#342 – Meet The Man Who Helped Make Sure Amazon Sellers Don’t Have To Collect Sales Tax

#342 - Meet The Man Who Helped Make Sure Amazon Sellers Don’t Have To Collect Sales Tax – Paul Rafelson Speaker 1: Welcome to episode 342 of the AM PM podcast. Speaker 2: My guest this week is Paul Raffleson. Paul is an attorney who loves to help Amazon and e-comm sellers solve their problems. He's been instrumental in helping make major changes in the Amazon seller ecosystem, whether that be from sales tax to how often and how long they have to wait to actually shut down your account to a lot of other things. We're going to be talking about that as well as some of the issues that are facing Amazon sellers today from the legal side of things and what you can do about it. Don't forget also the Billion Dollar Seller Summit is coming up June 11th to the 15th in Puerto Rico, San Juan. Bradley Sutton from Helium 10 will be speaking at that event, plus a lot of other great speakers that I've hand selected. You can get all the information at BillionDollarSellerSummit.com. Hopefully you can join us. It's one of the top level, if not the top level event in the entire Amazon selling ecosystem. Hopefully we'll see you there. But in the meantime, enjoy this episode with Paul. Unknown Speaker: Welcome to the AM-PM Podcast. Welcome to the AM-PM Podcast, where we explore opportunities in e-commerce. We dream big and we discover what's working right now. Plus, this is the podcast where money never sleeps. Working around the clock in the AM and the PM. Are you ready for today's episode? I said, are you ready? Let's do this. Let's do this. Here's your host, Kevin King. Speaker 1: What's up, Paul? Glad to have you here on the AM-PM Podcast. It's about time, isn't it? Speaker 3: Feels like it. I am so excited to be here. This is so cool. Thank you so much. Speaker 1: Yeah, I mean, you're someone that's kind of, you know, you take a lot of people don't know the name Paul Rafelson, but they should because you've been instrumental in a lot of the changes and a lot of what's happened for sellers. I mean, you're an attorney by trade. You've been doing this in the e-commerce space for helping e-commerce sellers for how long now? Speaker 3: I've been helping e-commerce sellers since 2017. It was when that tax amnesty issue hit. It was a blog post. I wrote a blog post that snowballed into a private law practice. So that was 2017. Before that, I was just a lawyer. I was working for Microsoft. I worked for Walmart or for General Electric. It was actually General Electric was the last big corporate job I had and then just sort of by happenstance wrote a blog post and I'm like, okay, there's this whole market here. I need to be in it. Speaker 1: You were dabbling, if I'm not mistaken, you were dabbling and selling on Amazon or something on the side, right? When you were a lawyer, you talked about it and you dabbled a little bit? Speaker 3: Yeah, on the side and even when I was in law school, I was actually funding my school on Amazon. Actually, Amazon wasn't my primary channel. I was so long ago, it was like Half.com. Do you remember Half.com? Speaker 1: Yeah. Speaker 3: It was like a single ASIN system. And yeah, it was Craigslist, but I was flipping DVDs, you know, and this was, you know, 2002, 2003. I mean, this was, you know, we would print up, I mean, it was very manual back then, you know, and during the holidays, I would have to go to the post office with like a hundred media mail DVDs a day. And I would just create these, you know, traffic jams at the Philadelphia post office. And I would sit on the floor of the post office, reading my law books while they scanned through. A hundred DVDs in like two and a half hours or so. It was, it was, it took forever. People hated me. Like I was actually starting to realize I should fear, I should have feared for my life. I was too young to realize that then, but like looking back, I should have feared people probably wanted to kill me during the Christmas season. Speaker 1: I was, I was probably right there with you back in the late nineties and early two thousands. This is before you could actually buy postage on the internet before an indicia.com or stamps.com. You had to have like a, a big physical meter, like a big heavy, Box kind of thing. And every time you want to put money on, you had to lug that thing down to the post office and say, here, put $500 on it. And they have a special key and they would put $500 on it. And that became such a pain in the ass. Sometimes I would just go with like you, like you with a hundred packages or sometimes more and just stand there in line and piss off everybody behind me. And you know, one guy would have to devote to me and it'd take him like an hour to sit there, put each one on the scale, put the little sticker on it. But you did what you had to do to stop by back then. Speaker 3: That was the hustle. Speaker 1: You go into the UPS store and standing in line there and you had those little forms. You couldn't do anything online on a computer. You had like a form and you could put up to four packages on a single form and you would write in the address by hand and then they'd have to stamp it and all this. You'd be in the UPS line for an hour and a half every night just shipping your stuff. It was crazy. People today have no idea how easy they have it. So you wrote this blog post around 2016, 2017 or so. Back then, for those of you that maybe weren't selling back then, There was a big issue with sales tax with what's called Nexus. And Amazon was, for a long time, was just