Getting your account suspended is every Amazon seller’s worst nightmare. What do I do when my account is shut down? How can I prevent future mishaps? How do I stop hijackers? Questions like these keep even the most experienced sellers up at night. Luckily, we’ve got answers to ease your fears and help you steer the Amazon waters when the shores become rocky.
Attorney CJ Rosenbaum specializes in helping Amazon sellers navigate legal issues. Listen as he explains how to prevent legal trouble and handle problems when they do arise.
Fear should never stop you from pursuing a passion. However, as the saying goes, if you fail to prepare, you prepare to fail.
Perfect Your Plan of Action
When your account is suspended, Amazon will have you write a persuasive essay outlining your plan to prevent further issues.
Break your POA into three sections: 1) What was the action you took when a problem arose? (This should include issuing a refund), 2) What long-term systematic changes will you make to prevent additional issues?, and finally, 3) An explanatory section that deep-dives into your investigation.
Above all, remember to stress leadership principles, include specific details, and take full responsibility for your role in the problem.
When it comes to preventing suspension, the best way to get Amazon on your side is to create your own brand. How? As a wholesaler, your goal is to build relationships with brands to win exclusivity or become one of several exclusive sellers. To boost your chances of locking-in exclusivity with a brand, focus on value add. For instance, find ways to improve their listings and remove unauthorized sellers. Do everything possible to prove that you’re a serious business owner!
Boot The Hijackers
What’s the best way to deal with hijackers? If you have an exclusivity contract with a brand, you can use a claim called Interference With Contract. This puts the unauthorized sellers on notice and helps settle disputes out of court. Something to note: it’s always better to have your brand or lawyer contact other Amazon sellers as opposed to yourself.
If you’ve got exclusivity with a brand, it’s also smart to have one company that holds your IP and a separate entity for selling. This way, should the time come, you can bring claims against Amazon with a company that’s separate from the tech giant.
Documentation, Documentation, Documentation
To prevent liability down the line, document everything. Before you start investing money into a particular product, pick apart your invoices, track products back to the brand’s warehouse, and do everything possible to ensure a distributor is legitimate.
As long as the decisions you’re making are based on sound logic and you’ve got the documentation to prove it, Amazon will have a difficult time suspending your account.
Use resources like podcasts, forums, and of course, legal counsel. The answers to your burning questions are out there. All you have to do is reach out and ask.
Resources From This Episode
- Contact CJ for a free consultation
- Check out the Ty Lewis Campbell Foundation
- Add Amazon Smile Redirect
Outline Of This Episode
- [00:00:19] Todd’s introduction to this episode
- [00:03:55] CJ’s story
- [00:09:25] How to write an effective POA
- [00:18:47] Becoming exclusive with brands
- [00:22:17] How to kick highjackers to the curb
- [00:44:55] The importance of documentation
- [00:58:32] Todd’s closing thoughts
Announcer: 00:00:01 Welcome fellow entrepreneurs to the entrepreneur adventure podcast where we talk about Amazon wholesale and how you can use it to build an eCommerce empire, a side hustle or anything in between. And now your host, Todd Welch.
Todd: 00:00:19 What’s up everybody? Welcome to episode number 10 of the entrepreneur adventure podcast. I’m your host, Todd Welch. And today we’re going to talk about getting suspended on Amazon and what you can do about it. And in fact , we’re bringing on CJ Rosenbaum. He is an Amazon seller lawyer, so his firm specializes in helping Amazon sellers deal with legal issues that they can get into on Amazon. So you’re definitely gonna want to listen to this episode. Don’t let anything that we talk about here stop you from getting started. And in fact, we talk about this in the episode multiple times. You have to get started first before you worry about this, but you’re going to love listening to this episode because we’re talking about what you need to watch out for, as well as some really golden nuggets in how you can work with brands to get exclusive agreements, help them get unauthorized sellers, offer the listings.
Todd: 00:01:26 And things like that, so you’re definitely going to want to pay attention to this episode and have because it has some really good information in it. And now real quick, before we dive in, I just wanted to thank all of you who have left reviews for the podcast. If you’re over on iTunes or Stitcher or Spotify or wherever you are, if you can leave a review, please do that. We love hearing from you out there what you think about the podcast and right now I’m just going to read you one of our new five-star feedbacks. This is from Northern Nelly and they say, I’ve been listening to your podcast during my one hour commute to work. The information you give is so helpful to a newbie like me. I love your contagious optimism and attitude. My goal is to work hard, be resilient, and hopefully turn my commute in as something I love to do. Thank you. Thank you Northern Nellie for leaving that five star review. I really appreciate it means a lot to me and thank you so much for the positive comments. I’m glad you’re getting value out of this and I’m able to help you, hopefully push you, move you forward and get started selling online and in e-commerce. So with that, let’s go ahead and dive into this episode with CJ. Stay tuned and if you want to get any of the information or the links that we talk about this episode or
Todd: 00:03:00 The transcript, head over to the show firstname.lastname@example.org forward slash 10 and you can grab all of that there. Let’s go ahead and dive into this episode. All right, what’s up everybody today I have CJ Rosenbaum on. He is the founding partner of Rosenbaum fam LRO law firm and they represent Amazon sellers and help them with legal issues including things like trademark issues or the dreaded if your account gets suspended and you can no longer sell. So we’re going to dive into that today. It’s going to be some really good information, so you’re definitely going to want to stay tuned for this. And with that, CJ, why don’t you tell us a little bit about your background in law and how you got into practicing law, specifically with Amazon?
CJ: 00:03:55 Hey, first of all, thank you very much for having me on. I mean, it’s a huge honor to be on with you. So thank you. The way I got on this, you know, my career, my first 15 years of my career was doing nothing but being a trial lawyer, car accidents, medical malpractice employment cases. But I always represented a group of entrepreneurs who are buddies of mine, frat brothers the people they did business with and one of our entrepreneurial clients, I did the contract or the initial draft of a contract to buy an Amazon based business and he buys the business and he closes and he’s got hundreds of thousands of dollars invested in it. And then the account gets suspended and it gives me a call back and he says, listen, you can’t help me. But the people that are out there right now are awful.
