Small Business Loses Out As Amazon Freezes Seller Account Amidst Pandemic
- While Amazon presents itself as a friend of small businesses, small retail businesses owners like Barak Govani suffered unfair treatment when their seller account was suspended, freezing retail inventory worth $1.5 million and pushing the retailer towards poverty amidst the pandemic.
Barak Govani, A small business owner, closed up his shop to resell online as an Amazon third-party seller due to the pandemic. The 41 year old retail veteran, shut down his New York Speed clothing store at Los Angeles’s Melrose Avenue, packing up $1.5 million in inventory to be shipped to Amazon’s warehouses for his new online retail store, Addicted Wear.
However, Govani says that he was kicked off the site after being falsely accused of selling fakes. Despite sending an invoice to Amazon to prove the authenticity of his products, Govani is not given access to his account and his retail inventory worth $1.5 million is now gone.
Amazon owes its success as the world’s largest e-commerce company to millions of third-party merchants who choose to operate through its online marketplace. Small and medium-size businesses also account for more than half of the goods Amazon sells to customers worldwide - moving around 3.4 billion products alone in the year ending May 31. The average small business has annual sales of $160,000 on Amazon, which has increased by 60% as compared to the previous year.
While Amazon presents itself as a friend of small businesses, small retail businesses owners like Govani have suffered from unfair treatment at the hands of this e-commerce giant.
“That inventory was everything I had. Amazon ruined my life, and I did nothing wrong,” Govani says.
Govani’s case is not the only one. Amazon is known for suspending seller accounts and freezing their money for weeks and months. The company requires merchants to waive their right to a day in court by agreeing to binding arbitration to resolve any dispute. However, stories such as Govani’s show that Amazon refuses to negotiate or even respond to emails and calls.
A recent House Judiciary Committee report also discusses Amazon’s treatment of its third-party sellers, recognising the need to provide adequate recourse to sellers in case big technology companies like Amazon abuse their power.
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