Just some background info for other people without a law degree (I am not a lawyer and this is not legal advice):
Sellers of new products are in general strictly liable for harms those products cause to consumers. "Strictly liable" means that the consumer doesn't need to prove who was at fault (the seller vs. the distributor vs. the manufacturer, etc.). If you buy something new and it hurts you (assuming it isn't your fault) you can sue the seller. The seller can sue the manufacturer/distributor/etc. (or bring that party into the suit against them) and indeed, the contract between Amazon and third-party sellers includes a clause that these sellers will indemnify Amazon.
There are a few reasons for this general setup. Sellers are good "insurers" in that they typically sell a variety of products to a lot of people, and can thus spread risk reasonably well. Sellers generally know where they get their products, so they can pursue that party for the liability; consumers aren't in as good a position to do so.
Amazon wants to not be a seller, so as to avoid liability.
The actual decision [0] explains this concept in a bit more depth, starting on page 9.
This is true. But at the same time Amazon tries very hard to hide any information about the customer from the seller. If the order is fulfilled by FBA, the 3rd party seller has the name of the customer and that's it. Amazon also can facilitate email exchange through their server, but most customers do not see it (getting into spam?) or ignore it. So in practice, you rarely have a reliable channel to communicate with your "customer".
Compare to eBay - you have all the info for the customer, can follow up, resolve issue, etc. On eBay there is no confusion about who is "the seller".
I understand why Amazon is doing that - theirs customers probably hate idea of dealing with individual sellers and instead prefer the uniformity of dealing with Amazon. But then the position that Amazon is not "the seller" kinda weak.
Yes. I too find that Amazon tries to hide (maybe even obscure) information of who the third party seller is.
So is amazon a marketplace or a seller. Hard to decide. I think courts should also give importance to how amazon markets itself.
EBay, always, marketed itself as a marketplace. There was never a confusion about whether it's a "store" or a "marketplace".
From the Amazon banners/ads/and other marketing material, I always get the sense that Amazon tries to market itself as a "store" and not as a "marketplace".
With that and the _hiding/obscuring_ of third party seller information on the amazon website, I think courts should treat Amazon as a seller/store more than a marketplace.
AIUI 'Strict liability' means that the consumer doesn't even need to show that any party was at fault. The bad thing happened, and the seller/whoever will be held liable even if all of their actions were perfectly reasonable.
For most torts, you have to show intent or negligence. But for strict liability torts, the outcome is enough.
Anyone in the supply chain is a potential party to products liability lawsuits, not just the supplier and retailer. So you have manufacturers, shippers, etc...
It makes sense that customers can sue Amazon directly. Otherwise any party in the supply chain will point to their suppliers until you end up at the sweatshop worker in Asia.
There's an antique store near me than works on consignment. I wonder how all this liability works there. I'd be surprised if the mom and pop are liable for the 300 stalls in the store.
The problem with the Amazon vs eBay argument I’ve heard in the past is that Amazon blurs the line between when you’re buying from Amazon and buying from a third party. And if Amazon is still commingling items they absolutely should be responsible because at a certain point it doesn’t matter who the seller is.
Seller rating on Amazon are also useless. At least eBay you can see what it is you’re buying (for the most part) and get a seller eating that’s at least somewhat useful.
I really hope this forces Amazon to start vetting sellers more, they’ve simply been run over by aliexpress “drop shippers”.
Etsy actually has even more of a problem with dropship queens. Interestingly, I got a shoe rack for free because it was a double dropship from AE to Amazon to Etsy. LOL!
None of the reports I found bothered to link to the court ruling. I eventually found it on Justia. That one refers to an earlier case involving a laptop battery, so I've included a link to it as well. I haven't had a chance to do more than skim the rulings so far, but at least in the earlier case the courts focused on third-party sales where Amazon held the product and shipped it from their own warehouses.
It stands to reason that selling arbitrary offshore products without liability insurance will come to an end. Almost every offshore brand and reseller has a throwaway name so they can just fold up and start over should anything happen.
Every time I ask this question the answer usually is "it's a free market! If you don't want to buy a charger that's a death trap, just don't buy one! Why would Amazon be responsible for your own purchasing decisions"
Or more recently a golden gem:
"Making the sellers responsible for items will inevitably make them more expensive, and I don't want that"
Considering Amazon's comingling of the “same” item from multiple sellers with no way to distinguish them, it is the only link in the chain you could really hold accountable, and therefore it must be.
Though this case wasn't about that. I think it is clear however that Amazon is not just an eBay-like site. They choose for you who to buy from by default.
Each individual unit needs a chain of ownership history back to where it was produced; and presumably from there at least a date or serial or batch number, the thing a consumer from that company needs to identify correlated issues.
That history must include returns, refurbishments, etc.
If anyone has a problem with a product that arrived at a consumer's house the chain of handling and ownership should exist.
Is the product official?
Did a second party seller buy a product they believe is official and ship it?
Did someone buy something and then return it (and was it really the same something)?
If a bad batch of that product got shipped out, can Amazon recall it without manually sending a human to look in every bin that might have it (and what if there are 500 middle-men selling slightly cosmetically altered versions of the same cheap crap from across the sea)?
