The "winter chill" continues for cross-border e-commerce as sellers navigate increasingly tense relations with Amazon. Recent upgrades to the platform's secondary review mechanism have created unprecedented challenges, with numerous sellers reporting account suspensions that further complicate an already difficult marketplace.
Zebao Lawsuit Warning: Is Compliance the Only Path Forward?
The parent company of Shenzhen-based top seller Zebao recently disclosed an ongoing arbitration case against Amazon involving 46.8 million yuan ($6.7 million). Zebao's U.S. subsidiary, Sunvalleytek International, alleges Amazon violated supplier agreements by freezing store accounts, claiming damages of 37.4 million yuan ($5.4 million). This lawsuit highlights growing tensions between Amazon and its third-party sellers.
The dispute traces back to Amazon's 2021 crackdown, when Zebao faced product removals and account suspensions after reports emerged about gift cards being included in product packaging. The company lost access to 367 storefronts with approximately 32.2 million yuan ($4.6 million) in frozen funds. Subsequently, Zebao's revenue plummeted 54.98% in Q1 2022, followed by an 81.17% annual decline.
While the case remains unresolved, Zebao's experience serves as a stark reminder of the importance of compliance in today's strictly regulated e-commerce environment. For sellers, focusing on sustainable growth through compliant operations may prove more effective than costly legal battles.
Secondary Review Storm: The Algorithm Behind Account Suspensions
Amazon's latest compliance crackdown has triggered widespread concern among sellers. Many report receiving demands for additional identity verification through video calls, requiring presentation of original IDs and business licenses within seven days to maintain selling privileges.
This secondary review process appears significantly stricter than previous verification measures. Numerous sellers claim their submitted documents were repeatedly rejected, leading to permanent suspensions without appeal options. The affected accounts predominantly involve purchased storefronts, fueling speculation about Amazon's verification methods.
Industry observers suggest the platform may be employing newly patented verification algorithms that combine hardware and software data to identify risky accounts. These systems potentially cross-reference verification locations with registered business addresses, automatically flagging discrepancies. While unconfirmed, these technological developments contribute to growing seller anxiety about account security.
Compliance as Survival Strategy in Cross-Border E-Commerce
As Amazon's policies grow increasingly stringent, compliant operations have transitioned from optional to essential for marketplace survival. Sellers adapting to this reality must consider several key strategies:
- Proactive Self-Audits: Regularly review store information for accuracy and compliance, particularly for acquired accounts.
- Authentic Operations: Avoid prohibited practices like fake reviews while strictly adhering to intellectual property policies.
- Cooperative Response: Engage promptly with review requests and prepare thorough evidence for appeals when necessary.
- Diversification: Expand sales channels beyond Amazon to mitigate platform dependency risks.
- Compliance-Driven Growth: Leverage ethical operations as competitive advantages for brand building and customer trust.
One successful case involves a former violator that transitioned to full compliance after repeated warnings. By eliminating prohibited practices, retraining staff, and focusing on product quality, the company regained Amazon's approval and achieved sustainable sales growth.
Amazon's evolving review mechanisms present significant challenges, but also opportunities for sellers embracing compliance as their foundation for long-term success in the competitive cross-border e-commerce landscape.