CJ: 00:04:42 You should look into this. And it was at a time in my life when I was sort of making a pivot. I was going through a divorce of the trial. Judges in New York had stopped working and I looked and I was like, you know what, I can work solely with entrepreneurs every single day. I’m jumping in with both feet. And this was uh god, seven, eight years ago, nine years ago, and haven’t looked back since. And I love everyday work with entrepreneurs. We’ve grown to now 32 people I think around the world. And all we do is help Amazon sellers with their accounts, suspensions, listing suspensions IP issues. And then something that I really love is as sellers are sort of, you know, maturing in the industry. They’re developing their own brands and we are right behind them, helping them protect their sales of their private label brands
Todd: 00:05:35 For sure. Very important. And it’s just, it seems like you hear more and more stories every single day. In fact, we talked it might’ve been two or three years ago now. And so I have a YouTube video of us that chat a while back, but that was really a broader chat about like private label, a retail
Todd: 00:05:58 Arbitrage and a little bit of wholesale we might’ve touched on. But now I’ve really honed in on wholesale. So that’s kind of where I want to take the conversation in that ballgame. I know it’s relatively similar, but a lot of things have changed since then. So why don’t we jump into the elephant in the room that everybody worries about. And that is, and in fact you might even know this, but I actually had my account suspended a couple of weeks ago. I don’t know if you seen my email come across to you guys. You know, I, I, I never discuss any particular suspensions, accounts or listings because everything everybody tells us is confidential. And I can’t tell you how many times I’ve been on a podcast or a webinar or on stage where I’ve represented, you know, multiple people either in the room or on the stage. I, I never would bring it up anyway.
Todd: 00:06:54 Sure, no problem. I definitely understand that’s good to keep that private, but I give you complete permission to talk about it here. But basically, yeah, I had my account suspended because I inadvertently started or was going to start selling a energy drink that had an ingredient, I believe it was called D M H a. And apparently it has not been finalized by the FDA and approved yet. And so this product has been selling on Amazon for quite a while years in fact without any issues. But I thought I would get smart and create a three pack of this product and then I’d have the buy box all to myself. And I woke up a few days later after I created that listing, didn’t even send any inventory in and Amazon had shut down that listing and said I needed to put in a plan of action. Basically a plan of action saying how I’m never going to break one of their policies or a law another day in my life.
Todd: 00:07:58 And so I wrote what I thought was a really good plan of action, sent it over to them. I put a lot of thought into it. And about a week or so after that at 10:30 PM, they I went and checked my Amazon seller app and it said, your account is suspended. I ran to the computer and looked and sure enough, they had rejected my my plan of action. And so I immediately sent an email off to you guys, cause I’m like, if it’s still suspended the next day, I need to have a lawyer take care of this because I’m selling, you know, 60, $70,000 a month. And so it’s not chump change at all. Thankfully I’m not completely living off of it right now, so I didn’t have to get no sleep at all that night. But I had advised my plan of action. I made it more detailed and submitted it that night. Thankfully in the morning they had reauthorize my account. I think it might’ve had something to do with that. I had just taken a seller loan from them. So I don’t know if that played into it at all. That they had just given me like $50,000. But that could have been part of it. But that is the big thing that everyone worries about. I worry about it. So what are your thoughts on that and you know, things that people need to look out for?
CJ: 00:09:25 All right. First of all, any plan of action? I’m sure you learned this while you were writing the first one on your supplement. The one is all you trying to do is to persuade people on Amazon side of the computer to reinstate your listing or reinstate your account. It is solely and exclusively an exercise in persuasive writing only. Your audience is not you. Your audience is a reader almost always in India, either hydro bot or Bangalore. So you have to write to them. You have to know what they are looking for from their training. You know, cause it’s easier to ride the horse in a direction that it’s going. So give them what they’re looking for. They’re looking for the facts, they’re looking to address the issue and almost always looking for documentation. In your case, they were also looking for you to stop doing anything that is in any way related to anything medical or biological. Okay. And, and that’s the kind of thing is that they’re looking for. And I, I knew, I knew me and my team were right about what to send them and I confirmed it by literally going to India and speaking with their staff a couple of months ago. And there are good people trying to do the right thing. You gotta give them what they’re looking for.
Todd: 00:10:40 Yeah, for sure. It’s, and that was really, it’s a, they basically wanted detailed like plans of actions of what I was going to do now to alleviate the violation, what I’m going to do in the future to make sure it never happens again. So I had to go and do a lot of detail with all of that. And my first plan of action, I think part of the problem was that I, I took responsibility for the problem, but I also pointed out that the product I’ve been selling for years on their website and it’s still selling and they may not have liked that. That might’ve been part of it. But I also expanded everything out. The second attempt,
CJ: 00:11:21 You know, what we find works is we break every plan of action into three basic sections, like your immediate corrective action. What did you do? As soon as you knew there was a problem and across the board you want to refund the customer if at all possible. Then the next is you’ll long term systemic changes. You know, what are you going to do? So Amazon does not have a problem with you in the future. And the third section is, is explanatory in terms of your deep dive and your investigation and really taking responsibility hat you mentioned. And that mimics the leadership principles of, of being responsible and doing a deep dive. So that’s what they’re trained to look for. And what I found remarkable, cause when I was in India, the leadership principles begin at the interview stage when they’re interviewing candidates for jobs in India, they start with the leadership principles and the people that get the jobs have studied them in advance and these things are just pounded into their heads to follow the 14 leadership principles. So your future, your now and your responsibility aspects of your plan of action were exactly what they were looking for?
Todd: 00:12:32 Yeah, on the second attempt, but not so much the first attempt, but I, I was close, I didn’t change a whole lot, but I just got out the language that had to do with, you know, kind of blaming Amazon a little bit and then expanded my future plan of action and stuff like that. But what a, so what other things do someone who’s either just starting or has been selling for a while, what do they really need to watch out for so they don’t end up in a situation like I did?
