Amazon Sellers News: Updates On More Common Mistakes Sellers Are Making
Recently, we discussed some of the most common mistakes that even the most experienced sellers on Amazon make. Using insights from the Amazon Sellers Lawyer team, this blog discusses more legal issues, such as compliance with the Business Solutions Agreement, and extreme measures that Amazon can take to force seller compliance.
Amazon Business Solutions Agreement Misunderstandings
When signing up to be a seller on Amazon, all parties agree to the Business Solutions Agreement (BSA), Amazon’s version of a terms of service that contains key information for how sellers are meant to behave on the platform. For this blog, we discuss the requirement of maintaining commercial liability insurance while you are a seller on Amazon. Many sellers are unaware of this requirement or are willingly negligible and attempt to skirt it. However, if brought to Amazon’s attention, it can lead to several issues.
The main thing that commercial liability insurance helps to do is cover the costs of both legal defense and settlements for litigation against you. Although we like to hope that sellers will not face legal challenges, it is an unfortunate reality that many will face litigation at some point during their time on Amazon. Having this insurance can therefore save you thousands of dollars and legal fees, and help you maintain good standing with Amazon’s team.
If you are facing suspension for a customer complaint issue, proof of insurance can also be a positive piece of evidence in supporting your case for reinstatement. Showing that you are prepared to face challenges, while also having the ability to fulfill customer settlements, is key to showing why Amazon would want you back on their platform.
Amazon Threatening Sellers Personal Bank Accounts
One strategy that Amazon employs for sellers who are ignoring or unresponsive to notifications is the use of withdrawing money directly from your bank account. This is different from withdrawing or freezing the funds of your Amazon account, it is taking money directly out of the linked bank account and using it as leverage. This can be damaging, time consuming, and massively disrupt your ability to source goods for your storefront. It is therefore vital to understand when Amazon does this and how to prevent it.
We recently sat down with Amazon Sellers Lawyer attorney Leslie Gillis who described some of the most common reasons why this happens. Many sellers who do not regularly check their email are likely to have alternative measures taken to get their attention for issues of compliance. If Amazon notifies you about the need for ongoing compliance and a seller does not respond for a delayed period of time, they may attempt to directly withdraw money from your account to get a response.
For sellers that do regularly check their emails, some believe that Amazon’s messages are scams or that they can ignore them and continue selling. Unfortunately in both cases, Amazon does have the power to force your hand by withdrawing money from your bank account.
Preventing this from happening requires consistent checking of communications from Amazon to ensure that you are on top of potential violations. If you are notified about an ongoing dispute, it can be advisable to personally withdraw money from your account, as Amazon can only take what is there. Doing so will allow you to have the financial backbone to challenge Amazon, or continue selling while the investigation continues.
Frozen Fund Amazon Arbitration
If you are in a current dispute with Amazon, they may also freeze disbursement of your Amazon account funds. This means preventing you from accessing more of your money, and potentially causing supply chain disruptions. Getting Amazon to lift the freeze on your account typically requires the resolution of any outstanding disputes on your account, and occasionally filing for arbitration against Amazon.
Under Amazon’s BSA, they have the right to hold your money during an investigation, with the ability to extend their hold to an indefinite period if the issue remains unresolved. They claim this is to help them process refunds or settle any customer problems for your products, but it can massively disrupt your ability to maintain relationships with suppliers.
The key to managing cases of frozen funds is to resolve any suspensions on your account if initial demands for release of funds are unsuccessful. Doing so requires the completion of a Plan of Action (POA) with supporting evidence for your case.
If previous steps are not sufficient for securing the release of funds, the next option is filing for arbitration against Amazon. Arbitration is a private legal proceeding that plays out similarly to a normal courtroom, with legal teams making arguments to an arbitrator who issues a legally binding decision. Here, arbitrators can order the release of your funds if argued for successfully.
Contact Amazon Sellers Lawyer Today!
If Amazon is currently threatening or freezing your funds, act now before it shuts down your whole business. The Amazon Sellers Lawyer team has been working exclusively on helping sellers with these issues since 2016 and is ready to help you navigate your current situation. Give us a call today at 212-256-1109 or fill out our online form here.
About the Author
CJ Rosenbaum, Esq.
CJ Rosenbaum is the founding partner of Amazon Sellers Lawyer. He’s been practicing law since 1995, and since 2016 his firm has focused exclusively on helping Amazon sellers deal with issues like suspensions, intellectual property disputes, and withheld funds.
CJ has written six books on Amazon seller legal issues including the Amazon Sellers’ Guide to Copyright Law. He has spoken at major industry events like the Prosper Show, Global Sources Summit, Retail Global. CJ also works with the Amazon Sellers Lawyer team to provide free content for Amazon sellers. This is available through their online blog and YouTube channel, frequently covering major Amazon updates and important topics relevant to the seller space.
Through BrandProtectionAmazon.com, the firm also supports brands in protecting their products. This gives the team the unique opportunity to learn from case wins on both sides of the fence, strengthening protection for both the sellers and brands that Rosenbaum & Segall P.C. represents.
Amazon repeatedly rejecting your Plan of Action? Amazon Sellers Lawyer handles suspension appeals and account reinstatement cases – including arbitration against Amazon when they’re withholding seller money. Contact us to discuss your situation and figure out the best path forward.