Managing Risk When Buying Amazon Accounts: Common Pitfalls and How to Avoid Them

Managing Risk in Amazon Account Acquisitions: Common Pitfalls and How to Avoid Them

Acquiring an established Amazon seller account can accelerate your growth, but it also exposes you to hidden liabilities. Many buyers make avoidable mistakes that lead to suspended accounts, frozen funds or expensive legal disputes. This article highlights the most common pitfalls and offers practical advice for mitigating risk before closing the deal.

Mistake 1: Treating migrations as simple edits

Some buyers assume they can change the bank account, tax ID and contact information immediately after a purchase. However, Amazon’s Business Solutions Agreement prohibits transferring an account without Amazon’s written consent. Attempting to bypass this process by editing greyed‑out fields often triggers a Seller Identity Verification (SIV) hold or outright suspension. Avoid this by submitting a formal Section 18 request and waiting for Amazon to unlock the fields before making any changes.

Mistake 2: Failing to define the transaction type

Amazon treats internal restructures, affiliate assignments and full sales differently. A restructure within the same ownership group may require different documentation than a sale to an unrelated buyer. Buyers who don’t clarify the transaction type may submit incorrect documents, leading to rejection and delays. Solution: Clearly state whether your deal is a transfer to an affiliate, a sale of assets or a share transfer and gather the appropriate legal agreements.

Mistake 3: Submitting incomplete or outdated documents

Amazon frequently rejects organisational charts for being more than 180 days old, missing signatures or lacking letterhead. Similarly, missing ultimate beneficial owner (UBO) declarations or outdated Articles of Incorporation can cause your Section 18 request to be denied. Recommendation: Prepare a complete ownership package with up‑to‑date documents, signatures and UBO breakdowns. Don’t underestimate Amazon’s scrutiny of documentation.

Mistake 4: Ignoring account health and performance metrics

Buying a suspended or unhealthy account is akin to buying a car with engine trouble. Always check the Account Health dashboard for policy violations and performance metrics like order defect rate (<1 %), late shipment rate (<4 %) and pre‑fulfilment cancel rate (<2.5 %). Investigate any unresolved suspensions or performance issues before closing. Poor metrics can lead to immediate account deactivation after transfer.

Mistake 5: Overlooking product reviews and customer feedback

Reviews are the moat that protects an Amazon listing. Buyers sometimes focus on revenue and ignore star ratings, only to discover later that key products have ratings below 4 stars or suffer from review manipulation. Low ratings can depress conversion rates – research shows moving from 3.5 to 5 stars can increase conversions by 12 %. Action: Review the quantity and quality of customer feedback for each top‑selling ASIN. Investigate sudden spikes or patterns that could indicate manipulated reviews.

Mistake 6: Assuming all owners need 25 % declarations

Many U.S. sellers believe that only owners with 25 % or more equity must be declared. In the EU and UK, anyone with 10 % or more ownership must be listed. Failing to disclose a 12 % shareholder can result in verification rejection. Tip: Use the 10 % threshold for European marketplaces unless instructed otherwise, and always follow Amazon’s guidance for ownership disclosures.

Mistake 7: Skipping financial and operational due diligence

Some buyers get excited by revenue but neglect to verify the numbers or understand the operations. Evaluate profit trends, margins, expenses and cash flow; most FBA businesses operate on 16–20 % net margins. Examine supply‑chain contracts, lead times and inventory management to ensure continuity post‑acquisition. A failure to recognise thin margins or supply chain weaknesses can erode profits quickly.

Best practices for safe acquisitions

Perform comprehensive due diligence. Review financials, account health, product performance, supply chain and legal documents before making an offer. Use the checklists outlined in our due diligence guide to leave no stone unturned.
Plan the migration with experts. Engage compliance specialists familiar with Amazon’s Section 18 process. They can help structure the deal, gather documents and communicate with Amazon.
Stage updates sequentially. Once Amazon approves the transfer, update the legal entity first, then tax information, bank accounts and contact details. Simultaneous updates can trigger fraud alerts.
Document everything. Keep case IDs, submission dates and correspondence handy. If something goes wrong, a documented timeline will help support your appeal or escalation.

Conclusion

Acquiring an Amazon seller account is not a plug‑and‑play exercise. By understanding the common mistakes – from skipping Section 18 consent to neglecting account health – you can mitigate risk and set yourself up for a smooth transition. Diligent preparation, complete documentation and expert guidance are your best tools for protecting your investment.