Amazon Sellers Struggle with Suspensions, Call for More Oversight

Brian Ott, 39, remembers vividly when he discovered that his Amazon account had been suspended. It was a week before Christmas in 2019 and the second generation toy salesperson, whose business maintains a tidy storefront in southwestern Pennsylvania, sat down to check his email. What he saw made his stomach drop.

Ott’s account, which generates three to five million dollars of sales a year, had been suspended.

Amazon’s anti-counterfeit measures routinely result in the suspension of legitimate products and accounts, according to sellers on the platform. This can cost them thousands of dollars, which they attribute to the lack of human oversight in both the suspension and appeals process.

On November 16, with the busiest shopping season of the year about to begin, Amazon announced the Account Health Assurance initiative, which guarantees that qualified merchants will receive a phone call from an Amazon representative if their accounts are at risk of suspension. Merchants say it provides some peace of mind that they won’t lose thousands of dollars from a sudden halt in sales, but does little to address the underlying lack of a seller support dedicated to monitoring and resolving intellectual privacy complaints.

The effects of an Amazon account suspension can be devastating for people like Ott. In addition to a complete halt in online sales through the site (on average more than $1,200 a day for Ott at the time), the freeze meant that he would not be able to access any money earned over the previous two weeks–a sum of over $175,000.

“It was the worst Christmas ever,” he said.

Ott eventually learned that a series of counterfeit claims filed against him by big-name toy brands had triggered the suspension. In most cases, intellectual property law protects the right of third-party sellers to resell licensed merchandise through a U.S. legal doctrine called “the right of first sale.” Counterfeit goods that are made to imitate branded products, however, are banned.

Ott quickly provided Amazon with documentation that the products were legitimate and had been sourced from Michigan based Notions Marketing, an authorized supplier. But he still struggled for weeks to get his account reinstated.

“To this day my mother won’t buy from Amazon because of what they did to us that year,” Ott said.

Ott said that he believes some brands knowingly make false claims to prevent third-party merchants from competing in the ecommerce space.

“Someone decides that they don’t like that we’re selling their product and we get a performance notification,” he said.

As of June, nearly 38% of total online sales in the United States occur through Amazon, making it the largest ecommerce site by a wide margin (the next largest is Walmart, at 6.3%). About 57% of sales are of goods sold by the third-party sellers. These merchants use the company’s tools to catalog products and manage listings.

This model of product sourcing, while efficient, has allowed the proliferation of counterfeit goods. Amazon has been criticized for failing to protect brands from being undercut by fakes. In 2016, Birkenstock shuttered its Amazon storefront largely because of the problem, and in 2019 Nike followed suit.

Over the last several years, Amazon has responded to complaints from brands and criticism from the Federal Trade Commission about counterfeits by intensifying its efforts to remove illegitimate goods. According to its annual Brand Protection Report, the company spent $900 million to prevent the sale of counterfeits in 2021, an increase from $700 million in 2020.

In addition to developing AI tools, Project Zero, an Amazon initiative launched in 2019, allows companies to register with the Brand Protection program. This enables them to flag–or even directly remove–suspected counterfeits.

Michael Einhorn, 39, owns Brooklyn-based ecommerce store DealMed, which sells medical supplies and equipment. He said that Amazon is too quick to suspend a listing, empowering brands to make wrongful complaints.

“The first thing they do is cut the listing without asking any questions,” he explained. “It’s easier than managing it properly.”

Einhorn said that there is no quick way to address false allegations once they’ve been made. As a result, appealing suspensions is a huge timesuck for his company.

“You can talk to Amazon until you’re blue in the face,” he said.

Ott said that more robust seller support, rather than an opaque system of boiler-plate emails and call center representatives, would address this issue

“There needs to be more human oversight,” he said.

When asked for comment, an Amazon spokesperson said, “Our Seller Support team is available 24/7 via email, phone, and chat, and we strive to respond to and resolve every contact as quickly as possible.”

Account and listing suspensions are a common enough pain point for merchants that it has given rise to a cottage industry of lawyers who specialize in helping confused or frustrated Amazon sellers appeal alleged policy violations. A search engine query of “Amazon suspension” returns dozens of results.

Leo Vaisberg started his Los Angeles-based firm, Amazon Suspension Lawyer, in 2018.

“The problem for sellers is a general lack of transparency and adequate communication from Amazon,” Vaisberg said.

He charges between $1,500 and $4,000 to help sellers navigate a standard account suspension appeal process.

CJ Rosenbaum is a New York-based lawyer whose firm, Amazon Sellers Lawyer, also helps sellers submit appeals to get legitimate goods relisted. He explained that this allows brands to make false claims to hurt competitors.

“Amazon makes it really easy to make the worst complaint possible,” Rosenbaum said.
Amazon’s new Account Health Assurance program is meant to buffer merchants from the threat of total account suspension. The initiative promises that a member of Amazon’s support team will proactively reach out to merchants whose accounts are at risk, who have 72 hours to address the complaint. To qualify, sellers must meet an account health score threshold. The rating is calculated based on efficiency in filling orders, accrued policy violations, and other factors.

Einhorn believes this is a step in the right direction.

“It’s an interesting idea and I think Amazon made a good decision by offering this,” he wrote in an email.

Ott agreed, but felt the move won’t change much for sellers.

“The Account Health Assurance was the first time I have ever felt Amazon MIGHT be on the side of the seller. It gave me a warm fuzzy feeling,” he wrote in an email. “But it doesn’t really address any issues. It just makes me slightly less likely to get suspended.”

About the author(s)

Yona Roberts Golding is a graduate student at the Columbia School of Journalism who likes to write about tech.