I guarantee this kills the Fulfilled-by-Amazon. Amazon works under the pretense of physical cache-as-a-service. If they have to start binning things based on sellers, they'll have to completely rearchitect their space management. They have to do this in a limited sense anyway with some products, but if it has to be done for everything, the space requirements would explode, as would picking time in the transition period to get a particular seller's product.
They can't just use APC/UPC anymore, because they'd have to accomodate the potential of sellers with a wide variety of products independently stored, even when not in use. This changes the FBA workability to only favor big actors, which admittedly, is exactly what people seem to expect.
Amazon works as well as it does because all the hoops everyone else has to jump through just haven't been held against them. It's no wonder they were an investor's darling.
Note: This is how I'd have started approaching building Amazon's logistics/FBA branch. Basically a library of physical goods. There's no way to know if they had started out that way whether they'd be in the position they are in now, but it is clear to me the direction many consumers want them to go.
I think this would actually, in the long term be good for Amazon. If it forces them to clean up their third party sellers and co-mingling of inventory and verify supply chains better, I would be more comfortable buying high value items from them.
Right now as it stands, for high value items or items where counterfeits are dangerous (think chargers) I have been either ordering at brick and mortar stores (Walmart, BestBuy) or direct from the manufacturer (Apple, Anker, etc)
My safety is worth a few extra dollars, a short trip to the store, or a few days wait on shipping.
For items they have in stock, BestBuy is much faster than Amazon - you can even order curbside pickup where you just drive to the store and they give you the item without you even having to get out of the car. Of course, it depends on how far you are from closest BestBuy - I have one in 5 mins drive, so I can get my stuff within half an hour if I'm lucky. Of course, the choice is less than Amazon but for things that they do have I've found them very useful. I thought Amazon would drive them out of business but now I think they have their place and I hope they stay.
When I needed new brush heads for my electric toothbrush. I hesitated before buying from Amazon, because I can't be sure that the toothbrush manufacturer-branded refills there are genuine. Going with a generic, compatible refill with good reviews is preferable in this case, aside from the lower price, because presumably no one will counterfeit it.
(I ended up buying the manufacturer-branded refill ... from Best Buy, not Amazon.)
This is really interesting. Can anyone on here explain if I am correct that this basically means any site that is operating as a middleman between supplier and consumer would be held liable for issues with the product?
So, like does this also apply to esty? EBay? Heck, maybe Shopify? At what point does the liability cease for the service provider?
I believe this is the opinion[1] discussed in the article. The important bit explaining the court’s reasoning starts on page 16. Basically, Amazon inserts themselves in the middle of transactions beyond merely providing a “storefront”.
> Owners of malls typically do not serve as conduits for payment and communication in each transaction between a buyer and a seller. Moreover, they do not typically charge a per-item fee rather than a fixed amount to rent their storefronts. Instead, these actions – 1) interacting with the customer, 2) taking the order, 3) processing the order to the third party seller, 4) collecting the money, and 5) being paid a percentage of the sale – are consistent with a retailer or a distributor of consumer goods.
I would say Etsy, eBay, and a Shopify lean slightly more mall-like than Amazon but whether that difference is enough for their legal department to be comfortable concluding they’re definitely outside the scope of this ruling is impossible to say. You can bet they’ll all be reviewing and revising their third-party seller program documents, though.
Slightly related, there was a recent case in Philadelphia that came to a similar conclusion (holding Amazon responsible for defective third-party products) for an entirely different reason: the commingling of Amazon-owned inventory and third-party inventory.
Regardless of how Amazon reacts to this specific case I think the direction things are heading for Amazon with respect to products liability is pretty clear.
This article doesn't really delve into the ruling at all, so I'm not sure. It's quite possible narrower than that, having to do with something specific about how Amazon does business, in which case I would expect them to do doing whatever makes them liable rather than fixing the reliability issue. Honestly, I mostly just wish they'd put country flags next to sellers names so I could avoid getting products from China
>1) interacting with the customer, 2) taking the order, 3) processing the order to the third party seller, 4) collecting the money, and 5) being paid a percentage of the sale – are consistent with a retailer or a distributor of consumer goods.
>explain if I am correct that this basically means any site that is operating as a middleman between supplier and consumer would be held liable for issues with the product?
IANAL. If you are reselling to the end-customer, then you are effectively a retailer and depending on where you operate will have some level of liability. Incidentally, a true middleman - a distributor - does (at least in the US) carries liability for product defects as does the retailer and manufacturer. I worked for a distributor who had to back a defective product from an out of business manufacturer who's warranty insurance was depleted. A lot of people at our company made bad assumptions about the law, and didn't realize that most consumer protection laws could not be waived by the consumer... So we ended up with a batch of 12000 bad network devices that we had to replace... When you operate at 20-30% gross margin that takes a huge bite out of profit.
>So, like does this also apply to esty? EBay? Heck, maybe Shopify?
The question is, who is operating the store? Who's name is on the receipt? In the case of eBay, the seller is clear (eBay forces the use of an escrow service -- often PayPal -- for payment). In the case of Shopify, the seller is clear (the store owner). On the question of Amazon, we shall see, but it appears they have lost quite a few cases (https://www.washingtonpost.com/technology/2020/08/29/amazon-...).