CJ: 00:13:04 Well, I think the first thing that new sellers or even, you know, relatively new sellers need to do is they got to do just a bit of research before they invest too much money in a particular product or a particular product line. It’s pretty easy to identify products that are going to be problematic. You know, if you did research on like Samsung chargers or Apple products or Johnny B, you know health and beauty, you know, those brands are, are making a lot of complaints and even though they’re baseless, a new seller needs to avoid problems, say, can learn to dashboard, build up their history, build up their sales. So the very first thing I would do is search the forums, listen to podcasts and webinars like this so that you avoid things that are just known, known landmines.
Todd: 00:13:51 Yeah, for sure. And yeah, so that’s the big one. Definitely the suspensions and things like that that we need to watch out for. And like you said, make sure you know, you’ve read through the policies and you understand some of the laws and stay away from maybe the things that could be a bigger issue. Like in this case it was a food item an energy drink and you wouldn’t think that would be a problem. But there’s a lot of additives and chemicals and things that go into those energy drinks. So I probably could have researched that a little bit more. And don’t just assume, right, that if it’s selling on Amazon that it is okay. Because those products that I get suspended for, they’re still selling on Amazon. So
CJ: 00:14:39 That’s exactly right. You know, we’ve also cross-examined dozens of Amazon’s witnesses at the arbitration. No famazon refuses to release your money, refuses to return your inventory to you have the right to them to arbitration. So I’ve had the opportunity to cross examine Amazon executives and to see a lot of documents that most people don’t get to see. So there are sellers selling things that you may get knocked out for because Amazon hasn’t picked up on it. To add to what you said watching the trends is absolutely vital because you’ll see that there are waves of suspensions for different types of things. And also I would avoid the whole right versus wrong kind of aspect. And just for newer sellers especially go for things where you’re not going to have bumps in the road. You know, it doesn’t really matter whether you are right or wrong when it comes to like a trade dress complaint, you don’t want that complaint at all. You want to avoid that, that complaint. So that’s kind of what I would stress research, research forums, podcast webinars, and just try trying first get up to speed and build up some history before you start taking significant risks.
Todd: 00:15:46 Yeah. Yeah. How much do you think that actually plays into if you do make a mistake, how lenient Amazon is your seller history with them?
CJ: 00:15:58 We know that monster sellers get a lot more breaks and it makes sense if they’re making Amazon a boatload of money, they’re going to get more breaks. Also the percentages, you know, if you have 20 complaints out of a million sales, it’s a, it’s a minute fraction. If you have 20 complaints out of a hundred sales, you know, it’s significant. So larger sellers definitely get breaks. More experienced sellers tend to have better arguments, right or wrong to show how they’re going to be a better seller. So newer sellers definitely have it a bit, a bit more tough, except I’d say over the last 30 days or so, Amazon came out with a whole, a whole press release with a push that they’re going to grow another 2000003rd party sellers strong. So they seem to be a bit more lenient over the past 30 days. And I expect that to continue. I’d probably say for the next six months or so where newer sellers who are having problems, we’ll get back on easier than they probably have for the last couple of years because they want to grow their base and diversify even more than they had already is.
Todd: 00:17:00 All right. Very good. Yeah, I missed that news. But that is really interesting that they’re trying to bring out a lot more. Cause in one of the previous podcasts we were talking about, you know, what the future of Amazon is, and I could even see at some point Amazon like closing off the third party sellers to new sellers just because of all the legal issues that they’re getting into and different countries are trying to force them to do different things, take more responsibility for stuff. So maybe they’re having a big push now to try to get as many people in there before they start limiting. And again, I don’t know, it’s all a, it’s all a conjecture and no facts to that. But just my thoughts,
CJ: 00:17:48 Like I say agree with you. Good. I was kind of stunned when I read it because all we’ve seen as a contraction in sort of cutting the legs off, a lot of third party sellers in favor of brands, you know, even small brands as well as large brands. So I started trying to grow another 2 million. That’s almost half, you know, it was roughly 5000003rd party sellers at any given point in time. And to announce they’re going to try and get to 7 million. That’s it. That’s a huge increase. So I was really stunned too. I would also advise every single seller out there right at the get go to start thinking about developing your own brand so that you have some protection against Amazon. You own an asset, you own an IP, right? If they go back to the trend of brand centric, you’re protected. So I, I am a huge proponent. I like wholesale. I like retail, like online arbitrage. I like, you know, retail arbitrage. But I think longterm, if you’re really looking at the long game, you’ve got to develop the own your own IP rights. That means a developing a brand.
Todd: 00:18:47 Yeah. So what, you know, developing a brand in private label is definitely very straightforward. Is there something that we can do there in the wholesale world? Because for us, we’re selling other people’s brands.
CJ: 00:19:03 You definitely can because what you want to do, if you’re, if you’re serving as a wholesale, you want to try a lot brands up into either you if you can, which is very difficult or a handful of wholesalers that have the access to these products. And then you need to try and get that brand to build something in so that you can have unauthorized sellers on there and it is following the same path as private label brands. You want to adjust the warranty, you want to have some copyright material, you want to have something in there that says you’re going to cooperate. If there’s a recall, notice you can register yourself with certain governmental agencies and these things will help you control your distribution. You know, and it’s constant battle. Like you have the sellers that you help the private label brands and the wholesalers and we help both, you know, because this is how you protect your business. You want to make sure that if you are wholesaling the success of a successful brand of products, you can then protect those sales. And it’s sort of the same line of things that help private label brands warranties add on benefits, recall safety mechanisms that hijackers can’t deliver.
Todd: 00:20:12 Yeah, for sure. And I do have some exclusive agreements with some different brands and those are some of my best selling brands just because I’m one of the only sellers or like you say, a one of a handful. So it’s definitely a really good side of the business. It’s not easy to get those exclusives or be one of a handful of sellers. But when you can get those, it’s very profitable because then you are one of the few sellers who’s able to sell it.
