What Sellers Can Learn from the Amazon Fraud Case: Part 4

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This final installment of my series on what Amazon sellers can learn from the recent indictment of co-conspirators in our industry discusses proactive steps for Amazon to take to reduce bad actors on the platform. I believe that Amazon is facing an existential threat from bad actors that will ultimately cause its collapse if not swiftly addressed.

About 10 years ago when I was still actively selling on Amazon, I experienced my first bad actors. This was a group of sellers who hated me because I was a “guru” (they called me that like it was a curse), had written a book about selling on Amazon and dared to charge for my services. They conspired to get me in trouble with Amazon. They changed images on some of my listings so that buyers were unhappy when they didn’t get what they thought they were buying.

They also did some other harassing tactics to sabotage my listings. I knew who they were, and I turned them in to Amazon. They were dumb enough to write all about the plot in a private FB group. I also showed other data and evidence to Amazon to prove I had bad actors on my tail. I suspect Amazon warned them because they stopped immediately. Oh, those innocent early days!

That’s what started my interest in Dirty Seller Tricks©. It was rare back then, but so commonplace now –and darker and more vicious now. I was irritated with my bad actors, but my clients are sometimes destroyed by theirs. These are not normal competitive forces and petty swipes – these are criminals running amok.

Amazon is making some progress, but they are not doing enough. They are a reactionary organization that responds to governmental action and media pressure. They must be a proactive part of the solution, however, because their punitive policies, lax security and indifferent treatment of sellers are part of the problem. This indictment divided the seller community because it wasn’t black and white.

Many sellers feel that they must exploit the system to survive. This is not hyperbole. Their entire lives are invested in selling on Amazon, and it can be snatched away from them capriciously. Unlike other businesses, there is no insurance that can help them recover and when Amazon takes it away, they often take it ALL away. Amazon isn’t just a sales channel; it is often a seller’s only channel for selling.

Some sellers saw the co-conspirators as heroes to the community – fighting for the little guys. Others saw them as criminals who enabled bad behavior and bad products on the platform, profiting from their criminal acts.

Now that the case is nearly over (two more sentencings to go), it is time to take the lessons and move forward as a community. Most sellers agree that the criminals and counterfeiters need to go. Nearly every successful seller I know has experienced bad actors to one degree or another. Amazon also wants to get rid of bad actors. So how do we move forward together?

Amazon Sellers Know Who the Bad Actors Are

One significant action Amazon can take is to listen to its sellers.

While I understand that it is difficult to separate a sincere violation reporting from a competitor causing mischief, Amazon could find a way if it wanted to. Honest sellers are rightly frustrated that Amazon doesn’t act against bad actors when they are reported. Sellers feel abandoned. I’ve known clients who literally had three-ring binders (with tabs) of compelling evidence proving that another seller was violating the law and Amazon’s policy but still Amazon did not act. My clients ended up going to law enforcement for justice.

Sellers are sometimes forced to sue other sellers because their complaints to Amazon are ignored, or the bad actors quickly get reinstated and continue their bad behavior (maybe they bribed someone?). Once they win the lawsuit, Amazon will act. Not every seller can afford to sue or wait months to years for a lawsuit to get resolved.

One of the problems here is that honest actors tell the truth and bad actors lie. (Duh, Cynthia!) What I mean by that is honest actors will build a case and say, “this and this happened,” “We observed this” or whatever. Bad actors will lie and use language that they know will trigger Amazon to an immediate suspension like a bogus IP complaint. They sometimes use inflammatory language in a negative product review rather than using the Amazon “Report a Violation” tool. Honest sellers are often trying to get Amazon to act on policies that are seemingly not hot triggers like a seller code of conduct violation or lying in a listing, or review manipulation. It’s a system that is rigged in favor of the bad actors.

There was no way for sellers and others in the community to report these co-conspirators to Amazon, either. What they were doing wasn’t a secret. They advertised, they hosted webinars, they sent out email blasts and they used social media to gain clients. The media was watching and hanging out in seller groups. They wrote stories for years about black hat tactics before the indictment.

There must be a better way for sellers to report, and they have to know that Amazon will actually listen and take action.

Amazon Account Annotations are Helpful

Amazon must communicate better with sellers.

That annotations are helpful is not the message Amazon wanted to send out with this indictment, but it is true, nonetheless. Account annotations are hard to interpret because Amazon uses its own language and acronyms, but the bottom line is sometimes sellers don’t understand what Amazon wants. This problem is exacerbated by the fact that sometimes Amazon makes mistakes and sends out one template for the suspension, but the problem is something else.