This does not mean that. This means that if you are a store and you sell something, you are liable.
Is a marketplace of vendors a store? No.
Is a piece of software that enables a vendor a store? No.
Is a store that runs software to host products from distributors a store? Yes. That's Amazon.
some amazon third party sales are shipped from/by the third the third party and some are fulfilled by amazon. the article doesn't state which was true in this case, but my suspicion is it actually did come from amazon's storage, which is never the case for ebay/etsy/etc.
There always is a viable business model. Brick and mortar stores have always assumed liability for the products they sell, even if they didn't make it.
They don't have to assume the whole liability - they can have a supplier contract that passes through all the liability costs (or part of it) to the supplier. In fact, as I understand, Amazon already does that. It's just that Amazon would become the first station to sue if the consumer is wronged. Nothing prevents the Amazon from passing the responsibility by either suing the supplier in turn or forcing them to join the lawsuit. What Amazon wanted is to be completely out of the picture, but the court denied them this. I don't think this invalidates the whole model - they still can act as a middleman, maybe just be a bit more careful with especially shady suppliers.
This strikes me as (yet another) instance of 'if you can't make it work, the business shouldn't exist.' If the business model really depends on the ability to sell bad goods without any blowback, it's a bad business.
I'm very sure there is, it's just that the commissions will have to reflect the necessary work to deal with potential customer relations issues.
Which is fair; it's just the cost of doing business. It's just that some merchants may reconsider whether it's a cost that's worth paying for working through Amazon.
I am European, Amazon does not operate in my country but sometimes I am forced to order things from them that I cannot find locally and every time I look their discoverability looks worse and worse due to the quality of the 3rd party product listings. I used to use the UK Amazon page, now I am forced to use the German one and the last time I tried to order some parts for my 3d printer the majority of the sellers were Chinese shell companies, some of whose results were flat out scams. The delivery time is often a month or more on these results. I am always forced to dig deep into reviews just to see if the seller is reliable. I’ve seen confirmed buys say they received some random plastic kick knacks and a weight in the package instead of what they ordered, etc. I usually look for specific products to buy instead of just browsing for stuff so it’s pretty frustrating to have to deal with it. It makes some sense to me that Amazon be forced to claim some responsibility for barely policing their listings.
It’s not squarely an Amazon phenomena, of course, local e-retailers allowing 3rd party sellers in a similar manner ended up with similar results but it’s kinda frustrating to have to deal with all that as a buyer; it removes a lot of the convenience of buying products online when I have to conduct an investigation just to order what I wanted.
I've said this before, amazon's search is so horribly bad that there is really no other explanation than that it is somehow desired. Really searching for something specific typically gives you pages of cheap slightly related products (e.g. search for a specific tablet with part number even, gives tons of results of screen protectors and other crap), and you're lucky to find the actual product within the first couple of pages. Similarly small spelling changes can make a huge difference, but theres no obvious logic to it.
Really the experience of shopping at amazon in Europe is so off putting that I would rather only shop in person if they would be my only choice.
I'm in the UK and frankly we've gone a bit mad when it comes to Amazon orders, however I also noticed higher number of random sellers in China selling some most absurd items, often with silly prices too. I still find Amazon useful for basic stuff,like books, some household items,etc. However anything beyond that and I'm off their website in no time at all.
I've been having increasing difficuly getting 3rd party sellers to even ship their products. Here's the most recent scam that I don't quite follow the purpose of:
1. Seller sells me a small patio side-table on Amazon.
2. Seller marks item as "shipped" with a UPS tracking number, meaning it has a tracking # but carrier has not taken possession of table.
3. Seller contacts me indicating that "FedEx" trucks are being used for covid purposes and that said table requires multiple boxes (not true) and that there are a backlog of boxes waiting to be picked up and that table will be delayed, but offers me a percentage discount which I decline.
4. Package never ships.
5. After the required number of waiting days from Amazon, I request and receive a refund.
What's the scam here? Is it purely negligence and they're not actually benefitting from this charade or why would a 3rd party seller go through this? How would this benefit them?
I’ve had this happen with some exercise equipment - where they just say “the package was damaged in shipping” (even though I can see the package never made it to FedEx/UPS/etc), and then they “ship another one”, and repeat this process forever until I request a refund.
My thought was that these are drop shippers who keep their prices low, and haven’t been able to find a lower price anywhere else, so they keep you hanging while they keep hoping for a lower price to show up somewhere. But I am wondering - could this be an investment scam, where they’re investing the money before they get the refund request, and pocketing the interest? I’m not sure how payment schedules and merchant fees and all that work for Amazon, I’m not sure if that’s viable or not.
Maybe their supply chain is disrupted, and they lied to Amazon about having inventory ready to ship. Then extended the lie a bit, hoping to get a shipment in before it came crashing down.
if you accept the discount, Amazon won't give you the full refund. my wife got caught by this, and customer support told her that because she had accepted the refund she couldn't also then request a full refund. It seemed crazy to us but I'm guessing the scammer is just using this policy as a way to steal a portion of the sale price. I'm sure amazon will catch on but it's just a cat and mouse game.
