Personal Finance

Amazon.ca competitor falsified returns to shut me down. Reorganizing business.

  • Last Updated:
  • Dec 11th, 2017 8:58 am
[OP]
Newbie
Jul 8, 2017
37 posts
20 upvotes

Amazon.ca competitor falsified returns to shut me down. Reorganizing business.

Roughly 6 months ago I was making a living selling on Amazon.ca. I had a niche product I was selling which was a very small portion of my overall business revenue making a very small income. If I knew what was going to happen I would have dropped the item.

I had a very aggressive competitor who sent me threatening messages to remove my listing. He retaliated by buying all my stock of this item using multiple accounts and then making A-Z claims on all of them stating they were fake. This resulted in an immediate Amazon.ca suspension. After several months of back-and-fourth with Amazon they refused to budge. Their decision was final. If you search Amazon suspensions online you will see many situations like this where very successful business who employ people get shut down for trivial matters or unethical competitors. Communication with Amazon becomes very slow and cryptic and they can take weeks or months to reply. Their response are not normal dialogue like a human you can talk with, but instead giant blocks of cookie cutter response which give vague response. Your chance of getting reinstated depends more on the mood of the representative on your case than anything it appears. I have also approached legal council but this venue did not prove viable.

For the past 7 months I've been on government assistance, scraping by and trying to find a solution. I was able to create two new Amazon accounts and they've been running for several months now and I am starting to become self-reliant again.

**Now heres this issue**

I am a registered business as a sole-proprietor and am liable for GST/HST remittance to the Canada Revenue Agency. In order to collect GST/HST on Amazon.ca you must give your "Federal Tax ID" which is your Business Number with the CRA. This number is used by the CRA to uniquely identity you and collect GST/HST.

If I do not collect this GST/HST on my new accounts I will be liable for all uncollected tax (13% of gross revenue). After a certain threshold Amazon will ask for tax information regardless. If I enter my Business Number this will immediately link me to my old account and Amazon will suspend me again.

Heres where it gets tricky. The Business Number "GST/HST" number unique to you. You can only have one number. The only way to change the number is you change your legal structure between 1) Sole Proprietor, 2) Partnership, 3) Corporation, 4) Declare bankruptcy. But this still only provides you with a single number. I have multiple accounts to not leave all my eggs in one basket and each would need their unique numbers.

My options:

1) Enter a random "Federal Tax ID" which would force Amazon.ca to start collecting for me. I believe Amazon.ca will report the tax collected on the account to the Canada Revenue Agency and give the random "Federal Tax ID" I had given them. The CRA will then start ask why this person is not remitting this tax or why it does not exist. This is very concerning stuff and I dont know how it will turn out.

2) Find a legal business structure and get two unique business numbers to do this correctly.

Option 2 is obviously what I want. What legal structures (if any) would I be able to pursue to generate two unique business numbers to use with my new Amazon accounts?
12 replies
Deal Fanatic
Jul 4, 2004
7723 posts
730 upvotes
The problem with option #1 is that your numbers could potentially be reported against someone else's business and that could cause them some serious tax grief later on - definitely not fair nor recommended.

If you could sell your items at a price with the tax already factored in (tax included), that could work until you hit Amazon's taxable limit. Then close that account down, open up another one afterwards and repeat.
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[OP]
Newbie
Jul 8, 2017
37 posts
20 upvotes
Frankie3s wrote:
Dec 10th, 2017 2:03 am
The problem with option #1 is that your numbers could potentially be reported against someone else's business and that could cause them some serious tax grief later on - definitely not fair nor recommended.

If you could sell your items at a price with the tax already factored in (tax included), that could work until you hit Amazon's taxable limit. Then close that account down, open up another one afterwards and repeat.
I agree with you. Its not fair and not a viable route.

I can understand the sell until tax limit and close and repeat but this is can't be a long term business option. I would like a long term option so I can grow my accounts. This is why I am seeking legal tax structure for doing this.
Penalty Box
Mar 22, 2017
270 posts
230 upvotes
OP posted the identical message on Reddit. Doesn't sound like a plausible story, some possible tax fraud scheme going on involving covering up of the old BN.
Sr. Member
Feb 18, 2004
739 posts
184 upvotes
As a sole prop you can have only one business number but you can have more than one GST number / sub-account (RT0001, RT0002 etc). You might want to check if Amazon.ca would link all sub-accounts together.
[OP]
Newbie
Jul 8, 2017
37 posts
20 upvotes
gabbycup wrote:
Dec 10th, 2017 4:55 am
As a sole prop you can have only one business number but you can have more than one GST number / sub-account (RT0001, RT0002 etc). You might want to check if Amazon.ca would link all sub-accounts together.
Yes, I thought about this but only the ending auxiliary group of digits which are not part of the business number change. For example, 123456789RT0002 , the actual business number: "123456789" stays the same. This is the number Amazon.ca requires. The RT0002 part is not apart of the business number.
Deal Expert
Aug 22, 2011
24952 posts
11240 upvotes
Ottawa
I'm interested in seeing what your product is.
Please PM your Amazon link.
Deal Fanatic
User avatar
Jan 27, 2007
5023 posts
899 upvotes
Peterborough
Incorporate a new business and get a new BN. BNs are not unique to Companies. Many people have many BNs through many different Co.'s.

If you want to stay a sole prop. then you have to use the same BN. They wont issue more than one to an individual.
[OP]
Newbie
Jul 8, 2017
37 posts
20 upvotes
dutchca wrote:
Dec 10th, 2017 8:20 am
Incorporate a new business and get a new BN. BNs are not unique to Companies. Many people have many BNs through many different Co.'s.

If you want to stay a sole prop. then you have to use the same BN. They wont issue more than one to an individual.
Thank you. I'm researching the implications, pro's/con's for incorporation as well as the provincial / federal options. Just to confirm though, I am only interested in the Business Number which is used to identify businesses with the CRA.

Some online sources confuse the Business Number with Business Identification Number's which are a completely separate thing used for identifying provincial businesses.
Deal Fanatic
User avatar
Jan 27, 2007
5023 posts
899 upvotes
Peterborough
speer12345 wrote:
Dec 10th, 2017 8:31 am
Thank you. I'm researching the implications, pro's/con's for incorporation as well as the provincial / federal options. Just to confirm though, I am only interested in the Business Number which is used to identify businesses with the CRA.

Some online sources confuse the Business Number with Business Identification Number's which are a completely separate thing used for identifying provincial businesses.
Yes CRA BN is 9 digits then an identifier like RT or CT or RP then usually 0001. Every corp usually has one. Just do a quick and dirty incorporation for $200-$300 and get a new number.
Sr. Member
Nov 8, 2006
678 posts
145 upvotes
Toronto
I totally agree with OP with amazon's investigation system.
I was also setup as a small business but they closed my account on the assumption of fraud. Never bother to reply to my emails and wont disclose their investigation or let you reply to them.
As a result I have given up entirely and they will also keep all the funds in your account and they will not return your earnings.

Lucky that I keep the minimum in there and its not my main job. But yea, big business throwing their weight around.
Deal Expert
User avatar
Aug 18, 2005
18260 posts
2938 upvotes
GTA West
OP you should probably make some video of yourself, making a warning to other prospective amazon sellers and promote it on social media. It is this kind of thing that gets attention because even though they do not give a crap about you, they don't want to lose resellers en masse.

Example: Warning to All Game Developers
What if there were no hypothetical questions?

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