basically ignoring this. And then the states, as Amazon started growing, the states started recognizing that, hey, we're losing out on our revenue here. And the way Nexus works is if I'm based in Texas and I sell you something into, let's say California, if I don't have a physical presence in California, I don't have an office, I don't have a warehouse, I don't have some sort of physical presence. Then under the old, there's a law that the Supreme Court passed called the Quill Act back, I forget, maybe in the seventies or something. Yeah, that I don't have to actually collect sales tax in California since I'm based in Texas. Only for people that live in Texas do I have to collect and remit sales tax. Well, when Amazon started getting so big, the state started realizing, hey, there's a lot of revenue here on the table that we're missing out on because people were ordering stuff online. So they went after Amazon initially, said, Amazon, you should collect this. And Amazon said, leave us alone. Fly, get away. Get away, mosquito. We're not going to do that. And so the state said, well, you know, we don't want to really cause a stir with Amazon. Let's, let's go after the individual sellers. So they started going after individual sellers and targeting like bigger sellers and saying, Hey, you're based in Texas. You're selling in California. We believe that you're doing, you know, $3 million worth of supplement sales into California every year. You owe us $240,000 in taxes because you didn't file. You owe us some extra fees and penalties and interest and blah, blah, blah. And it became a huge deal. And you're one of the people that actually got involved. I'm assuming that's what that blog post was about. Something along those lines. And you got involved and actually helped change this whole thing to where now Amazon basically in almost, I think there's a couple of states maybe left, but virtually every, I think it's everyone now. I think it's everyone now. Okay. Speaker 3: Yeah. Speaker 1: I thought there was like two or something. Yeah. Speaker 3: Kansas and, um, I think it was Missouri. I think they were both like the last holdout. But I think we're all in now. I think we're done. Speaker 1: Okay, awesome. So you came in and as an attorney started saying, hey, this is wrong. Amazon should be collecting this. The onus shouldn't be on the sellers. This is just too much work. And you helped get that changed and make life a lot easier for a lot of people. And unfortunately, some people got caught up in the web around 2018, 2019 and had to pay a lot of money. Speaker 3: Yeah. Speaker 1: So you were, you were like going, you were, tell us about the short version of the story about how you had to fight that and how that works. Speaker 3: So, so yeah, so my background is I did a lot of, um, corporate and tax law. So the, for the big companies that I worked for, for most of my career prior to kind of pivoting to this econ law, um, you know, I was doing complex corporate tax transactions, corporate tax litigation and defense. And part of that and what actually drew me to that is the constitutional law elements. So when you're dealing with, especially with state and local tax laws and the interaction of how tax laws affect our economy, it invokes certain constitutional issues. And that's why you have Supreme Court cases around this stuff. And so when I heard the states were kind of putting the blame for this on the Amazon seller, I said, well, that seems really wrong to me because as an Amazon seller myself, I said, you know, I don't really feel like we're The store in this transaction, I don't feel like it's our cash register. I don't feel like we're the retailer. And I felt like the states were really stretching the argument to say that, you know, on Amazon's, you know, platform, you know, we're the store, not Amazon. And that they were again, like you said, they're kind of avoiding maybe because of the fact because it's based on some of the documents we found in one of our cases that, you know, having to do somewhat with all the Amazon distribution centers, Amazon was trying to build out. States were kind of going a little easy on Amazon. We'll just leave it at that. So there were sort of two issues. There were states trying to get the back taxes and then this need to just get the law changed and be like, come on, this is stupid. Like, you know, across the board, whether it's eBay, Amazon, whoever, like we need to make it clear Amazon is the tax collector. And so we spent, we targeted California because In the world of state and local tax, California is like the influencer state. So however California goes, so typically goes the rest of the nation in terms of state and local tax policy. So we really heavily targeted California. Washington and Pennsylvania had already pivoted to this model, but we really need California to go. So we went to Sacramento and basically started out kind of by threatening a lawsuit actually. And then that led to sort of a last-minute scramble to sort of introduce legislation and then we lobbied for that legislation. So I spent quite a lot of time in 2019 flying to and from Sacramento to kind of push that law change and sort of send the message across the nation that that's what we need, the marketplace facilitator law. Speaker 1: And then around 2019, 2020, that started happening, right? States started slowly. Amazon started saying, OK, we're not collecting the tax in this state, in this state. Speaker 3: Exactly. Speaker 1: And what about the people that had paid all those back taxes? Were they just stuck