Interesting. Yeah, once they started changing the usual flow of the transaction, I knew there was no advantage to my doing whatever they were asking me to do, so I declined. Glad that I did. Thanks for explaining this version of the scam.
I would think that some people accept the discount and wait until they're out of the time period during which they can request a refund before realizing the product won't ship.
Not in this case. Apparently that's a common issue though because Amazon warns customers about it in the "wrapper" they put around the correspondence sent from the original seller.
Also, Amazon purposely mixes catalogues and advertises their own stock together with third party goods, and there's no clear wall on the site between them. If you look hard enough, you can see which ones are third party, but for a casual buyer it's all the same space. It's like if I came to Walmart and random goods on the shelves were "third party" and Walmart tried to claim they have nothing to do with it, just renting out the shelf space. Probably wouldn't fly very well in court.
#2 should have been a requirement. I used to sell a product through Hot Topic, its no Walmart or Amazon in terms of scale, but a Fortune 500 retailer with around 800 stores when we were a vendor and insurance was required.
I mean not requiring sellers to be insured - and yes every product is different, has different risks, but that is reflected in the insurance premium - basically is Amazon saying they don't give a shit about the quality of the products they market on their marketplace nor the safety of their marketplace customers. Its scandalous and if people only knew how much power they actually had they would crush Amazon into the dirt over night just by collectively organizing a mass cancellation of Prime, 1 week boycott of purchases and visitation...it would bring Amazon to its knees.
I’m baffled by the idea that anyone would sell anything without product liability insurance. Even at a shitty hardware startup sending out our first dev kits we made sure to have that. Maybe it’s different if you’re a fly by night drop shipped but still insane to me.
From some googling, it seems Amazon does require this of all sellers but didn’t require proof. I imagine we’ll see increased enforcement now.
Alternatively, the Supreme Court could flex its muscles and show those naughty big tech firms who's boss. I'm sure plenty of conservatives would love that.
That impulse would be balanced by the "pro-business" (usually anti-consumer) attitude many conservatives have, so it could go either way.
The concern is that Amazon may just drop smaller sellers since they would not be collectable if Amazon had to sue them in turn for damages. It perhaps may also make lawsuits more common since the bar of frivolity gets lowered if a lawyer knows the defendant has deep pockets.
>The concern is that Amazon may just drop smaller sellers since they would not be collectable
This is the hard part with business. If you make a product, you are responsible for it. If you sell a product, you are responsible for it. If I sell a dangerously defective used lawn mower at a garage sale, I'm responsible (yes hard to prove).
One of the dangers of too much growth is that your liability can out run your profits in a way that puts the whole business at risk. Historically, it was hard to make a new product and get it on the shelf... retailers required certification by a consumer products testing lab and would have to have indemnification AND proof of insurance where the retailer was a named beneficiary. Even though all of this is likely in the fine print at Amazon, one has to wonder if it is verified and audited.
I guess it depends on what is "too small to justify the risk", but I have a strong suspicion Amazon is not in the position to drop any significant number of 3rd party sellers, since these sellers drive something around half of Amazon's retail revenue. Perhaps if very few drive most of that revenue - then it might be the case where Amazon drops smaller sellers. But from where I look at it - most of 3rd party sellers are just small scale operations.
Man has store,
You go buy chips,
Chips is not potatoe chips,
But horshit chips.
Who is responsible?
everyone that made you eat “shit”
Is
Responsible. That includes whoever made the chip, who certified it, and who sold it.
Amazon is notorious for counterfeit/knockoff products (which is particularly scary for things like first aid supplies), so it will be interesting to see if this changes in the future
Just some background info for other people without a law degree (I am not a lawyer and this is not legal advice):
Sellers of new products are in general strictly liable for harms those products cause to consumers. "Strictly liable" means that the consumer doesn't need to prove who was at fault (the seller vs. the distributor vs. the manufacturer, etc.). If you buy something new and it hurts you (assuming it isn't your fault) you can sue the seller. The seller can sue the manufacturer/distributor/etc. (or bring that party into the suit against them) and indeed, the contract between Amazon and third-party sellers includes a clause that these sellers will indemnify Amazon.
There are a few reasons for this general setup. Sellers are good "insurers" in that they typically sell a variety of products to a lot of people, and can thus spread risk reasonably well. Sellers generally know where they get their products, so they can pursue that party for the liability; consumers aren't in as good a position to do so.
Amazon wants to not be a seller, so as to avoid liability.
The actual decision [0] explains this concept in a bit more depth, starting on page 9.
[0] https://law.justia.com/cases/california/court-of-appeal/2021...
> Amazon wants to not be a seller
This is true. But at the same time Amazon tries very hard to hide any information about the customer from the seller. If the order is fulfilled by FBA, the 3rd party seller has the name of the customer and that's it. Amazon also can facilitate email exchange through their server, but most customers do not see it (getting into spam?) or ignore it. So in practice, you rarely have a reliable channel to communicate with your "customer".
