Amazon Lawyer's Expert Insight into Amazon Seller Account Suspensions
Let’s say–even though you followed our advice about avoiding an Amazon Seller account suspension–one day, you get suspended.
So you follow the steps to get your account reinstated, but you’re worried it won’t work. And in the meantime, you can’t do anything but fulfill past orders.
Unfortunately, this scenario does happen to even good Amazon sellers who slip up and don’t meet Amazon’s strict seller requirements. What’s the solution? Should you keep trying or move on?
We sat down with CJ Rosenbaum, an Amazon Sellers’ lawyer in NYC, to discuss this issue.
Rosenbaum literally “wrote the book” on Amazon law–he is finishing writing The Amazon Lawbook, and there are two more Amazon books in the works. Rosenbaum sheds light on the types of sellers and products he sees restricted most, common red flags, and common obstacles sellers run into while trying to get an account reinstated.
Q&A With Cory Rosenbaum, Amazon Sellers’ Lawyer
Q: What’s the most common reason you’ve seen sellers getting suspended?
A: Intellectual property rights complaints have been skyrocketing. Congress recognized “trademark bullying” in 2006 or 2007. It’s a recognized term in the U.S. Patent Trademark Office. Now, it’s exploding for small manufacturers as well as huge.
[Trademark bullying] is becoming very common. It used to be like 20-30 percent, and now it’s definitely around 50/50 between the [intellectual property] complaints and everything else—inauthentic, not shipping on time, not uploading tracking numbers. But if you add it all up, the IP complaints are about half of all the suspensions we’ve seen…in the past two months.
Q: What do you think the catalyst is?
A: The success the manufacturers are having in knocking out sellers is…is the catalyst. I think the word has gotten around that if you just claim trademark…or copyright, you’ll knock all these little [Amazon sellers] out. I think also that the little guys are now taking a big bite of the big guys’ business. Let’s say the big guys sweep 20 sellers off a listing. Only a couple of them are going to fight, and maybe one is going to find their way to me.
Q: Can you give me an example?
A: One of my clients was buying clothes at his local Wal Mart…where yoga pants weren’t really selling, and he bought like 20-30 pairs off the discount rack…put them on Amazon, and was selling them, and was making more than Wal-Mart was making [on those pants]. Their brand management company put in these complaints that he was infringing on trademark and copyrights, but it’s not.
Trademark is like the Nike Swoosh or the red and white circle from Target. You cannot take that swoosh and put on a pair of Reeboks and claim they’re Nikes. That’s trademark infringement. But if you’re actually selling real Nikes and they have the swoosh on it, there’s no violation.
Q: What about for copyright infringement?
A: The same thing with copyright. Copyright is just a creative work, like the writing on the box or a comedy skit, or a dance or a painting—something creative. So unless you’re cutting and pasting the content from one box to yours, there’s no copyright either. Or you have them claiming copyright because the sellers are using detail pages that have already been created. But if I didn’t upload someone else’s picture, I didn’t steal it. I’m listing on it, but I didn’t do it.
It’s only infringement against the person that actually put the picture or the description up. If you stole a car, and I got in the car with you, I didn’t steal the car. You stole the car.
The first person to list the pair of Nike shoes [on Amazon], whether it’s Nike or somebody else, they create the page. There’s one page for every model of sneaker. There could be 100 people who jump and start selling the same model sneaker, but they didn’t steal anything from Nike, because it was already stolen, or it was already put up by Nike–[meaning] they gave it away.
Q: Have you seen a trend in the types of accounts or products being suspended on Amazon?
A: Most of them are mom and pops, some are doing significant business.
[As for products,] I see more suspensions probably in electronics and accessories than in other categories. We see [suspensions] in everything, but those things are pretty prime for suspensions for a lot of different reasons.
Q: Can you give me a couple of the reasons why electronics and accessories seem to get suspended more?
A: The sellers have listing problems where they use the wrong words. [For instance], where you’re not allowed to say “Compatible with Apple” or…use a picture of an iPhone or Samsung S7 or whatever. And also [electronics sellers] are really high volume—you have to sell a ton of phone cases to make a living…which means it’s more opportunities for sellers to be unhappy and make complaints.
We also see a lot in cosmetics…it’s the trademark/copyright infringement claims and the higher volume. For instance, if you’re selling those [makeup blenders] for 99 cents at a high volume.
We also had a big fight with a vitamin company a month ago that was selling a particular supplement, where the name of the company took up a third of the bottle, and a picture of the fruit it came from took up another third of the bottle. And a big company came in and said, “You’re copying us.” But in that case, my client was a pretty new business, and it really wasn’t in their interest to fight. It was much easier just to retool to avoid the complaint.
Q: Did visibility in the Buy Box play a role in either suspension?
A: Yes. In [the second client’s case], they were a little cheaper than other competitors, and I believe they were getting the Buy Box.
Q: Can you give me a basic outline of how to deal with an account suspension?
A: Sure. Well, there’s a couple things you have to recognize. When [a seller gets suspended], they have to write a Plan of Action.
