The Risks of Selling through Amazon’s Fulfillment Program: Corporate Counsel Turns to Kronenberger

Many online sellers claim to be making big profits off of the private label selling model, wherein sellers purchase bulk units of products from Chinese manufacturing websites and sell them on Amazon at a markup. However, it’s important to consider the legal complications that come with this selling platform. In the article “The Other Way Around,” Corporate Counsel turned to Partner Karl Kronenberger to explain some of the risks associated with selling private-label goods.

“There’s been unbelievable growth with Amazon, especially in the past four or five years in the marketplace,” Kronenberger said. “But you’ve got some who are not very sophisticated in their legal outlook. Although importing a generic product from China and putting your brand on it may seem straightforward, advocates for this selling model downplay the host of significant legal risks associated with it.”

Some of the risks outlined in the article include the challenge of holding overseas manufacturers accountable for deliverables, enforcing indemnification agreements against overseas manufacturers, as well as the risk of sellers “hijacking” other sellers with cheaper, counterfeit products that may be defective.

“[Amazon listing hijacking] so rampant that we’re sending out many cease-and-desist letters each day for this,” Kronenberger said.

Though selling through the Amazon Fulfillment program is appealing, it’s important to weigh the potential benefits against the potential legal shortfalls of the model

Read the full article here.