Most Common Reasons Why Sellers & Vendors take Amazon to Arbitration

Sellers and vendors most often pursue Amazon arbitration over withheld funds, disposed inventory, refusal to reinstate a suspended account, and hijacked listings or accounts. Each of these can involve significant financial harm that Amazon’s internal appeals process may not resolve.

If you are a seller or vendor to Amazon and are having an issue, you are not alone. We serve countless sellers in their efforts to resolve their disputes and obtain resolution with Amazon. Unlike other law firms who help Amazon sellers, we have experience as an Amazon seller, and as an Amazon vendor, which helps us through identifying key issues and resolutions.

Our clients frequently ask what are the most common reasons why sellers & vendors take Amazon to Arbitration, so we have compiled a list. Its noteworthy that we have had some of the largest and best resolutions for sellers and vendors on Amazon, and we must extend our gratitude to the amazing legal team that Amazon has who has been cooperative in allowing us opportunity to address these claims and resolve them.

1. Withheld Funds

When your account is suspended, frequently with allegations as to the authenticity of your item(s), Amazon withholds your funds. This is the case regardless of if you are a seller or vendor. In these cases, we bring a case against Amazon arguing that they are not entitled to keep the proceeds for sales of authentic products. This takes the matter out of their hands and allows a neutral, third party to review and decide the issue.

2. Disposed Inventory

We have always wondered what this mysterious “disposal” of inventory means. It is our understanding that this likely refers to a disposition and subsequent resale of your products. In these circumstances, we bring an arbitration action for the value of the merchandise that we can demonstrate was authentic and wrongfully converted.

3. Amazon Refused to Reinstate your account

This is generally much harder as Amazon’s BSA (Business Solutions Agreement) permits Amazon to terminate your account at any time for any reason, or no reason at all, nonetheless Good Faith is a fundamental factor in all agreements, including Amazon’s agreement. Accordingly, a refusal in bad faith to consider your appeals for reinstatement can be subject to arbitration where the decision making is removed from Amazon and passed on to a neutral third party Arbitrator.

4. Hijacked Listing and/or Hijacked accounts

This unfortunately is more common these days where a listing can be hijacked and can lead to account suspension and loss of sales. Frequently, through an arbitration action we can have these issues escalated to other teams in Amazon for review, and Amazon’s legal team to try and obtain a favorable resolution. Similarly, a Hijacked account can lead to where the bank account gets changed and your money ($$$) is sent to someone else’s account. This as tantamount to theft, and actionable, and we can try to bring an arbitration action to seek prompt resolution to such matters.

These are the TOP reasons that we have encountered. We have seen a host of issues sellers have, and frequently provide guidance and help to sellers to navigate and resolve their issues, however if you are a seller or vendor and need help, contact us for a free immediate consult.