Case Study:Comply & Recover
Challenge
Brands that sell on Amazon through Vendor Central must adhere to specific operational compliance processes and standards in order to be paid in-full by Amazon. Compliance issues were holding a healthcare company back from its full ecommerce potential.
Strategies
- Deduction identification
- Root-cause analysis
- Dispute resolution management
Results
- Recovered $235,175 in shortages
- Labeling and ASN refinements to avoid future shortages
The Brand
A major player in the healthcare products industry was new to ecommerce. One advantage the brand had was that once customers tried their products, they almost always purchased again. Starting in 2018, the company grew sales substantially on Amazon.
But selling on Amazon requires discipline. Any discrepancies from purchase orders, shipping, receiving, packaging, or data misalignment may result in chargebacks to vendors that significantly cut into a brand’s Amazon earnings.
“Many vendors just accept chargebacks as a cost of doing business with Amazon, as they don’t have the time or systems in place to make sense of it all.”
Shawn Oleson, Ideoclick Senior Operational Compliance Manager
The Driver
Conforming to Amazon’s operational standards can be a steep learning curve. The healthcare brand was experiencing operational compliance issues that racked up a shortage amount of over $300,000, which had accrued over a 12-month period.
Ideoclick Guidance
At Ideoclick, utilizing our Operational Compliance Dashboard, we aggregate client data to identify deductions from Amazon in the form of chargebacks and shortages resulting from non-compliance. We were able to demystify the complex invoice hierarchy system produced by Amazon to identify the shortage amount of over $300,000.
Shortages indicate operational issues that need correction. Our team of operational compliance (OC) experts works to identify root causes for chargebacks to avoid future issues.
In this case, many of the casepacks were improperly scanned at the Amazon fulfillment center due to labeling issues during the vendor’s shipping process, leading to shortages. The vendor also received chargebacks related to advanced shipping notification (ASN) complications.
The identification of these root causes was critical in enabling the client to change its labeling and ASN practices to avoid future chargebacks that subsequently lead to shortages.
Finally, the OC team manages the complex process of dispute resolution to recover funds on behalf of the client in order to get those fees and chargebacks back.
“Many vendors just accept chargebacks as a cost of doing business with Amazon, as they don’t have the time or systems in place to make sense of it all, or root through Amazon’s reinvoicing system or investigate where the non-compliance originated,” explained Shawn Oleson, Senior Operational Compliance Manager at Ideoclick.
Shared Success
Of the $300,000 of accrued shortage amount, we successfully managed the dispute process to recover $235,175.05 for the client.
Oleson says, “Our process of identifying the discrepancies, helping to solve for the root cause, and handling the dispute resolution will enable many more of our clients to recover funds, as well as avoid future chargebacks. Ultimately, we are helping clients conform to Amazon’s highly efficient ways of doing business on a massive scale — so both the consumer and the vendor stand to benefit.”
