Amazon has recently made 3 changes impacting sellers:
1. Refusing to Pay Lost Profits for Damaged / Lost Items
Every year Amazon pays out tens of millions of dollars to sellers for their lost profits due to lost or damaged products
Instead of being a better company Amazon has tried to enforce a new rule saying Amazon will only reimburse – some – of the costs in making the product, and not the lost profit.
The law of all 50 states be damned that the measure of damages is lost profits … this is what Amazon is doing and daring sellers to sue err arbitrate.
But the real kicker is determining costs – and either accepting a lowball offer from Amazon of having to disclose your costs, materials, suppliers, processes, etc. Basically, trade secret information critical to many businesses.
2. Requesting Cost Data to Analyze Product Profitability
Amazon has been rolling out new tools for sellers to give Amazon their cost data for products so Amazon can conveniently calculate for them their profit margins on sales.
3. Demanding Cost Data for “Stolen Goods” Audits
Amazon now says to fight “stolen goods” it needs to demand from sellers:
“Copies of invoices, receipts or other similar documents that demonstrate where your products are produced or manufactured
These documents:Should reflect the sales volume of your product across all Amazon marketplaces in the last 365 days
Should demonstrate your product’s full supply chain
Should include contact information for the supplier(s) and the original manufacturer. We may contact suppliers or manufacturers to verify the documents
Your documents should be able to trace your products to the original manufacturer even if you did not purchase them directly from the xoriginal manufacturer. This may require requesting additional invoices or supply chain documentation from your supplier if you are not sourcing directly from the manufacturer.
You may remove pricing information, but the rest of the document must be visible to enable adequate review of the documents you provide. For ease of our review, you may highlight or circle the ASIN(s) under review.”
By themselves for each there is a plausible reason. But it’s sort of like the government trotting out “terrorism” or “child trafficking” every time it creates a new anti privacy law that takes more of your information and reduces your privacy.
Fact is, such laws are not used to fight “terrorism” and studies have shown zero terrorists being caught. Rather, the laws are used for the real, underlying purpose of collecting information to use against people to keep track of them, for tax collection, etc.
Only a naive fool would fail to believe that is what Amazon is doing, a company which already has thousands, maybe tens of thousands of products competing with sellers who pay to be on the Amazon marketplace, and a company that has previously been caught using seller’s private data to create its own competing products.
Amazon is collecting data it can used to decide which products are sufficiently profitable for it to come in and have their own competing products.
Allow the data on the input end to be fed into the black hole of AI that no one pretends to know how it works, and have plausible deniability on the other output end when asking AI to provide new product recommendations, costs and expected profitability.
It’s a huge data grab so that Amazon can continue to eliminate sellers and offer the products instead – reaping the profits that used to go to sellers to feed their families.
On top of that, Amazon prevents sellers from suing and its arbitration terms require individual resolution in Washington, a state not allowing punitive damages awards. It’s a legal get of paying card that means Amazon can be as abusive, fraudulent and malicious as it wants towards sellers and it faces no real repercussions.
The remedy is for the government can pry apart a business which has massive conflicts of interest and huge incentives to abuse sellers.
IMHO it’s doubtful that will occur, at least for many years given the millions Amazon / billionaire owners are paying to Trump, his businesses and related persons / interests, and then the glacial speed it would take legal proceedings to go through appeals and conclude.
This isn’t a pleasant post or prediction, but over the next few years I’m expecting to see an acceleration of Amazon products into people’s lives, including products others used to sell.
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