Selling on Amazon? Learn the Crucial Terms and Conditions for Success
Amazon keeps a close eye on how well sellers are doing and wants them to keep up a good level of performance so they can keep selling on the platform. This includes metrics such as order defect rate, late shipment rate, and cancellation rate. Sellers who consistently fall below Amazon’s performance standards may face consequences such as account suspension. In this post we take a deep dive in the amazon terms and conditions for sellers.
Consequences of Violating Amazon’s Terms and Conditions
Not complying with Amazon’s terms and conditions can have serious consequences, including account suspension or legal action. Sometimes, sellers may receive a warning or an opportunity to fix the issue before facing more severe consequences.
In the event of account suspension, the following consequences may occur:
- Amazon may ban your business and products
- Amazon can hold your payments
- Amazon may choose to suspend your Amazon seller account
- Removal of reviews from a specific product (which failed to fulfill the ToS)
- Delisting your product from Amazon
- Legal action against the seller or more
Policies Every Amazon Seller Needs to Know
If you sell products on Amazon, you can access a huge online marketplace and reach many customers. However, you must adhere to amazon tos to maintain your selling privileges and grow your business.
1. Amazon’s Business Solutions Agreement and Policies
Familiarizing yourself with Amazon’s Business Solutions Agreement is crucial as it is legally binding and outlines the rules and procedures you must follow to sell on Amazon. As Amazon continues to grow in popularity, it becomes increasingly important to understand the critical points of this agreement to ensure your business thrives.
One crucial requirement of the Business Solutions Agreement is that disputes must be resolved through binding arbitration instead of the court system. Any disagreements between you and Amazon must be resolved through arbitration with the American Arbitration Association (AAA).
According to the agreement, sellers must respect the intellectual property rights of others and ensure their products do not violate those rights. Appropriate measures should be taken to prevent infringement.
Product Listing Requirements
Sellers on Amazon must follow specific rules when listing their products. They must provide accurate and detailed information about the product, including a comprehensive description, high-quality pictures, and the correct price.
Fulfillment by Amazon (FBA)
When using Amazon’s FBA program, following the terms and conditions outlined in the agreement is essential. This includes appropriately labeling and packaging your products and maintaining accurate inventory levels.
Suspension and Termination
Amazon can suspend or terminate a seller’s account if they violate any of Amazon’s policies. This can happen if a seller sells fake items, provides false information about their products, or infringes the intellectual property rights of others.
2. Account Health Rating Program Policy
The Account Health Rating (AHR) is a valuable tool on Amazon that can help you manage your account health. The AHR gives you a color-coded score and ranges from 0 to 1,000. This score shows you the risk of deactivation due to policy violations and provides near real-time information on your account’s health. Points are deducted for violations and added to address them.
If your score is between 200 and 1,000, your account is healthy and not at risk. If it’s between 100 and 199, it’s at stake, and if it’s 99 or lower, it’s unhealthy or eligible for deactivation. To maintain a healthy account, avoid policy violations and address them promptly. If your account engages in fraudulent or harmful activity, Amazon may deactivate it without warning.
3. FBA Inventory Reimbursement Policy
If you’re a seller and your products are lost or damaged while on FBA, Amazon’s Fulfillment by Amazon (FBA) service can replace or reimburse it. However, your item must meet the specific eligibility criteria listed in the policy. You must file a reimbursement claim following the appropriate process to receive compensation. You’ll get money back based on how much we think the item will sell for. We figure this out by looking at different ways to measure prices.
If you disagree with the valuation, you have 90 days to file a claim. Keep in mind that the maximum reimbursement amount per item is $5,000. You may need third-party insurance if your item is valued over this amount. Finally, interfering with Amazon’s ability to help other sellers could result in delayed support or account action.
4. ASIN Creation Policy
You have two options when selling on amazon. You have two options: you can either find a product that already exists on Amazon and match it, or you can create a completely new product that hasn’t been listed yet.
However, if you’re not the brand owner, you can’t make a new product for a brand already registered (enrolled in the Brand Registry).
If you get an error message, you can request approval to create a new product by contacting Selling Partner Support and providing information about the product. If the product is already listed, you can make an offer. However, there are limits on the number of new products and listings you can create each week, and there are restrictions on creating duplicates, variations, and prohibited practices.
Always use the correct UPC, EAN, ISBN, ASIN, or JAN code to avoid creating duplicates. If the product doesn’t have a known identifier, you can ask for a brand or SKU-level UPC exemption. Finally, brand owners and manufacturers can use an alternative identifier to register their brand with the Amazon Brand Registry.5. Product Detail Page Rules.
If you sell products on Amazon FBA, your offers will appear on a product detail page. To ensure customers have a clear and consistent buying experience, you must follow Amazon’s rules for writing listings and creating detailed pages.
You should follow the style guides, describe your products accurately, create valid variations, and avoid inappropriate content. Don’t use false information when making a detail page, infringe on intellectual property rights, or promote other products. If you update a detail page, only make changes to improve the product description and create a new page for new versions or re-branded products. If you don’t follow Amazon’s policies, you may lose your selling privileges temporarily or permanently.
