When Should Sellers Take Amazon to Arbitration?
Amazon merchants are critical to Amazon’s success as the e-commerce giant grows closer to monopoly status. The corporation is anticipated to account for more than half of all Christmas e-commerce transactions in the United States. As the platform grows, vendors face more frequent and difficult issues. Suspensions constitute a significant source of stress for sellers, and resuming sales is nearly always the top priority. Our staff has over a decade of trial experience and information gained from everyday interactions with Amazon.
We’re here to help Amazon merchants combat injustices.
In your contract with Amazon, you waive your right to sue Amazon, but you acquire the ability to resolve problems through arbitration, which is faster and less expensive.
Amazon specifies that any disputes be addressed through arbitration. Despite this, they often try to avoid arbitration since they simply want to eliminate the seller and keep the money. We are here to make sure that does not happen.
“To begin an arbitration proceeding, you must send a letter requesting arbitration and describing your claim to our registered agent, CSC Services of Nevada, Inc., 2215-B Renaissance Drive, Las Vegas, NV 89119.”
Both parties will see and examine it, and it will be the first document the arbitrator receives when we sit down and begin the arbitration process. They will continue to refer to that paper throughout the proceedings.
If you create a forceful, concise, and persuasive arbitration, there is a good chance that Amazon will eventually settle the case without requiring you to attend the hearing.
If your AMZ suspension difficulties fall into one of the following categories and your appeal process has failed, arbitration is your best choice for recovering money/inventory or obtaining payment for lost or damaged products.
Amazon’s terms of service:
According 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 third party, could be a retired judge or a practicing lawyer. The arbitrator’s ruling is final, just as if it were issued by a judge in court. This means that Amazon must adhere to the arbitrator’s decision as per the law.
Dead Ends of the Appeal Process:
When a seller is suspended, the appeals procedure begins by writing to Seller Performance. The seller must create a Plan of Action that details the reason(s) for their suspension, how they resolved the issue(s), and how to prevent the same issues from occurring again. Sometimes, this is insufficient to persuade Amazon to reinstate an account. Sellers are frequently locked out. Amazon may stop replying or provide generic denials. The next step is to file an appeal with the Bezos Escalation team. However, this might also result in a dead end. If your appeal goes nowhere, take Amazon to arbitration to force them to cooperate and respond.
Related AMZ Account Issues:
Related account difficulties are challenging because Amazon frequently assumes that accounts are related when not. The problem is that if Amazon decides that two accounts are unlawful, they will not explain why. We’ve received a notification: “We discovered that your account is linked to another account that may not be used to sell on the site.” When receiving a suspension like this, it’s quicker to reinstate the older account than it is to reinstate the more current one. If Amazon is erroneous in its belief, it is up to the seller to persuade them that there is no connection.
Lost Amazon inventory:
Although Fulfillment by Amazon is a valuable tool that allows vendors to build their businesses, it is far from ideal. We often hear about lost inventory. Lost goods mean lost money, which is difficult for sellers because so much is beyond their control. When negotiating with Amazon to retrieve or seek payment for missing goods, there is no timetable for how long it will take. When inventory is missing, retailers are left without a product to sell. As a result, debts may remain unpaid due to a lack of sales. Vendors have no idea when Amazon refuses to comply when they can resume operations.
Amazon’s unfair terms of service.
The deal that Amazon merchants enter into is unjust. Amazon’s Terms of Service effectively stipulate that your account can be suspended anytime and for any reason. They do not have to explain why they suspend sellers.
Amazon’s unfair terms of service.
The deal that Amazon merchants enter into is unjust. Amazon’s Terms of Service effectively stipulate that your account can be suspended anytime and for any reason. They do not have to explain why they suspend sellers.
In a suspended Amazon seller’s arbitration:
Allow Amazon’s lawyers and witnesses to testify that the contract authorized them to suspend you without providing a reason.
Make Amazon claim that it does not have to explain why it suspended your account.
Allow Amazon to refuse to testify about its methodology and algorithms.
Make Amazon present all of the nonsense of the Terms of Service straight to the arbitrator.
In previous articles, we mentioned that arbitrators are lawyers and former judges. When Amazon finishes explaining why it was acceptable to suspend your seller account, you contend that the agreement itself is invalid. At each suspended Amazon seller arbitration, demonstrate that the Terms of Service are unenforceable.
Fees for filing an arbitration claim against Amazon:
The AAA charges varied filing costs based on the amount of monetary damages claimed by the submitting party. There are no further fees for pursuing reinstatement. If all you want is reinstatement, you’ll pay the lowest fee.
An arbitration proceeding requires an “initial filing fee” (paid with the Demand for Arbitration) and a final fee (paid before the hearing). The arbiter also receives a separate fee.
“If the action can be brought for damages of up to $75,000 and you do not seek anything else, you may file under the AAA’s expedited case guidelines. This means that your case will be heard considerably sooner and for less money than other cases.”
The AAA website has charts outlining the fee schedule for filing for arbitration. They provide two payment options:
The Standard Fee schedule is a two-payment structure that allows for slightly higher initial filing fees but reduced overall administration fees for cases that go to hearing.
