Amazon - the online retail giant, has been successfully serving people globally for a long time now. They’re operating in more than 16 marketplaces worldwide along with 100+ million Amazon Prime users.
Undoubtedly Amazon is the most established shopping platform and everyone’s top pick for a reason. Getting such a big break requires breaking some eggs, and it’s the same for Amazon.
With the huge popularity supporting them, Amazon dominate the retail industry. This success is murdering small businesses.
Although Amazon has given these small businesses 'great exposure', a crowded platform, and a huge opportunity to do business, that was a beneficial move for Amazon more than the small businesses they bully.
These small businesses are why Amazon is making profit, and without them, the platform wouldn’t be flourishing in the first place. Indeed, small business is Amazon's life blood. But Amazon couldn't really care less for small businesses the same way that small businesses have catapulted them to success.
While Amazon doesn’t care and actively covers up and trivialises these complaints, the small business owners share their horrible stories. Not only is the small business owner the victim, but there are also small book publishers, product manufacturers, and other creators that have tasted the bitterness as Amazon reduces their chances of survival to the barest minimum whilst stepping on them and cleaning up of billions of profits every year.
Amazon has been bad for these small businesses in many ways. From exploiting, copying, to undermining them, Amazon has cornered them in the gambit. Get ready to learn some gruesome details about Amazon.
Competing Against Other Sellers And Mostly Amazon Itself
As mentioned above, small business owners are experiencing the terrible side effects of selling on Amazon, and product competition is one of the most common.
If you have a product that’s selling well on the platform, it’s only a matter of time before you’ll see knock-off versions from other US sellers or Chinese sellers. They’ll offer those products at such a rate that can’t be matched killing your ROAS and ranking.
To make things worse, if Amazon notices your well-doing product, you’ll get yourself a solid competitor. Once Amazon launches its version of your product, you’re much more likely to lose the competition. Amazon, the greatest thief of IP in world history.
Amazon Leveraging Their Resources
Since Amazon owns the platform, they’ve full access and liberty to decide what happens to the sellers, and the scary part is, you can’t do anything but accept the decision they make.
Sellers have shared that they often felt pressured to pay for ads and the FBA. Moreover, they said that they’d been punished for selling their items at a lower price in different rival sites like Walmart.
Luxury companies like Tumi and PopSockets have also said something similar. They mentioned that Amazon is very controlling about the seller’s choices, and that doesn’t leave any room to say what’s happening with the small businesses.
The small business owners feel extorted and yet accept Amazon’s unfair demands because well, what else can they do?
Evil Tactics Used Against Small Businesses
As Amazon constantly uses various tactics to dominate the retail industry, here is the nightmare you can face while selling on Amazon.
To make the small business owners’ work more challenging, Amazon opts for some terrible strategies. Here we’ve brought together some of them to give you an idea.
Tactic 1: Changing The Pictures Of Your Products
If you haven’t registered your brand on Amazon, you’re at the risk of getting your listing photo changed or even being delisted altogether.
Yes! This happens to other sellers and can happen to you too.
But you don’t get any notification of such changes. So, there’s no way to get an instant update unless you keep a regular watch on your listing. They just do it and then make you jump through thousands of hoops at the expense of your time to, well, maybe even never get a solution.
This can result in unexpected incidents like people will be deceived and believing that you’re not providing promised products. The worst scenario is your account will go down or get a horrible review (which Amazon allows while deleting good reviews on a whim and claiming you are soliciting them illegally, without providing any evidence).
Tactic 2: Amazon Sellers Returning Several Products And Dropping Negating Reviews At Once
To actively keep selling on Amazon, you must maintain a standard performance to be on the good side of Amazon. Hence, constant negative reviews or too many product returns can hamper that image and get your account / product shut down.
So, while you might be happy that all your product was sold and stocked out, you might be shocked when you get returns in bulk accompanied by negative reviews.
This can even lead to shutting the business down for a small business. But Amazon doesn’t seem to respond properly to small businesses cases either. You’re just left there with all your returned products, loads of negative reviews, and business down the drain.
Tactic 3: Accusing You Of Selling Fake Products
Amazon is overflowing with corrupted sellers. These dishonest sellers know that Amazon bans any counterfeit accusation without inquiring much. They’re taking advantage of this opportunity to take down a product, even private-labeled products.
You might get your products back or have them suspended for weeks or so, but the appeal process is exhausting and time-consuming. And the frustration of the sellers begins when they don’t get enough assistance / response from Amazon’s end.
Amazon once took down one of our products for a copyright infringemet violation while, wait for it, they were violating that exact infringement themselves. Inner Sloth, you know, the among us guys? They issued a copyright infringement and all the while let Amazon and THOUSANDS of Chinese sellers remain. Stay tuned for that story in more detail!
The problems that sellers are facing are not Amazon’s headaches. Amazon’s carelessness is a given as they only care about how they can squeeze the most profit out of a seller. While your business means a lot to you, you’re always replaceable to Amazon.
Amazon’s Evolving Algorithm
Another culprit that causes massive damage to small businesses is the A9 algorithm of Amazon’s search engine. This algorithm is constantly changing and upgrading, affecting sales in seconds.
For example, the SEO that’s helping you stay at the top of the Amazon results, ranking your products to be number one, might change anytime. When a change - according to Amazon’s preference - in the algorithm isn’t giving you the same privilege, there’s nothing you can do but accept it.
Amazon Seller Horror Stories
If you think selling on amazon is a piece of cake, let me give you a “good” spoiler - it isn’t fun, and it isn’t easy.
While it might seem feasible initially, as you get deeper into the details and spend a little time with Amazon, you’ll know surviving on a platform like Amazon is a tough game. You always need to take cautious steps and keep in mind that Amazon is not a friend.
Here’s a real-life experience from a small business owner whose story will tell you why exactly you need to be aware of Amazon.
This is about a dropshipping merchant starting a business on Amazon. Within a few hours, the merchant made about $600 and was very excited about the sale.
And then the drama started. The merchant afterward received an email where Amazon said that their account contained a link to a previously blocked account, and so their account was getting suspension.
As a new small business owner, the merchant’s frustration and tension became visible. The merchant tried to get in touch with Amazon’s customer care service to get some assistance, but as usual, Amazon didn’t care enough to respond.
After several failed attempts, the seller tried emailing them at seller-performance@amazon.com. However, Amazon declined to provide any valid information regarding the previous account told the merchant that the suspension was their final decision, and the seller wouldn’t get any more replies on that matter.
Stressful, no?
So, the disheartened merchant decided not to proceed with the orders and emailed all the clients personally to cancel the order and inform them of the situation.
If you think this is the worst thing that can happen, Amazon did way worse than this traumatic incident and still has reinstated the seller. How do I know. Well, IT WAS ME.
Conclusion
While Amazon might seem like a lifetime opportunity, there’s a price to pay with every good thing. You don’t want to face any major consequences / loss without any reason.
Don't pour all your investment into the platform if you don’t want to be the victim of Amazon’s selfish and evil schemes. Always be calculative and ensure that you’re getting the right profit.
There’s no need to abandon Amazon as it can help you grow and get a bigger audience. Since the turf isn’t yours, just be cautious with your products and try not to violate any rules.
We are here to help. If you are a struggling Amazon Western Small business. List here for free, fullfill through Amazon anyway, sans the competition of Chinese multinationals or Amazon themselves, and give the little guys the power back!