I think FBA third party sellers are about to get hit with Millions if not Billions in Adjustments as Amazon Charges back for all the recalls.
Amazon is responsible under federal safety law for hazardous products sold on its platform by third-party sellers and shipped by the company, a U.S. government agency ordered Tuesday.In a unanimous vote, the Consumer Product Safety Commission said it determined that the e-commerce company was a “distributor” of faulty items sold on its site and packed and shipped through its fulfillment service.
That means the company is on the hook, legally, for the recalls of more than 400,000 products, including hairdryers and defective carbon monoxide detectors, the agency said. It ordered Amazon to come up with a system for notifying customers who purchased faulty items and to remove the products from circulation by offering incentives for their return or destruction.
Overall, Amazon accounts for roughly 40% of e-commerce sales in the U.S., according to the market research firm Emarketer. The company sells many items directly to consumers and also partners with nearly 2 million third-party sellers, who drive the majority of the sales on the platform.The online retailer has fought the “distributor” label since 2021, when the Consumer Product Safety Commission filed an administrative complaint against the company for distributing hazardous items.
Amazon argued before an administrative law judge and the five-person commission that it shouldn’t be classified as a distributor under the Consumer Product Safety Act. The commission said the judge rejected the company's argument, and Tuesday’s order was an affirmation of that decision.According to the commission, Amazon failed to notify consumers about hazardous items and “did not take adequate steps to encourage” customers to return or destroy them, leaving them at risk of injury.
