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Policies Every Amazon FBA Seller Needs to Know

Sun Feb 12, 2023 Amazon Tips

Policies Every Amazon FBA Seller Needs to Know

As an Amazon FBA seller, you have the opportunity to reach millions of customers and grow your business in one of the largest online marketplaces in the world. However, with the many benefits of selling on Amazon comes a set of policies and guidelines that you need to follow to ensure that you can maintain your selling privileges and grow your business. In this article, we’ll go over the top ten most relevant policies that every Amazon third-party seller needs to know.

1. Amazon’s Business Solutions Agreement and Policies

As an Amazon FBA seller, it is crucial to understand the terms and conditions outlined in Amazon’s Business Solutions Agreement. This agreement is a legally binding document that governs your relationship with Amazon and outlines the policies and procedures you must abide by to sell on their platform. With the growing popularity of Amazon as an e-commerce platform, it is essential to be aware of the key takeaways from this Agreement to ensure the success of your business.

  • Dispute Resolution

One of the most significant aspects of the Business Solutions Agreement is the requirement to resolve disputes through binding arbitration. This means that any disputes between you and Amazon must be resolved through arbitration and not through the court system.

  • Intellectual Property

The agreement requires that sellers respect the intellectual property rights of others and take appropriate measures to ensure that their products do not infringe on the rights of others.

  • Product Listing Requirements

The agreement requires that sellers provide accurate and complete product information and comply with Amazon’s product listing requirements. This includes providing detailed product descriptions, high-quality images, and accurate pricing information.

  • Fulfillment by Amazon (FBA)

If you choose to use Amazon’s FBA program, you must comply with the terms and conditions outlined in the agreement. This includes proper labeling and packaging of your products and maintaining accurate inventory levels.

  • Suspension and Termination

The agreement allows Amazon to suspend or terminate a seller’s account for violation of its policies. This can occur for a range of reasons, including but not limited to, the sale of counterfeit products, inaccurate product information, and violation of intellectual property rights.

2. Account Health Rating Program Policy

The Account Health Rating (AHR) is a tool to help manage your account health on Amazon. The AHR is a color-coded score that indicates the risk of deactivation due to policy violations. The score ranges from 0 to 1,000 and provides near real-time status of your account’s health. Points are lost for violations and gained for addressing them. A score of 200-1,000 means the account is healthy and not at risk, 100-199 means at risk, and 99 or lower means unhealthy or eligible for deactivation. To maintain a healthy account, avoid policy violations and address them in a timely manner. Amazon may deactivate an account immediately for fraudulent or harmful activity.


3. FBA Inventory Reimbursement Policy

The Fulfillment by Amazon (FBA) service will replace or reimburse a seller for a lost or damaged item, provided the item meets the eligibility criteria listed in the policy. The seller must file a reimbursement claim, following the appropriate process, to receive compensation. Reimbursement value is based on the estimated sale price of the item, which is calculated using various price indicators. If the seller disagrees with the valuation, they have 90 days to file a claim. The maximum reimbursement amount per item is $5,000, and items valued over this amount may require third-party insurance. Interference with Amazon’s capacity to help other sellers may result in delayed support or account action.

4. ASIN Creation Policy

To sell a product on Amazon, you can either match it to an existing ASIN in the Amazon catalog or create a new ASIN for a product not already listed. Creation of new ASINs for a brand enrolled in Brand Registry by non-brand owners is restricted. If you receive an error message, you can request approval to create the new ASIN by providing information on the product and contacting Selling Partner Support. If the product is already listed, you can create an offer for it. Limits are placed on the number of new ASINs and listings you can create each week, and restrictions apply to the creation of duplicates, variations, and prohibited practices. To avoid creating duplicates, always use the correct UPC, EAN, ISBN, ASIN, or JAN code. If the product has no known identifier, you can request a brand or SKU-level UPC exemption. Brand owners and manufacturers can register their brand with Amazon Brand Registry to use an alternative identifier.

5. Product Detail Page Rules

As an Amazon FBA seller, your product offers will be displayed on a product detail page. To ensure customers have a clear and consistent buying experience, you need to follow Amazon’s policies for writing listings and adding detail pages. This includes complying with relevant style guides, accurately categorizing and describing products, creating valid variations, and avoiding inappropriate content. When creating a product detail page, you must not use false information, infringe on intellectual property rights, or cross-promote products. When updating a detail page, changes should only be made to better describe the product, and you must create a new detail page for new versions or re-branded products. Failure to comply with Amazon’s policies may result in your selling privileges being temporarily or permanently removed.

6. Drop Shipping Policy

Drop shipping is a fulfillment method where a third-party supplier sends products directly to the customer on behalf of the seller. To maintain a clear and consistent customer experience, it is important for the seller to be clearly identified as the seller of record on all products and packaging materials.

As an Amazon seller, it is prohibited to engage in drop shipping practices that do not clearly identify you as the seller of record. This includes purchasing products from another online retailer and having them shipped directly to the customer without proper identification or shipping orders with packing slips, invoices, or external packaging identifying a seller other than you or Amazon.

To comply with Amazon’s policies, if you choose to use drop shipping, it is important to:

  1. Have an agreement with your supplier to identify you as the seller on all packaging and shipping materials
  2. Remove any third-party information from packaging and shipping materials prior to shipping the order
  3. Accept and process customer returns for your products
  4. Adhere to all other terms of your seller agreement and Amazon policies

By following these guidelines, you can ensure a positive customer experience and maintain your ability to sell using Amazon’s Merchant Fulfilled Network (MFN).

7. FBA Product Restrictions

Listing products with Fulfillment by Amazon (FBA) can greatly enhance your sales potential, but it’s essential to know what products are suitable and which ones aren’t. Before listing, ensure you review all product requirements and restrictions to avoid any potential penalties or fines.

Stay in Compliance with FBA Product Requirements

To ensure your products are eligible for FBA, they must meet specific expiration date and temperature requirements. Additionally, your products must comply with Amazon’s seller agreement, program policies, and all relevant laws and regulations.

Avoid FBA Prohibited Products

Some products may be eligible for sale on Amazon, but not for FBA. Be sure to check the list of FBA prohibited products to avoid costly mistakes.

Dangerous Goods (Hazmat) Restrictions

Most hazardous materials regulated by the U.S. Department of Transportation (DOT) cannot be processed through FBA. Make sure you familiarize yourself with the identification guide for dangerous goods, examples of Amazon products that may be regulated as dangerous goods, requirements for lithium batteries, and necessary documentation for products regulated as dangerous goods.

Stay Ahead of the Game by Uploading Dangerous Goods Documents

To avoid any potential delays or penalties, make sure to upload all necessary documentation for products regulated as dangerous goods. This will ensure smooth processing and help you maximize your FBA selling potential.

Speak With An Amazon Seller Attorney At ESQgo

In conclusion, it is essential to understand and comply with the terms outlined in Amazon’s Business Solutions Agreement to ensure the success of your business. If you have any questions or concerns about the agreement, or if you need assistance in navigating the complexities of Amazon’s policies, contact ESQgo for a free consultation. We are lawyers that represent Amazon sellers so they can concentrate on protecting their interests and growing their business. We may be reached by calling 866-203-0541 or via our contact page.