CJ: 00:20:44 No, it’s also when you have what you’re describing, you have something you know works right. So it’s, I think it’s always a good bet to double down on something that you know is already selling and something that’s already working. You know, a lot of people then they’ll lose focus and start going on to other things that they’re just testing out. So if you have a brand that you’re wholesaling and it’s working, you know, offered to do some brand protection, you know, for the brand, even though you’re the wholesaler, you can still do brand protection, monitor the sales Mark to listings, make suggestions for the warranty. And every product you could always find something to add on. And I think that being a proactive with brands that are allowing you to have exclusive or semi exclusive distribution rights, those are the ones who really want to double down on.
Todd: 00:21:31 Yeah, for sure. I agree 100% and I do, you know, we call that value added services, right? So it’s a way to number one, maybe get our foot in the door just as one of the many sellers. But then if you’re that seller who is always paying attention to their listings, helping improve it, help get rid of people who aren’t supposed to be selling on it, you can work your way in possibly to that exclusive or being one of the few as they start locking down different listings. And we, we, I have seen that more and more often because brands are getting so sick of Amazon sellers who are not professional, don’t take it seriously, don’t treat it like a real business. And it’s definitely a problem.
CJ: 00:22:17 I’ve got to also tell you, most people don’t know this. Okay? I guess this is, I hope this will be like the golden nugget. You know of the program map pricing, minimum advertised price used to be like the big sword that brand used except in two thousands, either 2006 or 2007 the United States Supreme court said that you cannot enforce map pricing against people or companies that didn’t sign the contract, right? So it makes sense. But what you can do is use a claim called interference with contract where you have an exclusive contract with your retailers, you have no brand, you have it with your retailers and you have a written contract. And when you have someone else that’s hijacking your listing, you put that seller on notice that you have a contract and exclusive contract. And if they keep continuing to sell, they’re interfering with that contract. And by having notice of the contract and continued to difference, you now have leverage to stop them from selling cause you have a legal claim against them and they use that as leverage to get them to stop selling. I’m not rushing anybody into court. Okay. I’m done with the majority of my courtroom days. I used to be in court, like literally, you know, three to four weeks out of every month. You can use this claim to stop other people from selling your products that are outside your intended distribution network.
Todd: 00:23:40 All right, that’s, that’s actually really good info right there. Definitely a golden nugget. So even if you were like one of a handful of sellers from a brand and as long as say five of you all had an a contract saying you’re one of the five exclusives and someone else jumps on there, can you then report that to Amazon or how do you move forward with that?
CJ: 00:24:07 Okay. First of all, I never ever recommend going straight to Amazon. It is so easy for anybody to trash your listing trash or account that you don’t need to create, you know, unnecessary animosity. So what you do to set up the claim is first you let that seller know in writing, do by email, through the messenger system, cab brand registry. It’s really easy. Hey, there’s an exclusive contract between us and these other sellers for the exclusive sale and if you continue to sell, you’re interfering with that contract and I don’t want to make complaint against you, but if you don’t stop, you’re going to compel us to. That. Correspondence will result in like 60 to 70% of the hijackers either just getting off your listing or reaching out to you and saying, Hey, you know what? I’ve got 500 units. Can I just sell these out or can I become involved with the brand?
CJ: 00:24:59 Can I get a contract with you? So you’ll knock out most of the sellers amicably. Then the remaining ones, you can make a complaint with Amazon that shows that they’re violating your trademark rights because while they’re delivering a genuine product, it doesn’t come with the same benefits. So it takes it outside of what’s called the first sale doctrine. It brings it into a trademark violation and if it is necessary, you can make that dreaded complaint against the seller. But when you do that, you should know that that seller may get suspended. It may not just lose that listing, he or she may lose their entire business, which is a pretty draconian remedy when you really try and resolve things amicably.
Todd: 00:25:44 Yeah, for sure. And that’s something I want to come back to a little bit later, but so for that, is it best that the brand reaches out to that unauthorized seller? Because I know that a seller reaching out to another seller is technically a violation of Amazon’s terms of service. At least I know for sure like telling them that you’re their violin map or something because then you’re like price fixing.
CJ: 00:26:14 Okay. It’s not, it’s not Map. I do think it’s better either coming from the brand, coming from an intellectual property rights holding company or coming from your lawyer. Okay. I don’t think it’s wise necessarily seller versus seller because that seller has a contract with Amazon and is subject to all the policies. We’re, we’re doing with newer brands is having them hold their IP rights in one company and yeah, selling account in another. So the one that’s going to make the complaints has no relationship with Amazon at all. Right. Your thing and logistically creating a company is like a phone call and then you’re taking on one more tax return, but you’re gaining a lot, you’re gaining a lot of different freedoms and powers that you give up once you sign a contract with Amazon. I guess I, I’m sorry, I’m so long winded tonight. It’s kind of late for me. So the answer is I think it is better for the brand or for a lawyer to send that letter rather than seller verse sellers taken more seriously and you’re outside the realm of the tos.
Todd: 00:27:17 Yup. Yeah, I definitely wanted to point that out because when you get a message from another seller, you just assume that, you know, they’re trying to take advantage and they don’t really have any rights. So definitely having the brand reach out or like you said, a lawyer and that’s a really good trick actually about creating a separate company to hold your IP for sure. If you have brands and stuff like that, would you as a wholesale company selling other people’s products? Would that make sense at all? Or is that probably more on the private label side for the IP in a different company,
CJ: 00:27:53 If you’re selling on Amazon and you have contracts where you have exclusive distribution rights, I think having two companies is a good idea. One has the contract, then you just become, if you’re also going to sell and wholesale, you know you can have your company that has the rights and your selling account in two different entities. So I think it’s a good idea whether you’re a wholesaler who’s also serving as a retailer, right? Or a private label brand that’s also serving as a seller. I think that when you’re selling, you should have one entity that is solely a seller. Everything else should be in a different company so that you can bring claims against Amazon if necessary. You can bring claims against other sellers if necessary. And by bringing claims, I just really mean contacting them. I don’t mean racing into court. I know a lot of lawyers, a lot of people perceive lawyers and get to court, get to court the game, the name of the game I think for small to medium sized businesses is to resolve disputes without going to court because court slow and expensive. So all of these mechanisms we follow ourselves are geared to resolve things without ever ending up in court.