Compare to eBay - you have all the info for the customer, can follow up, resolve issue, etc. On eBay there is no confusion about who is "the seller".
I understand why Amazon is doing that - theirs customers probably hate idea of dealing with individual sellers and instead prefer the uniformity of dealing with Amazon. But then the position that Amazon is not "the seller" kinda weak.
Yes. I too find that Amazon tries to hide (maybe even obscure) information of who the third party seller is.
So is amazon a marketplace or a seller. Hard to decide. I think courts should also give importance to how amazon markets itself.
EBay, always, marketed itself as a marketplace. There was never a confusion about whether it's a "store" or a "marketplace".
From the Amazon banners/ads/and other marketing material, I always get the sense that Amazon tries to market itself as a "store" and not as a "marketplace".
With that and the _hiding/obscuring_ of third party seller information on the amazon website, I think courts should treat Amazon as a seller/store more than a marketplace.
Amazon now shares your email with sellers, exactly to avoid this argument.
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> "Strictly liable" means that the
> consumer doesn't need to prove
> who was at fault
IANAL
AIUI 'Strict liability' means that the consumer doesn't even need to show that any party was at fault. The bad thing happened, and the seller/whoever will be held liable even if all of their actions were perfectly reasonable.
For most torts, you have to show intent or negligence. But for strict liability torts, the outcome is enough.
Anyone in the supply chain is a potential party to products liability lawsuits, not just the supplier and retailer. So you have manufacturers, shippers, etc...
Yes, you can of course sue the manufacturer directly. But the key issue Amazon is fighting is whether they're liable.
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It makes sense that customers can sue Amazon directly. Otherwise any party in the supply chain will point to their suppliers until you end up at the sweatshop worker in Asia.
I can sue the Post Office for delivering a bad product to me?
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There's an antique store near me than works on consignment. I wonder how all this liability works there. I'd be surprised if the mom and pop are liable for the 300 stalls in the store.
This only applies to new items, an antiques consignment store has completely different liability rules.
Those aren't new products.
The problem with the Amazon vs eBay argument I’ve heard in the past is that Amazon blurs the line between when you’re buying from Amazon and buying from a third party. And if Amazon is still commingling items they absolutely should be responsible because at a certain point it doesn’t matter who the seller is.
Seller rating on Amazon are also useless. At least eBay you can see what it is you’re buying (for the most part) and get a seller eating that’s at least somewhat useful.
I really hope this forces Amazon to start vetting sellers more, they’ve simply been run over by aliexpress “drop shippers”.
Etsy actually has even more of a problem with dropship queens. Interestingly, I got a shoe rack for free because it was a double dropship from AE to Amazon to Etsy. LOL!
I've noticed that too and gave up trying to report when I realized Etsy is funny enabling it.
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What is a dropship queen?
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this particular case doesn't involve a Fulfilled By Amazon (where the commingling problem happens) product (though it is mentioned in a sentence)
None of the reports I found bothered to link to the court ruling. I eventually found it on Justia. That one refers to an earlier case involving a laptop battery, so I've included a link to it as well. I haven't had a chance to do more than skim the rulings so far, but at least in the earlier case the courts focused on third-party sales where Amazon held the product and shipped it from their own warehouses.
https://law.justia.com/cases/california/court-of-appeal/2021...
https://law.justia.com/cases/california/court-of-appeal/2020...
It stands to reason that selling arbitrary offshore products without liability insurance will come to an end. Almost every offshore brand and reseller has a throwaway name so they can just fold up and start over should anything happen.
No more cheap/counterfeit USB deathdapters https://youtu.be/3Hdn0MuCK_0
Also, I think electrical, li-ion, and RF products will have to prove their safety and compliance certification paperwork.
Question is why this has not been done from the start? Was this a favour for China?
Every time I ask this question the answer usually is "it's a free market! If you don't want to buy a charger that's a death trap, just don't buy one! Why would Amazon be responsible for your own purchasing decisions"
Or more recently a golden gem:
"Making the sellers responsible for items will inevitably make them more expensive, and I don't want that"
Considering Amazon's comingling of the “same” item from multiple sellers with no way to distinguish them, it is the only link in the chain you could really hold accountable, and therefore it must be.
Though this case wasn't about that. I think it is clear however that Amazon is not just an eBay-like site. They choose for you who to buy from by default.
Each individual unit needs a chain of ownership history back to where it was produced; and presumably from there at least a date or serial or batch number, the thing a consumer from that company needs to identify correlated issues.
That history must include returns, refurbishments, etc.
If anyone has a problem with a product that arrived at a consumer's house the chain of handling and ownership should exist.
Is the product official?
Did a second party seller buy a product they believe is official and ship it?
Did someone buy something and then return it (and was it really the same something)?
If a bad batch of that product got shipped out, can Amazon recall it without manually sending a human to look in every bin that might have it (and what if there are 500 middle-men selling slightly cosmetically altered versions of the same cheap crap from across the sea)?
I guarantee this kills the Fulfilled-by-Amazon. Amazon works under the pretense of physical cache-as-a-service. If they have to start binning things based on sellers, they'll have to completely rearchitect their space management. They have to do this in a limited sense anyway with some products, but if it has to be done for everything, the space requirements would explode, as would picking time in the transition period to get a particular seller's product.
