When Amazon Sellers Should Take Amazon to Arbitration:
Amazon sellers are essential to the Amazon platform as the ecommerce giant continues to grow towards near monopoly status. Last year Amazon shipped over 2 billion items worldwide on behalf of sellers utilizing the Fulfillment by Amazon service alone. In addition, the company is now estimated to make up more than half of all holiday ecommerce transactions in the United States. As the platform continues to expand, issues for sellers have become more frequent, and at times, more complex. Suspensions are a top concern for sellers, and getting back to selling is the number one priority in almost every case. The team at Amazon Sellers Lawyer has over a decade’s worth of trial experience coupled with knowledge from dealing with Amazon on a daily basis. We are here to help sellers fight the injustices on the Amazon platform.
Amazon regularly refuses to provide the substance of its allegations.
Sellers often feel that it’s impossible to write a Plan of Action when wrongfully accused and aren’t provided any indication of the reasoning behind the accusation.
By filing for arbitration, you can “take the decision out of Amazon’s hands” and legally bind them to the decision of the arbitrator. For a suspended Amazon seller, recouping your inventory and money is crucial. If your account issues fall into any of the below categories and your appeal process has hit a dead end, arbitration might be your best option to get your money and inventory back or obtain reimbursement for lost goods.
What types of cases are “ripe” for arbitration?
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 it is usually less costly and gets faster results. The arbitrator, a neutral third 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 an Amazon seller is suspended, the appeal process begins with writing to Seller Performance. The seller must draft a Plan of Action (POA) which details the reason(s) for their suspension, how they have corrected the issue(s), and a plan to prevent the same issues from reoccurring. Sometimes, a POA is not enough to persuade Seller Performance to reinstate an Amazon account. Amazon sellers are often “shut out” in a sense.. Amazon may stop responding altogether, or might just give the seller generic denials. So, the next step would be to file an appeal with the Bezos Escalation team, but many times this can be a dead end for sellers as well.
If you are getting nowhere with Amazon Seller Performance and the Bezos team, you may need to take Amazon to arbitration to force them to cooperate and provide a substantive response.
Related Account Issues:
Related account issues are difficult because Amazon often mistakenly believes that accounts are linked when in fact they are not. The difficulty is, that if Amazon believes that two accounts are impermissible, they will not provide any reasoning why. For example, one performance notification we have seen at ASL provided: “we found that your account is related to another account that may not be used to sell on the site.”
When receiving a related accounts suspension, sellers should keep in mind that it is easier to reinstate the account that is older, than it is to get the more recent one reinstated. If Amazon is incorrect in their belief that two or more accounts are related, it is up to the seller to persuade them that there is no relation between the accounts.
Although Fulfillment by Amazon is an amazing service that provides sellers with a unique opportunity to grow their businesses, it is far from perfect. Lost inventory is something we hear about regularly at Amazon Sellers Lawyer. Lost inventory is lost money. Lost inventory is frustrating for sellers because so much is out of their control.
When working with Amazon to recoup or seek reimbursement of your lost inventory, there is no estimate for how long it will take. Just like with appeals, Amazon may give generic responses or not respond at all to a seller’s attempts to locate their inventory. 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, Amazon sellers have no time frame as to when they can get back to selling.
In your contract with Amazon, you give up the right to take Amazon to court. But what you gain is the ability to have all your disputes resolved through arbitration, which is much faster and cheaper.
What a demand for arbitration is, how we draft it, and what we do with it:
Amazon stipulates that all of your issues are to be resolved in arbitration. Despite that, a lot of the time they will still try to avoid arbitration because they just want to remove the seller and try and keep your money. We are here to not let that happen. We send out a paper that says we demand to go to the hearing and arbitrate it with you.
We sit one on one with clients and figure out exactly what goes into this demand for arbitration. We can highlight how you have been a consistent seller, how you have excellent reviews, etc. We take the fight right to Amazon and take the decisions out of their hands. The demand for arbitration is the very first step. We work with the seller, identify what the issues are, and make sure that the arguments we make are persuasive.
How you get into the process of arbitration against Amazon:
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.
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 for the suspension.
- Let 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.
- Let 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. We know that all lawyers and judges studied contract law that states that one- sided agreements are invalid. 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 Your Suspended Amazon Account Back by Arbitration
Suspended Amazon sellers can get their account back by arbitration. An arbitration should be conducted the same way good trial lawyers present their cases. Make the case simple, concise, persuasive. Tell how you did nothing wrong and that Amazon unfairly suspended your account.
Suspended Amazon sellers should use notions of fairness to get their accounts back at arbitration. Sellers should use the Good Faith and Fair Dealing laws imposed on all businesses to get their accounts back. Suspended sellers should point out that Amazon refuses to reveal how they make decisions against sellers.