by being an honest person and out the money or did that get refunded? Speaker 3: I mean, our position was with our clients who were in that situation, we told them to stay out of it. We said, don't register. Don't listen to this either constitutionally. And we just got this case confirmed in Pennsylvania this fall, finally, after years and years of trying to get a case in court. And we're still fighting one in California. But our position was, you know, look, under the Constitution, your use of Amazon's Fulfillment Center is not physical presence in the sense of the Quill case that you were talking about. That's not enough physical presence. That's really not. You're not the one putting your stuff in these specific states. That's really Amazon doing it. So there's this concept in the law of purposeful availment. If everywhere you could possibly sell something or put inventory into commerce would trigger Nexus, you'd have Nexus in all 50 states. That's called the stream of commerce. You're just throwing it into the stream. It ends up everywhere. You have to be more deliberate. You'd have to be more like, I'm opening up. I'm renting a 3PL space here in this state and I'm putting my inventory in that state. It's a little more different. Amazon had an almost national network. We're building out an almost national network. And just by utilizing that, you know, you could have, you know, when I used to do a little bit of FBA, you know, I could send a box of stuff. I could send, you know, 20 widgets to Amazon and, you know, by Monday it would be in Florida. And by the end of the week, I'd have, you know, if you were to go by the state's interpretation, I'd have Nexus in seven states and it'd be like seven widgets. It doesn't make sense. That's not how the law works. We really, you know, position our clients to say, you know, look, you're not one, you're not a retailer too. You don't have nexus stay out of it. But a lot of people, you know, they got scared and they got these scary letters and the states were even threatened jail time. Um, and, and so I could understand why people felt like that was scary. There was really no risk of jail time, but people were afraid. Uh, and so they'd register. And you also had some tax software companies at the time sort of say, you know, the safest thing you can do is register. But you're like, Well, it's 2019 and they're about to change the law. And why is registering going to help you? Because it's not about the perspective. And in fact, if our clients wanted to register prospectively, we would help them restructure their businesses so that they were registering to new co, but not under their old co. Because here's the problem. If you registered in 2018, the second you registered, then they got you. Then California was like, okay, aha, now we have you. We're going to go back to 2012. And that's what was killing people. So they thought they were listening to like these tax software companies and going, you know, hey, okay, I'm trying to be compliant here. Let me register, start collecting going forward, but not realizing that this was all a trap by the states to basically go and get you for all the way back to 2012. So it sucks. And we still have some ongoing cases. We're still fighting. We've got one case right now that's the footsteps of the United States Supreme Court that we're trying to We actually have a call with NFIB today to assess it and see if we want to push it. I kind of want to. It's a good case. I like it. Speaker 1: So when this finally basically took care of itself and you don't have to register, you don't have to get sales tax permits in all these different states now, What other changes did you see come out of that? I mean, you also were instrumental, like as you're going through this process, sellers were saying, hey, we also have this issue and we have this issue and we have this issue. And I think the 72 hour rule is one that you actually played a role in helping as well, right? Speaker 3: Yeah. So shortly after we finished the work on the tax laws, we started working on sort of the first, there was this sort of EU push to sort of create what seller bill of rights style law. And, and there was some interest by some California legislatures, Buffy Wicks, um, uh, being the main one who wanted to basically create a law that would be similar to what the EU was sort of contemplating about sort of, you know, transparency and, you know, uh, people are, you know, we deal with a lot of suspended accounts and suspended, well actually not as many accounts these days as ASINs, but, You know, there's a lot more transparency in why you get suspended today than there was, you know, years ago. You just get shut off. You have no idea, right? Like they wouldn't tell you anything. So we sort of lobbied for these changes and basically invoked the law in California. And the good and the bad of California is that When California passes a law, it sort of becomes national law, right? They're like the biggest economy, right? So in the United States, right? So when they pass a law and companies like massive companies pretty much just have to adapt to it on a nationwide scale, right? And there's actually a free pork case right now called the National Pork Products, Pork Producers case or something like that, where they're actually challenging it because they're saying, you know, there's a California proposition that requires cruelty-free pork. And that's affecting mostly out-of-state producers and they're like, we can't do this. And so it's just, that's how powerful California is. So when that