They can't just use APC/UPC anymore, because they'd have to accomodate the potential of sellers with a wide variety of products independently stored, even when not in use. This changes the FBA workability to only favor big actors, which admittedly, is exactly what people seem to expect.
Amazon works as well as it does because all the hoops everyone else has to jump through just haven't been held against them. It's no wonder they were an investor's darling.
Note: This is how I'd have started approaching building Amazon's logistics/FBA branch. Basically a library of physical goods. There's no way to know if they had started out that way whether they'd be in the position they are in now, but it is clear to me the direction many consumers want them to go.
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I think this would actually, in the long term be good for Amazon. If it forces them to clean up their third party sellers and co-mingling of inventory and verify supply chains better, I would be more comfortable buying high value items from them.
Right now as it stands, for high value items or items where counterfeits are dangerous (think chargers) I have been either ordering at brick and mortar stores (Walmart, BestBuy) or direct from the manufacturer (Apple, Anker, etc)
My safety is worth a few extra dollars, a short trip to the store, or a few days wait on shipping.
For items they have in stock, BestBuy is much faster than Amazon - you can even order curbside pickup where you just drive to the store and they give you the item without you even having to get out of the car. Of course, it depends on how far you are from closest BestBuy - I have one in 5 mins drive, so I can get my stuff within half an hour if I'm lucky. Of course, the choice is less than Amazon but for things that they do have I've found them very useful. I thought Amazon would drive them out of business but now I think they have their place and I hope they stay.
When I needed new brush heads for my electric toothbrush. I hesitated before buying from Amazon, because I can't be sure that the toothbrush manufacturer-branded refills there are genuine. Going with a generic, compatible refill with good reviews is preferable in this case, aside from the lower price, because presumably no one will counterfeit it.
(I ended up buying the manufacturer-branded refill ... from Best Buy, not Amazon.)
This is really interesting. Can anyone on here explain if I am correct that this basically means any site that is operating as a middleman between supplier and consumer would be held liable for issues with the product?
So, like does this also apply to esty? EBay? Heck, maybe Shopify? At what point does the liability cease for the service provider?
I believe this is the opinion[1] discussed in the article. The important bit explaining the court’s reasoning starts on page 16. Basically, Amazon inserts themselves in the middle of transactions beyond merely providing a “storefront”.
> Owners of malls typically do not serve as conduits for payment and communication in each transaction between a buyer and a seller. Moreover, they do not typically charge a per-item fee rather than a fixed amount to rent their storefronts. Instead, these actions – 1) interacting with the customer, 2) taking the order, 3) processing the order to the third party seller, 4) collecting the money, and 5) being paid a percentage of the sale – are consistent with a retailer or a distributor of consumer goods.
I would say Etsy, eBay, and a Shopify lean slightly more mall-like than Amazon but whether that difference is enough for their legal department to be comfortable concluding they’re definitely outside the scope of this ruling is impossible to say. You can bet they’ll all be reviewing and revising their third-party seller program documents, though.
Slightly related, there was a recent case in Philadelphia that came to a similar conclusion (holding Amazon responsible for defective third-party products) for an entirely different reason: the commingling of Amazon-owned inventory and third-party inventory.
Regardless of how Amazon reacts to this specific case I think the direction things are heading for Amazon with respect to products liability is pretty clear.
[1]https://www.courthousenews.com/wp-content/uploads/2021/04/Lo...
This article doesn't really delve into the ruling at all, so I'm not sure. It's quite possible narrower than that, having to do with something specific about how Amazon does business, in which case I would expect them to do doing whatever makes them liable rather than fixing the reliability issue. Honestly, I mostly just wish they'd put country flags next to sellers names so I could avoid getting products from China
Amazon would have to break this chain:
>1) interacting with the customer, 2) taking the order, 3) processing the order to the third party seller, 4) collecting the money, and 5) being paid a percentage of the sale – are consistent with a retailer or a distributor of consumer goods.
>explain if I am correct that this basically means any site that is operating as a middleman between supplier and consumer would be held liable for issues with the product?
IANAL. If you are reselling to the end-customer, then you are effectively a retailer and depending on where you operate will have some level of liability. Incidentally, a true middleman - a distributor - does (at least in the US) carries liability for product defects as does the retailer and manufacturer. I worked for a distributor who had to back a defective product from an out of business manufacturer who's warranty insurance was depleted. A lot of people at our company made bad assumptions about the law, and didn't realize that most consumer protection laws could not be waived by the consumer... So we ended up with a batch of 12000 bad network devices that we had to replace... When you operate at 20-30% gross margin that takes a huge bite out of profit.
>So, like does this also apply to esty? EBay? Heck, maybe Shopify?
The question is, who is operating the store? Who's name is on the receipt? In the case of eBay, the seller is clear (eBay forces the use of an escrow service -- often PayPal -- for payment). In the case of Shopify, the seller is clear (the store owner). On the question of Amazon, we shall see, but it appears they have lost quite a few cases (https://www.washingtonpost.com/technology/2020/08/29/amazon-...).
