Amazon insurance premium incident escalates, some accounts receive red flags

In the past two days, Amazon sellers have been flooded with the news that "if the total sales reach $10,000 for three consecutive months, you need to purchase $1 million in insurance." Sellers who receive the email are required to purchase insurance within 30 days after reaching the sales target. If the seller fails to provide Amazon with insurance certificates as scheduled, their subsequent payments will be withheld.

According to feedback from sellers who received the emails in the previous batch, some accounts have received red flag emails. If you must buy insurance, how can sellers make the best choice? Many experienced sellers have given conscientious suggestions.

Insurance premium incident escalates, some Amazon sellers have received red flags

The day before yesterday, the editor published an article to inform everyone about Amazon's insurance premiums. Some people questioned it and thought it was groundless. So, how do many sellers explain the emails they received from Amazon? As one seller said, if this is fake, is the platform playing a joke on you?

According to feedback from various sellers, some sellers had received email notifications requiring them to pay insurance premiums years ago, requiring them to purchase and maintain at least $1 million in general commercial insurance, additional liability insurance or excess liability insurance within 30 days after their total sales reached $10,000 for three consecutive months .

The sellers received the most emails on February 16. After further consultation, some sellers received email replies : If you do not receive a letter by March 15, or your information cannot be confirmed, the new funds will be retained in the seller's account. If your insurance certificate cannot be verified before April 15, we will not allow you to sell on Amazon.

Judging from the reply, to put it simply, if the insurance certificate is not provided within one month, the seller will not be able to withdraw the money, and if the certificate is not provided within 2 months, the seller will be banned from selling.

Some sellers have already dutifully purchased insurance according to the service providers provided by Amazon, while those who did not purchase insurance received a red flag warning. It seems that the insurance premium is no joke between Amazon and sellers.

One of the sellers reported that all eight of his accounts had received emails. According to the experience of sellers who have purchased insurance, the insurance cost for one store is nearly US$4,000, so the insurance cost for eight stores exceeds US$30,000.

So, sellers with more accounts will have to pay more this time. Some sellers may have to pay more than $100,000 at a time , which is a huge loss! (Some sellers also offer low-cost insurance plans, which will be discussed in detail below)

According to the sellers who have paid insurance premiums, the fees paid by different stores are different, and the charging standards of different insurance service providers are also different. At present, many sellers have reported that the insurance fees paid range from US$2,000 to US$6,000.

According to a seller's inquiry, an insurance company replied that if the sales volume is less than 1.5 million US dollars, the insurance premium will probably be at least 2,000 US dollars.

Regarding the insurance premium incident, many sellers who received the email were very pessimistic. Some sellers believed that with slim profits today, they had to pay high insurance premiums. The platform's approach was a one-size-fits-all approach, and it was too difficult for small sellers to survive. Some sellers even said that this was a new round of persuasion.

These categories receive insurance premium emails

Many sellers still have many questions about the collection of insurance premiums, such as which categories are involved, and whether sales exceeding 10,000 refers to each month or the total of three months.

At present, sellers in categories such as auto parts, 3C, clothing, beauty, pets, home textiles, and outdoor sports have reported that they have received the email.

A senior seller said that judging from the current situation, the collection of insurance premiums should be related to the nature of the product and the qualifications of the store.

According to an investment manager , this insurance is a small-scale pilot project, and only some sellers have received the email. Those who have not received it do not need to worry about it for now.

More sellers are also concerned about another question: When sales exceed 10,000 for three consecutive months , does it refer to each month or the total of three months? Does this sales refer to the US site alone or the three North American sites?

According to industry insiders, sales exceeding $10,000 for three consecutive months should refer to sales reaching $10,000 each month for three consecutive months. Currently, only sellers on the US site have received the insurance email, and the sales problem sheet refers to the US site, not other North American sites.

How to choose an insurance company and products?

In solving the insurance problem, some sellers gave two solutions: 1. Buy insurance, 2. Photoshop the insurance certificate. Given Amazon’s habit of settling accounts later and account security considerations, in order to avoid losing both the money and the product number, the second option was almost collectively rejected by sellers.

So is it possible not to buy insurance? A seller who received an email in early February asked Amazon about the consequences of not paying for insurance and said, "You have to buy it." He has now purchased insurance for his account. How is the insurance fee calculated?

Jim, a service provider, expressed his own point of view: a new company should purchase insurance based on its estimated sales in the first year, and the second year should be estimated based on the sales in the first year. Insurance premiums vary for different products and sales. "Don't listen to the first-in-the-net service. A few years ago, Walmart and Wayfair needed insurance when they were recruiting merchants. You can buy it yourself or find a service provider. The price depends on the service provider. The fee is insurance premium + service provider commission."

Many sellers are eager to find a solution, which gives some service providers an opportunity to take advantage of it. Some people quoted a price of 600 yuan for consulting services alone , which is shocking. How can we complete the task of buying insurance with a suitable cost-effectiveness? Do we have to spend thousands of dollars a year on an account? Not really.

Amazon officially recommends three insurance providers, but according to seller feedback, the designated companies are very busy: "I contacted the insurance company and they said that thousands of people have asked about it in the past two days."

Some sellers shared more websites for purchasing insurance, including www.amazonins.com, coverwallet.com, etc., but sellers need to be careful not to encounter shell websites.

The seller Xiafanmao gave some practical suggestions:

1. Insurance company selection. Safety is the first factor. Don’t just Google or trust any strangers just to save money. Go to the National Insurance Association and check the company name to see if there is any insurance record. If not, it is likely to be a shell company or a shell website. The link to the US Insurance Association is https://content.naic.org/cis_consumer_information.htm. To select a company, search for the keyword "AMAZON INSURANCE". There are many results, and you can filter them yourself.

2. Insurance type. It is enough to choose the most basic product liability insurance. One more item means more expenses. Most products that are not powered or have safety hazards are basically impossible to use this insurance.

3. Premium price. It depends on the insurance company and the type of insurance. The most basic one is usually USD 300-600 per year.

So what information do sellers need to provide before purchasing insurance? Usually, it includes : company introduction (business license), product introduction (purpose), sales situation (annual sales, sales area), insurance requirements (according to platform requirements). Amazon also has detailed requirements:

However, when handling the business, some sellers received feedback from insurance companies that individual sellers could not handle it and needed to be converted to corporate sellers. In addition, some products require product test reports and other information, which also increases the cost pressure on sellers.

Amazon is pushing product liability insurance this time, and many sellers are reluctant to accept it. However, referring to the existing investment requirements of Walmart, Wayfair, etc., it is necessary to purchase product liability insurance for products with electricity. Previously, some products had accidents, and buyers could not trace the sellers, so they sued Amazon, and the platform felt innocent. Although the implementation of this insurance policy is difficult, it is also a key step in the development of the platform.

Amazon, Insurance, Red Flags