Todd: 00:29:03 Yeah, for sure. It’s definitely the best option. I mean, nobody wants to spend time in court that you could be selling more products, so, right.
CJ: 00:29:11 It takes money. It takes your focus away. So if you’re in court, there’s been a failure at some point or someone who’s been overly aggressive.
Todd: 00:29:20 Yup. For sure. And I just want to point out, so for the people listening, I don’t know if we explained what IP meant, intellectual property. So that’s like your trademark, your contracts and things like that on top of the products. And then also I just want to say that, you know, we’re talking about a lot of scary today, but definitely don’t let any of this deter you from starting because none of this really matters. I mean, it matters, but none of it is really important if you’re not even selling any products yet. So yeah, get started first.
CJ: 00:29:58 And, and this is the most remarkable opportunity in the history of commerce as far as I’m concerned because anyone with a credit card and a telephone, okay, can all of a sudden be an entrepreneur, get involved in markets, not just around the country but around the entire world. And that’s like unheard of. You know, you don’t need hundreds of thousands of dollars or even tens of thousands of dollars and you are in the game credit card, cell phone and boom, you can start doing business and then grow from there.
Todd: 00:30:30 Yup, for sure. It’s, it’s definitely big and it’s definitely not too late. A lot of people think it’s a, they ask me as a too late and I don’t think it’s even close to too late in a couple of years. In a few years. Possibly if Amazon decides to, you know, shut off the third party sellers, new ones coming in as all these legal issues Mount for them in different countries coming after them. But right now is perfect time. Cause if you can get in now, you’ll probably be grandfathered in later, no matter what kind of things happen. As things get harder, it also creates a barrier to entry for other people and make more opportunity for people who are in there right now. For sure.
CJ: 00:31:12 Now also if, if more countries follow like India is example, where it will not allow Amazon to both sell and own the platform, that can be great for sellers. Just all of a sudden your main competitor, Amazon itself could get pushed out. And that can happen in a number of countries. And even right here in the States my partner testified in Sacramento before the California state legislature about trying to pass a law to limit Amazon’s ability to use your data to compete with you. You know, so if that goes through right, that’s also going to limit Amazon from getting into products and using your, your data to compete with you, which means they need more third party sellers. So listen, if you’re not in today, get in tomorrow. If you’re not in tomorrow, get in next month, you can always stop and go. But I definitely think the opportunities are still there and I think as more products do better, it creates the opportunity for more sort of successful spin off products.
Todd: 00:32:13 Yup. For sure. And that is one of the things that I thought about too when you mentioned that they were trying to bring in 2 million sellers this year. So it was maybe the middle of this last year, I believe, where a lot of brands and vendors kind of had a scare from Amazon where they got an email saying that, you know, they weren’t going to be able to send products for Amazon to sell anymore and they’re gonna have to open up their own seller account, sell it themselves, and then Amazon quickly retracted that. I could totally see that this could be part of a continuation of that because it really doesn’t make sense in my mind for Amazon to be selling a lot of these products, especially smaller brands that are under like $1 million in sales in a year. They make more money from us selling it and then just taking the fees and they don’t have really any risk at all by going that route. So I could see them doing more of that. And then brands themselves, I’ve had actually had two of them recently come to me and say, you know, we’re sick of dealing with Amazon. They make us send our products all over. We got to put them in bags and put these stickers on them. We don’t want to deal with it anymore. Well you just sell a product for us. And one of those is actually now my best selling product,
CJ: 00:33:32 Which is huge, which is absolutely huge. And what you’re saying is I think Amazon makes the roughly double the amount of fees when third party sellers are using their warehouses. And as the FBA program continues to grow, they’ve got to fill that shelf space and pay for it. You know, Amazon is a genius. Bezos is a genius in apps. Absolute genius, right? So he went around the entire country pitching, you know, who’s going to be headquarters to HQ, to HQ to right. And then went back to those same municipalities that he didn’t give the headquarters to and then pitched him on FBA warehouses asking for the same governmental benefits. Right? So they’re looking to grow FBA tremendously, which means third party sellers to pay for the shelf space and provide them with more R and D for products. So I think it’s a tremendous opportunity. Absolutely. Tremendous.
Todd: 00:34:28 Yep`. For sure. Amazon’s going full steam ahead and they’re, they’re starting to get some small competition from Walmart that, you know, you’ve seen some articles about that. And I just seen an article about how Amazon is supposedly negotiating again with FedEx to try them, bring them back into being able to ship because Walmart is taking them and utilizing them. So Amazon’s going to have to bid for that service to try to kind of keep it away from Walmart if possible. But yeah, it’s, it’s interesting. Amazon is definitely the behemoth, but you know, that also creates its own set of problems and allows somebody like Walmart who, who’s a behemoth in themselves, if they can get their act together in the eCommerce world, they could become a, a big challenger.
CJ: 00:35:17 Yeah, absolutely. I mean the shipping, when Amazon announced the Amazon, you know, where you could own your own fleet of trucks and deliver for Amazon, it’s like, okay, they do this right. This could be great. But we get calls and chats and emails from companies who are getting hurt by Amazon cause they go out and they invest in 10 trucks and all of a sudden Amazon withholds their money. And some of the people we interviewed in India had to do a lot with the last mile deliveries and they are taking the consumer’s side and everything, which means the delivery guys are getting hurt and their margins are not that great either. You know? So yes, someone else can jump on in. I think they’re absolutely going to need more and more third party sellers to cover the cost of their growth just like they did years ago.
Todd: 00:36:01 Yup. For sure. So again, it goes back to that. I think it’s a great opportunity right now. It’s definitely far from too late to get into selling on Amazon and it’s just going to be great going forward at the same time. Why? Same reason I’m talking to you. We’ve got to protect ourselves, right? Because if we have all this income coming in from Amazon, we got to make sure that we have it protected as well, especially as you grow. So,
CJ: 00:36:28 I know that also suggests you brought something up about getting brands just over the last couple of weeks we’ve had, I’d probably say about a year dozen different calls and emails from private label sellers, wholesalers and retailers using their language skills in terms of sourcing products. You know, like if you speak Italian, if you speak German, if you speak Chinese you can go to those countries, suppliers and you have a huge leg up on getting brands that are manufactured in those countries. Cause you can just logistically work together in a much easier fashion. And it’s not just China, it’s not just Chinese factories, it’s brands from all over the globe where if you know how to sell and you speak the language, you can write better listings and negotiate deals cause you just, you make that emotional connection in terms of getting that brand.