This does not mean that. This means that if you are a store and you sell something, you are liable.
Is a marketplace of vendors a store? No. Is a piece of software that enables a vendor a store? No. Is a store that runs software to host products from distributors a store? Yes. That's Amazon.
Slippery slope averted.
Largely agree with your assessment, but...
>Is a store that runs software to host products from distributors a store? Yes.
Is not valid (presupposed outcome)
Did you mean,
Is a marketplace implemented via software to host products from multiple suppliers a store?
Conclusion: Yes. It is. It has inventory. It brokers sales and transactions. It is a store.
some amazon third party sales are shipped from/by the third the third party and some are fulfilled by amazon. the article doesn't state which was true in this case, but my suspicion is it actually did come from amazon's storage, which is never the case for ebay/etsy/etc.
In this case it was not fulfilled by Amazon.
If the site has to assume liability for third-party products, it makes me wonder if there's even a viable business model there.
There always is a viable business model. Brick and mortar stores have always assumed liability for the products they sell, even if they didn't make it.
They don't have to assume the whole liability - they can have a supplier contract that passes through all the liability costs (or part of it) to the supplier. In fact, as I understand, Amazon already does that. It's just that Amazon would become the first station to sue if the consumer is wronged. Nothing prevents the Amazon from passing the responsibility by either suing the supplier in turn or forcing them to join the lawsuit. What Amazon wanted is to be completely out of the picture, but the court denied them this. I don't think this invalidates the whole model - they still can act as a middleman, maybe just be a bit more careful with especially shady suppliers.
This strikes me as (yet another) instance of 'if you can't make it work, the business shouldn't exist.' If the business model really depends on the ability to sell bad goods without any blowback, it's a bad business.
I'm very sure there is, it's just that the commissions will have to reflect the necessary work to deal with potential customer relations issues.
Which is fair; it's just the cost of doing business. It's just that some merchants may reconsider whether it's a cost that's worth paying for working through Amazon.
I am European, Amazon does not operate in my country but sometimes I am forced to order things from them that I cannot find locally and every time I look their discoverability looks worse and worse due to the quality of the 3rd party product listings. I used to use the UK Amazon page, now I am forced to use the German one and the last time I tried to order some parts for my 3d printer the majority of the sellers were Chinese shell companies, some of whose results were flat out scams. The delivery time is often a month or more on these results. I am always forced to dig deep into reviews just to see if the seller is reliable. I’ve seen confirmed buys say they received some random plastic kick knacks and a weight in the package instead of what they ordered, etc. I usually look for specific products to buy instead of just browsing for stuff so it’s pretty frustrating to have to deal with it. It makes some sense to me that Amazon be forced to claim some responsibility for barely policing their listings.
It’s not squarely an Amazon phenomena, of course, local e-retailers allowing 3rd party sellers in a similar manner ended up with similar results but it’s kinda frustrating to have to deal with all that as a buyer; it removes a lot of the convenience of buying products online when I have to conduct an investigation just to order what I wanted.
I've said this before, amazon's search is so horribly bad that there is really no other explanation than that it is somehow desired. Really searching for something specific typically gives you pages of cheap slightly related products (e.g. search for a specific tablet with part number even, gives tons of results of screen protectors and other crap), and you're lucky to find the actual product within the first couple of pages. Similarly small spelling changes can make a huge difference, but theres no obvious logic to it.
Really the experience of shopping at amazon in Europe is so off putting that I would rather only shop in person if they would be my only choice.
I'm in the UK and frankly we've gone a bit mad when it comes to Amazon orders, however I also noticed higher number of random sellers in China selling some most absurd items, often with silly prices too. I still find Amazon useful for basic stuff,like books, some household items,etc. However anything beyond that and I'm off their website in no time at all.
I've been having increasing difficuly getting 3rd party sellers to even ship their products. Here's the most recent scam that I don't quite follow the purpose of:
1. Seller sells me a small patio side-table on Amazon.
2. Seller marks item as "shipped" with a UPS tracking number, meaning it has a tracking # but carrier has not taken possession of table.
3. Seller contacts me indicating that "FedEx" trucks are being used for covid purposes and that said table requires multiple boxes (not true) and that there are a backlog of boxes waiting to be picked up and that table will be delayed, but offers me a percentage discount which I decline.
4. Package never ships.
5. After the required number of waiting days from Amazon, I request and receive a refund.
What's the scam here? Is it purely negligence and they're not actually benefitting from this charade or why would a 3rd party seller go through this? How would this benefit them?
I’ve had this happen with some exercise equipment - where they just say “the package was damaged in shipping” (even though I can see the package never made it to FedEx/UPS/etc), and then they “ship another one”, and repeat this process forever until I request a refund. My thought was that these are drop shippers who keep their prices low, and haven’t been able to find a lower price anywhere else, so they keep you hanging while they keep hoping for a lower price to show up somewhere. But I am wondering - could this be an investment scam, where they’re investing the money before they get the refund request, and pocketing the interest? I’m not sure how payment schedules and merchant fees and all that work for Amazon, I’m not sure if that’s viable or not.