happened, Amazon sort of just repositioned their, how they deal with suspensions. We started getting 72 hour notices and things like that, which is what was required under the law. So yeah, we really did, we were able to pivot out of that and get a little extra bonus outside of the tax world for the Amazon sellers. And it was sort of the first time we were able to like use the law to kind of You know, get some fairness from Amazon, you know, and I think that was important. Speaker 1: And you said that one of the things that you're seeing now that your firm and some of the services you're involved with help Amazon sellers that have issues. And maybe in the past, it was more about the accounts coming completely down. And now some of that's changed. It's more of individual ASINs coming down. What are you seeing? As the big issues right now, I know Amazon's doing a big compliance sweep right now to make sure you have all kinds of, you know, going back in time documents, they're doing stuff with, you know, verify, verifying old sellers, you know, to make sure you're actually who you say you are. They're doing a whole bunch of a bunch of stuff. Finally, in some ways, they're getting their house in order. A lot of things that have just been they've been ignoring on compliance or trying to to implement now, but it's what are you seeing out there that you're having to constantly fight with and help sellers right now? What's what's the big topics? Speaker 3: So on the so we so you know, we served, you know, sort of You can say it's two or three markets. I guess it depends how you want to divide it, right? I mean, I always look at Amazon as sort of like there's three pillars. There's arbitrage, there's sort of wholesale, and then there's, you know, brand ownership, private label, whatever, you know, however you want to refer to it. You know, Amazon, if you look at the history, right, same with sort of sales tax, when Amazon said, you know, we're not a store, we're not responsible for sales tax. They also said we're not a store and we're not responsible for the safety of our products, right? And that had been the way for a long time. They sort of said, you know, the marketplace is a flea market, right? It's like going to a flea market. We're not responsible for what you buy. If you buy something from China and it blows up and burns your house down, that's on you and you can sue the China company. But, you know, as you know, good luck doing that. You'll never do that. The courts over the last few years have sort of wisened up to that argument and said, you know, really looking at the transaction names on, you really do look just like every other store in this transaction. This is your shopping cart. It's your gross, you know, it's your cash registers. You're in charge of the customer service. You own the customer. It's, you know, and so it's really Like the courts are having a hard time seeing Amazon's point of view and saying how like they can just pass on liability. So just to kind of give the audience, you know, in case you don't know, right? Like when you buy a product in the store, if I buy something at Walmart, if I buy a bottle of Coke and that Coke bottle explodes, and it cuts me and I lose my eyesight. It's like true case. I don't know if that happened at Walmart, but it's a real case. I can sue the store, right? I don't have to sue Coke. I could technically just sue the store under what's called strict liability theory, right? And it's the idea is it's supposed to, you know, when things like that happen, it's supposed to be easy for the person who's injured to recover. And then obviously the store can then go through and go upstream to the suppliers and distributors and figure out who's responsible. But as the consumer, I have a direct Cause of action against the store. And in the context of Amazon, it's really important when you have a lot of suppliers in China, when Amazon wasn't requiring insurance, it was a policy, but they never enforced it. Speaker 1: It was a policy for, was it three months? If you sell it for three months and over 10,000 per month, technically you're supposed to have it. Speaker 3: And, but they never, until a couple of years ago, they never. Speaker 1: That was just general liability. That wasn't product liability. Speaker 3: Right. Now you have that product. Now you have to actually have, you have to have product liability. So if you, you absolutely do. Cause if, if, if, um, if they find out you don't, they will shut you down. Cause we deal with that a lot. We deal with clients who get sued a lot. Um, and have to kind of like, I mean, there's not much we can do in that case. We just kind of help them deal with the Amazon. So the Amazon doesn't shut them down and say, okay, give us a moment to, cause we don't want to, we don't want to admit fault to Amazon and admit liability until We get the insurance companies green light because we don't want to, you know, cause that can affect your coverage. So we just want to make sure we do it all by the book, but you have to have that insurance. So since the laws, since the courts have kind of said, you know, Amazon can be at fault here, Amazon is 100% cracking down on compliance. So we're seeing it on all ends. We're seeing it with, you know, FDA, we're seeing it with consumer product safety. I mean, it's just, it's just, it's a compliance, um, Smorgasbord on Amazon. So anyone in the private label space, it's like I've got clients who have sold products for years, didn't have a clue that they were subject to FDA rules. They get shut down. They need to get