Today’s show is something that I feel is long overdue. I am always getting legal questions when it comes to selling on Amazon. We have with us CJ Rosenbaum, the founder of Amazon Sellers Lawyer, to help answer some questions about Amazon account suspension.
CJ has been representing entrepreneurs ever since he graduated from law school. He got started with Amazon sellers after client started investigating buying an Amazon based business. After the client managed to buy the business, he immediately had issues with Amazon account suspension and ASINs getting knocked off. He came to CJ because when he tried to find someone for legal help and the only people in the industry were non-lawyer consultant types that didn’t know much about being a seller. CJ has always enjoyed the challenge of working with entrepreneurs.
When he looked into, he found that there were really no lawyers involved. So he jumped in with both feet. He went from doing nothing but trying cases in court, to solely focusing on Amazon entrepreneurs. He has grown to four lawyers and six staff in New York. If you use Amazon Sellers Lawyer to handle your Amazon account suspension issue, you’ll know that whoever works on your case is a college educated paralegal. They are opening offices in London and Dublin and are looking to open an office in Mumbai. They have an office open in Shenzhen, China, with plans to expand into Guangzhou and Dongguan.
The number fear of any Amazon seller is an Amazon account suspension. Not picking a bad product. Not shipping issues. It’s getting that email that Amazon has suspended your account, they’re holding your money, and charging you storage fees.
Account suspension can be divided into two categories: non-intellectual property and intellectual property suspension.
Non-intellectual property suspension is from late shipments, bad feedback, etc, and are not really legal issues. The other half is solely intellectual property. This is another brand complaining about you as a seller and doing a sweep of their listings claiming your violating intellectual property laws. About 95%-98% of the IP, intellectual property, claims, in the US, are entirely baseless. They are bogus complaints meant to thwart competition.
These are coming from major brands like Wal-Mart, Samsung, Major League Baseball and other companies from around the world. CJ and his team stand up to these companies. Almost every time, these brands withdraw their complaints. Amazon Sellers Lawyer don’t charge outrageous fees for this service. If you hire a lawyer to defend you in court, it can quickly cost you tens of thousands of dollars. CJ is looking to get you back to selling without charging you an arm and a leg to do so.
These are not really legal issues, it has more to do with Amazon’s internal regulation. They come from customer complaints about late shipments, bad feedback, and the like.
The first step is to write a plan of action if you find that your account has been suspended because of a non-IP complaint. A plan of action is a practice in persuasive writing. You’re trying to persuade the person at Amazon to reinstate your selling privileges, rather than asking for more information or saying no. As lawyers, CJ and his team are trained to identify issues and write persuasively.
Writing a Plan of Action
There are three parts to a plan of action.
Part 1 The root cause.
This doesn’t mean admitting to doing something wrong that you didn’t do. You don’t have to admit to wrongdoing if you didn’t actually do something wrong. The root cause can usually be something that you can do better to avoid a customer getting a product that they feel is not authentic. You need to look into your account and figure out what cause the customer or Amazon to have an issue with your account.
Part 2 The immediate corrective action that you took.
You had a customer that was unhappy for whatever reason. It may have been a bogus complaint, Amazon is still customer focused. So whatever immediate action you took. Whether you gave them a refund or placed the unit, whatever you did to make the customer happy. The product may have been perfect and the customer is just trying to get one over on you, still refund or replace the unit. Let them take a small part to protect your account.
Part 3 What you’re going to change in your business to prevent future complaints.
What are you going to change so Amazon never has to deal with you again? Maybe it’s better packaging, better product quality, or better shipping.
There seems to be a knee-jerk reaction when sellers are faced with an Amazon account suspension, to say you did something wrong and apologize. It’s not necessary to admit wrongdoing if you didn’t actually do something wrong. Most sellers know, that when you face an Amazon account suspension, you’re writing to product quality or seller performance. They will say yes, no, or ask for more information.
At some point, if you’re not reinstated, you move on to policy team. Hopefully they say yes. If they say no, you then go to the Jeff Bezos team. They’re suppose to do a top to bottom evaluation and determine if you can sell or not. If they say yes, great. You go back to selling. What most sellers don’t know, is that if they say no you can use arbitration with the American Arbitration Association. If you are making a lot of money and it’s you business is worth it, you can decide to let a third-party arbitrate it. Here’s the key. It’s going to make this process if you admitted to doing something wrong in your plan of action.
Make note that this is if you’re selling in the US and it’s a US account. If you’re in the UK, like most of you I presume, you have to go to Luxembourg and it’s a whole other process.
CJ and his team has a lot of success when dealing with Amazon account suspension. Most of his clients get reinstated at the first level. Some have to go to policy teams and a small portion end up going to Jeff Bezos’ team where they are also fairly successful.
Their goal is to get their clients reinstated as quickly as possible. What they have learned from people at Amazon, is that the first plan of action is vital. You have to be concise and persuasive. It gives you a better chance of getting reinstated quickly. It also forms the basis of their future questions and your arguments going forward if it escalates. I really can’t emphasize enough how important that first plan of action is.
Now we’re going to cover the legal side of Amazon account suspension. These are the complaints of IP, intellectual property, laws violation from other brands. The good news is that almost all these are baseless and are easily dealt with by a letter from a lawyer. The first step is to take a look at the correspondence from Amazon. At the bottom it will have the name and email of whoever filed the complaint. Amazon Sellers Lawyer will look at the product, how it was packaged, and look at the details on the listing.
They usually find that there is no intellectual property copyright violation. Even though Amazon accepted the complaint, there is no violation under the law. They will then send them a letter, as your attorney, and go step by step how there is no copyright violation. Doing this, and maybe a few phone calls, will usually get the company to withdraw the complaint. Sometimes it needs to be escalated. They may have be more zealous and explain the potential liability their company faces if they refuse to withdraw the complaint. What that does is attempt to persuade them to withdraw their complaint and build-up the arguments to then submit to Amazon that there is no violation.
This is the best time to have a lawyer. The best thing a lawyer can do is help you avoid problems. When you developing products, your number one threat is your own factory. There are times when the factory will agree to not make your product for anyone else, and then they do. Now you have other brands competing against you with your own IP. Intellectual property laws are a bit of a grey area in these places.
If you’re in China, make sure you’re dealing with a factory in a province, like Shenzhen or Guangzhou, that is trying to work on their IP issues. There are all these places in Asia, right now, that are battling to see who will be the leader in intellectual property which means they are wanting to protect IP rights and the court will do a better job backing you up. You will want to file for trademarks. Obviously, in the US and the UK, but you also want to file with WIPO, World Intellectual Property Organization, in the countries where you’re manufacturing, and the countries where your biggest risk is coming from.
Your contracts are very important. If you’re having a lawyer in the US or the UK write the contracts, they’re writing in that you have to go to court in the US or UK. The factories in China, Thailand, Vietnam, and India don’t care what a US or a UK court orders because it won’t ever touch them. You need to have the court in the country where the factory is and make sure you have the ability to take them to court in their country. That ruling will affect them. That’s where your leverage is in negotiations.