There’s a lot to be said of the Amazon Marketplace. If you look back to its rise, it could really be said that ecommerce in general was much more decentralized and it wouldn’t be far-fetched to describe it as the “wild west”. Much like it’s older cousin, the dot-com bubble of the late 90s, ecommerce grew quickly and wildly.
Find more statistics at Statista
If you are doing business on Amazon, the details imparted in this article are important for you to understand.
I’m aware that the Wall Street Journal has been writing numerous articles on Amazon that relate to Chinese sellers on Amazon. Some of these articles I had knowledge about before the WSJ had published them, due to my relationships in the industry. One of the articles I’m going to be focusing on today is the article titled Amazon Investigates Employees Leaking Data for Bribes. If you are doing business on Amazon, the details imparted in this article are important for you to understand.
The reality of ecommerce is that Amazon has centralized the online shopping experience. From a report on Techcrunch, in 2018 Amazon controlled 49% of the ecommerce market share in the US, or the equivalent of $274.766 billion, when using the total market from Statista. This kind of consolidation means that Amazon’s traffic is coveted by sellers and as is with everything of value, there is corruption.
News of Amazon purging a huge swath of its account managers had begun making the rounds in the industry a week before the WSJ article. I’m not going to pretend to know the inner workings of the WSJ. its writers, or their investigations, but I do know they had a team in Shenzhen, China at the time, covering a VIP Meeting of big hitters in the Amazon industry. The writers of the previously referenced article are also credited on the article that covered the event in question.
The power sellers of Amazon, regardless of whether their accomplishments are true, are in reality a relatively small circle of people. This group ranges from sellers grossing tens to hundreds of millions of dollars, writers, consultants, and even new sellers. Due to Amazon’s size and importance in ecommerce, there is an entire industry of services and consultation that brews below the surface.
With the current size and dominance of Amazon, not only is having an account manager more common, pulling strings also becomes a profitable business
In the good old days of Amazon, when Amazon was still in its period of growth and trying to gain market share, having an account manager was a privilege. Through my previous work, I’ve had my fair share of discussions with account managers to help pull strings. Amazon’s current size on the market is credited to their devotion to the customer experience.
With the current size and dominance of Amazon, not only is having an account manager more common, pulling strings also becomes a profitable business.
It’s a bit innocuous to say that Amazon employees were fired for leaking information, if you don’t understand how powerful that information truly was. Like I had mentioned in my Shua Dan (刷单) article, Amazon collects massive amounts of data on its customers and make no mistake that you as a seller are also a customer of Amazon.
Let’s begin by talking about one of the most discussed points as to why these managers were fired.
Removing Negative Reviews
Removing negative reviews is inherently going to be a necessary tool for Amazon employees, as there is a legitimate need to remove fake or ineligible reviews. It’s also important to understand how important a review can be for a seller. As anybody in the ecommerce industry knows, especially so on Amazon, one of your biggest challenges is getting a buyer to leave a review for your product, regardless if that’s negative or positive.
In an Inc. article, it’s stated that it takes about 40 positive customer experiences just to offset a single bad review. This really shows you why it’s so important to not only be able to remove negative feedback, but to manipulate your feedback to look better than it really is.
Being able to bribe an Amazon employee to remove feedback for you is only one of many strategies when it comes to feedback manipulation. However, you can see why a seller would be willing to invest money into having this option. Eventually I may write an article on some of the strategies involved with feedback manipulation, but for now will keep it short, as this shouldn’t be the focus of why the firings occurred.
The real focus of this corruption within Amazon’s own ranks come down to the data leaks.
The Leaked Data
Data leak in this day and age seems to be an everyday occurrence. Just recently Google announced the end of Google+ and the security issues that lead to this decision. However, it’s important to understand exactly what it means when Amazon is talking about its managers leaking data.
The reality is the kind of data that was being leaked meant most of you were no longer playing the same game as the sellers gaining access to these reports.
A great metaphor would be bringing a knife to a gunfight. You might look at some of the basics as to how to best improve your sales. Ensuring your product descriptions are robust and informative, your images are clean and attractive, even that your price is competitive. These are the ABCs of product listings on Amazon, the very base necessity of reaching your customers.
However, gaining an edge means optimizing many more things, such as keywords, paid advertisements, and promotions. The most basic explanation of sales volume on Amazon is that sales volume generates more sales volume, call it sales inertia. Amazon rewards listing that are successful, so it’s paramount for a seller to have that constant advantage to be able to push more sales.
The reality is the kind of data that was being leaked meant most of you were no longer playing the same game as the sellers gaining access to these reports. For example, Amazon’s internal version of an ASIN report contains data you probably never even thought you needed. A report on your seller account could show any demerits the account may have, whether your account is believed to be linked to any other accounts, and your potential familial account links.
Visualizing how this data could provide an advantage to a seller is only really possible if you have a strong understanding of all the strategies employed by sellers and how this affects their listings. Due to the previously mentioned inertia of sales volume on Amazon, the advantages brought on by these leaks were a monumental tool for sellers and could be credited with shaping the Amazon marketplace for at least the last year.
The balancing act for Amazon must consider not only the experience for their customers, but also the revenue that is generated by their less legitimate sellers.
If viewing the internal ASIN report, I could see what other product listings lead you to mine, how many clicks that took, what else you bought with my item, these are metrics I can use to better target you. Whether it’s something like moving into a new item that statistically sells well with an existing listing or providing you with exclusive and usually hidden data to contact customers by region, it is a leg up on your competition. Prior to the firing of managers at Amazon, this was widespread practice, especially so amongst their staff in China. Even now you can browse Taobao.com for internal ASIN reports, or other shady services like positive reviews.
Amazon doesn’t just have a responsibility to ensure these things don’t happen, it is within their own best interest to do so. The battle of stamping out these practices is a never ending endeavour for Amazon. If Amazon truly wanted to stop this behavior across the board, it could easily do so. However, the end result of these power sellers is that regardless of the methods they use, their sales also generate income for Amazon. The balancing act for Amazon must consider not only the experience for their customers, but also the revenue that is generated by their less legitimate sellers.