FDA clearance. They might have a class two. I mean, and sometimes it sucks because sometimes that what they need can take a year, you know, or more. Right. But that's the world we're in right now with Amazon. So we're seeing a lot of A lot of issues in the private label space, like you said, compliance is so important. In the arbitrage space, we're still dealing with these pesky IP claims where the brands are constantly in a battle with resellers. Brands don't like the resellers, but the resellers are reselling. And the resellers are saying, we have the right to sell under the first sale doctrine. The brands are saying, no, you don't. And they're using Amazon's intellectual property tools like Brand Registry to take them down. And that's where we come in because we, what we did in the last year is we helped A lot of resellers sort of, you know, reclaim their right to, I mean, the law is still very murky on this issue, but what is clear is Amazon's policy. Amazon's policy is you have the absolute right to resell. If you have a new authentic product, if your documentation is good, if you can prove chain of custody, you know, so let's say you're an arbitrager. Look, if you bought it from Walmart, you're pretty, you should be good, right? If you bought it from some random liquidator, You know, good luck. It's not going to help when you get these sort of inauthentic or counterfeit without a test bike type claims. But when you have the documentation, we can go to Amazon and one of the things we've been really working hard is getting on is getting Amazon to see that a lot of companies are abusing brand registry. That's not the way you're supposed to go about controlling your, you know, who can sell your product. There are other ways to do it, but Amazon's brand registry tools aren't one and Amazon's, you know, intellectual property policy and their reseller, seller code of conduct both state that you cannot do that. It's still plenty of, plenty of these sort of like fly by night operators and brand managers don't know that. And they're, they're, they're filing these IP claims left and right. And what we actually started doing is we actually got confirmation from Amazon is that we're actually getting brand registry rights revoked for brands that do that, which is really cool. Speaker 1: What else are you seeing out there that's a big issue? The compliance, you said? Speaker 3: Compliance is kind of the biggest thing right now. In my opinion, that's what I focus on because I mean, it forces me to learn a lot. Proposition 65, this is something that was like a nothing for a long time for the majority of sellers. That's a California Prop 60. He's referring to California Prop 65. This is something that is really I'm really worried about this There's so for those that don't understand what that is. Speaker 1: Can you explain what that is? Speaker 3: Exactly. So Prop 65 proposition 65 is an old law in California that basically It requires you to notify, you know, requires retailers and wholesalers and distributors and manufacturers to notify California customers of toxins that are potentially in the products that you're selling. And there's like a list of like, I don't know, 900 toxins or something. I mean, it's always changing. It's ridiculous. It goes on forever. And what ends up happening is like, Basically, what you're supposed to do is you're supposed to put a little sticker on your product and it'll say, warning, this product may contain chemicals that cause cancer or reproductive harm. And it may list the chemicals such as lead or phthalate. And you're supposed to put that sticker on your product and give that warning to the consumer before they buy the product. But there was always some exceptions to those rules. And one of the major exceptions was that if you were less than 10 employees, you didn't have to deal with it. You were exempt from the law. The other exemption from the rule was that retailers, such as what you would assume Amazon would be, We're not liable for that law unless they were aware of the violation. And they only became liable five business days after they became aware. So a Prop 65 case in 2019 would go something like this. My client would get a Prop 65 notice of violation. Somebody would file a 68 notice with the California Attorney General's office. Speaker 1: This will be like an individual consumer. Speaker 3: It could be any person. It can be any person at all. It's usually some people or organizations backed by lawyers. So the other side of this is very, very, very bounty hunter incentivized. Lawyers can make a lot of money doing these cases. They can basically just pick any product. Make a Prop 65 claim. And for the time that they spend fighting the case on behalf of the state of California, they're basically what they're called private attorneys general. So they're basically stepping into the shoes of the California attorney general and enforcing this law on behalf of the state. And they get to charge their hourly fees while they're doing it. So while you're fine, when you violate this might only be $700, sometimes the settlement payments could be like 15 or 20 grand, right? You know, just enough to where it's not worth going to court, right? It has to be, they do it just right. But it's a very perverted incentive, right? Because you've attorneys all over the country that just, you know, downy hunt and look for these products and go after people for this. But with a lot of my clients, as most of our clients are under 10 employees, a lot of them wouldn't be subject to this law because they're under 