5. Drop Shipping Policy
When using drop shipping, a third-party supplier sends products directly to the customer on behalf of the seller. To ensure a clear and consistent customer experience, the seller must be identified as the seller of record on all products and packaging materials.
If you sell on Amazon, you are not allowed to engage in drop shipping without making it clear that you are the seller. This includes buying 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 that identifies a seller other than you or Amazon.
To comply with Amazon’s policies, if you choose to use drop shipping, it is essential to:
- Have an agreement with your supplier to identify you as the seller on all packaging and shipping materials
- Remove any third-party information from packaging and shipping materials before shipping the order
- Accept and process customer returns for your products
- 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).
Fulfillment by Amazon (FBA) is a great way to increase sales opportunities. However, knowing which products are suitable and which aren’t is essential. Here are a few things to keep in mind before listing your products on FBA:
Stay in compliance with product requirements:
Your products must meet specific expiration dates and temperature requirements and comply with Amazon’s seller agreement, program policies, and all relevant laws and regulations.
Avoid prohibited products:
Some products may be eligible for sale on Amazon but not for FBA. Be sure to check the list of 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 hazardous goods, requirements for lithium batteries, and necessary documentation for products regulated as dangerous goods.
Stay ahead of the game by uploading dangerous goods documents:
Upload all necessary documentation for products regulated as dangerous goods to avoid potential delays or penalties. This will ensure smooth processing and help you maximize your FBA selling potential.
The activities and actions Amazon explicitly prohibits for Amazon Sellers.
Amazon has strict policies in place to protect both merchants and buyers. The company does its best to ensure a level playing field for all users, so any actions that give you an unfair advantage over other sellers are prohibited. If you’re unsure whether an approach you’re considering is against the Terms of Service (ToS), it likely is. Here’s a brief overview of the most common prohibited tactics:
Unauthorized brand names:
All company names must accurately identify the merchant, not mislead customers, and must be a name that the merchant is authorized to use. For example, it cannot be a trademarked name or brand a merchant cannot use. Company names cannot include an email suffix (i.e., .biz, .com, .net).
Diverting Amazon traffic
Merchants cannot use links or language that direct traffic away from Amazon, including special offers, calls to action, or advertisements encouraging customers to leave the platform.
Misusage of search and browse:
Any attempt to manipulate customer experience when searching and browsing is restricted. This includes artificially boosting customer traffic via internet bots, sharing misleading product information in catalogs, or adding item identifiers to hidden search terms attributes. Merchants
Inappropriate communication via email:
Merchants cannot send unsolicited messages to customers except those required for customer service or order fulfillment. Advertising emails to customers are not allowed.
Improper usage of customer phone numbers:
Merchants can only use customer phone numbers to provide carrier label requirements. Personal information policy must follow Amazon’s guidelines, which can be found in the Seller Agreement.
Misusage of ratings, feedback, and reviews:
Merchants are strictly prohibited from committing any actions that might manipulate feedback, reviews, and ratings. It includes providing incentives to customers for their ratings or reviews, publishing feedback to your profile, etc. Merchants can neutrally ask for feedback but cannot request positive reviews. Merchants must also follow Amazon Community Guidelines when handling customer reviews.
Multiple selling accounts:
Merchants cannot maintain and operate multiple selling accounts, except with permission from Amazon support, which requires proof of need for various profiles.
Misusage of Amazon Seller service:
Merchants that repeatedly add excessive data or use the service excessively or unreasonably might face blocked or restricted access to products or any other service they misuse. The marketplace decides what this misuse means at its discretion.
Misusage of sales rank:
Merchants are not allowed to engage in actions that abuse sales rank. For example, this refers to knowingly accepting or soliciting fake orders, making orders for the goods, or supplying compensation to buyers for purchasing your items.
Should follow Amazon’s guidelines to optimize product listings in compliance with the rules correctly.
Tips to Adhere to Amazon’s Terms and Conditions
Now that we’ve covered some key terms and conditions for Amazon sellers let’s discuss how to ensure compliance with these rules.
Read and Understand the Terms and Conditions
The first step to adhering to Amazon’s terms and conditions is to read and understand them thoroughly. It’s essential to familiarize yourself with all the rules and guidelines to avoid unintentional violations.
Stay Up-to-Date on Policy Changes
Amazon’s terms and conditions are subject to change, so sellers must stay informed about any updates or revisions. This can be done by regularly checking the Amazon Seller Central website or subscribing to email updates from Amazon.
Utilize Amazon’s Seller Central Resources
Amazon provides various resources for sellers to help them understand and comply with the terms and conditions. These resources include training videos, webinars, and a seller forum where sellers can ask questions and get support from other sellers.
Monitor Your Performance Metrics
As mentioned earlier, Amazon closely monitors seller performance and expects sellers to maintain specific metrics to continue selling on the platform. It’s essential for sellers to regularly monitor their performance metrics and take steps to improve if necessary.
Understanding and adhering to Amazon’s terms and conditions is crucial for any seller looking to be successful on the platform. By following these rules and guidelines, sellers can maintain a positive reputation, avoid penalties, and continue growing their Amazon business.
Remember to review the terms and conditions regularly and stay informed about any updates or changes. Doing so ensures that you are always in compliance and set yourself up for success as an Amazon seller.