As an Amazon seller, you live on Amazon’s bi-weekly disbursement funds, right? That’s your entire business’s cash flow. Have you ever met a situation where on your disbursement funds date, you don’t see the money being posted to your bank account. And when you go to check your seller central, the transfer amount becomes “$0”?

 

Disbursement Funds


Disbursement funds can be held by Amazon for various reasons. But this can be a disaster for the seller if he can’t solve the issue within one or two weeks. One very severe issue is a temporary
restraining order (TRO).

 

What is a Temporary Restraining Order (TRO)?

A temporary restraining order (TRO) is a legal document issued by a judge before trial that forces or prevents an action for a specified time frame. During court cases that involve trademark infringement or the use of a trade secret, a TRO can halt patent, copyright, or trademark infringement in the short term.

Private label sellers may have the risk of being sued by another brand for trademark infringement. Under extreme situations, the plaintiff can file TRO to the court, and notify Amazon. If Amazon received the TRO, they will freeze your disbursement funds without even looking into the issue.

Many times the lawyers for some brands will go into court, or they will go to the judge in secret, one sided, and convince that judge to issue an order freezing your account, freezing your money, freezing your inventory. The lawyers may persuade the judge into believing that the damage to the brand will be so devastating that a stop is needed immediately.  Without too much deep analysis, the judge may issue a temporary restriction order (TRO) on you together with a lot of other sellers and order Amazon to implement it.  Then, you will receive an email from Amazon asking you to contact the attorney in order to resolve the issue.  Your disbursement funds are likely frozen and the opposing attorney may play tricks on you.  You are going to be desperate very soon due to no payout from Amazon for the following weeks or months.

 

How to solve funds suspension due to TRO in two to three weeks?

While in some cases, the TRO might be valid.  However, if you are the victim of the TRO, you should fight back. I’m sharing a true case from our client. I will hide the key information for privacy issues. In 2020, a regular Friday, the Amazon seller’s disbursement funds, which was over half a million, got held without any sign until a performance notification came indicating that there was a TRO against them and they had to deal with the opposing attorney.  The only other information provided by Amazon was the company’s name who sued them.

Solution 1: Contact the legal representative of the other company as soon as possible!

It is always a good strategy to contact the other company that has this intellectual property infringement issue against them and see what they are asking for. However, in this case the Amazon seller  tried to contact the company and the attorney but they didn’t respond. They later know that the company sued over several hundreds of Amazon sellers for a similar private label product without any strong evidence. Of late , many of the pil activists in the country have found the pil as a handy tool of harassment since frivolous cases could be filed without investment of heavy court fees and deals could then be negotiated with the victims of stay orders obtained in the so. Amazon sellers should really choose to fight back hard under these types of situations!

Solution 2: Find the right attorney to request TRO urgent release

After consulting, the seller found a well-known law firm specialized in Amazon related cases.  They immediately reacted by reaching out to three federal judges that were dealing with a case with the opposing attorney and quickly confirmed the TRO case.  After days of collecting detailed information, the attorney held a meeting with the federal judge, presented the situation, and filed an urgent motion to vacate the TRO.  The judge granted the TRO vacation and made the lawsuit a regular one.

If you become a relatively bigger Amazon seller, consider building relationships with attorneys, accountants and other professionals. Business can run into unexpected crisis and if you have the right person to help you, This will significantly reduce the risk of running your business.

Solution 3: Working with your Amazon Account Manager

Even though the seller got the TRO vacation order, remember Amazon is a huge organization and their reaction can be very slow if you can’t reach the right department. And even more frustrating, a lot of sellers can just reach Amazon’s AI customer service!

Since this Amazon seller’s business grows quickly, they start to use the SAS program and they have a dedicated Amazon account manager. It costs them several thousand dollars per month for this service. But when a crisis happens like this, the account manager plays a key role to solve the problem for the seller. After receiving the TRO vacate, the seller immediately reached out to their Amazon account manager who helped them contact the Amazon legal department.  They then wrote a request to release funds to various departments and Amazon’s legal department released their funds within 2 days.

 

Summary

In sum, as an e-commerce owner, your sales may grow quickly year over year. However, you may also need to deal with more potential risks. Besides focusing on your operations, your capitals and your employees, it is also important to build up professional relationships and consultants for risk management. After all, an unexpected storm may ruin your years of effort!

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