It seems like most Amazon sellers are familiar with Amazon Business Solutions Agreement (BSA). Many sellers think that they are governed by the Terms of Service or Participation Agreement. However, the agreement between sellers and Amazon is governed by Business Solutions Agreement.
This blog post will cover what is Amazon Business Solutions Agreement, the difference between Business Solutions Agreement, why sellers are under BSA, and what is Section 3 on Amazon’s BSA.
Read the entire post to learn about the changes to Amazon Business Solutions Agreement.
What is Amazon Business Solutions Agreement?
Before you become a seller on Amazon, you need to agree with their Business Solutions Agreement. This agreement contains the terms and conditions that govern the seller’s use and access to Amazon services. It is an agreement between the seller or the business that the seller represents and Amazon.
There are 18 points or items under the Amazon Business Solutions Agreement and I will briefly discuss each of them.
Enrollment
Sellers must first register for one or more of the Services before they can begin the enrollment process. The Services are only available to persons who are legally permitted to engage in and make contracts under applicable law.
Sellers must provide Amazon with their name or their business’ legal name, phone number, address, and e-mail address, as well as any other information that Amazon may require as part of the application. Any personal information you give them will be handled according to Amazon’s Privacy Notice.
Service Fee Payments, Receipt of Sales Proceeds
The appropriate Service Terms and Program Policies contain information about fees. Sellers are solely liable for all costs associated with this Agreement.
To use a Service, you must provide us with valid credit card information for a credit card or credit cards that Amazon accepts, as well as valid bank account information for a bank account or bank accounts that Amazon accepts.
You will only use a name in connection with a Service that you are allowed to use, and you will update all of the information you give to us in connection with the Services as needed to ensure that it is accurate.
Term and Termination
The period of the Agreement with Amazon will begin on the date of your completed registration for use of a Service and will end when either the seller or Amazon terminates it. You may cancel your account or this Agreement at any time by sending them a notice via Seller Central, email, the Contact Us form, or other similar means. With 30 days’ notice, Amazon may terminate your account or this Agreement for convenience.
However, Amazon can terminate or suspend your account immediately due to the following reasons:
- Unless your breach exposes us to liability toward a third party, in which case we are authorized to modify or waive the aforementioned cure period at our reasonable discretion, you have materially violated the Agreement and failed to cure within 7 days after a cure notification.
- Your account has been compromised, or their controls have detected that it could be used for misleading, fraudulent, or unlawful purposes.
- Other sellers, customers, or Amazon’s legitimate interests have been injured, or our controls indicate that they may be harmed, as a result of your use of the Services.
Amazon will immediately notify you of any suspension or termination via email or other means such as Seller Central. The reason why your account is terminated or suspended will be included as well as options to appeal if possible. However, if Amazon believes that providing such information can affect or hinder their investigation, they have the option not to give you more details about it.
License
Sellers grant Amazon a royalty-free, non-exclusive, worldwide right and license to use any and all of Your Materials for the Services or any other Amazon product or service for the duration of your original and derivative intellectual property rights, and to sublicense the foregoing rights to Amazon’s Affiliates and operators of Amazon Associated Properties.
However, Amazon will also not change any of the sellers’ Trademarks from the form provided by them, except to resize trademarks necessary for presentation. Amazon will also honor seller’s requests to have specific uses of Your Materials removed in the event that you are unable to do so using standard functionality made available to you via the applicable Amazon Site or Service.
Representations
Both Amazon and sellers represent and authorize that:
If it’s a business, it’s properly organized, validly operating, and in good standing under the laws of the nation where it’s registered, and you’re registering for the Service(s) in that country.
It possesses all of the necessary rights, authority, and power to enter into this Agreement, perform its responsibilities, and grant the licenses, rights, and authorizations set forth herein.
Any information submitted or made available by one party to the other or its Affiliates is accurate and complete at all times.
It is not subject to sanctions or appointed on any list of restricted or prohibited parties, or owned or controlled by such a party, including but not limited to the lists maintained by the UN Security Council, the US Government, the European Union, or its member states, or any other applicable government authority.
Indemnification
Seller Indemnification Obligations
You agree to indemnify, defend, and hold Amazon, its directors, officers, employees, and agents harmless from any third-party claim, damage, loss, cost, settlement, expense, or other liability arising from or related to:
- Your failure to follow applicable laws
- Your taxes and duties, as well as the collection, payment, or failure to collect or pay them, as well as the failure to meet tax registration responsibilities or duties
- Actual or alleged breaches of any promises you’ve made
Amazon’s Indemnification Obligations
Amazon shall defend, indemnify, and hold you and your directors, officers, employees, and agents harmless from any third-party claim resulting from or related to the following:
- Claims that the operation of an Amazon Site breaches or misappropriates the intellectual property rights of a third party
- Amazon’s failure to comply with applicable laws
Process
If any indemnified Claim threatens to harm Amazon, they may voluntarily intervene in the proceedings at their own expense, to the extent permitted by applicable law.
