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TECHNOLOGY IN VIEW

FROM IAN INSIGHTS

Time for some changes at Amazon.com

By Ian Campbell
CEO of Nucleus Research

I know I’m not the only one who has started to notice the growing problem with Amazon. AWS is doing well, despite losing the US Defense contract to Azure, and Alexa is certainly good enough to turn my lights on and off, but Amazon.com — the shopping site — is starting to show a critical flaw. In fact, Amazon.com may be in a tough place that it can’t get out of.

Slowly but steadily, Amazon shoppers are realizing that Amazon is not a seller of goods like Walmart or COSTCO, but rather a platform that connects shoppers with independent sellers who have done little more than register with Amazon.

This arrangement has been beneficial for Amazon in two very important ways. First, having multiple sellers allows Amazon to “stock” a wide range of products and simply take a cut of each sale. That’s a great benefit for shoppers. In one case, I was able to find a wire connector for a light that was impossible to find otherwise. True, I had to buy a package of five, but the price was low enough that it didn’t matter.

The second benefit is Amazon’s common response when it finds itself in court on a product liability issue. Simply, Amazon is not the seller, so it’s not responsible. A quick search finds numerous cases including Eberhart v. Amazon.com, Inc., 325 F. Supp. 3d 393 (S.D.N.Y. 2018) which found Amazon was not a “seller” under New York law and cannot be strictly liable for defective products sold on its website.

Okay, so Amazon absolves itself of product liability when it’s not the actual seller. Not good for the consumer, but that’s not the problem.

The problem is a growing number of gray market and fake goods that are starting to show up on the site. In many cases, you can sniff it out by reading the reviews. Lots of early product reviews that seem glowing (although fake product reviews on Amazon is an industry by itself) followed by a downward trend in reviews with pictures of defective products, claims of grey market items, or even fake packaging. I’ve been delivered gray market items and just recently spent far too much time trying to purchase rechargeable batteries (Duracell 1.2V Rechargeable AAA Batteries 4 Pack) only to trip over claims of fake batteries in the reviews.

According to a report from CNBC earlier this year, some third-party merchants within Amazon’s Grocery & Gourmet category were cited as selling “expired” or “rancid” food products, leading to a deluge of complaints and backlash from hundreds of customers.

And that gets to the real problem: trust.

While Walmart, Target, and COSTCO are all responsible for their supply chain, Amazon isn’t. At least not to the same extent. Now Amazon will say its rankings of sellers and ability to return items is a self-correcting process. Bad sellers will get pushed out. It’s also taking steps to move to larger sellers, ostensibly with more to lose, while eliminating some of the smaller folks. All good, but spending 30 minutes today trying to purchase batteries isn’t fun, especially when the price is only a little more on the Walmart site, and that’s likely because those are real.

Before this gets too far out of hand, Amazon needs to rethink its seller vetting process. While I appreciate the speed offered by Prime, that’s useless if the products delivered to my desk are of dubious provenance.