In the excitement of starting an Amazon business, many sellers unknowingly give up important legal rights the moment they create an Amazon seller account.
As a condition of selling products on the marketplace, you agreed to be bound by a contract called the Amazon Services Business Solutions Agreement (BSA). This contract requires that you forfeit your right to sue Amazon over any dispute that may arise. Instead, you must agree to submit any disputes to binding arbitration governed by the American Arbitration Association.
What is Arbitration?
Arbitration is a less formal, more streamlined mechanism for resolving legal disputes compared to full-blown litigation. Your dispute will be heard by a single arbitrator, or panel of arbitrators, who will act as judges over the dispute. Both sides will present evidence and make arguments as to why the relief sought should be granted or why it should not be granted.
Many people choose arbitration over litigation because they get their dispute resolved more quickly and at a lower cost. However, there are two important points that Amazon sellers need to understand:
- You have given up your right to file a lawsuit in a court of law;
- and Amazon Arbitration is binding.
Most Amazon sellers have no intention of ever filing a lawsuit in court. After all, litigation can be extremely time-consuming and expensive, with no guarantee of a positive outcome.
The second point, however, is often controversial. When arbitration is binding, it means that you agree to accept the outcome and understand that you have no further recourse. For many sellers, this can be a bitter pill to swallow if the outcome is not what they expected.
Common Claims Brought to Amazon Arbitration
Any dispute you have with Amazon can be brought to arbitration when you have exhausted all avenues of the appeal process and you believe that Amazon has committed an error. But one of the leading reasons for arbitration relates to Amazon FBA reimbursement for the lost or destroyed inventory.
Although Amazon FBA logistics is a great service that provides sellers with an opportunity to grow their business, it is far from perfect. With Amazon fulfillment centers receiving and shipping millions of packages daily, it is easy to understand how your products can be lost, destroyed, disposed of, damaged, or overcharged with Amazon FBA fees. Needless to say, mistakes are bound to happen when there are a lot of moving parts involved.
When Amazon loses, destroys, or disposes of your inventory, you may be eligible for an Amazon FBA reimbursement. In such cases, we recommend GETIDA to help retrieve your Amazon FBA reimbursement claims on your behalf.
Unfortunately, seeking Amazon FBA reimbursement via their internal channels does not always guarantee recovery of funds owed to you. Amazon departments responsible for resolving disputes are typically understaffed and overworked. They can be unresponsive and unpredictable. If they reach a decision, they may not provide a well-reasoned or transparent basis for their decision.
Many sellers also feel that these departments are ill-equipped to handle complex disputes that require greater time and attention. Just like with appeals, Amazon may provide generic responses or not respond at all to your attempts to resolve the issue with the appropriate internal channels. In cases like this, you may demand Amazon arbitration to resolve the matter.
The money damages you are entitled to at Amazon arbitration include the sale price of your inventory as if they were never lost or destroyed, less the amount paid in FBA fees. If you prevail at Amazon arbitration, you will recover money that amounts to the value you would have obtained if the products had been sold to customers on the marketplace – in accordance with Amazon’s Reimbursement Policy.
How the Amazon Arbitration Process Works
If you need to pursue a claim against Amazon, your arbitration will be governed and heard by the American Arbitration Association. A rough outline of the process is as follows:
- You or your Amazon arbitration lawyer must issue a “Demand for Arbitration” notifying Amazon of your dispute, the nature of the dispute, and what you believe the outcome should be. A copy of the letter must be sent to both Amazon at the address of their registered agent and filed with the American Arbitration Association.
- Your demand will be reviewed by Amazon’s lawyers. Some claims may settle at this point if your demand is reasonable.
- If you are unable to settle your dispute, it will be heard by AAA arbitrators chosen by the parties.
- Once your dispute has been heard by the arbitrators, they will render a binding decision.
The critical step is in drafting the Demand for Arbitration. A thorough, yet concise, demand will shape the dispute and likely determine your likelihood of success. For this reason, you should consider working with an Amazon arbitration attorney if you are considering a claim.
The Problem with Amazon Arbitration
Obviously, most sellers do not want to jump straight to arbitration. While it is less expensive and time-consuming than litigation, there are still costs and it can be an intense process. Most small businesses simply do not have the time or money to go through it. Because of this, we understand that Amazon arbitration is not for everybody.
An Alternative Solution: Synthetic Arbitration® (SynArb®)
In looking for a way to better serve our clients, we created a unique solution that we refer to as Synthetic Arbitration® or “SynArb®” for short. It is a balance of creative problem-solving paired with aggressive advocacy. This is a proprietary process created exclusively for clients of ESQgo®.
Rather than rely on Amazon’s internal seller departments and the arbitration process, we leveraged our knowledge of Amazon’s internal workings to open a side door. We first go to Amazon’s outside counsel with your dispute. In a firm, well-reasoned letter, we explain your dispute and demand the result that we expect. We inform them if we cannot get the issue resolved, we may demand arbitration.
This process is faster and cheaper than Amazon arbitration and more effective in resolving complex disputes.
Rather than spending a year with the Amazon arbitration process and spending tens of thousands of dollars in fees and costs, we are able to reach a resolution for your dispute in much less time and at a fraction of the cost. Most importantly, help keep your business moving forward.
Offset Arbitration Cost with Refunds
It’s your responsibility to audit your inventory and submit claims for error reimbursement.
GETIDA auditing software keeps track of your Amazon FBA inventory transactions, refunds, seller data analytics, and FBA reimbursements easily and clearly. Equally important, dedicated case managers with Amazon experience follow up on FBA reimbursement claims on your behalf to help ensure you get back what you are owed.
GETIDA makes the process of claiming Amazon fee reimbursement easy. And it’s free, with no commitment. GETIDA charges only when a claim we file is successfully reimbursed.
The more reimbursements you collect, the more available funding you have for your Amazon PPC strategies.
$400 in Free Amazon Seller Refunds with GETIDA.