However, if one party settles any claim that is exclusively aimed at and affects that party, both Amazon and the seller may agree to the entry of any judgment or engage in any settlement of an indemnified claim without the prior written approval of the other party, which may not be unreasonably withheld.
Disclaimer and General Release
As a seller, you use Amazon sites, seller central, and their services at your own risk, except for those set out in sections 5 and above.
Limitation of Liability
Amazon will not be liable to sellers or other people whether in warranty, contract, tort for any costs of cover, recoupment of any investment, recovery made by the seller or its affiliates in connection with loss of profit or with this agreement.
Insurance
If the overall revenues from Your Transactions in any given month exceed the appropriate Insurance Threshold, the seller will maintain umbrella, commercial general, or excess liability insurance with the Insurance Limits per occurrence and in aggregate that covers the liabilities caused by the operation of the business, products, and bodily injury at the expense of the seller for the remainder of the term.
Tax Matters
The seller will be responsible for the reporting, collection, and payment of all their taxes except for the following:
- According to applicable law, Amazon calculates, collects, and remits taxes on behalf of the seller.
- In conjunction with tax calculation services made accessible by Amazon and used by the seller, Amazon expressly agrees to accept taxes or other transaction-based charges on behalf of the seller and should agree to the Tax Policies and will follow them.
- All fees and payments due to Amazon under this Agreement or the applicable Service Terms are exclusive of any applicable taxes, withholding, or deductions, and the seller will be responsible for paying Amazon any of Your Taxes imposed on such fees, as well as any deduction or withholding required on any payment.
Confidentiality and Personal Data
Sellers may get Confidential Information as a result of their usage of the Services. They agree to this during the duration of the Agreement and for 5 years following its termination.
Force Majeure
Amazon will not be liable for any delay or failure to perform any of its responsibilities under this Agreement as a result of events, or other circumstances beyond Amazon’s reasonable control.
Relationship of Parties
Amazon and the sellers are independent contractors, subject to the Transaction Processing Service Terms (where the Elected Country for a Service is the United States). Nothing in this Agreement creates a partnership, franchise, agency, joint venture, sales representative, or employment relationship between Amazon and sellers.
No power will be given to sellers to make or accept any offers or representations on its behalf. Amazon and the seller will not have an exclusive connection as a result of this Agreement.
Suggestions and Other Information
Amazon will be free to use, reproduce, disclose, license, modify, transfer, and distribute any of the materials or foregoing information in any manner if the seller or its affiliates elect to provide comments, suggestions, improvements, feedback, or ideas to Amazon in connection with or related to any Amazon service or site.
Modification
Amazon will provide at least 15 days’ notice in compliance with Section 18 for any changes in the agreement. However, Amazon may modify or change the Agreement anytime immediately if it is related to legal, fraud, regulatory, security reasons, and abuse prevention.
Continued use of the Services after any changes to the agreement on the effective date in accordance with this Section 15 will be deemed acceptance of that change. Sellers agree not to use the Services and to terminate the Agreement as specified in Section 3 if any change is objectionable to them.
Password Security
Any password provided by Amazon is only valid for the duration of the Term and can only be used to access Seller Central or other tools to utilize the Services, electronically accept transactions, and review completed transactions. Sellers are responsible for keeping their passwords secure. They are solely liable for any use of or activity taken under their password (other than third parties permitted by sellers to use their account in line with this Agreement). If the password has been compromised, it must be changed right away.
Export
Sellers are not allowed to indirectly or directly transmit, re-export, cause to be re-exported, exported, or transmitted any technology and commodities to other countries, corporations, individuals, organizations, or entities to which export, re-export is prohibited including individuals, countries, organization, corporation, or entity under sanctions administered by the UN, US Departments of State, European Union or other government authority.
Miscellaneous
The Agreement will be governed by the Governing Laws, without regard to any choice-of-law provisions or the Convention on Contracts for the International Sale of Goods. If the Elected Country is the United States, Mexico, or Canada, Amazon and the seller agree that any dispute or claim with Amazon or its Affiliates relating to this Agreement or the seller’s use of the Services will be resolved by binding arbitration as stated in this paragraph, rather than in court.
However, it has exceptions to the following:
- If the seller’s claims qualify, they can file them in a Governing Court’s small claims court.
- To enjoin infringement or other misuses of intellectual property rights, the seller or Amazon may file a lawsuit in the Governing Courts, submitting to their jurisdiction and relinquishing their respective rights to any other jurisdiction.
