Amazon News Roundup, Volume 12

Seller chatter

Amazon has been waging a quiet war the last few years, and it looks like Amazon may have lost.

It all started four years ago, while Heather Oberdorf was walking her dog. The dog’s leash broke, snapped back, and hit her glasses. Heather is now blind in one eye.

So, after the incident, the question being asked was: who’s to blame?

According to the Federal Circuit Court of Appeals, it’s Amazon. At least in part.

Originally, the target of Oberdorf’s lawsuit was the third-party seller, The Furry Gang. However, the case was dismissed by the District Court.

But, when placed under further examination by the third U.S. Circuit Court of Appeals in Philadelphia, Amazon was found liable.

The following was taken from that ruling:

1. “Amazon enables third-party vendors such as The Furry Gang to structure and/or conceal themselves from liability altogether. As a result, Amazon remains “the only member of the marketing chain available to the injured plaintiff for redress.” (pg. 15; footnote 21)
2. “Although Amazon does not have direct influence over the design and manufacture of third-party products, Amazon exerts substantial control over third-party vendors…Therefore, Amazon is fully capable, in its sole discretion, of removing unsafe products from its website.” (pg. 16; second paragraph)
3. “Amazon is uniquely positioned to receive reports of defective products, which in turn can lead to such products being removed from circulation…Third-party vendors, on the other hand, are ill-equipped to fulfill this function, because Amazon specifically curtails the channels that third-party vendors may use to communicate with customers…” (pg. 18; first paragraph)
4. “Neither the Oberdorfs nor Amazon has been able to locate the third-party vendor, The Furry Gang. Conversely, had there been an incentive for Amazon to keep track of its third-party vendors, it might have done so…Thus…all four factors in this case weigh in favor of imposing strict liability on Amazon.” (pg. 20; second and third paragraphs)

What does this mean for Amazon?

This definitely adds to the pile of issues Amazon has run into over the past year.

In addition to accusations of poor labor practices, black hat sellers abusing the system, and threats of being broken up by the federal government, now Amazon has to contend with potential lawsuits arising from unsafe items being sold on its platform.

If history serves as an indicator, though, we can expect Amazon to move quickly, likely mitigating the blow back of this decision by shuffling responsibility onto its sellers.

Seller Chatter in the Amazon FBA Competitive Edge group tends to agree:

“People who aren’t carrying the required liability insurance are going to get the boot.” – Robert S.

“Amazon requires product liability insurance. They will start enforcing it and suspending for non-compliance.” – Norman C.

“Sellers who are trying to sell faulty products are about to get banned.” – Faisal Inam

“It is not going to be good for us…that’s for sure, they are going to transfer the risk [onto] sellers as much as possible.” – Saurov R.

The consensus is that Amazon will enforce liability insurance for sellers, which (let’s be frank) is reasonable.

What we may also see, however, is another significant wave of sellers departing, creating more space for sellers who follow the rules and stay in compliance.

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Amazon FBA seller news this week

Need to know for Amazon FBA Sellers

1. California dangles sales tax relief to Amazon FBA sellers – Ecommerce Bytes
2. Operational challenges of expanding to Amazon explained – Digital Commerce 360
3. Amazon lets sellers offer Prime-exclusive discounts – Ecommerce Bytes

Also of interest:

1. FedEx stopped flying your Amazon packages in June because the partnership wasn’t profitable enough–and UPS has the same problem – Business Insider
2. Fold enables spending Bitcoin at Amazon, Starbucks and Uber via the Lightning Network – Forbes
3. Don’t be surprised if Amazon Prime Day starts to happen every month – Business Insider

Anything we missed?

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