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Suspended Amazon seller gets a record breaking award after spending $200000 on legal fees

Kika Angelic

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An Amazon seller in the United States spent 18 months and $200,000 in legal fees fighting for his withheld funds and seized inventory following Seller Account deactivation over authenticity issues. In the end, he received about half the $1.4 million in restitution requested. But the biggest victory was the acknowledgment that the world’s largest online retailer treated him unfairly. 

Amazon suspended the seller’s account after suspecting him of selling counterfeit electronics, according to arbitration documents reviewed. Then the company seized $80,000 in his account and 50,000 products stored in its FBA warehouses. 

The merchant, who did not wish to disclose his identity, asked for his money and products back, but Amazon ignored him. He couldn’t file a lawsuit because, like all other Amazon sellers, he agreed to arbitration as a condition of selling on the platform.

After reviewing contracts, interviewing witnesses and reading legal arguments, arbitrator awarded the merchant $775,000 in November. He ruled that Amazon had reason to suspect the merchant and was within its rights to suspend his account. But he said the company went too far by ignoring the seller and withholding his products, including many that weren’t suspected of being counterfeit at all. 

“Given the vast resources of Amazon,” he wrote, “I would hope that in the future it will devote the resources necessary to treat all of its sellers with respect and some semblance of due process.”

The case provides a rare look inside an arbitration process that lawmakers and regulators say favors Amazon by discouraging sellers who lack the money, time and energy to take on the company. 

A report issued last year by the House Judiciary Committee investigating the power of big technology companies revealed that between 2014 and 2019 only 163 merchants—out of the millions who sell on Amazon—had initiated arbitration proceedings against the company. A bill that would end forced arbitration has been discussed in the Senate since 2019, and its advocates hope testimony from Amazon merchants will give it fresh momentum. 

The original intent of the 1926 Federal Arbitration Act was to provide a cheaper, faster alternative to settling business disputes than clogging up public courts. In the decades since, U.S. Supreme Court rulings have allowed arbitration to spread further into day-to-day transactions.

Before consumers rent a car or get cellular service, they’re often asked to sign contracts in which they surrender the right to sue and agree to resolve any dispute through arbitration. Some businesses require new workers to agree not to sue as a condition of employment, practices that can let serial sexual harassers remain on the payroll while their victims take confidential settlements and leave.

It looks like lawmakers are finally waking up to the antitrust implications of big companies using arbitration to gain an unfair advantage over smaller ones.  “Arbitration functions as a way for Amazon to keep disputes within its control, with the scales tipped heavily in its favor,” the House Judiciary Committee said in its report. “As such, Amazon can withhold payments from sellers, suspend their accounts without cause, and engage in other abusive behavior without facing any legal consequences.”

Amazon has no incentive to change its practices even though they often don’t pass muster with lawyers and retired judges who sideline as arbiters mediating disputes. When merchants prevail, the arbiter’s decision sets no legal precedent, so Amazon can do the same thing over and over, knowing most merchants won’t bother mounting a challenge. 

“It’s very expensive and time-consuming, and most small businesses don’t have the money or the time,” says Mario Simonyan, a Burbank, California, attorney. He says most clients decide against launching arbitration cases against Amazon because they typically cost $80,000 in legal fees.

One potential solution is to pass the Forced Arbitration Injustice Repeal Act, which would create a way for Amazon sellers to pursue class-action lawsuits against the company. Jacob Weiss, a home-goods merchant who supports the legislation, testified before the House committee in February. He told lawmakers that, despite spending $50,000 on an arbitration case against Amazon, he failed to recover his losses. Weiss said a second case has dragged on for nine months without resolution.

The anonymous merchant who won his case isn’t waiting for a new law. He paid off debts with the arbitration award and hopes to start a new business “as far away from Amazon as I can get.” His suggestion: “Make the final rulings public so other arbiters can consider them and Amazon won’t lose the argument today and make the same argument with a different arbiter tomorrow and win.”