10 employees. And because Amazon was initially notified and we'd have our warnings up within five days, it simply would end the discussion at that point. But there were some changes in the case law over the summer that's creating some chaos and Amazon sort of saying we're not really that retailer who gets the five day notice. And the courts are saying there's ways Amazon might be aware of these violations aside from these direct notices through the California system. And lawyers are getting creative and sort of making arguments that Amazon knows. And Amazon's basically telling me that they're throwing the white flag up. So now what happens is you sue Amazon, not necessarily the seller. You just sue Amazon. And what Amazon does is they say, and they'll say something, and maybe you make something more general and say, all vinyl contains this DEHP failing. All vinyl does. Amazon knows that. All vinyl contains failing. Therefore, anything with the word vinyl in it is in violation. Amazon, give me a list of every seller who sold anything with vinyl. Amazon will give them that list. And then they'll send you a letter contact selling you that you sold something with vinyl in it, contact this lawyer and settle the case. And that settlement will be 15 grand. And it affects resellers too, because you could be a reseller of a single product. Let's say you sold a paintbrush with vinyl rubber grip on it and you sold one unit. Actually, let's say you never even sold that unit. Let's just say you listed it. Amazon says you're still responsible and you have to pay, uh, you know, 15 grand to the lawyer, maybe $700 to the state of California, $200 to the plaintiff who brought the case. And that's, and that's it. So like the state gets 700 bucks, the plaintiff gets 200 bucks, the lawyers get like 15 grand. Speaker 1: What do you do to protect yourself if you're a seller on this? If you're already selling or if you're looking into something? Speaker 3: Well, we may be actually initiating a new lobbying campaign over this because I have some clients who are very concerned about this, but what you're supposed to do is you're supposed to put the warning up on Amazon. So when you go into Amazon's back end system, if you're the private label brand owner, you can go in, you can put the warning up. There's a Prop 65 section and that'll make it so that the warning pops up. Only when somebody from California, you know, is buying a product or when a California zip code is used. So like if you put 90210 into the list, you know, into something you're looking at, that warning will pop up by the time you check out. And at the same time, you're supposed to stick your product. You're supposed to label your product. You should also test your products. There are labs like SGS, Eurofins. I like Eurofins. That will tell you whether your product has these things. But if you're a reseller, it sucks because there's nothing you can do. Because if you're selling one paintbrush, you got off a liquidation paddle, which you probably shouldn't do anyway. You don't control the listing. You don't have contribution rates. You can't even put that warning up. And that's why I think it's really scary for the resellers. That's why I'm really not happy with the way this all is going. Speaker 1: One of the things they can do, you offer a service actually for, for sellers. It's like a fixed amount per month or something, right? That covers some basic, you know, it's kind of like an emergency, uh, emergency legal or something. Right. So that is, uh, can you talk about that a little bit? Yeah. Speaker 3: So it's like preventative and emergency legal. I mean, it's not legal. It's, it's more, it comes with the benefit of, of legal. Cause there's network law firms. There's my law firm and actually a host of another bunch of law firms that will help. I offer you advice, but it's called Seller Basics, sellerbasics.com. And what it is, it's a hundred bucks a month and you get a couple of things. One, you can run it by a lawyer. We find my career that I've found in my six years of helping Amazon sellers, a lot of the messy stuff that my clients get into is so preventable. Have they just run it by a lawyer? Whatever issue it is, had you just asked a lawyer for 15 minutes, you probably would have saved yourself the headache that you're dealing with today, right? So the whole idea of that program is like, if you can talk to a lawyer for $100 a month, anytime you have a question, whether it's a scary letter, whether it's about something you're going to do, whether it's about your LLC, tax question, You know, we're here to help you give you that initial insight. Speaker 2: And then if you want to go from there, you drop an email or is that you get on the seller basis, poorly scheduled calls. Speaker 3: It's, it's all automated. Speaker 1: Just a short, like short consultation calls. So it's not like legal work. Speaker 2: You're not going to drop contracts or something. Speaker 1: It's just a general advice, general advice. Speaker 3: And then if you want more than it's discounted, we'll flat rate it. It's a lot cheaper. Like trademarks are much cheaper. If you're a member of seller basics and you know what, like typical law firms charge. And then the other benefit that people love is that if your account or your ASIN goes down or you get an IP claim, we cover it. We take care of that. We'll do everything in our power to fight that outside of litigation. Speaker 1: What else are you seeing out there as far as legal, in the legal landscape and when it comes to e-commerce, any other big