An account annotation is clear (once you translate the acronyms/codes). While I understand why Amazon doesn’t want sellers to see everything that is on their annotations, I don’t understand why they can’t be clear about the suspension reason. Why make sellers guess? I liken Amazon performance notifications to interpretive dance:

Amazon opens its fan, a butterfly explodes, your account is suspended.

Our job at eGrowth Partners is to help sellers understand and respond to these suspensions with a plan of action. A more transparent Amazon could put me out of business. Bring it on, Amazon!

Over the years they have made changes to the seller dashboard and added an account health team which has helped some, but it seems an expensive solution to a simple problem. Why not just tell sellers why they are really suspended?

It would also take away one of the drivers of bad behavior on the platform – seller desperation and misunderstanding. I’m not advocating that Amazon tell us its trade secrets. I’m advocating clarity in communications with its sellers. Here’s one example of what I mean:

Several years ago, a seller was suspended for review manipulation. He was stumped. He didn’t solicit reviews or try to manipulate reviews in any way – honest mistake or otherwise. I verified this myself. The reviews were clean. They had a paid strategic account manager at Amazon, and we put a lot of pressure on that person to give us a clue. Finally, the person came back with two words: “twister abuse.” Suddenly everything was clear (to me at least. My client was “what???”). This wasn’t review manipulation per se, it was improper variations – a listing violation that can appear to be review manipulation. VERY different. Now we knew what we were looking for and could help the client fix his variations and write an effective appeal. Ever since then, we look at our clients’ variations when they are suspended for review manipulation.

Sellers are desperate to give Amazon what they want. They want to comply. Amazon makes it unnecessarily difficult, and it could fix that.

Everyone Else is Doing It…Not

Amazon needs to recognize that not all sellers are bad actors.

The “Everyone is doing it” mentality is one important reason why Amazon and the prosecution went after the co-conspirators. They are well-known figures in our community, and the fact that they were breaking the rules made it seem acceptable to others. This concern is real. I cannot tell you how many sellers argued with me over the years about black hat tactics, that I was exaggerating, that I was overreacting, Amazon didn’t really care that much…etc. I was a real buzzkill on the speaker circuit.

I experienced the disappointment of having long-time clients leave us and go to a black hat provider to press “the easy button” and get guaranteed results. These clients were often reinstated within hours after we had been trying for days or weeks. Bribery by the co-conspirators and others in our industry had a huge negative impact on our business and others that follow the law.

While we could not compete against the easy button, we found that there were many sellers who didn’t want to break the law and who were uneasy by what they were seeing. We had easy button clients come back to us. We focused on our other services to help sellers and built on our strength of compliance knowledge. And it wasn’t just us. Many competitors of ours made the same decision. It wasn’t “everyone else” that was doing it, but they were making the most noise, for sure.

Amazon has created this negative dynamic with its sellers and needs to fix it. We are not the enemy, just as Amazon is not the enemy. Most of us want to be partners. Most of us are honest. Most of us love Amazon and are among the biggest buyers on the platform, as well as sellers.

Amazon needs to focus its attention on the bad actors and stop punishing honest sellers. We all understand that this is difficult with millions of sellers on the platform, but if any company can figure out a way, Amazon can.

Amazon Must Protect Seller Data

Amazon must take strong steps to protect our data. If they do not, they are complicit in the crimes committed by bad actors inside and outside of the organization.

When I first read the indictment, I devoured the salacious details – suitcases of cash delivered by Uber! $100,000 stashed in a stuffed Llama! – but I was shocked by Amazon’s admissions about how they didn’t have a way of knowing who was accessing its internal wikis and stealing gigabytes of data from the company. When an unsecured hard drive full of data about Amazon sellers and buyers was found on the internet a year or so later, I was really concerned. Amazon’s seller and buyer data is far, far worse than having your credit card number stolen in a hacker breach. And this wasn’t a hacker breach. They bought it! We as sellers can’t sue Amazon for its carelessness with our data, but we can apply pressure to keep Amazon focused on the issue.

Courageous sellers helped Congress during their monopoly investigation and have talked to the FTC as well. It is slow, tedious work watching government grind forward, but ultimately some good may come of it for us. Other sellers have talked to the media off-the-record to verify what is happening to sellers and to make issues known to the broader world. This has helped a lot. Media is faster than government.

It took Amazon three years to investigate and act against the co-conspirators, but they did act and deserve full props for that. However, they can’t take three years to protect our data. It would be criminally negligent.

Amazon Needs to Root Out Internal Corruption

Amazon must clean house publicly and vigorously.

Amazon has conducted crack downs on lowly actors in India, China, and other countries – mainly Seller Performance employees – but seemingly not higher placed employees in Seattle and other hubs. If they truly want to scare internal bad actors, they need to be public about it.