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2 Comments

2 Comments

  1. K Yu

    March 8, 2021 at 10:12 am

    We must have a funding to fight against unfairness.

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What is Customer Service by Amazon (“CSBA”)? 

Kika Angelic

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Recently, Amazon launched a new service for their third party sellers called Customer Service by Amazon (“CSBA”). Is is basically an option for FBM (Fulfilled by Merchant” sellers to have Amazon manage all of their customer service.

It is a paid service, which is currently only offered on selected Amazon marketplaces. To be able to enroll, you need to have a Professional Selling Account in a good standing.

Here are the full CSBA Program Requirements:

  1. Enrollment: To enroll in CSBA, your account must be created on Amazon.com and be a professional selling account in good standing. We will notify you when your enrollment in CSBA is complete and will begin to provide customer services on your behalf after your enrollment is completed.
  2. CSBA Units: CSBA will provide customer service for units that you fulfilled yourself (“CSBA Units”). CSBA will not provide customer service for any non-CSBA Units, including those fulfilled by Fulfillment by Amazon (FBA) or Seller-Fulfilled Prime. We will provide customer services for CSBA Units in orders placed while you are enrolled in CSBA. If an order contains both CSBA Units and non-CSBA Units, CSBA will provide customer service only for CSBA Units.
  3. Amazon-Provided Customer Service: We will be responsible for all customer service issues relating to shipment and customer returns, refunds, and adjustments related to CSBA Units. We will determine whether a customer will receive a refund, adjustment, or replacement for any CSBA Unit, and you agree to be bound by our decisions. You also consent to deductions against your seller accounts for our decisions to allow returns or refunds.
  4. No Interference with Amazon Customer Service: You may not interfere with any communication between customers and us and you may not instruct us on how to specifically address a customer’s issues. Communications between us and customers for customer service are not recorded in Seller Central and cannot be viewed by you.
  5. Information from You: We will need information from you relating to CSBA Units to provide customer service, including information required in subsections (6)-(9). If you fail to provide information or provide wrong or incomplete information for them, we may take any measures to respond to the customer, determined by us in our discretion to best serve the customer, including cancelling or refunding the order.
  6. Valid Contact Information: We may contact you for information to respond to customer questions by email, telephone, or other means as needed. You must provide valid and current contact information to us and update it immediately in case of change.
  7. 24-Hour Response Time: When we contact you for CSBA inquiries, you must respond with complete and accurate information within 24 hours (including weekends and holidays).
  8. Tracking Numbers for Orders: You must enter a traceable order tracking number provided by the shipping carrier at the time you confirm the order shipment.
  9. Valid Return Address: You must provide a valid return address and ensure this return address is capable of accepting customer returns.

The CSBA fee is around $0.10 per customer message. Here you can review the full CSBA fee schedule: https://sellercentral.amazon.com/help/hub/reference/G92LV47D9LP2MXEF

I hope you found this article helpful. Many Amazon sellers recently started trading stocks and crypto currencies, hoping to diversify their income, which is a very good idea with all the uncertainty which comes with the platform. For this reason, we launched a new Facebook group, Crypto Arbitrage Income (Bitcoin, Crypto, Altcoins, Blockchain, Trading) – feel free to join us and forget about the troubles of selling on Amazon for a moment!

Regarding Amazon Seller Performance, you can always participate in our Amazon Seller Performance – Friendly Advice – Worldwide group, where you will be very welcome.

If you are an Amazon Seller who needs help with any Amazon-related issues such as suspensions, listing blocks or is looking for professional assistance, please don’t hesitate to subscribe to my new OnlyFans page at: www.onlyfans.com/kikaangelic

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Watch out! Amazon will be auto-destroying aged FBA inventory! 

Kika Angelic

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Recently, Amazon introduced a new measure aimed to reduce the amount of slow-selling FBA Inventory belonging to third party sellers, which are stored in their warehouses.