Todd: 00:37:21 Yeah, for sure. That’s actually a really good idea too. And kind of vice versa of that. So if you’re in the U S and you’re selling in the U S but you happen to speak Spanish or Italian or German, you could potentially reach out to brands in those countries. Maybe they’re not selling or not selling well in the U S but it’s a product that could sell well and work out some kind of relationship there to start selling their products on amazon.com as well.
CJ: 00:37:50 Yup. Yeah. I really, I liked that a lot in that just the last couple of weeks. It just come up too many times to ignore.
Todd: 00:37:56 Yup. For sure. So one of the other big things, especially recently that people I’ve been dealing with, Amazon seems to, they go on, you know, like up and down when it comes to like enforcement of things. They’re like really lenient and then they get super hard, difficult. And until they find like that happy middle I think is how they do that typically. And right now IP complaints is way at the extreme where you get like one IP complaint and they’re not only shutting down that listing and they’re shutting down your whole account. Have you seen a lot of that as well? Lately
CJ: 00:38:34 We single IP complaints, shutting down accounts almost exclusively for smaller sellers or newer sellers. Once you’re, once you’re going, you know, six months, 12 months, 18 months, and you have some decent sales, it’s kinda rare that a single IP complaint will shut down your account. You’ll almost always, you lose your listing. But losing your whole account is, is kinda rare for a seller who’s not brand new. We are seeing a dramatic rise not just year over year and quarter over quarter, but month over month in the number of IP complaints being asserted. And also we’re seeing big, big brands making more baseless complaints. Like what’s surprising to me is the giant brands have not worked into things that we’re working into. The smaller brands, warranties that actually mean something, copyright, inclusion, recall inclusion, things that are legitimate to add in and then you can make a legitimate complaint. You know, we just filed a lawsuit against the NFL players association and the Dallas Cowboys because they couldn’t figure out how to stop our seller from reselling genuine products.
CJ: 00:39:44 So they just made a counterfeit complaint, right? And they cost our guy a lot of money and he’s like, you know what, I’m not letting them kill me like this. I’m going after him. And so we, we stood the NFL and the Dallas Cowboys maybe two weeks ago. We started that action. So it’s, the point is there’s a lot more complaints. There’s also a lot more baseless complaints and is a big difference cause some makes a baseless complaint against you. They’ve accused you of a crime, they’ve accused you of a civil wrong and you have leverage over them to compel even the big brands to withdraw their complaints. The NFL withdrew the complaint. We’re still suing them because they cost so much money in damages, but we showed them your complaint is baseless and you knew it. They withdrew it even though they knew we were going to Sue them all on top of that, so sellers, you are not impotent. You got to see whether that complaint is valid or not and then act accordingly from that point.
Todd: 00:40:44 Yeah, for sure, and that’s, that’s awesome to hear that somebody is moving that forward because just for the precedent, right, it’s going to make other big brands think twice about that and that’s, that’s one reason I recommend to a lot of new sellers and see sellers have been selling awhile. Focus even more so on small brands that you’ve never heard of. Pretty much all of the products I sell, probably if I started listing them off here, you would know them and most of the people that are liste ning probably wouldn’t know of them either. You’re going to have a lot less trouble typically with that and allow less competition and a profit’s going to be better. Yeah. Versus like a big name brand like NFL or Nike or something like that. But that’s good to hear that the people are pushing back and we’ll get that sorted out.
Todd: 00:41:37 We’re still in kind of the wild West of all this and IP complaints, especially the baseless ones. I had one just recently an IP complaint on a new product that I sent in. Thankfully I was just doing a test order. I always recommend doing a small test order of like a case or a dozen of the product or something to test everything out and feel everything out. But yeah, I got the product in there and all of a sudden the listings went down and it was an IP complaint from that company. And since it was just a small order and I hadn’t been selling them, I just pulled the product out and said, okay, I’m not even going to worry about, it’s not worth my time. But yeah, if it’s something that I had been selling, it’s one of my lead products and they’re costing me a lot of money, then yeah, definitely moving forward and finding out, you know, for sure. Is that anything valid there?
CJ: 00:42:31 No. Also if you think about it, there are a quarter billion brands out there, a quarter of a billion different brands, and the ones that are making the complaint really are a time I need tiny percentage of, of the, of the fruit that’s out there. So go for brands that are not doing it and that, and then cut your teeth on that. And if it does as an opportunity to make a tremendous amount of money with a big, big brand, then you’re making that risk versus reward analysis. Would open eyes and it might be worth it to you or might not be worth it to you. Yeah. Think about it. There are so many brands out there that is still are not online and there’s also populations out there that are just emerging online right now that you can look at. And I love spinoff products. I love the story of I think it’s called crucial. Were started off selling filters. There was like the world’s greatest coffee press, but the complaints were all about the filters. So he started selling a better filter, did tremendously well. I can’t think of his name right now. He speaks to some of the Amazon events and when you have a great selling product, there’s often either upsells or corollary products or add ons to it that sellers can jump onto and improve the accessories.
Todd: 00:43:48 Yeah, for sure. That is a very good point. Don’t necessarily look at the main product and try to sell that. You can look at all the offshoots of that for sure. And that the profit margin on those are probably going to be even a lot better than some of the main products. Like a, if you wanted to sell a Keurig, you’re probably not going to make a lot of money selling the Keurig, but you could make a lot of money, maybe sell on the cups or other accessories for it or whatever the case may be.
