New Seller scam emerges on Amazon
A report in America has uncovered a new scam using the ‘#1 Best Seller’ badge.
The black hat tactic has been uncovered by Bloomberg, and sees Sellers putting popular items in slow-selling product categories to trick Amazon algorithms into thinking it is selling much better than it really is.
Bloomberg says that the scam focuses mainly on smartphone mounts for car dashboards, phone cases and USB drives, but that it could target other products.
The report states: “Affected merchants say they’re losing hundreds of thousands of dollars in some cases and that Amazon needs to crack down before the scheme becomes more widespread. With US shoppers expected to spend $120 billion online this holiday season, scammers have plenty of incentive to game the system.
“The product categories, created by Amazon but selected by merchants, appear right next to the best-seller badge. But people often don’t notice the trickery because they’re shopping quickly - an estimated 28% of Amazon purchases are completed within three minutes - and because most customers use mobile devices, where the fine print is easily overlooked.
“Bloomberg recently identified more than 25 examples of smartphone mounts, all sold by China-based merchants, with best-seller badges that had been slotted into incorrect categories.
“A magnetic mount sold by LISEN Direct in China was the best-seller in a category for replacement windshield wiper hoses. The perpetrators win by boosting their own sales, which can jump by as much as 50%.”
Thompson and Holt managing partner Craig Gedey expects Amazon to focus quickly on the approach given the publicity it has already received in America.
Gedey said: “As always with black hat tactics such as this, the biggest losers here are the Amazon Sellers that are abiding by the rules, because their products are being artificially push down in search results, making it less likely for customers to see them.
“Amazon has already said that it uses technology to identify products placed in incorrect categories, but it’s clear now that many are slipping through that net. Those that are identified can be warned and then suspended, but it’s clearly not putting off those merchants identified in Bloomberg’s report.
“Amazon maintains a stance that they want a trustworthy shopping experience that is customer focused and that there is no place for fraud. But their systems need updating and increasing to keep up with ever-evolving scams that exploit others.
“The report suggests that some Sellers that have been affected filed hundreds of complaints with Amazon with ‘mixed results’, and that absolutely needs to change. For many Sellers this will be a really important issue and it needs to be treated as such.
“Using technological automation keeps costs down for Amazon, but if is not doing the job that’s required then it needs supplementing with Amazon employees working directly on issues like this.
“This isn’t a completely new tactic - during the height of the global pandemic, some merchants put face masks in the book and video game categories to circumvent Amazon’s product-safety rules regarding coronavirus.
“But this has now moved into a new area, and the Sellers involved have avoided alarm systems because phone mounts are technically car products and as such can avoid detection at present.
“You’re supposed to earn the best-seller badge with an excellent product and strong customer reviews, which is why it is rated so highly on the site. These kind of practices completely undermine that and need to be stamped out.”
If you have found yourself suspended while selling on Amazon, contact Thompson and Holt for a free LiveChat to get your Seller business back online as quickly as possible.