It is mind-boggling that some of the lowest paid, poorest trained employees oversee Seller Performance and that no one predicted the vulnerability there. However, now that they know, they need to do something to make it harder to steal our data from the company and to “flip the switch” on reinstatements for money.

And it’s not just the guys in India. In the indictment and subsequent filings, the government showed that the co-conspirators were calling on many Amazon insiders in Seattle. They had their phone numbers and emails. They talked to them to get things done for their clients (even if money was not involved, this is still a violation of Amazon’s internal policies for its employees). This is part of why the community sees them as heroes.

Beyond this bribery case, I’ve seen evidence of other internal bad actors. As far as I know, no Amazonians were fired for these illegal acts:

A desperate seller made persistent calls to people inside Amazon. The seller ended up getting a cease-and-desist letter from Amazon’s lawyers. The seller believed that an Amazonian who was also a seller had stolen their brand registry and was selling their brand on Amazon (but with new products). I believed it, too. We had evidence of VAT payments in the UK by someone other than my client (who didn’t have a VAT number and didn’t sell in the UK/EU) and the person who we believed had stolen the brand instigated the cease-and-desist letter.

Another theft case that affected a lot of sellers:

A few years ago, bad actors were stealing sellers’ payment distributions by redirecting/changing their bank accounts inside their Seller Central accounts. When this happens, Amazon’s policy is to freeze the account. I assume they are also supposed to report it to law enforcement.

The seller takes steps to make sure their system is clean from keystroke capture malware, changes their password, enables 2-step verification on all their systems, etc. The seller changes the bank account back and that’s usually the end of it. The seller account is modified so that no further changes to the bank account can be made without additional proof that it is the seller making the change.

This time, however, was different. Anxious sellers would closely monitor the next distribution to make sure it worked and somehow – a few seconds before the distribution — the bank account was changed again. I had clients that lost multiple distributions this way. This went on for months and affected a lot of sellers in the US and UK. Amazon eventually made a very small public statement in the UK claiming a hack from outside bad actors.

I believe it was insiders. How would an outside hacker group know exactly when distributions were being made? How would they know to remove the protective modification on the account without inside help? I assume that Amazon had some heavy-duty protection on its financial systems including alarms if there was a breach. It isn’t credible that these grand scale thefts could go on undetected without insider involvement. The thefts eventually stopped, but Amazon never told any of the victims the resolution. My clients never got their money back.

Sellers who tell Amazon about internal bad actors aren’t believed, which is particularly galling. My clients who had money stolen from them were told things like: “our system shows you made the change. It is coming from your IP address.” The seller said, “I’m in my account right now. I did not make the change, but I saw it happen. Someone else made this change.” It made no difference. Not until a lot of sellers reported the same issue did they consider something was truly wrong.

They chastised my clients for poor security measures when it turned out it was Amazon that had poor security measures. I’m still mad about it.

Amazon Must Be Proactive

Amazon will continue to lose to bad actors unless it takes proactive measures.

Amazon is always telling its sellers to be proactive to create excellent buyer experiences and to fix problems. Ironically, they do not see sellers as important as buyers and don’t take their own advice. Reacting to the media or Congress or moves by others means Amazon will always be behind in the battle against bad actors. I don’t mean some new algorithm here. I mean Amazon needs to make peace with their sellers, rebuild trust and engage with us as partners in the fight.

Amazon sellers are a key ally in this battle, and we could make a difference if we weren’t afraid of retaliation or apathy from Amazon.

Some of the worst actors are Chinese sellers. That’s a known fact but Amazon treats the Chinese sellers with kid gloves. There are few consequences for their bad behavior. They have so thoroughly absorbed Amazon’s processes and algorithms that it is child’s play for them to set up multiple fake accounts, to steal rank and reviews from other sellers and to destroy other sellers. They see black hat tactics as normal business and they are causing an inordinate amount of damage to other sellers and to buyers. The glut of poor quality, unsafe, counterfeit, and stolen goods on the platform comes largely from China. This is bad for sellers and consumers alike.

Other hot spots of bad behavior come from India, Pakistan, and Ukraine. It is too late to debate if these countries should have been added to the platform, but it is not too late to shut down their bad behavior. Amazon is not helpless in this fight, but they need the will to fight it.

We ALL care about buyer trust and that is also eroding as buyers have more and more bad experiences on Amazon. When buyers leave, we all will leave, and Amazon’s platforms will collapse. Bad actors are an existential threat to Amazon. It is not too big to fail.

I hope it is too smart to fail. his indictment has shown sellers and the rest of the watching world that there are big problems to resolve. Amazon was a victim but had a role to play in its victimization. Its own policies and lax security measures made it vulnerable to the co-conspirators and other bad actors yet uncaught. The company needs to take steps now or this will keep happening.

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