Over the last 20 years, Amazon has undoubtedly evolved from a highly-efficient and relatively cheap online seller of books to the biggest name in global commerce. It has done this by actually rapidly expanding itself into new areas.
Bluntly, the company has accomplished this by cutting corners and relying on third parties to source a lot of its products and do much of the selling for them. This has led to significant problems regarding quality control and even the most basic standards of product safety. Amazon simply does not have the means or the infrastructure that would be required to check that every product they sell meets the safety standards of every market that they operate in. Instead, they have passed this responsibility on to the third-party sellers that provide them with most of the products they offer. As the vast majority of sellers simply have to tick a box to certify that they comply with the necessary standards, there is no way of being sure that this is actually the case.
The Risk of Low-Quality Products
Since Amazon does barely any work to check the products it is helping to send into the market, sellers are almost incentivized to cut corners. This is because Amazon’s algorithms always send the cheapest version of a product towards the top of a search results page. Complying with safety standards and other applicable laws is expensive, and the temptation to ignore these in order to improve margins and sell products at lower prices can be tough to resist.
While Amazon naturally does not directly encourage its sellers to bend rules, the system that it has set up can lead to this happening anyway. The need to always be the cheapest seller of a product above almost anything else and the lack of ability to build relationships with customers forces sellers to do everything that they can to keep prices low. The result of this is that even retailers that never had any intention of ignoring regulations or misleading their customers feel that they have no choice but to do so if they are to keep making the money that they need to survive. This is bad for customers and legitimate businesses but does no damage to Amazon’s bottom line. They are able to keep providing customers with products at prices that none of their major competitors are able to match.
The State of Selling Today
Unfortunately, Amazon is now such a significant part of the world’s selling infrastructure that it is far more challenging to do anything about this problem than it would have been ten or even five years ago. People have become used to finding almost any cheap product on Amazon and having it arrive at their door a day or two after they purchased it via Amazon Prime. Amazon now owns virtually every part of the process, from the website the order is made on to the delivery service that gets it to the consumer and any customer service follow-up that is required. There is hardly any chance for the seller to be involved and add value to the customer’s experience. By preventing this from happening, Amazon makes it impossible for businesses to add value to a buyer’s experience through improved customer service. This means that price is the only way that sellers can compete with one another on the Amazon platforms and leads to the type of corner-cutting discussed in this article.
Amazon has so normalized these types of breaches and problems that they are not picked up on in the way that they would be in almost any other situation. If a cheap contractor built a road without reference to government safety standards in order to keep the price as low as possible, there would be an outcry. Amazon is now such a large business with such enormous lobbying spend in Washington and state capitals that these issues rarely bubble to the surface. When they do, Amazon, like Uber and Lyft before it, will have the possibility of mobilizing its enormous customer base using the email addresses and other contact methods that it has spent years collecting at the expense of the companies that use its platform. These could then be used to change laws or alter other things that do not suit the business model that Amazon has pivoted to.
How to Resolve This Problem
As difficult as it may be for many businesses that have grown to rely on Amazon and its customer base, the best way to resolve this problem is to pivot away from Amazon and sell directly to consumers. This may require companies to take a hit in the short term, but it will be far better for their business in the long run as they will truly own the relationship that they have with their consumers.
Websites such as this one provide a catalog of non-Amazon sellers of popular products that make it easy for consumers to find ways of shopping online without having to go through Amazon. There is no charge for making a listing here, so there is no reason not to try, even if you run your own online retail operation in parallel with your Amazon selling at the beginning.
Once the first order has been placed on your owned and operated e-commerce site, you will then hold the relationship with that customer. This means that you can directly manage any customer service issues that crop up after the order has been made. More importantly, it signifies that you have the right to directly contact that customer with information about their order and, so long as they have given you permission, any future products and services that you may choose to launch.
Most importantly, it means that you can get on with running your business without the constant fear that Amazon is about to make a change to its terms and conditions that will kill your operations, a truly priceless asset.