Amazon’s stricter control over its sellers has led to a new legal industry. Small businesses are seeking legal help to reactivate their Amazon accounts after suspensions.

The Financial Times reports that numerous Amazon seller accounts have been suspended for supposed policy breaches, raising worries among business owners. Many merchants who have been suspended are now hiring lawyers to help them regain access to their accounts and funds. These suspensions can greatly affect small businesses that rely on online sales and may even push some of them out of business.

Amazon often holds funds in the accounts of suspended sellers for suspected fraud or abuse. This money might be kept permanently if the seller’s account isn’t restored and they’re seen as a problem. Furthermore, Amazon often doesn’t reveal the reasons for suspensions and victims often find Amazon’s support lacking.

This situation arises due to Amazon’s strict policies and actions against violations. Four e-commerce-focused law firms in the US have already reported a high number of cases from Amazon sellers.

Understanding Amazon’s Seller Suspensions

Amazon, prioritizing risk management in its marketplace, heavily monitors third-party sellers. As of the second quarter of 2023, marketplace sellers made up 60% of Amazon.com’s sales.

 

amazon seller suspensions

 

Each year, Amazon suspends numerous seller accounts. The company keeps the suspension reasons private to safeguard its investigation process.

However, according to Lesley Hensell, co-founder of a firm dedicated to addressing complex issues faced by Amazon sellers and vendors, there are several common causes for these suspensions, including:

  • Selling inauthentic or counterfeit products.
  • Delivering poor-quality products.
  • Failing to complete orders, either in a timely manner or at all.
  • Not providing shipment tracking information.
  • Manipulating the platform, such as paying for reviews.
  • Engaging in illegal activities, including money laundering and fraud.

Basically, Amazon typically suspends sellers when:

  • Customers have negative experiences.
  • Sellers violate Amazon’s extensive rules.
  • Sellers breach state, U.S., or international laws.

While Amazon doesn’t disclose specific figures regarding account suspensions, widespread suspensions are uncommon. Nevertheless, Hensell notes that she has seen suspensions affect even the largest seller accounts and well-known brands on Amazon.

She writes:

Amazon’s priority is not, never has been and never will be sellers or brands. In the view of Amazon executives, every seller and brand is replaceable. Buyers are paramount, and their complaints rule the day.

Examples of Suspensions

Hensell explains that a review of client data from their Amazon Seller Central accounts revealed the following problems:

  • Customers were returning a bundled shampoo and conditioner because they were receiving two shampoos instead of one of each.
  • A high-end face powder was getting a lot of complaints for breaking easily.
  • Many customers were unhappy with a dish soap that was leaking and sticky.
  • A popular clothing brand had issues with a shirt line that was too small for the sizes listed.
  • There was an issue with a car replacement part being sent out as a generic item when it should have been a branded one.

The increase in lawyers and consultants dealing with Amazon’s strict seller policies suggests problems with how Amazon treats its sellers. Sometimes, sellers are wrongly accused by Amazon’s automated systems that look for sellers breaking the rules.

As Amazon’s marketplace expands, the company has increased its oversight. In the first half of 2023, Amazon took 274 million actions in its EU store to manage or remove content, even if it wasn’t illegal. The primary action, blocking access to content, accounted for 134 million of these actions. They also removed content in 84 million cases and partially suspended services in 52 million situations.

Out of the total 274 million actions, Amazon automated 73 million of them. Notably, 97% of these automated actions were found to be correct.

Marianne Rowden, CEO of the E-Merchants Trade Council, believes that sellers needing legal help shows a weakness in Amazon’s marketplace. An anonymous seller agrees, pointing out the many law firms now specializing in Amazon issues.

In serious disputes, lawyers often have to navigate through Amazon’s required arbitration process, which is costly and not public. This can be a big financial challenge for small businesses, as attorney Leo Vaisburg points out.

Law firms focusing on Amazon usually charge between $1,300 and $3,500 per case.