When Sellers Should Take Amazon to Arbitration:
Amazon sellers are essential to Amazon, as the ecommerce giant continues to grow towards near monopoly status. The company is estimated to make up more than half of all holiday ecommerce transactions in the USA. As the platform continues to expand, issues for sellers have become frequent, and at times, more complex. Suspensions are a top concern for sellers and getting back to selling is the #1 priority in almost every case. Our team has over a decade’s worth of trial experience coupled with knowledge from dealing with Amazon on a daily basis.
We’re here to help sellers fight injustices on Amazon.
In your contract with Amazon, you give up the right to take Amazon to court, but what you gain is the ability to have disputes resolved through arbitration, which is faster & cheaper.
Amazon stipulates that all issues are to be resolved in arbitration. Despite that, a lot of the time, they’ll still try to avoid arbitration because they just want to remove the seller & try to keep their money. We’re here to not let that happen. Our team sends out a paper that says we demand to go to a hearing & arbitrate it. We work with sellers identifying what the issues are & make sure the arguments we make are persuasive.
The piece of paper itself is mailed to two locations: the Triple A’s office and the other is sent to Amazon’s location out in Nevada. Both parties will see it and then review it and that will be the first document that the arbitrator has when we actually sit down and go to the arbitration proceedings. That document is what they are going to keep referring to throughout the proceedings.
If you draft a powerful, concise and persuasive arbitration, there’s also a significant possibility that Amazon will eventually settle the case and not require you to go through the hearing.
If you think you have a case for arbitration against Amazon,
If your AMZ suspension issues fall into any of the below categories & your appeal process has hit a dead end, arbitration is your best option to get money / inventory back or obtain reimbursement for lost / damaged goods.
Amazon regularly refuses to provide the substance of its allegations. Sellers feel it’s impossible to write a Plan of Action when wrongfully accused & aren’t provided any indication of the reasoning behind the accusation.
Amazon’s Terms of Service:
Pursuant to Amazon’s terms of service, “each party consents that any dispute or claim relating in any way to this Participation Agreement or your use of the Services or Transaction Processing Services will be resolved by binding arbitration as described in this paragraph, rather than in court …” Arbitration is similar to going to court, but is usually less costly and gets faster results. The arbitrator, a neutral 3rd party, may be a retired judge or practicing lawyer. The arbitrator’s decision is final just as if it were given by a judge in court. This means Amazon must abide by the decision of the arbitrator according to the law.
Dead Ends in the Appeal Process:
When a seller is suspended, the appeal process begins with writing to Seller Performance. The seller must draft a Plan of Action detailing the reason(s) for their suspension, how they’ve corrected the issue(s), and ways to prevent the same issues from reoccurring. Sometimes, this isn’t enough to persuade Amazon to reinstate an account. Sellers are often shut out. Amazon may stop responding or give generic denials. The next step is to file an appeal with the Bezos Escalation team, but this can be a dead end too. If you’re getting nowhere in your appeal, take Amazon to arbitration to force them to cooperate & provide a response.
Related AMZ Account Issues:
Related account issues are difficult because Amazon often mistakenly believes that accounts are linked when in fact they’re not. The difficulty is, if Amazon believes that 2 accounts are impermissible, they will not provide any reasoning why. One notification that we’ve seen provided: “We found that your account is related to another account that may not be used to sell on the site.” When receiving a suspension like this, it’s easier to reinstate the account that’s older, than it is to get the more recent one reinstated. If Amazon is incorrect in their belief, it’s up to the seller to persuade them that there is no relation.
Lost Amazon Inventory:
Although Fulfillment by Amazon is a great service providing sellers an opportunity to grow their businesses, it’s far from perfect. Lost inventory is something we hear about regularly. Lost inventory is lost money, and it’s frustrating for sellers because so much is out of their control. When working with Amazon to recoup / seek reimbursement of lost inventory, there’s no estimate for how long it will take. When inventory is lost, sellers are left with no product to sell. Thus, debts may go unpaid due to lack of sales. When Amazon refuses to cooperate, sellers have no time frame as to when they can get back on.
The Unfair Terms of Service
The agreement Amazon sellers enter into is unfair. Amazon’s Terms of Service essentially states that Amazon can suspend your account at any time, for any reason. They are not required to explain why they suspend sellers.
Amazon Sellers Lawyer
CJ Rosenbaum states:
As a lawyer with over 20 years of experience, it seems that every time Amazon hires a new lawyer, they have that new lawyer edit the Terms of Service to see how else it can unfairly suspend sellers. Over time, all of these edits have become so one-sided that the entire contract may fail when it is challenged.
At a suspended Amazon seller’s arbitration:
- Let Amazon’s lawyers and their witnesses testify that the contract allowed them to suspend you without providing the reason.
- Make Amazon argue that it doesn’t have to tell you why it suspended your account.
