Amazon Purposely Driving Arbitration Costs Up for Sellers

A big question that I get asked when it comes to arbitrations against Amazon is how many arbitrators, how many judges hear my case? And the answer is almost always one.

Now, if the case is over a million dollars, either side can demand a panel of three arbitrators, but I usually advise against it because it drives the costs up like crazy. Instead of spending money for one arbitrator to listen to every aspect of the case, you end up paying for three arbitrators. So you’re tripling your costs to hear every aspect of the case. And then you’re also paying those three arbitrators to talk with each other when you’re offline. So on average, it actually quintuples the cost. It’s five times the cost if you have a panel of three arbitrators.

So arbitrations, whether it’s expedited, meaning up to $50,000, or non-expedited, up to a million dollars, usually going to go with one arbitrator.

If it’s over a million dollars, you may still only want to pay for one arbitrator, but Amazon has the right to insist upon a panel of three. And we’ve seen Amazon do it. We believe, to simply drive up your costs. So to answer the question, there’s almost always one arbitrator, but if it’s over a million dollars, Amazon or you can ask for a panel of three arbitrators.

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Rosenbaum, Famularo & Segall, PC (Amazon Sellers Lawyer) is an international law firm working to defend the rights of sellers on Amazon and other online platforms.