Your Amazon Store Just Became a Compliance Program
If you sell on Amazon, eBay, Walmart Marketplace, Etsy, or Temu and you've crossed 200 sales and $5,000 in revenue in any 12-month stretch, you are now a "high-volume third-party seller" under federal law — whether you've ever heard the term or not. And in September 2025, the Federal Trade Commission proved it's willing to enforce the rule that comes with that label: Temu's parent company, Whaleco, Inc., agreed to pay a $2 million civil penalty for allegedly failing to give shoppers a way to report suspicious sellers, the first enforcement action ever brought under the INFORM Consumers Act.
For years, the INFORM Consumers Act sat quietly on the books — a 2023 law that most small sellers never thought about because nobody had been fined under it. That changed with Temu. The case is a reminder that "the marketplace handles compliance" is not actually true, and that a law built to catch stolen and counterfeit goods sellers can just as easily catch an honest small business that let its paperwork lapse.
What the INFORM Consumers Act Actually Requires
The INFORM Consumers Act (Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act) took effect in 2023. It doesn't regulate sellers directly — it regulates the marketplaces sellers sell through, and requires those marketplaces to collect certain information from sellers who hit specific volume thresholds. In practice, that means the compliance burden lands on your desk in the form of marketplace verification requests, not a government form.
Who counts as a "high-volume third-party seller." You trip the threshold if, in any continuous 12-month period during the past 24 months, you've had 200 or more separate sales of new or unused consumer products and $5,000 or more in gross revenue on that platform. Those are low bars — a side-hustle Etsy shop or a part-time reseller can cross them without noticing.
What marketplaces must collect from you. Once you cross the threshold, the marketplace has 10 days to start collecting your bank account information, contact information, and tax ID number (EIN or SSN). They're also required to verify that information and require you to recertify it as accurate at least once a year.
What you must disclose to customers. If your gross annual revenue on a given marketplace hits $20,000 or more, the platform must display your business name, physical address, and contact information on the product listing page, in order confirmation messages, or in your account's transaction history — visible to any shopper who looks.
What happens if you don't comply. The marketplace is required to notify you in writing, give you 10 days to fix it, and then suspend your ability to make new sales until you do. For most sellers, that suspension — not a government fine — is the real financial risk: a locked Amazon account during peak season can cost far more than any penalty.
What Actually Happened With Temu
The FTC's complaint against Whaleco didn't allege that Temu ignored seller verification altogether — it focused on the consumer-facing side of the law. According to the FTC and the Department of Justice, Temu failed to offer shoppers a working mechanism, electronic or by phone, to report suspicious activity on "gamified" product listings, and didn't provide a telephone reporting option for standard listings either. That's a specific, narrow piece of the law — the requirement that marketplaces let consumers flag sellers offering stolen, counterfeit, or unsafe goods — and the FTC still found it worth a $2 million penalty plus an injunction requiring Temu to build a phone-based reporting system and fix its disclosure practices across the platform.
The lesson for sellers isn't "Temu got in trouble, I'm fine." It's the opposite: the FTC has now shown it will litigate INFORM Act violations rather than let them slide, and the law's seller-facing provisions (verification, annual certification, revenue-triggered disclosure) are just as enforceable as the consumer-reporting piece Temu got caught on. Expect marketplaces to tighten their seller-verification flows in response — which means more requests landing in your inbox asking you to reconfirm your tax ID, bank details, and business address, sometimes with tight deadlines.
Why This Catches Honest Sellers, Not Just Bad Actors
The INFORM Consumers Act was written to help shoppers identify who's actually selling them a product, so they can avoid counterfeiters and report shady listings. But the mechanics of the law don't distinguish between a fraud ring and a legitimate small business that:
- Changed banks and never updated the marketplace's records
- Formed an LLC mid-year and now has a business tax ID that doesn't match what's on file
- Missed the annual recertification email because it landed in a spam folder
- Sells across four marketplaces and only remembered to update three of them
Any of those can trigger a suspension notice. And because the 200-transaction/$5,000 threshold looks back over a rolling 24-month window, a seller who had one strong holiday quarter last year and a quiet year since might still be classified as "high-volume" without realizing it.
A Practical Compliance Checklist
- Know your numbers per platform. Track transaction count and gross revenue separately for each marketplace you sell on — the thresholds apply per platform, not in aggregate across all your channels.
- Keep one source of truth for seller-verification data. Business legal name, current physical address, tax ID, and bank account details should live in one place you update the moment anything changes, not scattered across four marketplace dashboards.
- Don't ignore recertification emails. Marketplaces are required to make you recertify your information at least annually — set a calendar reminder so it doesn't arrive as a surprise 10-day countdown.
- Watch the $20,000 disclosure trigger separately from the $5,000 threshold. Crossing it means your business name and address become customer-visible; if your LLC's registered address is your home, consider a registered agent or commercial mailbox before you hit that number.
- Reconcile your marketplace payout data against your books regularly. The same transaction and revenue counts that feed the INFORM Act thresholds are the ones you need for accurate income tracking anyway — if your bookkeeping already separates revenue by sales channel, hitting these thresholds is a non-event instead of a fire drill.
Keep Your Seller Records as Clean as Your Books
The businesses least likely to get caught off guard by a marketplace verification notice are the ones already tracking revenue and transaction counts by channel as a matter of routine. Beancount.io provides plain-text accounting that gives you complete transparency and control over your financial data — no black boxes, no vendor lock-in — so the numbers a marketplace asks you to certify are numbers you already have on hand. Get started for free and see why developers and finance professionals are switching to plain-text accounting.