CJ: 00:44:17 Hundred percent. Again, listen, none of us have to be the smartest person in the room. What what entrepreneurs are really good at is seeing what’s working and then doing it a bit better. Sourcing it a bit cheaper, advertising it a little more savvy
Todd: 00:44:33 For sure. For sure. Yeah, lots of stuff. Definitely lots of good stuff in this podcast so far for sure. What other things do we need to watch out for specifically as wholesalers who are selling other people’s products? Maybe from direct from the brand or we could be even buying from distributors and things like that.
CJ: 00:44:55 Documentation, documentation and documentation. What I mean by that is to make sure every year getting your products from directly from the brands, other larger distributors, wherever you’re getting documented. And then before you really start spending a ton of money with any one source, you want to pretend you’re one of Amazon staff and start picking apart your own invoices. Does the address really lead you on Google earth to a commercial establishment? Can you independently verify that? That goes all the way back to the manufacturers? Those, the pricing makes sense. Do they have an internet presence? Make sure that at the drop of a dime, if you need to justify to Amazon tracking that product all the way back to the manufacturer, the you can do. So if you can’t, then again, risk versus reward. Is it still worth, is it still worthwhile where your profit margin in place or do you want to start looking for someplace where you have more solid documentation but pretend you are Amazon picking apart your invoice?
Todd: 00:46:00 Yeah, for sure. That’s a very good tip. And I, that’s one reason I always tell people. So we call ourselves wholesalers, but we’re like B to C wholesalers and there’s also B to B wholesalers. And I always recommend new salaries, especially to stay away from those kinds of sellers. Not that they’re are necessarily bad or anything and you can’t make money from that, but Amazon typically won’t take there invoices too dispute and IP complaint or something like that because a wholesaler does not have a direct relationship with the brand. They’re usually getting things from closeouts or businesses went out of business or returns and things like that as well.
CJ: 00:46:46 So I also, I just, I, I spoke to someone today and she was talking about going to visit where she’s going to start sourcing our products from. And she happened to be flying down the day before so she could stay in a hotel and get some sleep. And I’m like when you get into town, go by the facility and see what trucks are dropping off products. You see trucks that are branded. It’s a good safety mechanism. Take pictures of it. So in the future you can show Amazon that you went down the night before you took pictures. He has my airline tickets and I saw the branded trucks, I saw a branded Curry is dropping off products and then meet with them. So you want to make sure that you can justify your decisions right or wrong later. Cause if you look at the Amazon’s leadership principles, it says leaders are right a lot, not all the time.
CJ: 00:47:36 They don’t demand perfection, but they expect you to be right a lot and to continuously improve. So if your decision was based on sound research, even if you were wrong, that will help you get your account or listing back later on. So plan for the potential problem. And I think that’s the best thing that that people who are doing like Wholesale B to C can, can do for themselves now after you left. I also, I don’t want any of this stuff to stop anybody from selling. Okay. Don’t be afraid of jumping in with both feet, but as you learn more, you have more to protect and then learn how to protect what you’ve got.
Todd: 00:48:13 Yup. For sure. And B2B is business to business. B to C is business to consumer. Just so clarify that if anybody’s not sure, but yeah, you know, obviously we’re weren’t probably not going to be able to jump on a plane and go visit every distributor that we might open an account with. But another option could be to, if there’s certain products that you’re looking at selling from a distributor, reach out to the brand and maybe shoot them an email and say, Hey, is this company an authorized distributor of your products? And then you have that paper trail to back you up if something was to happen as well
CJ: 00:48:48 I also, I’ll give you an a, I’ll give you a little life hack. Okay. My experience as a personal injury trial lawyer led me to learn certain skillset. One of those is the use of private investigators. So you know, let’s say you’re in California and you’re sourcing from a distributor outside of, I don’t know, in Florida someplace and you can’t fly to everyone, but you can get online and find a private investigator in Tallahassee, Florida pretty easily and for like 30 to 50 bucks an hour, right? You can pay that person to go sit outside their warehouse and take some photographs of who is dropping off materials. And if it’s a bunch of guys and pickup trucks that aren’t covered, maybe you want to stay away. If there are legitimate semis pulling into a loading dock and it looks at official, yeah, you can have that done and now your cost is going to be more like two to $400 to have some good documentation.
CJ: 00:49:48 And I did this, I guess I did this about three years ago where someone we used to compete against that we’ve now just surpassed tremendously. Was, was saying some negative things about me and my team. So I said, I really got to find out what her operation is like. So I hired a private investigator in her hometown and I found out that the office wasn’t an office, it was a PO box in a ups store. And I’m never going to reveal who it was, right? But I let them know that I knew and all of a sudden the nasty comments stopped. Okay. So if you think about it, if you can’t fly to Florida, call someone who’s already there. Private investigators do this on all different types of businesses. So for 30 to 50 bucks an hour, you spent $250 and you get some idea who’s doing business with your distributor.
Todd: 00:50:46 Yeah, that’s a really good idea. I’d never thought of that.
CJ: 00:50:49 You save it and just, if it’s going to help you make decisions on who to do business with, it’s also then going to back you up. If you choose to do business to show in this persuasive writing that before you started sourcing, you did your own deep dive investigation that included sending somebody there to take pictures of who is making supplies and lo and behold, there was a Staple’s truck, there was a branded truck dropping off products. So I thought they were a legitimate cause they were getting their goods directly from, you know, whatever the brand was.
Todd: 00:51:23 Yup. All right. Very good. Yeah. Again, another something really good to do as you get bigger and the stakes become bigger, having that paperwork to definitely back things up for sure. Definitely
CJ: 00:51:36 Boots on the ground, all politics, all business is local, you know, do your research and if you, if you can’t figure out a way of, of finding information out, call me, go on forums, bounce ideas around. None of us is as smart as all of us.
Todd: 00:51:54 Right.
CJ: 00:51:55 And when I first told them, I was like, hire a private investigator to check it out. They were like, Oh my God, genius. I was like, I used to do it all the time as a personal injury lawyer to make sure my own clients weren’t falling scams. So you can do this anywhere in the country. They are all over the place and it’s cheap and it’s good, thorough investigation.
