products can be defective or broken.
When that happens, customers leave bad reviews and your listing takes a hit.
So, what can you do to reduce those bad customer experiences?
We asked Sajag Agarwal, the founder and CEO of supply chain optimization platform Movley, to help us explain how cutting corners can tank your Amazon business.
The good news? Proper supply chain management and inspections can protect your listings.
Protect your products like they’re an investment
It’s really important to think of the entire customer journey on Amazon.
Sellers are quick to spend money on listing optimization and ads, but the most important factor is the quality of your products.
Cutting corners on product quality is never the right choice.
“Once you put in money into your listing and you’ve spent money ranking it, building your keywords, optimizing it, running ads to your listing, getting the buy box, if you have other distributors on listing as well, once you’ve invested all that money, quality control is something that a lot of sellers skimp on,” Sajag said.
Spending money on quality control protects your business.
How you compete in a large marketplace like Amazon is through reviews and customer testimonials.
When you fail to deliver on product quality, that’s when you’ll start having returns and negative reviews and those can impact the ranking of your listing.
The full impact of returns
Let’s look at the full scope of how returns affect your listings.
Defective products are the cause of 20% of ecommerce returns. That amounts to $41 billion in lost profits every year due to returns and $82 billion lost to faulty products.
The impact of a faulty product return isn’t restricted to just those sales though.
“When it comes down to an overall kind of rundown, as far as kind of how that works, especially when you have like defective products and file for return, that return can eat up sales and your profits for multiple sales,” Sajag said.
When he was an Amazon seller, one return unit would eat up the profits of three to four sales.
If you’re looking to reduce your return rate and protect your profits, implementing effective quality control practices will help do so.
Amazon is the online reputation for your product
It’s important to think of ensuring your product quality as protecting your reputation.
“You have a customer who’s unsatisfied with the product, they’re 10 times more likely to leave a review,” Sajag said. “And based on the general research, it takes on average 40 good reviews to undo the damage with one bad review.”
Negative reviews don’t only affect your Amazon sales. If you’re also selling on your website or at other retailers like Target or Walmart, they will impact you there, too.
“A lot of shoppers go online and they go on Amazon to look at reviews, even if they buy that product at Best Buy, they buy that product at Walmart,” Sajag said. “So Amazon is almost like an online reputation for your company, for your specific products.”
You need to do all you can to protect yourself from those bad reviews. Once they’re on your listing, there’s no way to take them down or contact the customers to rectify it.
Don’t inflate your product descriptions
Another way you can set yourself up for bad reviews is through dishonest product descriptions.
“A lot of sellers when they first start out their business, especially in launching, they like to inflate their product features and things like that and that can lead to a lot of problems,” Sajag said.
While 20% of returns are because of defective products, the other 80% are because of dissatisfaction with the product. A lot of those are because of inaccurate information in the listing.
This can also happen if you’re using the wrong keywords, even unintentionally.
When Sajag was a seller, one of his products came in different lengths. His ad keywords were for the various lengths, but often customers looking for one length would end up with the wrong one because they didn’t check the listing against the ad.
That led to a lot of returns.
Make sure everything on your listing and in your keywords is accurate.
“If you inflate your features too much and it’s a little bit too much over-promising on your product, when customers receive those products that encourages them to return and they’re not as satisfied,” Sajag said.
Marketplace sellers have it hardest
The supply chain is set up for brick and mortar businesses. Those sellers don’t deal with the same rates of return or bad reviews as marketplace sellers.
Plus Amazon sellers have to deal with the metrics that Amazon tracks and all the ways those affect their listings.
Sajag said that when you’re looking to optimize your supply chain and product quality, you can’t rely on the advice written for brick and mortar sellers.
“So all the supply chain advice you can get online, that’s really good. But you want to always do things on the side of caution and doing things a lot tighter than what you would expect from the advice you get online,” Sajag said.
That applies to anything on the supply chain side, from negotiations to pricing strategy.
Marketplace sellers need to go above and beyond the traditional advice on quality control to stay competitive.
Prioritize supply chain management
The pandemic showed us just how important supply chain management is.
The sellers who survived the pandemic were the ones who had all of their inventory under control.
Sajag said keeping your items in stock and continually managing inventory will protect you if things get disrupted.
“It’s incredibly important that supply chain is prioritized there, because if you have shipping times and getting it to the warehouse, it’s more time,” Sajag said. “If there’s any delays in the process, there’s so many points of contact in the process. If there’s delays, you can lose the buy box, you can lose your listing.”
Running out of stock can hurt you in more ways than just losing those sales.
Bad product reviews from a defective product can take anywhere from a month to six months after the sale to show up. If you’re not making new sales, you won’t have any positive reviews to balance them out.
“When your product goes out of stock, you’re not only losing search relevancy losses, not only losing your optimization on the listing, your ads performance, and you have to reset that,” Sajag said.
“You are also affecting your product reviews. Because if they’re out of stock for three, four months and you had a bad order, or you had some problems with your product, now all of a sudden for three, four months, we’re only getting negative reviews from past sales if you’re not getting positive reviews for new sales.”
Give customers a way to contact you
We’ve talked about how it’s almost impossible to do anything about negative reviews once they’re on your listing, but there are ways to keep them from landing there in the first place.
Amazon used to have a feature where you could respond to negative reviews and work to resolve the issues, but they’re removed it.
Now your best tactic is to give your customers a way to reach you off of Amazon. That process should be part of your overall branding.
A lot of sellers cut corners here because they don’t think they need a website or email or social media profiles because they can do everything through Amazon.
“A lot of times you don’t need a website for selling products, but you want a website for customers to reach you because those same customers that leave a review and, you’d be surprised, a decent portion of them would actually rather contact your company and ask for you to resolve that before they leave that negative review,” Sajag said.
An easy way to give customers another way to reach you is by including that information in your packaging.
Some successful brands include a card with two sides, happy and unhappy. The happy side encourages the customer to leave a review. The unhappy side tells them how to get in touch and have their issue resolved.
It all comes down to sample size
A crucial piece of product quality testing is controlling for the defect rate of your product.
This is where sellers cut corners and it can lead to major problems.
If a product has a 1-2% defect rate, sellers will try to cut costs on inspections and only test 80 units out of 1,000.
The problem is that at that rate, one out of a hundred will be defective. You’re not testing enough to catch the defective product.
When that happens, you end up shipping faulty products and getting bad reviews.
The solution to that is finding the right sample size for your inspections.
“You want to look at it from the perspective of how many units do I need to check to have a statistically significant result. Less so of how many units on a percentage should I test of the entire order,” Sajag said.
Sajag recommends using ISO 2859 standards to guide your sample size.
“So what ISO 2859 basically looks at is what is the least number of units you can test while still being statistically significant and level one is the lowest statistical level quantity and level three is the highest,” Sajag said.
“That’s generally what we use as a baseline for inspections and that’s what you want to use as a baseline for inspections as well.”
Level 1 for 1,000 units is 32, Level 2 is 80, and Level 3 is 125. But then you have to control for the defect rate on top of that.
“If you’re trying to account for a 1% defect rate or a 2% defect rate, you need to test enough units in whatever level you choose or even go above and beyond that, to make sure that you’re testing for that appropriate defect rate,” Sajag said.
Going above and beyond when it comes to product quality control will always be the best plan to protect your business.
As Sajag said, marketplace sellers have it the hardest. Don’t let your listings tank by cutting corners on your products.
