Amazon’s Achilles Heel: A Marketplace Filled with Scammers
Having just finished a conversation about smart doorbells and their inherent awesomeness in the smart home market, the Dealerscope editors turned our attention to Amazon for a quick minute for two reasons. 1) We wanted to see a quick comparison of MSRPs on smart doorbells for “research purposes,” and 2) we basically talked ourselves into buying them for our own use.
So, you could only imagine our excitement when we came across one particularly well-known brand’s smart doorbell available for a penny. That’s right, $0.01. A copper Lincoln. (Spoiler alert: We knew it was too good to be true.) There was no way we could pass up a deal like that, right? And why would Amazon, a company millions of consumers place blind faith in, lead us astray?
The team of us went ahead and placed our order through Amazon Marketplace third-party seller Cristobal Gonzalez. We gave him our penny, and almost immediately received confirmation that our order had shipped—it had an estimated shipping date about two-and-a-half weeks out.
We didn’t have to wait the two-and-a-half weeks, though, to know that we just wasted our pennies and would never see those doorbells show up on our doorsteps. Turns out, the tracking number we received was fake. Nothing but a random assortment of numbers and letters made out to look like a tracking number, but it didn’t work on USPS (which is the service Mr. Gonzalez allegedly used), FedEx, UPS, or any other shipping service.
We got scammed.
Of course, Amazon we could go through the grueling motions with Amazon’s A-to-Z Guarantee to get our money back—not worth it for a penny—and we knew our payment information wasn’t compromised because of how the ecommerce giant operates its Marketplace. But that didn’t change the fact that we were (knowingly) scammed and that Cristobal Gonzalez—if that’s even his name…—was somewhere bathing in pennies.
And to be clear, we are far from the only people to have been shorted a penny by this bogus marketplace seller. Far from it. More than 100 other poor souls like us had left reviews on his Marketplace page, 91 percent of which were negative reviews—we assume the other 9 percent were left by the scam artist himself or his other cronies—and comments that sung an all-too-familiar tune.
What’s unbelievable about this scam sham, though, is that Amazon knows it’s an issue, that it has been for years now, and they seemingly refuse to take preemptive action to stop it from happening. And according to a number of different and more recent reports, this is an issue that is only going to get worse.
How the Scam Works
One of the biggest benefits of Amazon, both as a seller and a buyer, is the simplicity of the platform. It’s easy to find what you’re looking for. It’s easy to place orders. And it’s incredibly easy to get set up as a third-party seller in the Amazon Marketplace. It’s that same ease of process that turns out to be Amazon’s downfall in the scamming business.
These guys only have to be on the Amazon Marketplace for a few hours to rake in possibly thousands of dollars. All they have to do is get registered, open up their shop on the Marketplace, post a ton of product for super cheap prices, and start selling. And, of course, the product they’re posting doesn’t actually exist; they don’t have any inventory. So, it doesn’t matter what they post, because they’re never going to fulfill those orders anyway.
Our dear friend Cristobel, for example, had enough product to fill probably 20 whole warehouses—over 190 pages of product with each item listed for a penny.
From there, all they have to do is wait around for the sales to start rolling in.
With the shipping dates more than two weeks away, scammers buy themselves some time to keep unsuspecting customers at bay and to receive their bi-weekly payment from Amazon. And, honestly, some customers might altogether forget about the fact they placed the order in the first place. More customers, though, will either question where their package is or why the tracking number they received was phony, and that’s when the negative reviews start rolling in. At a certain point, Amazon will get pinged about all of the negative reviews a particular seller receives and suspend that account.
At that point, though, the seller already has their “earnings.” It’s not like Amazon can order them to return the money to the scammed customers. The email and contact info provided by the scammer probably isn’t real anyway, so getting in touch with the person—by Amazon or a curious customer—is impossible.
So the seller moves on, probably opening another fake account under a different pseudonym and repeating the entire process over again.
The issue of scammers opening up shops has gotten so bad that Marketplace Pulse, a business intelligence firm that focuses on ecommerce, launched a website—www.scamsellers.com—dedicated to helping consumers safely navigate the platform. The site also provides step-by-step instructions for how to respond to an scamming incident or report fraudulent sellers to Amazon.
According to the site, an average of 50-100 fraudulent sellers join the Marketplace each day. And during research they conducted in last summer into fraudulent sellers on the platform, they found sellers with thousands of negative reviews from customers who never received their orders.
Cleary this isn’t some isolated incident.
However, Amazon’s response to the matter when questioned recently by Forbes was rather nonchalant: “We take swift action if we detect such actions from any source,” a note from the media relations department read. “We encourage any customer not fully satisfied with their order to file an A-to-Z claim or contact customer service.”
Amazon did not respond to a request for comment for this article.
Getting your money back isn’t the issue. The customer, as Amazon suggests, can go through the proper channels, file a claim, and get reimbursed. What they can’t get back, though, is the lost trust in the Marketplace.
Conversely, this creates a tough environment for new, legitimate sellers who jump onto Amazon’s third-party platform. As customers get scammed out of more money, they’re less likely to trust shops that haven’t been on the Marketplace for very long. If the negative experience doesn’t force the customer off of the platform altogether, the customer will, at the very least, start paying closer attention to how the order is fulfilled. A majority of customers already only purchase products with the Prime option available, meaning those sellers use Fulfillment by Amazon (FBA). With scam sellers on the rise, this only hurts businesses that do their own fulfillment.
All of these Marketplace troubles present a tremendous opportunity for the traditional retailer to prove their worth to consumers.
Let’s face it; you’re never going to beat Amazon. The only way that you come out on top in that fight is if Amazon somehow crashes as a business while the rest of us are standing on the sidelines watching them unravel.
Rather than beat them, retailers ought to look for ways to differentiate themselves. And what better way to do that than by telling (and showing) consumers what a legitimate shopping experience looks like—one where they don’t have to worry about who they’re handing their money over to and whether or not the product they purchased will ever end up in their hands.