How to Trace Diverted Inventory on Amazon With Lot Codes and Test Buys

Every unauthorized seller on Amazon got your product from somewhere. Almost always, that somewhere is a company you sold to. Finding it is the single most effective thing you can do to clean up your listing, because removing one seller does nothing if the source keeps supplying the next one.

The usual sources of diverted inventory

• A distributor reselling out the back to Amazon sellers, often to hit volume targets.
• A retail account dumping overstock or returns at a discount.
• A dealer you terminated clearing what’s left in their warehouse.
• Someone buying at your promotional pricing and flipping it online.
• Liquidation and closeout channels where excess or damaged-box goods land.

Step 1: Make your product traceable

Tracing only works if units can be tied back to where they shipped. Check what’s already on your packaging: lot codes, date codes, batch numbers, serial numbers. If your lot codes only identify a production run, you can often still narrow it down by matching the lot to which accounts received that run.

If you have a serious diversion problem, consider coding that identifies the customer, not just the batch. That’s an operational decision with real cost, so weigh it against what diversion is costing you.

Step 2: Buy from the sellers

Place test orders with the sellers you can’t place. Buy a few units, not one, and ship to an address that won’t tip them off. When the product arrives, record:

• Lot, date and serial codes
• Any stickers, labels or codes covering original markings
• Packing slips, invoices or return labels left in the box
• The condition of the outer carton

A sticker covering a code is a clue on its own. Someone didn’t want you reading it.

Step 3: Match codes to shipments

Compare the codes against your shipping records. Which customers received that lot, and when? Often several sellers trace back to the same one or two accounts. That’s normal. A handful of leaks usually feed a crowd of storefronts.

Step 4: Act on the source

Once you know the source, you have options your attorney can help you choose from: enforcing the terms of that customer’s agreement, changing their allocation, or ending the relationship. What matters is that the consequence is real. The sellers already holding stock will sell through it, and then they can’t reorder.

How long it takes

Test buys and lot tracing normally narrow things down to a specific source within a few weeks. Price recovery on the listing takes longer, typically months three to six, because existing inventory has to clear.

Related

• How to find out who is selling your product on Amazon
• How to remove unauthorized sellers on Amazon
• Authorized reseller agreements for Amazon

Frequently asked questions

Written by

Troy Marchand, CEO

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