Wednesday, October 27, 2021

Amazon: the amazing company we all love to hate

I admit. I order plenty of stuff on Amazon. 

I don't tend to order books for myself - I prefer to do my ordering through my indie if they don't have what I want -  but I have a friend in NY who's spending a lot of time in and out of rehab facilities of late. And when she's in, I send her regular book shipments. 

But there's always something. 

Honestly, I try to see if I can find whatever it is I'm looking for in a brick and mortar store. But sometimes I just can't. And it's just so easy to login to Amazon and let my fingers do the
shopping. And over the last couple of months those whatever it is's I'm looking for have included orthotics, moisture absorber (rainy summer), disposable guest towels for the bathrooms, a plastic holder for my vaccination card, ear buds, supplements (tried my indie pharmacy and two CVSs; that darned supply chain!), and KN95 masks.

But I don't love, love, love Amazon. And I still order shoes through Zappos, pretending that they haven't been owned by Amazon since forever.

On the plus side: Amazon is simple, fast, and easy to buy things you need and/or don't need, especially key after you strike out with physical stores.

On the negative side: Bezos kabillions, worker treatment, putting brick and mortars out of business. (I just hate to think of Amazon completely prevailing there...) And now some disturbing information has come to light. 

The accusations that Amazon has steered shoppers towards its own branded goods - copycat versions of successful products - and away from the other sellers have been around for a long while. I don't believe I've ever purchased Amazon-brand anything, but I wouldn't be surprised if they'd snuck something past me when what I wanted was pretty generic. Amazon has, of course, repeatedly denied the accusations that they were using their data in sneaky ways to promote their knockoffs, and in the process knocking out their competition.

But a bit of evidence has emerged that suggests that the accusations are true.

A trove of internal Amazon documents reveals how the e-commerce giant ran a systematic campaign of creating knockoff goods and manipulating search results to boost its own product lines in India - practices it has denied engaging in. And at least two top Amazon executives reviewed the strategy.

...thousands of pages of internal Amazon documents examined by Reuters – including emails, strategy papers and business plans – show the company ran a systematic campaign of creating knockoffs and manipulating search results to boost its own product lines in India, one of the company’s largest growth markets. (Source: Reuters)

Well, who you gonna believe? Amazon or your own eyes?

Among other tactics, Amazon rigged search results "so that the company’s products would appear, as one 2016 strategy report for India put it, “in the first 2 or three … search results” when customers were shopping on Amazon.

They also developed their private-labeled goods by meticulously replicating what they called "reference or benchmark products." They then went as far as to attempt to develop partnerships with the manufacturers of those reference products to ensure that the quality would be equivalent. 

In 2020, Bezos swore up and down before Congress:

...that the e-commerce giant prohibits its employees from using the data on individual sellers to help its private-label business. And, in 2019, another Amazon executive testified that the company does not use such data to create its own private-label products or alter its search results to favor them."

These statements may, in fact, be self-serving hogwash. Or what we used to call lies. 

I don't have a clue where smart business moves end and possibly illegal anti-competitive practices begin. I'll leave that to the antitrust folks. But it sure looks bad to see Amazon let the smaller guys take the market risk in terms of developing and perfecting products, only to swoop in and grab their business. 

The revelation of the India strategy will no doubt encourage other regulatory entities - EU, US - to poke around further. 

The Reuters article gets into lots of juicy detail. Well worth the read.

As for Amazon, they deserve whatever rains down on their heads. If their private brands business has to get separated out, it'll serve them right. Amazon's just such an amazing company, managing to engender all that love AND hate.

Meanwhile, when it comes to any Amazon shopping sprees, I'll try to be more judicious. Maybe I'll try an extra real store or two before giving up and making my inevitable way to Amazon. And I'll just say no to any 2 a.m. impulse shopping, when I wake up in the middle of the night and realize that I could use another bottle of that shampoo that does wonders for gray hair...

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