Can I Sue Amazon? Understanding Amazon Arbitration for Sellers With Lawyer David Miller

Wondering if you can sue Amazon?

For most sellers, the answer is no, but that’s not the end of the story. 

There’s another option that could actually work: arbitration.

In my latest conversation with Amazon seller lawyer David Miller, we dive into when arbitration makes sense, when it doesn’t, and why it can sometimes be the only way to recover what Amazon owes you.

In this article, I’m sharing that full conversation with David, along with clear examples like lost inventory and withheld funds, so you can understand whether arbitration is the right move for your situation.

Let's delve in!

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Can You Actually Sue Amazon?

Vova: Hey David, here’s a question that comes up a lot, and I’ve wondered about it too: can a seller actually sue Amazon?

David: Yeah, that's a great question, Vova, and I get it all the time.

For most Amazon sellers, the short answer is generally no, you can't directly sue Amazon.

But you do have another option called arbitration.

Arbitration is basically a legal method for solving disputes outside the courtroom, and it's usually quicker and less formal.

Watch All My Videos With David Miller On YouTube

When Arbitration Works and When It Doesn’t

David: Still, arbitration has limits, and you have to know when it makes sense to pursue it.

Not every situation is worth the investment of your time and money.

Let's break it down clearly.

Number one: if Amazon suspends your account, arbitration usually won’t help.

Technically, you can file what's called a demand for arbitration, but in my professional experience, that's not a successful route to get your account reinstated.

Amazon typically won't reinstate your seller account just because you went to arbitration.

It's just not how the process works, unfortunately.

However, there are two main scenarios where arbitration is a solid and realistic option for sellers.

First, inventory problems.

Let's say Amazon has misplaced your inventory, accidentally destroyed it, or just outright lost it.

In these cases, arbitration can actually be effective.

Many sellers have successfully resolved these inventory disputes through arbitration.

The second good reason for arbitration is if Amazon is withholding your funds.

Sometimes Amazon holds onto sellers’ money without clearly explaining why or when they'll release it.

Arbitration can absolutely help in these situations as well.

Still, there’s a catch: the amount matters a lot.

Let’s imagine Amazon only lost $500 worth of your inventory.

Now, $500 might be frustrating, but arbitration isn't cheap.

You have to pay lawyer fees, arbitration fees, and potentially other costs if it proceeds to a formal hearing.

By the end, you might easily spend more money than you're actually trying to recover.

So in that scenario, it doesn't really make sense.

In case you're dealing with pricing-related warnings, this guide walks you through what to do next: Avoid Amazon Pricing Related Suspensions: Price Fixing Risks

When Is Arbitration Worth the Cost?

David: Typically, our law firm recommends arbitration only if the disputed amount is around $30,000 or more.

At that point, the financial balance makes sense, it becomes worthwhile to pay arbitration expenses because you're still likely to come out ahead.

But if Amazon only owes you $5,000 or $10,000, arbitration can often be too expensive and time-consuming.

The math just doesn't add up favorably.

Hopefully, that gives you a clear overview of when arbitration is useful.

To summarize quickly,

1. Account suspensions; usually no.

2. Lost inventory or withheld money, especially large amounts; usually yes.

Vova: I completely agree, David.

Actually, as an Amazon seller myself, I totally understand these frustrations.

Inventory loss is something that happens more often than we'd like.

Amazon occasionally damages or misplaces items, and that can really hurt your business.

Explore Cheaper Options First

Vova: What my team usually does first is use specialized companies that help sellers track lost or damaged inventory and recover the costs.

One great example we've personally used is a company called Getida.

Basically, their team helps sellers find instances where Amazon hasn't reimbursed you properly.

You know, sometimes you ship Amazon 1,000 units, and their system shows they received zero.

Your first reaction might be panic, naturally, but companies like Getida can step in, locate the discrepancy, and help you get reimbursed.

So my advice is always to try these services first.

Here’s a closer look at how Getida works if you want to understand the service before trying it yourself: Getida Review - What Is It And How It Works

Click Here To Visit The Official Getida Website

Interestingly, Amazon has recently made changes to their reimbursement policies.

They're now promising quicker reimbursements and reducing the time window sellers have to request reimbursement.

But even with these policy improvements, sometimes things still slip through the cracks.

Even the best reimbursement company might not catch everything.

That's exactly the scenario you're talking about, right David?

If you've tried everything else, that's when arbitration could really save the day, correct?

David: Exactly, you're spot-on, Vova.

Before jumping into arbitration, it's always better to explore easier and less expensive solutions first.

Using companies like Getida to handle reimbursement claims is definitely a wise choice.

Actually, I've met many members of Getida’s team and even their founder personally.

They're professional, reliable, and have helped numerous sellers successfully recover lost money.

When Arbitration Becomes the Best Move

David: But let’s say you've already tried all the easier methods.

Maybe you've asked Amazon directly, worked with reimbursement companies, and submitted appeals, yet you're still out tens of thousands of dollars in lost inventory or withheld funds.

That's precisely when arbitration becomes your best option.

It’s definitely not the first thing you should try, not even the second or third.

Usually, arbitration is your fourth or fifth step when all else fails.

Because arbitration, while effective, is a significant commitment both financially and timewise.

So, it's crucial that sellers understand their options clearly.

Vova: Absolutely, David.

On a personal note, we've been using Getida’s services ourselves for nearly two years now.

They've consistently helped us recover losses and manage fees effectively.

For those interested, we've actually made a detailed video with Yoni Mazor, Getida’s Chief Growth Officer, where we show sellers exactly how to use their service to get reimbursed from Amazon.

Click Here To Visit The Official Getida Website

You can watch it here if you want:

Plus, let me share your contact information for those interested.

Website: https://www.damlawfirm.com/

YouTube: DAM Law Firm YouTube Channel

Instagram: @davidallenmillerlaw

TikTok: @davidallenmillerlaw

Facebook: David Miller - Facebook

LinkedIn: David Miller - LinkedIn

Email: David@damlawfirm.com

Phone: 646-760-2844

And here's a playlist of over forty helpful videos we've created together.

Watch All My Videos With David Miller on YouTube

Each of these videos clearly addresses different legal issues that Amazon sellers face regularly, like suspensions, trademark issues, and now arbitration.

Thank you again, David, for always sharing such useful and practical insights.

Your expertise is really helping the Amazon selling community navigate complex legal issues.

David: My pleasure, Vova! Always happy to help.

Vova: Great! Thanks everyone for reading.

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Conclusion

So, can Amazon sellers actually sue Amazon?

In most cases, the answer is no; at least not in the traditional sense.

But as David explained, sellers aren’t without options.

Arbitration provides a practical alternative when you’re facing major issues like lost inventory or withheld funds, especially when other methods haven’t worked.

While it’s not the right move for every situation, understanding when arbitration makes sense can help you protect your business and recover what you’re owed.