Check out our other videos here Amazon is instituting a new contract between Sellers and Amazon.
They are imposing a new agreement upon you and there are significant changes to that agreement. Some are going to be super helpful and really good for sellers. Other provisions are absolutely awful for sellers.
To get started, most sellers don't even know that this document exists. Most sellers thinks it's a term of service with a participation agreement and it's not. It is this contract that governs your relationship with Amazon and it is incredibly one-sided, and we're going to get right into the substance of it.
You look at the name Amazon Business Solutions and you wouldn't think, directly, this is a contract which you're going to engage in with Amazon, which is going to hold you to some legal responsibilities. But it entirely does and the first three lines addresses selling on Amazon and fulfillment by Amazon. Third party vendors who are accessing Amazon at sellers' request through the API, they're under this agreement also, even though they're not signing it.
What are your thoughts on Amazon taking this agreement and including vendors and service providers under this contract? You would think that those third party services would need to be participatory in this agreement. But if they're not signature to this agreement, it's kind of interesting that this would extend its reach to them or at least make an attempt to extend that reach.
CJ Rosenbaum: So right off the bat, Amazon is trying to reach out and encompass companies who don't sign this agreement because they are working on your behalf.
The second paragraph is the same as the old Business Solutions Agreement and it says basically that by using Amazon services in any way, you are agreeing that this is the agreement. There are no changes and if Amazon updates it, you are responsible for those updates. There's no ability to negotiate. It is purely a contract of adhesion, which means you take it or leave it.
Now Travis, we're getting into the third paragraph of the general terms. (We're still on the first half a page of this contract and there's a ton of information for sellers). The third paragraph, what concerns you most about the changes to the Amazon Business Solutions Agreement in the third paragraph?
Travis Stockman: So what they added into the third paragraph was that the general terms take precedent over any other prior terms or service terms or general.
CJ Rosenbaum: So what that means is that if you sent $100,000 of inventory to Amazon the day before this contract was issued, that $100,000 in inventory is now subject to this agreement. And that doesn't really seem fair. How do you think we're going to use that to help sellers?
Travis Stockman: When you enter into a contract, one thing courts look to to uphold the validity of a contract is whether there was a manifestation of mutual intent, whether both parties truly intended to enter into this agreement and when they did so, they fully understood the terms of the agreement. By creating inconsistencies, it's difficult. It's difficult for sellers to understand the general terms of service, but to now deal with terms of service when there's several inconsistencies, you don't know which one takes precedent and it creates a little ambiguity. When there's ambiguity, sellers aren't clear about what policies they're expected to follow.
CJ Rosenbaum: I think this is both good and bad for sellers. It's bad because Amazon can suspend you under one provision that conflicts with another one that you're in compliance with. But when it comes to your plan of action, you could argue that your in compliance with the portion that you're complying with and show Amazon staff that you did a deep dive, looked at the contract, and argue what works.
What are your thoughts about how the new Amazon Business Solutions Agreement right here that says that the general terms will govern instead of the other 46 pages?
Travis Stockman: It sets that these new changes are going to take precedent over anything else in the agreement and it even creates not just inconsistencies with the prior terms of service, it creates inconsistencies within the new contract itself.
That is the general terms of the new Business Solutions Agreement. That is just the first 3 paragraphs of what you need to know. We're going to break down these videos paragraph by paragraph to provide sellers the information they need to know.
If you have any questions about the new Amazon Business Solutions Agreement, call for a free consultation: 1-877-9-SELLER.
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