Amazon is the World’s largest online marketplace when it comes to market capitalization and revenue, with over 350 billion US dollars in retail sales in 2020 alone. The sales are projected to exceed 500 billion US dollars in 2021, thanks to the pandemic which had shoppers flocking to the site due to the lockdown situation.
However, the actual magnitude of Amazon’s phenomenal success is somewhat obscured, due to the way Amazon reports its result, cleverly concealing its marketplace performance from its third-party sellers.
Third-party marketplace sellers now account for more than 60% of the Gross Merchandise Volume; as a result, Amazon has started investing more in the international market to further exploit this side of the business, recently adding Pakistan to its list of third-party sellers. Although, in order to fully benefit from Amazon’s esteemed economic platform, local sellers need to ensure top-notch service.
Chinese Sellers’ Mistakes on Amazon
Last year, China-based third-party sellers constituted more than half of the new merchants on Amazon, with a staggering share of 63 percent on Amazon’s US site alone. In short, selling on Amazon is huge in China! They have huge production centers pumping products cheaper than anywhere else, and there are few countries as comfortable with e-commerce as China.
However, among the sheer numbers of Chinese sellers operating on Amazon, there are some who use unethical means to get ahead and compete in the marketplace, including counterfeit products, fake reviews, variation abuse, and sabotaging competitors’ product listings.
In recent events, Amazon suspended over a dozen Chinese sellers for participating in fake review schemes. The list includes Mpow and Aukey, two of the biggest electronics Amazon-native brands out of China. The total sales by the suspended sellers eclipses $1 billion.
A Chinese seller’s review strategy can come in one of two varieties: compensating/reimbursing real customers for leaving a positive review, or the more extreme technique of making fake orders and leaving positive reviews through zombie Amazon accounts.
Another malicious tactic applied by Chinese sellers is by offering counterfeit products using listing hijacking. Since Amazon allows multiple sellers to sell the same product and the fact that they don’t actively audit every product that is sent to their warehouses, the authenticity of the product then solely rests on the particular UPC code. Malicious sellers simply print out a fake UPC barcode and put it up on their counterfeit products.
A product may have several variations on Amazon, and malicious sellers manipulate the community contribution model to add completely different products as variations to existing products, hoping to benefit from the existing reviews for that product.
Mostly, when a completely different product is added as a variation to a popular product, Amazon’s algorithm identifies that and removes that product or blocks the account altogether.
Until recently, international sellers, the majority of them being Chinese merchants, had been selling unsafe products, as most product categories have no safety requirements from Amazon. That changed when Amazon restricted certain categories, like the pesticide-related category, to American sellers in an attempt to make some headway when it comes to product liability.
Tips for Pakistani Sellers
While there are thousands of success stories of Amazon sellers, we should take heed from the Chinese sellers and not indulge in the unethical and malicious practices that are sooner or later going to be reprimanded. This should not discourage you from becoming an Amazon seller or creating a business though. If you are passionate and willing to put in the work and time required, you can be successful.
Some of the potential areas where sellers need to tread with caution are:
No Policy Violation
It is highly recommended to thoroughly go through Amazon’s Selling Policy and Code of Conduct, since Amazon expects you to adhere to them strictly. In case of any violation, Amazon reserves the right to deactivate your account.
Avoid Divulging in Unethical Tactics
Amazon has ways to detect and keep track of scams and other malicious activities on the marketplace. Their recent crackdown on fake user reviews should serve as an example to avoid any activity that is in disparity with Amazon’s SOPS and policies.
Packaging and Labelling requirements
Packaging your shipment correctly is crucial to making sure your inventory reaches Amazon’s warehouses safely and that it is optimized for entry into the fulfillment centers. Read through the Shipment Checklist to learn more.
Keep Inventory Replenished
If you are running low on your inventory, it can affect your standings on Amazon and can even lead to getting your account deactivated. Make sure to keep your products in stock and the inventory replenished to keep those ratings positive!
Sourcing the Right Product/Niche
Because of the immense competition, it has become difficult today to find an untapped niche. If you do find one, the competition may obliterate you, such that you have to move on to a new product.
Provide Product Listing Details
As a seller, this is the most important thing, as this would help customers gain trust and allow your product to stand out if it is something new. Details like SKUs, product identifiers, keywords, product descriptions are imperative for your product to succeed and sell.
Amazon coming to Pakistan has surely opened new doors for the Pakistani people and the economy as a whole, making it a great moment in history where every SME businessman in Pakistan has entered the global market with barriers further minimized. However, only by adopting the best practices and learning from mistakes can Pakistani sellers hope to compete in the marketplace.
About Author: Zeeshan Riaz is Chief Operating Officer at Urtasker.com which is a leading full-service Amazon marketing agency, assisting brands both on and off Amazon. With its headquarters in New York and operational offices in Pakistan, Urtasker is managing the top 50 brands on Amazon.