John W. Collins, the founder and CEO of chargeguard, spent the past decade scaling some of the world’s largest brands on the Amazon platform. His brand management agency, OmniiX, managed over $500 million in sales and $50 million in Amazon ads. After recognizing a gaping hole in the market, however, Collins is transitioning into a new space.
“One area of Amazon has been overlooked by almost everyone,” he says. “Amazon is charging sellers and vendors about $12 billion every year in deductions and fees, and up to 70% of those charges are erroneous.”
Chargeguard is changing the experience for Amazon vendors
Chargeguard goes beyond helping Amazon sellers and vendors recover fees. Rather, it provides them with the visibility they need to avoid these charges in the future.
“We swap out cryptic codes for easy-to-understand stories and action-oriented steps designed to improve profitability on the Amazon platform,” explains Collins. “When we first started, we primarily talked about recovery, but we discovered the problem was much bigger. When clients log into our dashboard, they see insights they don’t find anywhere on Amazon. Our goal is to change the Amazon experience.”
Amazon levies about 40 different types of chargeback fees and shortages for vendors. The policies were put in place to protect consumers and sellers on its e-commerce platform, but vendors bear the brunt of the system’s flaws.
“Amazon applies fees at multiple points along the supply chain,” Collins explains. “We see fees for minor infractions in packaging, validating, and shipping that adds up to anywhere from 4 to 18% of a product’s price. It is challenging for vendors to keep up because the guidelines continue to change. Our mission is to put profitability back in the hands of Amazon’s vendors.”
Automation is at the root of e-commerce fees
Fees on Amazon’s Vendor Central platform are automated. While automation is arguably necessary to scale such a cumbersome process, it often leads to mistakes.
“Automation is a catch-22,” remarks Collins. “Amazon has scaled to become a global marketplace through the wonders of intelligent machines. The company’s size is a massive benefit to sellers, but on the flip side, those machines are making a lot of mistakes. As a result, sellers and vendors are the ones paying the price.”
Once Amazon automatically withdraws fees from their accounts, disputing erroneous charges becomes a complicated and time-consuming process. Collins finds that brands simply don’t have the manpower they need to audit their Amazon accounts and contest each fee. “We call it ‘death by a thousand cuts,’” he explains. “Over a given month, an Amazon vendor may accumulate 15,000 chargebacks costing two or three dollars, but each of these charges must be disputed individually. For each fee, a seller must open a dispute, wait up to 30 days for Amazon’s decision, then either escalate the dispute into a second or third stage.”
How chargeguard works
Chargeguard’s platform helps vendors through this complicated recovery process and protects against future charges. The experienced teams at chargeguard initiate and track thousands of disputes for each brand. Their proprietary process enables chargeguard to average a 70% recovery rate for its clients and to venture five years back in recovery efforts. For most vendors, this amounts to millions of dollars in fees and a significant chunk of revenue. Although the process is laborious, the potential gain is worth the trouble — especially if a company like chargeguard is there to do the heavy lifting.
Before beginning recovery, chargeguard completes a detailed audit of each client’s account called the chargeguard Evaluation and Recovery Analysis (C.E.R.A.). This audit breaks down all of the fees a vendor has been charged and identifies how much is recoverable. After the risk-free, complimentary C.E.R.A. audit, clients can look over the recovery numbers and decide whether they prefer to attack each fee on their own or pay a small percentage for chargeguard to take up their fight.
As vendors recover fees, they gain in-depth access to insights about those charges. “Even for experienced sellers, Vendor Central can be a complicated platform to navigate,” Collins remarks. “We show clients how much money we have recovered, how much we are still disputing, and how much they lost in rejected disputes. This benefit is what sets us apart. We interpret the data and enable brands to take advantage of it as they move forward.
chargeguard believes that Amazon’s vendors and marketplace sellers deserve to be treated fairly and transparently. That stronger oversight of erroneous fees levied upon vendors should be enacted for all vendors, regardless of size. Operational non-compliance should be enforced on both sides of the table. That a brand’s profits are justly theirs — not Amazon’s.
chargeguard’s purpose is not only to help brands THRIVE on Amazon and e-commerce retailer platforms but also to empower them with the knowledge, actionable insights, and thought leadership needed to even an unfair playing field.