The Flexible Fee schedule is a three-payment schedule that allows for a lower initial filing fee while spreading future payments out over the course of the arbitration. Cases that go to a hearing will incur slightly higher total administrative fees.
Get Your Suspended Amazon Seller Account Back Through Arbitration.
Suspended merchants can reinstate their accounts through arbitration. It works in the same way that trial lawyers present cases. Make it brief, concise, and persuasive. Explain how you did nothing wrong, and Amazon wrongfully suspended your account. Amazon merchants should use the concept of fairness to recover their accounts at arbitration. Use the Good Faith and Fair Dealing laws, which apply to all businesses. Suspended sellers should point out that Amazon refuses to disclose how it makes decisions against sellers.
For a suspended AMZ seller, recouping inventory and money is critical. You can legally bind Amazon to the arbitrator’s judgment by filing for arbitration.
If Amazon refuses to reactivate your account, release your money, or return your merchandise, and you cannot address the situation through Plans of Action or by filing lawsuits, every seller has the right to take Amazon to binding arbitration.
Prepare to Tell Your Story
Examine your account, especially the emails to and from AMZ, before the hearing.
When many vendors are suspended, they create a Plan of Action in which they admit they did something wrong.
As with any trial, you must consider the confessions you made that may have harmed your case and either take the wind out of Amazon’s sails or find a method to turn your admissions of wrongdoing into good presentation components.
First and foremost, you must argue why you deserve to win. However, you must also answer the issues the opposing party will likely raise. Identify the negative facts and determine how to turn them around or minimize their impact. Before the arbitration begins, prepare to communicate your story concisely and persuasively in a way that is simple to grasp.
What vendors need to say and how to convey their testimony:
As the party bringing the arbitration, your story should be brief, straightforward, and persuasive. You should be able to summarize the situation in 2-3 sentences. Arbitrators are individuals just like you. Like us, they have short attention spans and are accustomed to receiving information through sound bites. In an age with numerous displays and too much on our plates, focus solely on why your account should be reinstated.
When sellers testify at an arbitration, they must be persuasive.
Top trial lawyers employ the same tools and strategies in their trials across the United States. Some methods of persuasion include training the arbitrator about Amazon sales and empowering them to make a favorable verdict.
One tried-and-true way to influence someone is to give them the knowledge they need to decide. You become the teacher. Your testimony empowers the arbitrator to make a conclusion.
For example, you might wish to show the arbitrator how vendors constantly fear suspension. Regardless of how flawless, large or small, the unifying theme across salespeople is anxiety. You want to teach the arbitrator that until the arbitration, Amazon held all of the cards. Merchants will do and say anything to comply with Amazon’s hidden regulations because when you are suspended, they withhold your money and frequently seize your merchandise. Teach the arbitrator that Amazon refuses to explain what merchants did wrong. Educating the arbitrator about how Amazon works tells him that the rules are unfair and that you should be reinstated.
How to Deal with Action Plans in Which You Have Admitted Errors:
If you were like most Amazon sellers before the arbitration, you submitted many Plans of Action, admitted to doing something wrong, and apologized for it. You were willing to say anything to have your account restored.
As a trial lawyer, I can assure you that any confessions of wrongdoing will be used against you in arbitration.
Bring your Plan of Action admissions with you when you testify so that Amazon can cross-examine you on them. By the time you need to discuss your admissions in your failed POAs, you’ve already established that Amazon is a bully, and you and all other sellers are at their mercy.
As a tactic, you should not emphasize on the admissions of making mistakes; instead, mention them briefly, explain them, and then go on. Take the wind out of Amazon’s legal sails. Take the sting out of your previous statements.
Bury Your Problems in the Center of Your Presentation
Basic human psychology and trial strategy demonstrate that individuals recall what they hear first and last. Use this psychological tactic to your advantage during your arbitration.
When you testify, begin with your strongest arguments about how bad Amazon treats its sellers, then address the Plans of Action in which you falsely admitted to wrongdoing, and last testify about how amazing you are as a seller.
Testify about all of the things you sell, all of the great feedback you receive, and all of the times you sold without incident. Then, in the middle, state that you made minor mistakes (if you did) or explain why you acknowledged to things you didn’t actually accomplish before moving on. Take the surprise and strength of the arguments from Amazon’s lawyer’s hands. Finally, make sure your testimony ends on a positive note.
Amazon’s Policy Changes and How They Lead to Unfair Seller Suspensions
Policy changes lead to Amazon seller bans.
Make one-sided adjustments to win your arbitration. It is relatively easy to exploit unilateral changes against Amazon. It’s easy to focus your arbitration on Amazon’s poor behavior. Show the arbitrator that Amazon’s Participation Agreement is unjust and unenforceable. Demonstrate why your Amazon suspension was unfair.
Allow Amazon’s lawyers and witnesses to testify regarding the arbitrary revisions to the Participation Agreement. Allow Amazon to point out that it unilaterally changes the seller agreement. Allow the arbitrator to process that you have lost your capacity to do business, pay bills, and make payroll because Amazon changed its policies at will. This violates the fundamental principles of contract law. Each arbiter will be aware of this.
