Amazon is the undisputed center of the e-commerce universe. Every month, more than 98 million users shop online with the Amazon app. In 2021, those Amazon users spent nearly $470 billion dollars on e-commerce purchases. E-commerce vendors that want to optimize their growth and profitability will undoubtedly find the shoppers and buyers they need to grow a profitable business through Amazon.
However, e-commerce brands that work with Amazon need to be careful. Amazon’s amazing ability to scale is driven in large part by software that automates its processes. While that software opens the door for e-commerce vendors to reach new markets, it is also known to regularly make mistakes when it comes to shortage and chargeback fees. Some estimates show that Amazon makes as much as $12 billion annually through these fees.
“Amazon’s first-party vendor shortages and chargeback fees have become so prevalent that many sellers now just accept it as a part of doing business with Amazon, even when they know they are incorrect,” says John W. Collins, CEO of chargeguard. “We don’t feel that is right, and we are working to change that.”
Collins founded chargeguard to empower businesses with the knowledge, actionable insight, and thought leadership needed to level the Amazon e-commerce playing field. The services that he and the chargeguard team provide ensure that all Amazon vendors, regardless of their size, receive fair and transparent treatment.
“A brand’s profits are justly theirs — not Amazon’s,” Collins says. “Erroneous fees levied upon vendors, which are often simply a part of Amazon’s automated processes, can cost brands their hard-earned profits. Our mission is to empower stronger oversight that identifies and challenges those erroneous fees.”
Fighting back against erroneous fees
For companies that have a first-party vendor relationship with Amazon, which involves Amazon buying products wholesale and managing the bulk of the sales process, the average chargeback and shortage fees range from 4 percent to 18 percent. That means first-party vendors with $10 million in sales stand to lose as much as $1.8 million for noncompliance chargeback and shortage fees.
The services that chargeguard provides to its clients include investigating those fees, identifying any that were wrongly assessed, and petitioning Amazon to have them removed. In essence, chargeguard keeps Amazon honest, which allows e-commerce vendors to increase their profitability.
Giving e-commerce vendors more income and better insight
The first step in the chargeguard process is a free, no-obligation chargeguard Evaluation and Recovery Analysis (C.E.R.A.) audit that has been expertly engineered to uncover all errant fees.
“You can’t fight what you can’t see,” Collins explains. “Our C.E.R.A. account audit lets businesses see the size of the prize before they begin the recovery process. It puts the path to cash in motion.”
After the C.E.R.A. audit is complete, businesses have the opportunity to team with a dedicated chargeguard Certified Recovery Specialist to start the process of disputing fees and recovering revenue. Based on chargeguard’s past performance, businesses can expect to recover up to 70 percent of the fees identified going back as far as two years. Brands who have moved forward with chargeguard’s process have boosted their profitability by as much as 20 percent.
In addition to completely managing the fee dispute process, chargeguard also provides insights on deductions that are consistently costing businesses. Armed with this information, businesses can understand the root cause of their issues and tweak systems to minimize new Amazon deductions from the start. Everything chargeguard discovers is presented to clients via the chargeguard Insight, a next-level dashboard that provides daily, real time delivery of action-oriented steps.
“For many vendors, the thought of going up against Amazon to dispute and recover fees can feel like a classic ‘David versus Goliath’ battle in play,” says Collins. “We understand that reversing those fees can seem like an endlessly daunting task, but we want you to know that you are not alone in the battle. When you are ready to start the process, chargeguard is here to empower you.”