Any units of inventory, which Amazon considers to be aged will be automatically destroyed at the seller’s expense!

The following inventory is subject to automated removal:

  • Units that have been in fulfillment centers for more than 365 days and that are subject to long-term storage fees
  • Units of ASINs that haven’t sold in six or more consecutive months and that have been in fulfillment centers for more than 180 days

Since Amazon requires a local return address for FBA Inventory removals, if you are based outside of the marketplaces, where your stock is stored, you risk having it automatically destroyed, unless you have a local return address on file for such removals.

Amazon’s default Automated Aged Inventory Removal setting is disposal, so you should immediately go and check your settings.

Here is a screenshot of Amazon’s e-mail announcement regarding the matter:

Here is a copy of the full wording in English:

Your aging inventory is at risk of disposal

Hello,

You currently have units of aging inventory that are at risk of immediate automated removal and disposal.

For the past several months, we’ve been reaching out to inform you that the following inventory will be automatically disposed:

Units that have been in fulfillment centers for more than 365 days and that are subject to long-term storage fees
Units of ASINs that haven’t sold in six or more consecutive months and that have been in fulfillment centers for more than 180 days
Go to Manage Inventory Health to see the units that will be subject to immediate or upcoming automated disposal.

If you don’t update your settings to manage your aging inventory, Amazon may dispose of these units in the manner we deem appropriate. We may also retain any proceeds from the disposal. 

Go to Automated fulfillable inventory settings to choose how to manage aging inventory: 
Select Return and enter a valid return address to have your inventory returned to you. Due to the high volume of requests during this period, it may take up to 90 days to process the return of your inventory. To avoid further delays, make sure that returns are accepted when delivered to your address.
Select Liquidation to recover value from your eligible products.
Select Disable to opt out of automated removals at any time.

The Fulfillment by Amazon team

I hope you found this article helpful. Many Amazon sellers recently started trading stocks and crypto currencies, hoping to diversify their income, which is a very good idea with all the uncertainty which comes with the platform. For this reason, we launched a new Facebook group, Crypto Arbitrage Income (Bitcoin, Crypto, Altcoins, Blockchain, Trading) – feel free to join us and forget about the troubles of selling on Amazon for a moment!

Regarding Amazon Seller Performance, you can always participate in our Amazon Seller Performance – Friendly Advice – Worldwide group, where you will be very welcome.

If you are an Amazon Seller who needs help with any Amazon-related issues such as suspensions, listing blocks or is looking for professional assistance, please don’t hesitate to subscribe to my new OnlyFans page at: www.onlyfans.com/kikaangelic

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Amazon launches Small Business badges available to Handmade Sellers

Kika Angelic

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Recently, Amazon started displaying ”Small Business” badges and supplementary wording next to offers from storefronts belonging to Amazon Handmade merchants:

”Shop products from small business brands sold in Amazon’s store. Discover more about the small businesses partnering with Amazon and Amazon’s commitment to empowering them.”

Currently, there is no option for sellers to opt in and only selected accounts are eligible for this badge. A page with more information can be found here: https://www.amazon.com/b?node=18018208011&ref=sbp_dpb_01B

Here you can view a screenshot of the badge being displayed:

Here is a screenshot of the page with information:

I hope you found this article helpful. Many Amazon sellers recently started trading stocks and crypto currencies, hoping to diversify their income, which is a very good idea with all the uncertainty which comes with the platform. For this reason, we launched a new Facebook group, Crypto Arbitrage Income (Bitcoin, Crypto, Altcoins, Blockchain, Trading) – feel free to join us and forget about the troubles of selling on Amazon for a moment!

Regarding Amazon Seller Performance, you can always participate in our Amazon Seller Performance – Friendly Advice – Worldwide group, where you will be very welcome.

If you are an Amazon Seller who needs help with any Amazon-related issues such as suspensions, listing blocks or is looking for professional assistance, please don’t hesitate to subscribe to my new OnlyFans page at: www.onlyfans.com/kikaangelic

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