- Let Amazon refuse to testify about its methodologies and algorithms.
- Make Amazon themselves present all of the ridiculousness of the Terms of Service directly to the arbitrator.
In our previous articles, we have discussed that arbitrators are lawyers and retired judges. When Amazon finishes making their argument about why it was OK to suspend your seller account, you then argue that the agreement itself is invalid. At every suspended Amazon seller arbitration, show that the Terms of Service is unenforceable.
Get a Suspended Amazon Account Back by Arbitration
Suspended sellers can get their account back by arbitration. It’s conducted the same way as trial lawyers present cases. Make it simple, concise, persuasive. Tell how you did nothing wrong and that Amazon unfairly suspended your account. Amazon sellers should use notions of fairness to get their accounts back at arbitration. Use the Good Faith & Fair Dealing laws imposed on all businesses. Suspended sellers should point out that Amazon refuses to reveal how they make decisions against sellers.
For a suspended AMZ seller, recouping inventory & money is crucial. By filing for arbitration, you can take the decision out of Amazon’s hands and legally bind them to the decision of an arbitrator.
If Amazon refuses to reinstate your account, release your money, or give you back your inventory and you can’t resolve things with Plans of Action or by creating cases, every seller has the absolute right to take Amazon to binding arbitration.
Preparing To Tell Your Story
To prepare, review your account including emails to and from AMZ that preceded the hearing.
When many sellers become suspended, they write a Plan of Action where they admit to doing something wrong. As in any trial, you must take the admissions you made that can hurt your case and either take the wind out of Amazon’s sails or find a way to make your admissions of wrong doing into positive aspects of your presentation.
First and foremost, you must argue why you should win. On the other hand, you also have to address the arguments you anticipate from the other side. You will need to identify the negative facts, figure out how to either make them positive or take the sting out as much as possible. Before the arbitration starts, you must be prepared to tell your story in a concise and persuasive manner that is easy to understand.
What sellers need to say & how they should deliver their testimony.
As the party bringing the arbitration, your story should be quick, simple and persuasive. You should be able to boil the case down to two or three sentences. Arbitrators are people just like us. With short attention spans, used to getting information in sound bites, just like us. In an age of multiple screens and too many things on our plates, focus on exactly why your account should be reinstated and nothing else.
When sellers testify at an arbitration, they need to be persuasive.
Use the same tools and methods used at trials around the United States by top trial lawyers. Some tools of persuasion include: teaching the arbitrator about selling on Amazon and empowering them to reach a favorable decision.
One tried and true method for persuading someone is to provide them with the information they need to make their own decisions. You become the teacher. Through your testimony, you empower the arbitrator to reach a decision.
For example, you want to teach the arbitrator how sellers live in daily fear of suspension. That no matter how perfect, big or small, the common theme among sellers is living in fear. You want to teach the arbitrator the fact that until the arbitration, all of the cards were in Amazon’s hands. That sellers will do and say anything to comply with Amazon’s hidden rules because when they suspend you, they withhold your money and often take your inventory. You want to teach the arbitrator that Amazon often refuses to tell sellers what they did wrong. Through your educating the arbitrator about how Amazon works, you are persuading the arbitrator that the rules are unfair and that you should be reinstated.
How to Deal with Plans of Action Where You Admitted Errors
If you’re like most Amazon sellers, before the arbitration, you sent in multiple Plans of Action and admitted to doing something wrong and apologized for it. You were willing to say anything in order to get your account back.
As a trial lawyer, I can tell you that any admissions of doing something wrong will surely be used against you at arbitration. When testifying, bring the admissions you made in your Plan of Action before Amazon cross examines you with them. By the time you need to discuss your admissions in your failed POAs, you have already set the stage that Amazon is a bully and that you and all other sellers are at Amazon’s mercy.
As a strategy, you do not want to focus on the admissions of making mistakes, just touch upon it, explain the admissions briefly and then move on. Take the wind out of Amazon’s lawyers sails. Take the sting out of your prior statements.
Bury Your Problems in the Middle of Your Presentation
The Primacy and Recency Effect: Basic human psychology and trial strategy confirm that people remember what they hear first and what they hear last. Use this psychological tool to your advantage in your arbitration.
When you testify, start with your strongest points about how awful Amazon treats its sellers, then address the Plans of Action where you falsely admitted to wrongdoing, then testify about how you are an awesome seller.
Testify about all of the products you sell, all of the positive reviews, and all of the time you sold without issue. Then, in the middle, you should mention that either you made minor errors (if you did) or explain why you admitted to things you didn’t really do and move on. Take the surprise and the strength of the arguments out of Amazon’s lawyer’s hands. Finally, make sure to end your testimony on a strong note.
Amazon’s Policy Changes and How They Result in Unfair Seller Suspensions
The changes in policies result in Amazon seller suspensions.
