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Latest Amazon Crackdown On China

Some U.S. based sellers might be happy to hear that Amazon has focused on Chinese sellers with fake reviews.

Over 50,000 seller accounts in China were suspended last week in the biggest foreign purge that I’ve ever seen. The typical problem revolves around pay for review schemes which seem to be more popular in China than other markets. In the U.S. I would usually encounter refund schemes where buyers would be refunded money via Paypal. However, in China, fake reviews are often incentivized with gift cards.

The crackdown came after reports of a data breach in May that exposed correspondence between Amazon sellers and fake review writers, and soon after, Recode reported that the Federal Trade Commission wanted Amazon to do more to fight fake reviews. 

I think that many sellers greatly underestimate the backend of Amazon’s technology platform that is able to detect multiple accounts and other nefarious activity. Similarly, I would expect that Amazon has ways to track whether any consideration has been passed to reviewers.

Without question, operating on the Amazon platform has become increasingly risky for sellers. Suspensions are much harder to reverse than in years past. The result of this is that many brands are better off selling themselves to an aggregator such as Thrasio that can diversify their risks across several brands. Amazon is much less likely to suspend a large account than a small account that is just starting out. I am sure that the company would not admit this policy. However, I have definitely noticed that bigger accounts have more leeway than smaller, less established accounts.

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