Sellers must buy $1 million insurance to sell $10,000, otherwise they will be banned from selling

Today, most companies have resumed operations, and sellers have also faced their first tough battle of the new year: Amazon has recently announced that sellers must purchase at least $1 million in commercial insurance after their sales total reaches $10,000 for three consecutive months. Failure to purchase insurance may result in the inability to withdraw cash or even prohibition of sales. Some sellers have already purchased insurance. Sellers may not be able to avoid this mandatory expense.

If the total sales in three months reaches 10,000 USD, the seller needs to purchase at least 1 million USD insurance

On February 16, Amazon sent an email notification to many sellers. After seeing the news, the sellers were all confused.

The email stated that sellers are expected to provide proof of liability insurance for products sold through Amazon stores, and sellers must respond before March 15, 2021 .

Specifically, Article 9 of the Sales Agreement requires that sellers purchase and maintain at least $1 million in commercial general insurance, additional liability insurance, or excess liability insurance within 30 days after the total sales amount reaches $10,000 for three consecutive months . For more information, sellers can visit the Amazon Services Business Solutions Agreement website.

Sellers who received the email have reached the threshold of $10,000 in total sales in three months , so they need to reply to this email within 30 days using the email address registered with the account, and attach a liability insurance certificate to the email, which must cover all products sold on Amazon.com. The document should be in the form of a "Certificate of Insurance" issued by the seller's insurance company , and detail the covered property and personnel, coverage, and any exclusions or deductibles. The document can be submitted in .pdf, .png or .gif format.

So what are the insurance requirements? The seller’s commercial liability insurance policy must meet all of the following conditions :

- Limits of coverage of at least $1 million in the aggregate per occurrence covering liabilities arising out of or related to the operations of your business, including products, products/completed operations, and personal injury;

- The policy must cover all products sold through the Amazon.com website;

- The policy must name Amazon and its assigns as additional insureds;

- The policy holder name must match the 'legal entity' name provided to Amazon. You can verify the legal entity name in Seller Central;

- The policy must be valid for at least 90 days from the date of submission.

At present, most sellers have received email notifications, but some sellers said they have not received them yet. The reason they have not received the notification may be that their sales have not reached the policy threshold, or Amazon's notification is on the way.

Many sellers resisted Amazon's sudden request and complained: "Sales of $10,000 in three months must be a sluggish sale, but I have to pay a high insurance fee." "I was asked to do so too, can I not buy it? I didn't make any money, but I still have so much expenses."

The questions that sellers are concerned about include: How much is the insurance premium? Is it mandatory? Can I not buy it? What will happen to my account if I don’t buy it? So a seller asked Amazon: “What if I can’t provide proof of liability insurance for products sold through the Amazon store? What are the consequences? When is the deadline?” The seller received the following reply:

“If we do not hear from you by 3/2/2021, or we cannot confirm the information you provided, future payments will be held on your seller account until we are able to verify your proof of insurance. If you still do not take any action, or if we are still unable to verify your proof of insurance by 4/2/2021, we may not allow you to continue selling on Amazon.com.”

The seller cannot afford to withdraw money from his account or even continue selling. Therefore, the seller had no choice but to buy insurance from the service provider provided by Amazon. The insurance cost for one store was nearly $4,000.

For sellers, there is no possibility of escape. What they need to consider now is which insurance company is more affordable, which will also give rise to new cross-border e-commerce service businesses.

Amazon’s shipment confirmation process is about to change

Amazon has released new requirements for the shipping process. When confirming the shipment of self-delivery orders through the "Manage Orders" page of the seller platform , the carrier name must be provided.

In the announcement, Amazon said that in order to improve the customer's delivery experience after the seller completes the order, we want to ensure that customers can see detailed shipment tracking information as much as possible. This will also reduce customer contact, order-related defects and shipping cost losses, while also improving sellers ' feedback scores.

Amazon's new shipping requirements for sellers are : Now, for self-delivery orders, sellers must provide the name of the carrier when confirming shipment through the platform's "Manage Orders" page. The platform will make the following changes to the shipment confirmation process :

Starting April 5, 2021 , sellers must provide the carrier name (i.e., the carrier code field) when confirming shipments through bulk upload data, API, or integrators . Commonly used carrier names include USPS, UPS, and FedEx.

Starting May 3, 2021 , Amazon will verify tracking details (including carrier name and tracking ID) for all seller-fulfilled orders and display warnings for invalid tracking details.

For the new changes, sellers should do the following when entering carrier information :

1. When using Manage Orders, sellers select the carrier name from the drop-down list. If you do not see your carrier in the drop-down list, you can select "Other" and then enter the carrier name in the text field ( the platform says it will gradually add more carriers for sellers to choose from ) .

2. When using bulk feeds or the API, provide a carrier code (“CarrierCode” for the API) during the shipping confirmation for each order. If the carrier you want to select is not in the list, set the carrier code to “Other” and then provide a name in the Carrier Name field ( “CarrierName” for the API).

It is worth noting that if the seller is using an integrator, please work with the integrator to ensure that the carrier details are provided to Amazon when confirming the shipment .

To use Buy Shipping, you don't need to take any action. Amazon automatically collects data about the carriers and shipping methods used through Buy Shipping.

If the seller provides an incorrect tracking ID during shipment confirmation , he will receive a warning message "Please enter a valid tracking ID to confirm the shipment. The shipment can only be confirmed after entering a valid tracking ID.

In response to this new change, sellers have raised questions: What is Amazon really saying is that after receiving a warning, the order will not be confirmed shipped until a verifiable tracking ID is provided , thus leaving the order in an unshipped status? If so, why not specifically state this?

Some sellers also said that this update is not aimed at many professional sellers, but just to prevent some people from making trouble. In most cases, the changes will affect the shippers, who will confirm the order and then enter the shipping details, which may not be friendly to self-shipping sellers.

Amazon US

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