Amazon is quickly becoming the biggest online retailer. They ship millions of products to buyers across the world, acting as a go-between for manufacturers and consumers. Unfortunately, not everyone is happy with their experience with Amazon. One new controversy is the lawsuit filed by JC Berg. The New York businessman is accusing Amazon of a $1.5 million fraud that involves the popular toy called hoverboards.
Businessman Is Accusing Amazon of Taking His Merchandise and Refusing to Pay
This whole issue started in late 2015 when hoverboards became popular. JC Berg says that he was one of the first retailers to notice the trend, so he stocked up an inventory with thousands of hoverboards. When Amazon realized that parents would be buying hoverboards for Christmas, they rushed to buy hoverboards from JC Berg who had been an Amazon supplier for years.
Amazon and Berg created a deal that said Berg would supply 4,000 hoverboards to Amazon, and then they would pay him $1.5 million. However, this changed when cheaper knockoff version began showing up everywhere. According to the lawsuit filed by JC Berg, he had shipped 3,000 hoverboards to Amazon, but then Amazon refused to pay.
The lawsuit of the businessman is accusing Amazon of leveraging
“market conditions, it’s enormous size and media scrutiny to attempt to pay JC Berg less than the amount to which it originally agreed.”
When Berg refused to accept a lower price and tried to cancel the deal, Amazon did not return his stock. They also canceled all other deals with JC Berg and will not let the vendors sell on their website.
Lawsuit May Just Be One of Amazon’s Many Troubles in 2017
The businessman is accusing Amazon, but this is just one example of the growing discontent towards Amazon. It brings up several concerning factors that other sellers have complained about in the past. Amazon is currently flooded with cheap, counterfeit items from Chinese manufacturers. Brand enforcement attorney Chris Johnson says:
“Amazon is making money hand over fist from counterfeiters, they’ve done about as little as possible for as long as possible to address the issue.”
Another lawsuit that Amazon is facing was filed by the creator of the famous “Snuggie” blankets. This lawsuit says that Amazon owes them fees for all the lost profits caused by counterfeiting. According to the suit, Amazon knows that some sellers are selling cheap counterfeits, yet the retail giant does nothing to stop them. The counterfeiting is so bad that some brands like Birkenstock shoes refuse to even sell to Amazon anymore.
JC Berg’s lawsuit reveals that not only does Amazon allow cheaper counterfeit products to undercut legitimate retailers, but apparently, Amazon is also willing to use these counterfeits in problematic negotiations. In the case of the hoverboards, Amazon tried to pay JC Berg the price of the cheaper hoverboards he bought elsewhere. The fact that a businessman is accusing Amazon may cause retailers to be wary of dealing with a company that will attempt to pay less than agreed on for delivered products.
What Happens If JC Berg Wins
It seems likely that Berg will be able to present his case successfully. The businessman is accusing Amazon with emails and other proof that Amazon agreed to a higher price and then tried to bully the retail store into accepting a lower price once the products had disappeared into the Amazon warehouses. The money Amazon would be forced to pay to Berg if he wins is not a huge loss for the retail giant, but the loss of their reputation may cause bigger issues.
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