It is critical that you prepare for arbitration.
Numerous arbitration options are available to reclaim access to your suspended Amazon account. Choose a lawyer who understands how to turn the spotlight back to Amazon to reinstate your suspended account at arbitration. Amazon’s one-sided terms of service, unexpected policy changes, and failure to explain its actions are why you should be reinstated and allowed to continue selling.
Testifying at an Arbitration
Sellers involved in arbitration must be willing to testify. If the arbitrator trusts you instead than Amazon’s witness, your account should be reactivated. When a seller testifies, their attorney does a direct examination. We ask questions so that the seller can share their tale. The questions are essentially nudges to move the vendor through the pre-prepared presentation. Before the hearing, the seller should have a good idea of how to present their case.
Cross-examination by Amazon’s lawyers
Every arbitration will involve cross-examination. But rest assured, after the cross-examination, we will ask a few questions to ensure that your testimony concludes on a high note.
Imagine the following testimony:
Question: Did you admit any faults in your Plan of Action?
The answer is yes.
Versus:
Question: Did you admit any faults in your Plan of Action?
Answer: I don’t remember.
Question: Look at Exhibit A; is that your POA?
Answer: Yes.
Question: In the first few pages, you apologize for making mistakes and violating policies.
Answer: Yes.
Question: Do you mind reading it aloud?
You’ve now garnered a lot of attention and testified about your faults.
It might be preferable to simply answer the question with a yes and push the other lawyer to go on to something else.
Every seller in the United States signed away their right to sue Amazon in exchange for the ability to take Amazon to binding arbitration.
The American Arbitration Association (AAA) handles arbitrations for terminated Amazon seller accounts.
Arbitration for suspended vendors is analogous to trials.
The suspended seller has an attorney who provides testimony.
Typically, the suspended seller provides their own testimony.
Use of Personal Responsibility to Reinstate Suspended Accounts
Suspended Amazon merchants should take personal responsibility for reinstatement of their accounts.
“Personal Responsibility” refers to the notion that we are responsible for our actions.
Each suspended Amazon seller is responsible for maintaining their account. Each seller is responsible for providing near-perfect client experiences. If you wish to regain your account, you must accept responsibility for your actions.
The first stage in every arbitration is to create a document known as a Demand for Arbitration.
This paper outlines the suspended seller’s case for reinstatement. The seller’s demand for arbitration must explain why the arbitrator should overturn Amazon’s decision and reinstate the seller’s account. In the Demand for Arbitration, the seller should accept responsibility for his or her outstanding performance as well as whatever occurred that resulted in the suspension.
We do not believe you should acknowledge to committing mistakes you did not commit. However, you can still accept responsibility for the situation.
For example, a suspended Amazon seller could accept responsibility for the customer’s complaint and suggest measures to improve the firm. Assign someone to ensure the packaging is current with products sold in brick-and-mortar retailers. Accept responsibility for the problem by modifying packaging to protect itself from poor delivery handling during transit.
When preparing to testify in your arbitration, you should have a list of topics for which you accept responsibility.
Testify about how you ensured Amazon customers received exactly what they requested. Describe the modifications you’ve already implemented to improve the performance of your merchants’ accounts. That your efforts, not Amazon’s, resulted in high metrics.
We use bullet points to direct the conversation when preparing a client to testify.
We emphasize that the vendor should never blame anyone. If you find yourself blaming Amazon for your suspended account, you should reframe things. Change your perspective. You are an entrepreneur who controls your own future. Testify about what you’ve done to ensure that the customer experience meets Amazon’s requirements. You may win the reinstatement battle before Amazon’s lawyers say anything.
Every stage in a suspended seller’s arbitration is an attempt to persuade, just as your Plans of Action, appeals, and Bezos Escalations were. Use this persuasion tool to reinstate your suspended Amazon account.
Affirmatively embracing personal responsibility has at least two functions:
1.It aligns with Amazon’s Leadership Principles, demonstrating compliance with company policies to the suspension arbiter.
2. It will help persuade the arbitrator to reinstate your suspended account, even if Amazon denied your appeals.
7 Reasons for Arbitration Against Amazon
1) Inventory that has been destroyed or disposed of.
According to our findings, Amazon sells inventory rather than destroys it. So, destroyed inventory is identical to discarded inventory. I can’t tell you how many vendors we spoke with who stated that Amazon had disposed of their product yet was still selling it.
2 – Withheld funds.
When your things are 100% genuine and not counterfeit, but Amazon is retaining your money.
3 – Hijacked listings.
This results in an account suspension and a loss of sales. Taking Amazon to #arbitration often results in your issue being seen by higher-level teams.
4 – compromised accounts.
Where your bank was changed, and $$$ was sent somewhere else. If you have a brand register and someone #hacked into it, modified your listings, or stole your intellectual property.
5 – Vendor central disagreement.
We learned much about Amazon’s refusal to pay for inventory while repeatedly ordering it.
6. Amazon should have reinstated you.
If personnel just made incorrect decisions regarding your reinstatement.
7 – You’ve recorded issues with Amazon.
They aren’t reading valid arguments.