Private Label

The updated Business Solutions Agreement may signal minor operational changes like a “grace period”, but Risk Management still prevails.

By Lesley Hensell

This week, Amazon announced changes to the Amazon Services Business Solutions Agreement. This is essentially the “terms of service” under which third-party sellers operate. Almost immediately, many in the Amazon seller community began hailing the changes as a 30-day “grace period” before account suspension. I’m here to tell you – that simply is not what the new agreement says.

A review of the red-lined version reveals these changes:

1. Amazon has upped its game for account verification. No longer can you simply sign up or provide only a driver’s license/passport and utility bill. Amazon now says you must provide “any other information we may request.” Takeaway? They are making it much harder to establish the kind of duplicate/second accounts that so many sellers have created in the past.
2. Amazon will give you 30 days’ notice before terminating your “use of services” or Business Solutions Agreement. Sounds nice, right? But if you read a little more, Amazon gives itself every possible out. They can suspend or terminate your use of any services immediately for:
   • Material breach of the BSA. That is about as broad as it gets.
   • Failure to cure within seven days of a cure notice. In other words, if you get a warning in performance notifications, and you don’t fix it, you’re done. This is already the standard for many suspensions.
   • You exposed Amazon to liability toward a third party. That could mean a rights owner/brand owner who filed an IP claim, anyone complaining about fake merchandise, product liability issues, customers not receiving orders, etc.
   • Your account has been or “may be used” for deceptive, fraudulent or illegal activity. Again, this can include so many things: inauthentic merchandise, counterfeit merchandise, not shipping products, platform manipulation, fake reviews and more. If you don’t have pristine invoices that Amazon accepts, you fall into this bucket.
   • You have harmed or “might harm” other sellers, customers, or “Amazon’s legitimate interests.” Again, this is terribly broad. Amazon could claim that ANY seller “might harm” Amazon’s legitimate interests.
3. Amazon will tell you about suspension or termination, including the reason and any options to appeal. Amazon already does this.
4. Amazon will not tell you the reason for suspension or termination if they believe it will “hinder the investigation or prevention of deceptive, fraudulent, or illegal activity, or will enable you to circumvent our safeguards.” In other words, Amazon is not going to provide information that will put its risk management practices in jeopardy.
5. Amazon retains the right to halt any of your transactions, prevent or restrict access to services, or take any other action to restrict access or availability of any inaccurate listing, any inappropriately categorized items, any unlawful items, or any items otherwise prohibited.
6. You have 30 days to appeal A-to-z claims.
7. The language for FBA reimbursements has changed from “reimburse” to “compensate.” In other words, they will decide how much you deserve to be paid for your inventory – not you. This has always been the case. Now it’s in writing.
8. Amazon can immediately dispose of your inventory if they decide it is a safety risk, or a liability risk; if you engaged in fraudulent or illegal activity; or if Amazon terminated your account and is exposed to liability. In other words, if you cannot prove the inventory is valid and authentic, they can throw it away. Right now. Amazon has always had the right to destroy inventory they believed was risky. Again, nothing has changed.
9. You have 30 days to appeal customer returns that you think were made in error.
10. Everything in the prior agreement regarding MWS has been replaced with language about the API. I haven’t analyzed this and will take more time to read it later. It’s long and complex.

So, as you can see, Amazon still retains all of the power.

Why? Risk management. Amazon must control the platform to prevent fraud and abuse. Will Amazon’s SOP change? Maybe a little. They might edit some emails or timeframes as well.

But overall, very little will change. It’s still Amazon’s platform. Don’t fall for the “grace period.” And no, Virginia, it’s not a kinder, gentler platform.

Concerned about other Amazon pit-falls call Riverbend Consulting 877-289-1017.

Lesley is Partner at Riverbend Consulting, she offers practical know-how to improve retail performance. Lesley’s experience with Amazon compliance gets accounts back up fast.