- Amazon may file any claims connected to the sale of counterfeit products on the Amazon Site with the Governing Courts and seek any legal remedies available.
What is the Difference Between Business Solutions Agreement and the Participation Agreement?
While the terms under Business Solutions Agreement and the Participation Agreement are almost the same, they have several differences. First, BSA is considerably longer than the Participation Agreement. Another difference is that BSA is broader and sad to say has more restrictions on sellers and is more beneficial for Amazon.
Also, under the General terms of BSA, it states that “If there is any conflict between these General Terms and the applicable Service Terms and Program Policies, the General Terms will govern and the applicable Service Terms will prevail over the Program Policies.”
This means that BSA will govern in case there are conflicts between BSA and the Terms of Service or Participation Agreement.
What is Section 3 of Amazon’s Business Solutions Agreement
As mentioned above, Section 3 of the Amazon Business Solutions Agreement is Term and Termination. Sellers need to know the importance of Section 3 to avoid the termination of their accounts.
Here’s a summary of Section 3:
- Amazon can terminate the agreement with a 30-day advance notice
- Amazon will give sellers a notification if they think there’s a breach on their account. If the seller fails to cure it within seven days after the notification, Amazon has the right to suspend the account.
- In other cases wherein the seller had exposed Amazon to a third party, services were used for fraudulent or illegal activity, or have harmed Amazon, other sellers, and buyers, Amazon will waive any advance notification to give sellers time to fix the issue.
Many sellers had their accounts suspended and most of the time had accidentally violated a policy. To prevent this from happening, it pays to read and understand the entire BSA, especially Section 3.
What are the Changes to the Amazon Business Solutions Agreement?
Amazon had made several changes to their Services Business Solutions Agreement, effective September 1, 2021. Below are the changes to the BSA.
- Section 2 on the General Terms has been updated to note that illegal, fraudulent, or deceptive activity includes using other accounts for such activities and selling counterfeit goods.
- Section 3 on the General Terms has been updated noting that the Term and Termination provisions are applicable to this Agreement or to your account.
- Section 9 of the General Terms have been updated and changed “each month over any period of three consecutive months” to “any month if the Elected Country is the US or each month over any period of three consecutive months if the Elected Country is Mexico or Canada.”
- Another update to Section 9 is that Amazon may request that sellers will provide full insurance policies and other documents regarding insurance coverage.
- Section 18 on the General Terms has also been updated to provide Amazon the ability to pursue claims that are related to the selling of counterfeit products.
- Another update on Section 18 is that Amazon’s registered agent has been changed to “CSC 300 Deschutes Ways SW, Suite 208 MC-CSC1, Tumwater, WA 98501. It was previously “CSC Services of Nevada, Inc., 112 N Curry Street, Carson City, NV 89703.”
- “Amazon Services Contracts, Inc” Amazon Contracting Party has been replaced with “Amazon.com Services LLC.” However, if the Elected Country is Canada it will use “Amazon.com.ca, Inc.”
- Under Definitions on the General Terms, “Amazon Services Contracts, Inc” Amazon Contracting Party has been replaced with “Amazon Advertising Canada, Inc.” for Amazon Advertising.
- Under Section S-2.1 of Selling on Amazon Service Terms had included that when packaging products, it should include instructions or warnings necessary to use the products safely.
- The Selling on Amazon Service Terms has been revised to include S-3.3, a provision that adds a Claims Process for Property Damage and Personal Injury claims to the A-to-z Guarantee for the United States, as well as a new Program Policy addressing that process.
- S-7.2, a Continuing Guarantee clause covering specific products regulated under US law, has been added to the Selling on Amazon Service Terms. Food, Drug, and Cosmetic Act of the United States.
- The Selling on Amazon Definition for “Required Product Information” has been revised to indicate that sellers must include information necessary for the safe use of their product in conjunction with the advertising, offer, merchandising, or sale of the product.
- Section F-7.2 of the Fulfillment Services has been revised to contain a provision regarding proceeds connected to units Amazon is allowed to dispose of, as well as the way of disposal.
- The Fulfillment Services section F-11 has been updated to incorporate references to “releasing party” and “released party.”
Sellers continued use of Selling Services even after the changes had been made constitutes their acceptance of the changes and updates in the agreement.
Conclusion
The Amazon Business Solutions Agreement is made to protect the interests of both sellers and Amazon. However, reading through it and with all the changes, it seems like the Agreement is more favorable to Amazon, which is not surprising. In any case, it pays to have an Amazon seller lawyer in case you violate a policy and have your account suspended.
Are you aware of the content of the Amazon Business Solutions Agreement? What do you think about it? Share your thoughts in the comment section below.