Ecommerce News: Amazon Responsible for Third-party Products According to an Appeals Court Ruling

Ecommerce News: Amazon Responsible for Third-party Products According to an Appeals Court Ruling

By at - 8 Minutes

Victory for eCommerce sellers or just another speedbump for corporate America?

Last week, a U.S. city appeals court in Philadelphia overturned two previous lower court’s rulings, holding Amazon responsible for faulty third-party sales. To date, nearly half of the products bought and sold on Amazon was done so through a third party seller totaling $11 billion in revenue for Amazon alone in the last quarter.Percentage of products sold by third-party sellers on Amazon

Percentage of products sold by third-party sellers on Amazon in the first quarter of 2019 courtesy of Statista.

Though the ruling lines up with Pennsylvania law, product liability varies on a state by state basis, so even if the ruling is upheld, it will take a federal court or even a supreme court ruling to really make a large-scale impact, though a Philadelphia state precedent may help ease the path to judicial success down the road against the corporate behemoth Amazon has become.

Should you go up against Amazon or stay put? 

The answer is complex, and to tell you the truth, it is entirely up to you. Just know that you are not alone in your discontent with Amazon. This is a hot bill topic for many Americans with 1,029,528 new sellers joining Amazon in the last year alone and with presidential candidate Elizabeth Warren (D-MA) making corporate giants like Amazon an integral part of the political discourse in the coming elections, which I discuss in more detail in a recent post under the title “Where do you see eCommerce in 10 years from now?”. The battle for fair trade is an extension of this legal battle, many Americans, Amazon sellers or not, are sick and tired of Amazon making exorbitant profits on their backs only to deny liability on third-party faulty products and swoop in with their own product lines pushing sellers out of entire sectors. 

Today, the American Judicial system said no more to Amazon and restored eCommerce sellers with a sense of hope for the future of an economy which is quicker than ever evaporating from the physical environment and into the online arena.

Currently, 21.8% of the global population shops online, and by the year 2021, sales generated from worldwide online retail will hit $4.8 trillion.

What steps can you take as a ‘small’ Amazon seller? 

Most people believe there is nothing they can do, they feel weak in the face of great economic and political might. If you choose to do nothing, that is your prerogative. But for those of you who are proactive and believe in the fight of the small against many, much like the Maccabees in The Old Testament, this is a time for action. Whether you are American or not, Amazon is an American company. It is for this reason that the battleground is rooted in American politics, the judicial system and the economy by its inherent nature. Here are some ideas of what to do next:

  1. Start a grassroots movement – Grassroots movements are historically political for the most part. People start organizing from the bottom up in an attempt to mobilize their community in favor of a cause or candidate they hold dear to their heart. But this does not have to be the case. If you feel strongly enough about the injustices Amazon is perpetrating against ‘helpless’ sellers, then mobilize the troops, so to speak. Call up and email every Amazon seller you know, put together a petition demanding Amazon take responsibility for faulty third-party sales and stop competing with third-party sellers while employing unfair trade tactics. Petitions, especially ones on social media, can have a great influence on big companies like Amazon, whose success depends a great deal on public opinion and favor.  
  2. Call your government representative -If you are an American, you know that you vote and have representation on every level (city, state, federal). Reach out to your representative either by phone, email or both and let them know this is an issue you care about. With elections coming up and enough voter concern, you would be surprised how easy it may be to mobilize your government representative to speak out or act on behalf of a group of concerned citizens. If you are not an American, contact your local international trade bureau and voice your concerns. America is as much dependent on international trade as it is on national trade and has trade agreements with most of Europe and large parts of Asia, Africa, and Latin America. Let your voice be heard!
  3. Expand your businessGoing multi-channel vs. remaining single channel is a common strategy with folks looking to diversify their risk, as well as the control Amazon has over their business. It is important for sellers who currently only have a presence on major marketplaces (especially Amazon) to create assets and online brands of their own.This trend is gaining more prevalence among mainstream sellers as small victories against companies like Amazon don’t currently have enough impact on sellers’ day-to-day dealings.
  4. Boycott Amazon – This may seem extreme to some, but if you are truly unhappy, what better way to voice your opinion than by taking your business elsewhere? In a country where ‘free economics’ reigns supreme, put your money where your mouth is and slowly but surely move your business to other marketplaces – there are a plethora of them both in The United States and abroad. If you are seriously considering expanding abroad, check out my post “6 must-know eCommerce Customer Support Growth Hacks When Expanding Overseas.” There, you will learn how to deal with language barriers, international taxation and most importantly, I reveal six new international marketplaces which I recommend you look into selling on.  

Summing It Up

The victory against Amazon in Philadelphia, if upheld, can and will affect the way in which Amazon does business in the long-term but will have very limited short-term effects for the average eCommerce seller. Sellers should continue fighting the good fight against Amazon while simultaneously choosing a course of action which is right for them. As Eli Weisel once said, the opposite of love is not hate but indifference. Do not be indifferent, especially if you have something to say!Amazon Philadelphia 3rd U.S. City Court of Appeals ruling

Source: AZquotes 

Please comment below  – 

  • Where do you stand on the fight against Amazon?
  • How impactful do you think the 3rd U.S. City Court of Appeals ruling will be?
  • Which course of action will you be taking and why?



Nadav Roiter

Nadav Roiter is a published writer and a Jerusalem Post freelance journalist. Formerly part of the CrazyLister content team, he is now the Marketing Manager for Subivi eCommerce CRM which has developed a customer support tool uniquely built to help eCommerce sellers offer stellar customer support while simultaneously maximizing profits.

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