They used to be read by people in Seattle and San Jose. A significant number of those jobs have been now shifted to two cities in India—Hyderabad and Bangalore. As the reader has changed, you have to write differently. Could you imagine…using a baseball analogy for somebody who grew up in Hyderabad? It makes no sense.
I speak to people in India about every other week—I was trying to open an office out there because I wanted to meet the people who were reading my stuff. They’re trained now by watching videos…and they’re paid a lot less…and they have to do very high volume. The writing [should be] shorter, more concise, more bullet points. But the same basic principles apply.
You have to identify the root causes of your problems, identify how you corrected those problems, and then you want to [show] why there’s not going to be similar problems in the future.
Q: Can you give me an example of a solid Plan of Action?
A: Let’s say it’s a tracking issue or shipping issue. Your products are showing up late, or the tracking numbers aren’t showing up in Amazon’s system quickly enough.
So the root cause is you were doing it manually, and you only had one person doing it. So when that one person was out sick for a few days, the tracking numbers got all screwed up. So that’s the root cause of your problem.
What’s your solution? [You’re] going to automate by using UPS tracking as a tracking program…and you’re going to have redundancy in your office—two people who are responsible for it.
So for number three—how are [you] going to prevent this in the future—as [you] grow more, [you’re] going to follow this system and hire more people. And there will be somebody else checking to make sure all the tracking information is actually uploaded.
Q: What’s a common obstacle sellers run into while trying to re-enable their account?
A: In terms of a basic suspension, and getting reinstated—it’s just erratic. That’s really the hang-up. Sometimes you just hit a brick wall and there’s nothing you can do about it. You just keep writing and writing and you keep going in circles.
Most people get reinstated, but the fact that it’s so erratic and…circular—you’ll put in a plan of action, and you’re addressing what they told you to address, and you get an email [saying], “We need more information”. But you already told them everything, so you kind of rehash it again and again and again, and all of a sudden you’re back on, for no rhyme or reason. Like you didn’t say anything in the 5th writing that you didn’t say in the first.
Also, when you’re dealing with the IP stuff, it’s dealing with the other side—the lawyer. Some of them are really great, cordial and friendly, and others are not.
Q: What’s the difficulty level of appealing when you’ve been suspended vs. banned?
A: Banned [means] they shut your account down and they can’t access it anymore. But we’ve gotten some people reopened after they’ve been shut down.
Most of the people are suspended from particular products, or their whole account is suspended.
[For instance,] someone will get suspended either from particular products, where their whole account is suspended. They can still log on, but they can’t sell anything. They’re still responsible for fulfilling orders that were placed before the suspension, but they can’t sell anything new. And they’re really freaking out because now their income is gone. And also, Amazon holds onto their money for like 90 days.
It’s a huge problem even for big businesses because now they can’t make payroll. And if you’re small, now you can’t pay your bills. You’ll submit a Plan of Action, and maybe you’ll get a request for more information a couple times, and you might get an email that says, “You can’t sell, and maybe we won’t read your stuff anymore.” But they still do.
[All suspended sellers] seem to be on a level playing field up until they can’t log in anymore. Once they can’t log in anymore, the chances of [being reinstated] drop significantly.
Q: Do sellers always know why they’ve been suspended?
A: [Sometimes] they’ll tell you “We’re suspending you because there’s an allegation that there was a counterfeit product.” But they’re also holding against you that there was a couple late shipments, a couple complaints…you have to look into the account and try to identify what the problems are and explain how you’re going to be a better seller.
Q: Do you notice once a seller has been flagged, they’re under closer watch?
A: We definitely noticed there are more complaints when clients are under review. In a way, sellers [are at a disadvantage already] because they can’t respond in the same fashion as they did. They can’t send a new product. If a customer complains that “the headphones are busted,” [the seller] can’t send another one because they’re suspended. They can’t function.
Q: Is this a bigger issue for Amazon vendors or 3p sellers?
A: It’s across the board. I don’t see any real rhyme or reason to it.
I am really astonished every day at how good the sellers are. You know, in [brick and mortar] retail, it’s normal to get a return. It doesn’t mean [the seller has messed anything up.] People buy stuff, and they return it…can you imagine the store owner offering you free stuff because you complained in your local store? Can you imagine [the local store owner] saying, “You know what? Just keep it for free, and here’s an extra one. Thanks for the complaint.”
Q: Moving forward, would you recommend sellers use FBA to avoid red flags that put them at risk of suspension?
A: Yes. If you save the shipping, you avoid the complaints. The only issue that could arise is if you have a return, you have to uncheck a certain box so amazon’s warehouse people don’t send out the item again as “new”. It’s a tremendous opportunity for sellers because you can literally get into a big business with no overhead. All you have to do is be able to identify what people are going to buy.
Q: If a seller is denied when they appeal, what do you recommend they do next?
A: Suspensions start at the basic seller performance level, and then you can then go to the policy team, then you can escalate to Jeff Bezos’s team, and then you can go to the Amazon lawyers. Each one you can do multiple times, but we try to start low because there are a lot of chances to get success there. The further up you go, the less of a chance you have.
Q: Anything you want to say before we close?
A: A lot of sellers see Amazon as the devil, and they’re not. Where else can somebody 10 bucks in their pocket can have access to 80 million customers?
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