issues that are on the horizon or coming up or cases that are going to be going through the Supreme Court in California or the US or anything? Well, you know, at one point there was this thing where Amazon, what was it, a five, was it like five different little cases that were brought up in the legislature about Amazon opening up and sharing more data. And, uh, you know, they started doing some of that, but I'm forgetting what the name of those were. Um, it was a couple of, about a year and a half ago, there was like five different, uh, proposals put through, uh, Senate bills during the antitrust, those antitrust bills that we were working on. Yeah. Speaker 3: So, Yeah, I think that's right. I mean, you've got Lina Khan who's wrote this sort of very, you know, she's the head of the FTC and she was this Yale law professor who wrote this sort of very anti-Amazon sort of manifesto-ish style law review paper. And so she's, you know, kind of has it, you know, you could argue she has it in for Amazon a little bit. It seems like a lot of that legislation died. Speaker 1: Yeah, I haven't heard much about it. Speaker 3: And we didn't think it was very good. We were very supportive of the trust investigation. In fact, the Online Merchants Guild is a nonprofit that I run. That's where we do a lot of our advocacy and volunteer, like our Supreme Court cases and stuff like that. We run through this seller organization that's backed by sellers. We were the number one cited resource in the antitrust report. If you go and read the antitrust investigation, you'll see online merchant skills cited more than anyone else. So we really did take the time to give Congress insight into what it's like to sell on Amazon as of 2020 or 2021. But, you know, the legislation they were proposing, in my opinion, was garbage. It was just wasn't good. It wasn't going to solve any problems because they were basically trying to say Amazon is this big platform. And they're going to break it up and you know, it can't do this and that, you know, you can't be the FBA, you can't be the inventory, you can't have a provide these sort of services and be the platform at the same time. So you can't be FBA and the platform, you have to be one or the other. Our point of view was, well, Amazon's obvious pivot here is just to say they're not a platform and that they're a store, that they're being miscategorized, that they're just a store like Walmart, like Target. And that's actually exactly what Amazon says. So if you look at Amazon's messaging in the last few years, you always see them often referred to the Amazon store. Now you go back to 2017 when sales tax is a big issue, they never say that. They'd never say they were a store because that would be a tax liability problem and they would never say they were store because that would be a Personal injury liability problem. But since these all these things are changing anyway, they're they're sort of going in that they're a store and they're going in on those they're a store because they're like they have no reason not to and because it affect it's a great defense to any of this antitrust criticism. So for example A lot of people like to criticize Amazon for competing against sellers, which we know did happen. I don't know if it happened at the scale that it's worth really making a big deal out of it, but it does make headlines. People like it's juicy. It sounds good. But if you look at the numbers, is Amazon private label really much? Probably not, right? I don't think it makes a lot of money. I don't think it's material. I mean, I think when you back up batteries, it's not even close to what the hundred, 200 odd billion dollars that Amazon sellers produce. But it is juicy. But I mean, Amazon's defense of that, if you read their statements in the antitrust investigation, is sort of saying like, hey, look, when you go to Costco, and you see that, what's that stuff called? It's a snuggle, that fabric softener, it's blue with a bear, the cute little bear. What's right next to the snuggle when you go to Costco? Speaker 4: You know, you know, I don't know. Speaker 3: It's the Kirkland version of that. And it's all Kirkland. Speaker 1: OK. Speaker 3: Right. It's Kirkland fabric software. It's almost just like it is also in a blue bottle with almost the exact same looking nozzle. Right. It looks almost identical. Right. Clearly the message is right. And so what Amazon is saying is like the store brand concept is something that has been sanctioned in retail as good for the consumer. So what we do is perfectly sanctioned. If you look at it from the perspective that we're a store and not competing against our sellers. And we use the same data that Costco uses. So they're sort of posturing that they're a store now. So that's really fascinating. So we're watching that. We saw Alina Khan take action against the FTC, take action against, did you see this, the Nature's Bounty supplement company? Because they were using, they were manipulating the bestseller badge, right? So they would launch new products and then they would basically borrow the best, borrow the bestseller badge. They basically put their old product, their new products on, you know, they treat their new products as a variation of older products so that it would get the benefit of the bestseller badge. And this is a company that's like one of the biggest companies in the world owned by Nestle and they got a $600,000 fine. So, I mean, after all these years and all these posturing, I mean, the best we've seen so far. Speaker 1: The result of some of that legislation though