For many Amazon sellers, arbitration can be a useful process. If you have had your funds frozen by Amazon, are dealing with an inventory issue, or are looking to reinstate your Amazon sellers account from suspension, arbitration is a necessary next step. Thankfully, our talented team of attorneys can help you figure out what your plan of attack should be in arbitration.
Intro. into Arbitration
Arbitration is a process by which the client – usually an Amazon seller – and Amazon each plead their cases in front of an arbitrator – a type of judge. Both sides deploy a team of lawyers to help them in their case, and our firm is one of the most prolific suppliers of lawyers for Amazon sellers.
“Rosenbaum Famularo, P.C. is the leading law firm for Amazon-related issues,” said Rob Segall, Associate Attorney at Rosenbaum Famularo, P.C., law firm behind AmazonSellersLawyer.com. Segall also leads of the firm’s arbitration team. “Our firm handles roughly 70% of all the arbitrations filed against Amazon, so our experience is unmatched.”
A lot of strategy is involved in approaching an arbitration case, and each case is different. As CJ Rosenbaum, CEO and founder of Rosenbaum Famularo, P.C. likes to say, “every case lives and breathes on its own merit.”
Intro. into Arbitration: Let’s take a look at some particular instances where arbitration is most often used.
Frozen Funds
One of the more common reasons that arbitration is called upon is when Amazon freezes the funds in a seller’s account. Amazon will send an email to the seller to alert them that they will not have access to the money they have collected online and will provide a reason for why they have done so.
The problem is that sometimes Amazon will freeze a client’s funds even though the client has done nothing wrong. Amazon might see suspicious activity and assume that the seller is listing illegitimate products, for instance.
“Amazon’s contract provides that Amazon can withhold funds indefinitely for a variety of reasons,” Segall said. “However the most common include: (1) allegations of intellectual property violations; (2) allegations of fraudulent or manipulative activity; and (3) related / multiple accounts.”
Some reasons a seller may see their funds frozen are for illegal actions, such as intellectual property violations. However, there are other instances where a seller’s funds have been frozen for less serious violations.
Rosenbaum recalls one particular instance where the team helped a client regain access to their funds.
“We went into this case with an invoice that had been submitted to Amazon about an Apple Space Gray iPhone. S-P-A-C-E is how you spell ‘space’ and that’s how Apple spells ‘space.’ On this particular receipt, ‘space’ was spelled S-P-A-S-E.”
Despite the obvious issues that the Amazon Sellers’ Lawyer team faced going into the trial, they won the case. Segall was paramount in helping the client retain their assets.
“In a case where the evidence weighs against the client, it is always important to remember that violating Amazon’s policies does not amount to illegal activity,” Segall said. “Amazon has no right to indefinitely hold a sellers’ funds.”
Inventory Disputes
Many Amazon sellers use Fulfillment By Amazon (FBA) to store and ship their products directly to customers from one of Amazon’s many warehouses around the globe. Each warehouse stores products from hundreds or even thousands of individual sellers. In some instances, product can get mixed up and lost. In other situations, Amazon might refuse to return items to a seller for various reasons.
“Fairly often, Amazon will lose significant amounts of our client’s inventory, but claim it was never delivered,” Segall said. “In some cases, we have seen Amazon tell sellers their inventory was lost, only to later see Amazon themselves offering the products for sale.”
This represents another instance in which arbitration would be beneficial to the seller trying to retain their assets. Amazon has no right to hold onto a seller’s inventory, even if that seller has had their account suspended. Resolving inventory disputes is one of the most common uses of arbitration for Amazon sellers.
Reinstatement
In rare situations, arbitration can help a seller get their suspended account reinstated. Often times, reinstatement goes hand-in-hand with another issue that the client is seeking to resolve through arbitration. If a seller has had their funds frozen, they have more than certainly also had their account suspended. If arbitration can help prove the seller’s innocence, it’s possible to get reinstatement along with getting their money back.
“It is important to remember that once you file for Arbitration, it is NOT Amazon’s decision to reinstate,” Segall said. “We must convince the arbitrator to do so. However, in situations when Amazon has made a blatant mistake, their attorneys usually reach out and offer reinstatement as a settlement offer.”
Every particular case has its own variables. If a seller who is dealing with an inventory issue doesn’t want to sell on Amazon anymore, then reinstatement likely isn’t important to that seller compared getting those products returned.
In other cases, reinstatement is paramount to the client’s future success online.
“In one matter, our client sourced footwear directly from the manufacturer of the brands they offered,” Segall recalled. “Yet Amazon suspended their account and withheld their funds upon their false belief our client was selling inauthentic products. Once we filed for arbitration and Amazon’s attorneys reviewed the case, they offered to reinstate our client’s account and return the withheld funds.”
Conclusion
Arbitration is by no means a slam-dunk for every client. However, we have the best track record in the business when it comes to helping Amazon sellers win their arbitration hearings.
One of the best things you can do to prepare for your upcoming arbitration case is to be upfront with your team of lawyers. The more detail you can provide your lawyers, the better they can help you win your case.
“It’s best for a client to be completely transparent with their attorney about any issue that may be going on with their account,” Segall said. “An arbitration hearing is just like a scaled down version of a trial in court – a witnesses’ credibility is vital to their case. It is best to be prepared to respond to difficult questions, rather than avoiding them.”
If you have had your funds frozen by Amazon, are looking to recover your inventory, or are dealing with an Amazon account suspension, call us 1-877-9-SELLER or email CJ@AmazonSellersLawyer.com for a free consultation.
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Anders is a content creator for Rosenbaum Famularo, P.C.
Anders recently earned his degree in journalism from Hofstra and has six years of professional journalism experience. He has written for numerous online and print publications including SB Nation and The Hofstra Chronicle.