Tips for Amazon Sellers to Prevent an Amazon Arbitration Case

Two of the most common reasons for an Amazon Seller to want to sue Amazon are:

Undeposited funds due to an account suspension
A denied claim for lost or damaged inventory

For either of these reasons, you may need to seek legal counsel from an Amazon Lawyer to seek justice and receive the funds you are entitled to. But we’re not going to focus on Amazon Arbitration in this article. We’re going to discuss ways to prevent an Amazon Arbitration case.

The best way to prevent a legal situation from arising is to take preventative measures regarding your seller account.

What are some common reasons Amazon might suspend your seller account?

Amazon can suspend a seller’s account for a variety of reasons. Some of these are clearly stated, while others seem like they just happen.

As of Q4 of 2023, third-party sellers on Amazon amounted to 61% of the platform’s overall sales, so as a business entity, Amazon thrives on having third-party sellers on its platform, but they do tighten up when it comes to what they consider risk mitigation.

So then, why would Amazon suspend an account?

Here are some common reasons why an Amazon Seller account would be suspended that does not include obvious reasons like fraud or counterfeit products.

Poor performance—Your store’s performance can suffer for a number of reasons, including not shipping your products on time, failing to include shipping information, receiving multiple negative reviews, review policy violations, among others.
Your store is being targeted by a “black hat seller” – An Amazon black hat seller is another seller account who is taking any number of negative actions against you including posting fake reviews (negative or positive), making false intellectual property violation claims, or even making changes to your product listing.
A change in Amazon’s policy affects your store – Amazon can make changes to its policies at any time. If those changes affect your store then you may face a suspension.

Amazon can suspend a seller’s account for any number of reasons. These are just a few.

How to prevent an Amazon Account Suspension?

Actively stay up-to-date with all of Amazon’s policies and policy changes. Know Amazon’s rules and policies so you can follow them.

Focus on delivering a high-quality customer experience. By focusing on the customer, the experience you deliver will take shape, which can place you in a position to have a high-performance score. This includes abiding by selected shipping methods. If you opt for FBM (Fulfillment by Merchant), make sure to ship products on time.

Make sure your products are in line with Amazon’s product policies – a strong emphasis needs to be placed on this category. Pay close attention to avoid committing an intellectual property rights violation.

What are some common reasons Amazon might lose or damage your inventory?

Amazon’s warehouses are massive; people can make mistakes. If Amazon damages your inventory there is no excuse. They should honor your damaged inventory claim as long as the claim is valid.

Lost inventory can happen for a number of reasons. Some common reasons include:

Your products were misplaced – If using an FBA model (Fulfillment by Amazon), your items are likely kept in a massive warehouse where thousands of other products are being stored and sold. A misplaced item in this scenario may not turn up for some time – if ever.
Your products were damaged – Products can be damaged during the fulfillment process and taken out of your inventory because the damage renders the product unsellable.

Need to speak with an Amazon Lawyer?

Don’t let an account suspension or lost inventory prevent you from moving forward. If you find yourself feeling like Amazon has wronged you, speaking with a U.S. Amazon Lawyer can help you understand your options.