Use the one-sided changes to win your arbitration. It is relatively simple to use the unilateral changes against Amazon. It’s easy to put the focus of your arbitration on Amazon’s bad conduct. Show the arbitrator that Amazon’s Participation Agreement is unfair and thus, unenforceable. Show that your Amazon suspension was unfair.
Let Amazon’s lawyers and witnesses testify about these arbitrary changes to the Participation Agreement. Allow Amazon point out that it unilaterally changes the sellers’ agreement. Let it sink in with the arbitrator that you have lost your ability to do business, pay bills, and make payroll because Amazon randomly changed policies. This goes against contract law at its core. Every arbitrator will know it.
It’s important that you prepare for arbitration.
There are many methods for arbitration against Amazon to get your suspended account back. Use a lawyer who knows how to shift the focus onto Amazon to get your suspended account back at arbitration. Amazon’s one-sided terms of service, unannounced changes in policy, and refusal to explain its decisions are all reasons you should be reinstated and get back to selling.
Testifying at an Arbitration
Sellers involved in an arbitration proceeding against Amazon must be prepared to testify. If the arbitrator believes you over Amazon’s witness, your account should be reinstated. When an Amazon seller testifies, s/he is first questioned by their attorney, otherwise known as a direct examination. We ask questions so that the seller can tell their story. The questions are simply nudges to move the seller along in the pre-prepared presentation. The seller should know how best to tell their story before the actual hearing.
Cross Examination by Amazon’s Lawyers
In every arbitration, you will be cross examined. But rest assured, after the cross examination has completed, we ask a few questions of our own so that your testimony ends on a strong point.
Imagine the following testimony:
Question: Did you admit in your Plan of Action that you made errors?
Question: Did you admit in your Plan of Action that you made errors?
Answer: I do not remember.
Question: Take a look at Exhibit A, is that your POA?
Answer: Um… yes.
Question: Do you see the first few paragraphs where you say that you’re sorry for making mistakes and violating policies…
Question: Would you mind reading it aloud?
You’ve now brought a ton of attention and testified about your errors.
It would be better to simply answer the question with a yes, then force the other lawyer to move onto something else.
Every seller in the USA gave up their right to sue Amazon in exchange for the right to take Amazon to binding arbitration.
Arbitrations for suspended Amazon seller accounts are through the American Arbitration Association (AAA). Arbitration for suspended sellers are similar to trials. The suspended seller has an attorney and uses testimony. The testimony is usually provided by the suspended seller themselves.
Use of Personal Responsibility to Obtain Reinstatement of Suspended Accounts
Suspended Amazon sellers should use the theory of personal responsibility to obtain reinstatement of their suspended accounts. “Personal Responsibility” refers to the belief that we are each responsible for our own conduct. In the case of a suspended Amazon seller, each seller is responsible for maintaining their account. Each seller is responsible for delivering near perfect customer experiences. If you want your account back, you must take responsibility for your conduct.
The first step in any arbitration is to draft a document called a Demand for Arbitration.
The suspended seller spells out his or her case for reinstatement in this document. The seller’s demand for arbitration must state why the Arbitrator should override Amazon’s decision and reinstate your sellers’ account. In the Demand for Arbitration, the seller should take responsibility for his or her great performance and for whatever happened that caused the suspension.
We do not believe you should admit to making mistakes you didn’t make. But you can still take responsibility for the issue.
For example, a suspended Amazon seller could accept responsibility for the customer’s complaint by identifying ways the business can be improved. Assign a person to make sure packaging is up to date with products sold in brick and mortar stores. Take responsibility for the issue by altering packaging to protect itself from awful delivery handling during shipping.
When preparing to testify at your arbitration, you need a list of issues for which you accept responsibility for.
Effortlessly testify about what you did to make sure Amazon’s customers received exactly what they ordered. Describe how you have already made changes to your business to make your sellers’ account run better. That it was your efforts, not Amazon’s, that earned high metrics.
When we prepare a client to testify, we use bullet points to guide the discussion. We point out that the seller should never blame anyone. If you find yourself blaming Amazon for your suspended account, rephrase everything you say. Change your perspective. You are an entrepreneur responsible for your own destiny.
Testify about what you’ve done to make the customer experience exactly what Amazon requires. You may win the battle for reinstatement before Amazon’s lawyers say a single word.
Just like your Plans of Action, appeals & Bezos Escalations were efforts in persuasion, so is every step in a suspended seller’s arbitration. Use this tool of persuasion to obtain the reinstatement of your suspended Amazon account.
Affirmatively accepting personal responsibility performs at least 2 functions:
- It complies with Amazon’s Leadership Principals… which will help show the suspension arbitrator that you follow the boss’ rules.
2. It will help persuade the arbitrator to reinstate your suspended account even though Amazon turned down your appeals.