Maybe their supply chain is disrupted, and they lied to Amazon about having inventory ready to ship. Then extended the lie a bit, hoping to get a shipment in before it came crashing down.
if you accept the discount, Amazon won't give you the full refund. my wife got caught by this, and customer support told her that because she had accepted the refund she couldn't also then request a full refund. It seemed crazy to us but I'm guessing the scammer is just using this policy as a way to steal a portion of the sale price. I'm sure amazon will catch on but it's just a cat and mouse game.
Interesting. Yeah, once they started changing the usual flow of the transaction, I knew there was no advantage to my doing whatever they were asking me to do, so I declined. Glad that I did. Thanks for explaining this version of the scam.
I would think that some people accept the discount and wait until they're out of the time period during which they can request a refund before realizing the product won't ship.
Do they want you to pay directly by other means with the "discount" maybe?
Not in this case. Apparently that's a common issue though because Amazon warns customers about it in the "wrapper" they put around the correspondence sent from the original seller.
Three outcomes I see from this:
1. eBay and Amazon basically drop all small sellers.
2. eBay and Amazon require third party sellers to hold insurance protecting themselves if anything happens.
3. eBay and Amazon aggregate data and drop selling of broad categories of products that statistically lead to lawsuits.
I do not see how these three things are not implemented in the next 12 months.
Some important points of the decision seem to be:
Amazon:
A) takes the payment (and later disburses it net30/60/90 whatever) instead routing of it (possibly less a fee) directly to the seller
B) Doesn't allow communication directly between the seller and buyer
C) Requires already fairly significant restrictions on the seller
I don't think eBay does any of those things or at least not to nearly the same degree.
Also, Amazon purposely mixes catalogues and advertises their own stock together with third party goods, and there's no clear wall on the site between them. If you look hard enough, you can see which ones are third party, but for a casual buyer it's all the same space. It's like if I came to Walmart and random goods on the shelves were "third party" and Walmart tried to claim they have nothing to do with it, just renting out the shelf space. Probably wouldn't fly very well in court.
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#2 should have been a requirement. I used to sell a product through Hot Topic, its no Walmart or Amazon in terms of scale, but a Fortune 500 retailer with around 800 stores when we were a vendor and insurance was required.
I mean not requiring sellers to be insured - and yes every product is different, has different risks, but that is reflected in the insurance premium - basically is Amazon saying they don't give a shit about the quality of the products they market on their marketplace nor the safety of their marketplace customers. Its scandalous and if people only knew how much power they actually had they would crush Amazon into the dirt over night just by collectively organizing a mass cancellation of Prime, 1 week boycott of purchases and visitation...it would bring Amazon to its knees.
I’m baffled by the idea that anyone would sell anything without product liability insurance. Even at a shitty hardware startup sending out our first dev kits we made sure to have that. Maybe it’s different if you’re a fly by night drop shipped but still insane to me.
From some googling, it seems Amazon does require this of all sellers but didn’t require proof. I imagine we’ll see increased enforcement now.
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> I do not see how these three things are not implemented in the next 12 months.
4. Supreme Court throws consumer protection under the bus and finds in Amazon's favor
I believe this case is state law. The supreme court wouldn't have jurisdiction generally speaking.
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Alternatively, the Supreme Court could flex its muscles and show those naughty big tech firms who's boss. I'm sure plenty of conservatives would love that.
That impulse would be balanced by the "pro-business" (usually anti-consumer) attitude many conservatives have, so it could go either way.
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The concern is that Amazon may just drop smaller sellers since they would not be collectable if Amazon had to sue them in turn for damages. It perhaps may also make lawsuits more common since the bar of frivolity gets lowered if a lawyer knows the defendant has deep pockets.
>The concern is that Amazon may just drop smaller sellers since they would not be collectable
This is the hard part with business. If you make a product, you are responsible for it. If you sell a product, you are responsible for it. If I sell a dangerously defective used lawn mower at a garage sale, I'm responsible (yes hard to prove).
One of the dangers of too much growth is that your liability can out run your profits in a way that puts the whole business at risk. Historically, it was hard to make a new product and get it on the shelf... retailers required certification by a consumer products testing lab and would have to have indemnification AND proof of insurance where the retailer was a named beneficiary. Even though all of this is likely in the fine print at Amazon, one has to wonder if it is verified and audited.
I guess it depends on what is "too small to justify the risk", but I have a strong suspicion Amazon is not in the position to drop any significant number of 3rd party sellers, since these sellers drive something around half of Amazon's retail revenue. Perhaps if very few drive most of that revenue - then it might be the case where Amazon drops smaller sellers. But from where I look at it - most of 3rd party sellers are just small scale operations.
This is ok in my book it forces small sellers to other platforms and consumers to chase them there too.
Man has store, You go buy chips, Chips is not potatoe chips, But horshit chips. Who is responsible? everyone that made you eat “shit” Is Responsible. That includes whoever made the chip, who certified it, and who sold it.
Judge Dread
Amazon is notorious for counterfeit/knockoff products (which is particularly scary for things like first aid supplies), so it will be interesting to see if this changes in the future
Amazon doesn't even provide a way to filter out 3rd party sellers ...