Suspending An Amazon Account Forever For Once Mistakenly Selling Tainted Goods.

In the past few months, many sellers have reached out to me to lament that their Amazon Businesses are crushed because Amazon has accused them of selling stolen goods. This includes a few doing tens of millions of dollars annually and in business for 10+ years. Appeals are being ignored with zero communication and zero due process. (A small percentage have been reinstated)

Some Background

Amazon Third-party sellers account for 60% of the site’s goods and keep growing. Selling your goods on Amazon gives you access to hundreds of millions of customers and unrivaled legitimacy. Amazon does this through reviews and a brutal compliance system known as Seller Performance.

This compliance team is often accused of being overly strict to legitimate third-party sellers and in the past, groups such as ASGTG have been a much-needed check when they have gone too far. See the most sucessful third pary sellers petition ever.

Stolen Goods

CNBC reported that many sellers are suspended for reselling stolen goods on Amazon on deals they purchased. Sellers are held liable for this as they are responsible for checking their supplier’s stock, and tainted goods are the sellers responsibility. I agree they should be held liable; even punitive punishment may sometimes be necessary. I’m afraid I have to disagree with how Amazon enforces these suspensions.

Why this can happen even with due diligence?

Take a sample 25 million dollars a year Amazon Seller. Such a seller has a huge payroll, cost of goods, operations, accounting, insurance, rent, and multiple employees. To sell $25 million a year, you likely have a few buyers sourcing goods. Goods are sourced from wholesalers and liquidators. A legitimate seller can buy from an honest middleman and still end up with tainted goods once in a few years. If the goods were legit for the last ten years, your not going to question it every single time. This is just not practical. Even Amazon and Walmart can once mistakenly source from a supplier sourcing tainted goods. These goods likely represent .00001% of the goods the seller has ever sold, and clearly, this is a reasonable mistake and not a “scheme.”

How is Amazon enforcing this?

Amazon is suspending the seller indefinitely, holding ALL goods, not just the tainted ones, and seizing ALL funds not settled, even from goods unrelated to the tainted goods. The result is multiple million-dollar businesses destroyed with no recourse and thousands of US jobs lost. The entire mistake is a buyer sourcing from a regular supplier that, this time, may have sourced from a bad supplier. These sellers are running real businesses, and the tainted goods are a significant aberration that can happen to reasonable companies doing real business.

Better way

Amazon should give these sellers another chance while holding the tainted goods and only the funds from the tainted goods after the seller agrees never to source from the troubled supplier again. Those goods and funds should then be litigated through arbitration or some real due process. This is only in cases where there is an aberration and not when there is a pattern of abuse.

In Conclusion. Amazon has gone too far by exacting a punitive price for a reasonable mistake by legitimate US sellers. This is justified if there is a pattern in a specific business of selling tainted goods. There are no patterns in these cases; clearly, the punishment does not fit the crime.

Please join ASGTG, as it has been the most effective tool in reigning in unfair compliance enforcement against legitimate third party sellers.