Practical Ecommerce

For marketplace selling, know written and unwritten rules

If you are selling on a third-party site like Amazon or Ebay, it is important to understand the rules — the written rules and the unwritten ones. The unwritten rules are harder to ascertain, but they relate to how the third-party customer service personnel will act in certain situations, regardless of what the actual rules say.

Judging from the number of ecommerce merchants complaining about it, PayPal has the worst reputation, closely followed by Ebay, with Amazon trailing far behind. The common thread in all the complaints is how PayPal, Ebay, or Amazon has unjustly destroyed the merchant’s business, and how unfair he has been treated. Further investigation, however, can often lead to the conclusion that many of the complaints were self-inflicted.

Reliance on third-party marketplaces

No ecommerce business should rely on a third-party platform for all its income. Leaving all your revenue under the control of a third party can result in obliteration if the site suspends you.

However, not relying on third-party sites is easy to say, but it’s far harder to achieve in practice. In the real world, with third-party marketplaces growing and, indeed, with Amazon becoming the go-to site for many consumers, even ahead of Google for product searches, it is likely that many retailers have no choice.

Therefore it is essential to understand the rules and working practices of the marketplaces on which you sell, to reduce the chance of falling afoul of them.

Amazon is a tightly managed marketplace. As such, I like selling on it. Amazon has very little customer fraud, an almost nonexistent level of credit card chargebacks, and has even been known to rule on the side of the retailer in disputes.

But Amazon is not perfect. It puts much emphasis on its catalogue. Amazon wants a single listing for a product and all retailers that sell that product must include their offer within this single listing. However, Amazon’s control over its catalogue is weak, as it relies on the retailers to populate the catalogue.

A retailer wants to be the only choice for a listing and it wants this listing to appear on top of search results, so that all Amazon customers buy that retailer’s product. Thus, the inevitable occurs. Retailers try to either find an excuse or way to create a duplicate listing that is somehow unique to them, or they find ways to exclude other retailers from the listing.

Bullying on Amazon

This is where bullying starts. I have addressed the situation where a distributor or manufacturer tries to enforce territorial boundaries and impose shipping restrictions online. Suppliers have raised these intimidations against me and have seen them off. Recently, however, I have had other retailers try to bully me on Amazon.

For example, one retailer said I had to remove my offering on one listing within 24 hours or it would tell Amazon and, also, get the distributor and the licensee to sue me.

I take all such threats seriously. The very first thing I did was to confirm I had not broken any rules. I had not. The item’s pictures on Amazon matched my item. My description matched the manufacturer’s description. The item I had was delivered to me direct from the manufacturer and was invoiced by the manufacturer and was in the manufacturer’s boxes. I took pictures to prove all this.

The initial reply from the other retailer was a polite “you are wrong” and included pictures of my stock, delivery notes, and also a comment that the licensee would not be happy about its name being used in this context. The retailer sent this reply via Amazon’s mail system so that Amazon personnel could see it, if the dispute escalated.

But my photos and explanation shut the competitor up for a day. The competitor’s eventual response was that the product I stocked had a different bar code to the one on the listing. It seems that the competitor, or the distributor, printed its own bar code and stuck the bar code label on top. This, it said, meant I was breaking Amazon’s rules regarding listing using the wrong bar code. They suggested that I listed my offer on a different catalogue entry, which was supposedly using my bar code. Naturally this duplicate listing was much lower in the sales ranking.

Certainly duplicates exist on Amazon. In this case, the competitor was trying to chase off all other (lower priced) retailers so that it could have the higher price.

So to avoid the competitor reporting me to Amazon and accusing me of breaking the rules, I reported both listings to Amazon and suggested that they were duplicates and should be merged. The reason behind this was that, although the competitor was technically wrong to create a new bar code and thus create a unique listing, the Amazon customer service personnel could have taken the easy way out and suspended my listing as a policy violation. Amazon personnel, conceivably, would not have taken the time or trouble to validate the bar codes.

Further, if you do get a inventory item suspended on Amazon as a policy violation, the only way to get it re-listed is with the agreement of the organization that raised the complaint originally. This would likely never happen in this case. It is a bizarre procedure, anyway.

I received a response from Amazon agreeing that they were duplicates and would be merged. Now, a week latter, Amazon still has not merged them. But I don’t mind. I have effectively obtained permission to list on both listings as Amazon has said they are the same item. I copied the competitor with this correspondence and it, too, has gone quiet, presumably because it does not want the merge to happen as the duplicate listing has a lot of much lower prices but, strangely, still has a much poorer sales rank.

Knowing the rules and the practices

So, by standing my ground and by playing by the formal rules and informal working practices, I have seen off the bully. It’s a dangerous game to play, and is only worth it if the item in question is selling well on a decent margin. Other retailers apparently caved in. But by sticking to the rules and by using my knowledge of how Amazon works in practice, I have retained the right to sell a profitable line.

In other words, if you are going to sell on a third-party marketplace like Amazon or Ebay, it pays to be aware of the way they work. There is no justice or fairness in these marketplaces. The more you know, the more you will survive, and the more you can risk concentrating your business on them.

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