I think is one of the reasons that Amazon has opened up the data a little bit more. Some of the brand analytics and the search term, all these new reports that you used to have to either try to get through nefarious ways or you couldn't get or guess. Now they're opening it up and I think some of that legislation, even though it's kind of died, actually led to them. Speaker 3: Doing that right because if they open up the data, then they can't be accused of having some, you know, special advantage, right? Everybody which I always kind of thought, you know with helium 10, right? Like I always thought, you know, really at the end of the day. I never really felt like Amazon had that much of an edge because we all had access to that similar kind of data through tools like Helium, right? I mean, we had the ability to, pretty good idea of what was selling, right? In the context of like retail and competition prior to that, I mean, I don't think any, you know, like, you know, in the, in the 1990s, I couldn't go to Walmart and like click on a product and say, Oh, wow, they've sold this many of these, you know what I mean? That just didn't, that never happened. So, I mean, as far as the history of retail, I think Amazon has been, you know, we've had these tools that helped us get a pretty good sense of what sells, what doesn't sell and that's It's intentional, right? That's to drive competition. Amazon wants people, they don't really necessarily, it's not for their own benefit. And I've never really thought that it was, you know, Amazon in the big picture, you know, highly matrixed organization. You're going to have people who do bad things. It's going to happen, right? I've worked for some, right? It's just, it's just too big, right? So you're going to have rogue people, but I don't think Amazon's intent was to do that. I think it is to say, I think for that, from their perspective was to say, If a product starts trending and we make that data available through tools like Helium, that's going to let the world know that these products are trending and that's going to create competition because they don't want monopolies. They don't want people coming in and just cornering a market unless they have a patent. They want to create competition because competition will keep prices down. My point of view is Amazon is always thinking about the value of the prime member. And if the prime member sees value in lower prices, then that's good, right? And so the more competition there is from China, from wherever, that's good for the consumer. That's good for the prime member. And so that's why I think they've always made that information sort of publicly available to some extent. They're just kind of improving on it. But yeah, I think the antitrust has had a lot of benefits. I mean, I think Amazon as a whole has changed. I mean, under chassis, you know, we're seeing just more, it's getting better. I mean, they're better to deal with. Like I said, we're seeing less account suspensions. We have more information now. We know why things are getting suspended. It's easier to deal with them. So I do think, I think it's, I think there are, I think Amazon is in a position now, and we definitely leverage this in our practice when we, When we deal with complex cases, we look to government sometimes to get answers if we can't get them ourselves to get the client solutions. But Amazon is definitely responding because they don't want to be broken up, so they're trying to make it better for the seller. They want the experience to change. I think they genuinely do want to do that because I think they want to change that narrative that was going around in 2020 and 2021 that it's like talking to a brick wall. Speaker 2: Yeah, I agree. Well, Paul, this has been great. Speaker 1: Been a great discussion here and some great information. If people want to know more about what you do or reach out to you, how would they do that? Speaker 3: So yeah, so they could, my email address, you can just email me. It's paul.ecom.law. That's E-C-O-M dot L-A-W, paul.ecom.law. So that literally is my email address. You can email me. I will likely respond or somebody from my team will. You can go to our website, uconn.law. And if you're interested in our subscription, in the subscription program, that's separate from the law firm that's Seller Basics, check out sellerbasics.com. And yeah, love to love to chat with you guys and meet you out there in AM, PM land. Speaker 1: Awesome. Thanks, Paul. Speaker 2: Appreciate your time today. Speaker 3: Appreciate you. Thanks so much for having me on. This has been absolutely amazing. Thank you. Thank you. Speaker 2: As my discussion with Paul highlights, it's an ever-changing world on Amazon. Always going to be something changing out there. Always got to be on your toes with those changes. Hope you enjoyed this episode with Paul. Don't forget the Billion Dollar Seller Summit's coming up June 11th to the 15th in San Juan, Puerto Rico. Information's at BillionDollarSellerSummit.com. Bradley Sutton will be speaking at the event, as well as a couple of other people from the Helium 10 team will be out there. I think Cassandra and Carrie Miller will also be out at the event. So hopefully you can join us in Puerto Rico in June. Before we leave for this week, I just want to leave you with some words of wisdom. Here you go. Limitations drive you to figure out solutions. Your constraints inspire your creativity. Limitations drive you to figure out solutions. Your constraints inspire your creativity. Have a great week. We'll see you next Thursday.