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, you’ll need to review your account including all emails to and from Amazon that preceded the hearing.
For example, when many sellers were initially suspended, they wrote a Plan of Action where they admitted 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. They have short attention spans and are used to getting their information in sound bites… just like us. In an age of CNN, multiple screens and too many things on our plates, you need to be focused on exactly why your account should be reinstated and nothing else.
When Sellers Testify at an Arbitration, They Need to Be Persuasive.
You need use the same tools and methods that are 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 are like most sellers, before your arbitration, you sent in multiple Plans of Action and admitted to doing something wrong and you 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. But, all is not lost. When you testify at your arbitration, bring out 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. Of course you would admit that your products weren’t shipped carefully… you need to feed your family or make payroll.
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. This is called “primacy and recency.” 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.
A few examples of the unilateral changes in Amazon polices that have resulted in many Amazon seller suspensions include:
- Retail Arbitrage Suspensions: Amazon’s policy now seems against retail arbitrage. The limits on Amazon sellers through Brand Gating is rampant.
- Not Accepting Retail Receipts. If your account was suspended for inauthentic you need to know how to address this issue. At your suspended seller arbitration, you need show that retail receipts were fine last year and suddenly they are not accepted.
- At your suspended seller arbitration, show how Amazon sellers are suspended for new policy updates that they were never made aware of.
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 is important that suspended Amazon sellers 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.
Be Prepared to Testify 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.
Sellers’ arbitrations are held in either the offices of the American Arbitration Association or via telephone. When an Amazon seller testifies, he or she is first questioned by their attorney. Just like in court, this is called the “direct examination.” The Amazon seller’s lawyer will ask questions of its own client so that the seller can tell their story. The questions by the lawyer 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.
If you are properly prepared for your hearing, when you are cross examined, you will have a few tools to use.
For example, when you are asked about information about something that is not good for your case, just answer the question. Do not draw more attention to the issue by being evasive. Just say yes or no.
The point is this: give in quickly on battles you cannot win so that you can ultimately win the war against Amazon. The bottom line is to get your account back.
Also, rest assured, that after your cross examination is complete, any skilled trial lawyer will make sure to ask a few questions 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?
Question: Do you see the first few paragraphs where you say that you are sorry for making mistakes and violating policies…
Question: Would you mind reading it aloud?
You have now brought a ton of attention and testified about your errors. It would have been better to simply answer the question with a yes and then force the other lawyer to move onto something else.
Every suspended seller in the USA gave up their right to immediately sue Amazon in exchange for the right to take Amazon to binding arbitration.
Suspended sellers can take the decisions about their accounts out of Amazon’s hands and have their appeal heard by an arbitrator. The arbitrations for suspended US accounts is through the American Arbitration Association (AAA). Arbitration for suspended sellers are similar to trials. At an arbitration, the suspended seller has an attorney and uses testimony. The testimony is usually provided by the suspended seller themselves. When a larger Amazon account is suspended, then the suspended account owner may use his or her staff to provide the needed testimony.
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 to get your account back after being suspended, sellers must take responsibility for their conduct.
The first step in any arbitration for a suspended Amazon seller 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.
At AmazonSellersLawyer, we do not believe that suspended sellers should admit to making mistakes they did not 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 that the business can be improved. A suspended Amazon seller could improve the business by assigning a person to make sure that the packaging is up to date with products sold in brick and mortar stores. A suspended seller could take responsibility for the issue by altering packaging to protect the protect better from the USPS awful handling during shipping. Or, if the customer complained about your products being inauthentic or used sold as new, the suspended seller should take responsibility for why the customer thought that the product was not genuine or used.
Affirmatively accepting personal responsibility performs at least two functions:
- It complies with Amazon’s Leadership Principals… which will help show the suspension arbitrator that you follow the boss’ rules, and;
- It will help persuade the arbitrator to reinstate your suspended account even though Amazon turned down your appeals.
When you are preparing to testify at your suspended seller arbitration, you should have a list of issues for which you will accept responsibility. You should be able to effortlessly testify about what you did to make sure that Amazon’s customers received exactly what they ordered. You should be able to 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 suspended seller should never blame anyone. Americans, including the arbitrators, are not persuaded by finger pointing. As a tool to show compliance with Amazon’s Terms of Service and a tool to persuade the arbitrator, be prepared to take responsibility for your business. If you find yourself blaming Amazon for your suspended account, rephrase everything that you say. Change your perspective. You are an entrepreneur responsible for your own destiny. Be that person – get your seller account reinstated.
If you testify at your suspended account arbitration about what you have 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.