Todd: 00:52:14 Very good. So CJ, we’ve gone over a lot of stuff here and a lot of this is for good. Really good to know if you’re just getting started, but make sure you get started. Number one, don’t worry about any of this until you’re started, but let’s say there’s some people listening out there I’m sure, who have good businesses going, maybe they’re relying on this income and how can you help them either prevent things from happening or maybe after something happens. What do you guys are able to help with?
CJ: 00:52:49 You know it, every situation is, is different. So I would suggest, take me up on my offer to speak with you for absolutely nothing so we can talk about the issues that you’re facing. See if we can give you some solutions. You can do yourself. Search our blog. We have like thousands and thousands of posts by now and hopefully we can steer you in the right direction to avoid problems. So each one is really different. So I guess it was, I’m not also trying to drum up thousands of free consultations. Okay. We’re pretty busy. But ask the question at least you know, a of times something that you know, you can’t solve or I can’t solve is right at the tip of the tongue with someone who deals with it every day. And I think take advantage of that. Amazon sellers, Amazon vendors are still a very open sharing community just like this, this, this webinar, you know, and take advantage of that. It just asks also it could be, it’s tell you is either I’m too busy or I’ll talk to you later, but just to ask the question.
Todd: 00:53:51 Yeah, for sure. And it’s, it’s important to have a lawyer in your corner, especially as you’re growing your business. You know, you need a, you need a banker, you need an accountant and you need a lawyer. Those are kind of some of the big ones that you need when you’re running a business to do things properly, especially as you get bigger. So talking with you guys ahead of time and starting that relationship so that if something does happen, like it happened to me, I sent you guys an email that night before I went to bed and you guys contacted me the next morning. Thankfully my account got suspended, but if it didn’t then you know I’d already made that connection and talked with you previously as well so that we can just hit the ground running and get things going. So yeah, your website is Amazon sellers, lawyer.com sellers with an S, is that the best place for them to book a call with one of you guys if they’re interested in that?
CJ: 00:54:52 Yeah, absolutely. The phone numbers there, the chat boxes there, the email is there, so yeah, if you go to the website number one place as way of getting in touch with us and we are available to sellers seven days a week. Our team of five lawyers led by me is on call all the time. Seven days a week. Our hours now have expanded, so not only will be available in New York business hours but through California coast to coast business hours and roughly half the year we have someone stationed usually in Melbourne, Australia upset. We’re kind of around the clock during certain portions of the year. But seven days a week go to the website if it’s like middle of the night Eastern time and we’re not there, you’ll get a, you’ll get a response back first thing in the morning.
Todd: 00:55:39 Perfect. Perfect. And I’ll put a link to that in the show notes for this episode as well so people can find it on our website. But yeah, Amazon sellers, lawyer.com definitely check that out. CJ, is there anything else that we need to go over that we should be aware of before we wrap up here?
CJ: 00:55:57 No, if you don’t mind though, a lot of Amazon sellers are also Amazon buyers and it’s a love hate relationship. You know, and if you’re a seller and you’re buying stuff, you never return either. You’re kind of given that up cause you don’t want to hurt another seller. But with a lot of people don’t know about as the Amazon smiles program and what it is. You log in through Amazon smile, you pick a charity and every time you buy something, Amazon kicks back a small portion to the charity. So our charity is the Ty Louis Campbell foundation, T Y Ty Lewis Campbell foundation. Ty was diagnosed with an aggressive four brain cancer at three and he lost his battle. I think just after his fifth birthday, he was the son of one of my fraternity brothers, Luke Campbell and his incredible wife Cindy. And they, they turn this like god-awful tragedy into this incredible foundation. So if you’re buying anything, I don’t care if it’s a pack of pens or staples or buying everything on Amazon, please use Amazon smile. If you don’t have the charity, please pick the Ty Louis Campbell foundation so that, that’s what I want. That’s what I like to end with. And use a charity. It’s, it’s free money to a really worthy cause.
Todd: 00:57:14 Yeah, that’s perfect idea. I’ve done that some in the past. I need to do it more. The only problem I’ve run into is that some of the plugins I use when I’m analyzing products don’t work on smile.amazon.com so sometimes I forget to jump over and do that. But yeah, it’s really easy because then you’re just automatically donating to a cherry. And so we’ll put that charity in the show notes as well. So if people want to donate to that one, that would sounds like a really good one. It’s awesome that you guys are putting that out there for that. But, and there’s actually an extension as well. I don’t remember the extension name. I’ll put it in the show notes for that as well. But you can install it in Google Chrome and then whenever you go to Amazon or click and Amazon link from a website, it automatically redirects you to the smile.amazon.com as well
CJ: 00:58:06 Yeah. And it is a great thing as a lot of times people just forget to do that.
Todd: 00:58:11 Yeah, it’s easy to do, but all right, I really appreciate you coming on CJ. This has been excellent information. I think people are really enjoyed it. So thank you again for coming on. I always like having you on the show.
CJ: 00:58:24 Hey, appreciate it. And again, I don’t take this lightly. Thank you very much for having me on
Todd: 00:58:29 For sure. You have an awesome day.
CJ: 00:58:31 Bye bye.
Todd: 00:58:32 All right, so there, yo, what did I tell you? Another fantastic episode. It was great talking with CJ. A lot of great information in there. I love the idea of utilizing your contracts with brands such as exclusive agreements to help keep unauthorized sellers off the listings on Amazon. And then the other nugget there of having a separate business to hold your IP, your intellectual property, something to think about as you get bigger. And even the using the private detective, I mean I would have never thought of that to verify that a distributor is a legit distributor. So lots of really good nuggets in this. Thank you so much for watching. Check out the show email@example.com forward slash 10 and leave us a review over on iTunes. That would be greatly appreciated. Really help get the show out there. Share with your friends. Things like that would be awesome. If you got anything out of this, I would greatly appreciate it. So with that, this is Todd Welch from the entrepreneur adventure, signing off. Happy selling everybody.
Announcer: 00:59:50 This has been another episode of the entrepreneur adventure podcast. Thanks for listening, fellow entrepreneur, and always remember success is yours if you take it.