War is On: How to Fight Unfair Competition on Amazon

(Full Article on Link Above)

This article is a follow-up of the previous research published under the title “The Secrets Behind the Success of Chinese Amazon Sellers, as Revealed by Insiders”,  that has reached an incredible amount of organic shares, mentions, comments, and quotes in the past months since its release on our blog in March 2018. We went through an interesting deep research about Chinese business mentality and culture, digging into the reasons why Chinese sellers are so great at doing business on Amazon and other e-commerce platforms while not belonging to the culture of the markets they sell to.

Whether this incredibly efficient competition coming from China might be fair or unfair, there are a lot of players out there who are definitely playing the Amazon game dirty. Most of the times they don’t even come only from China: they might be operating from India, Russia, Middle East and from the United States. Among all the incredible feedback that I have received from a many experienced and not-so-experienced Amazon and e-commerce sellers, there’s one question that constantly popped up at the end of the conversation:

“How can I protect my business from unfair competition on Amazon?”

Have you ever seen a listing being hijacked like this? Things are getting hot, read on to find out what’s going on!

In the next paragraphs I’m going to share with you the result of my latest research, which objective is to demonstrate how it is possible to still be a successful Amazon seller, despite the incredible – and in many cases very unfair – competition. So let’s dive in!

Topic List

1. What is Unfair Competition on Amazon

2. Most Common Unfair Practices Today

3. How the Game is Changing, and What This Means for You

4. Go Big or Go Home?

5. Can You Trust Your Supplier?

6. Play Like a Chinese

7. Alternative Sourcing & Markets

8. Do the Right Branding

9. Treat it as a Business

10. Conclusion

1. What is Unfair Competition on Amazon

First of all, what do we mean with “unfair competition” here? Unfair competition is any kind of action taken by a seller to hurt one or more of its competitors, may it be via use of black hat practices, false value attribution to competitor’s product listings, false lawsuit claims, etc. It could also be classified as unfair competition when a new seller with better access to key resources enters a relatively small market, offering wide inventory and product variations at an extremely low price, screwing the entire game of oblivious first coming sellers by devouring their sales and rank. This is happening today more often than it ever did. In other words, selling today on Amazon is way more complicated than it used to be just 4-5 years ago when you just had to list your products, put down a little description on your listings and just see the sales kicking in.

To say it with Kevin King, 7 figure seller on Amazon, founder of FreedomTicket, whom I had the pleasure to meet at Global Sources Summit 2018 in Hong Kong:

“The entire system has been inviting a lot of good and bad sellers, often giving to the consumers cheap products by actively recruiting Chinese companies and giving them many benefits over the American sellers. This is a golden ticket for Chinese sellers, as they can enter a market that other than their own market is the biggest in the world, and because of their cultural differences they won’t play by the rules. It’s super competitive, and in the end, the customer of the lower end price, gets a lot of garbage. I think there’s going to be a shakeout: as an experienced seller I can look at a listing and see if this is a legitimate product or not, but the average customer cannot do it. Everyone should have a trademark and a brand registration today. Amazon is waking up, but for every bad seller they wipe off, many other will pop out.”

Time for Amazon to literally wake up?

Actual screenshots taken on Sunday 18 November of a listing hijacked by a Chinese competitor who claims to be the first seller and to have the right to change images of other sellers.

Liran Hirschkorn, Facebook public post

Clearly, selling on Amazon has never been so competitive – and so dangerous – as it is today (ready for the Black Friday sales?): with more than 1 Million new sellers joining in 2017 only, 66% of top sellers using FBA and an increasing number of them being registered in China or Hong Kong, the game is getting overcrowded.

And as if this wasn’t enough, the number of private labels owned by Amazon is constantly increasing, making it even harder for any new seller to compete in the Amazon Jungle.

SunTrust Robinson Humphrey

Is this staggering increase of sellers on Amazon making you feel dizzy and claustrophobic?

Do not despair, the first thing to take into consideration is that you are truly getting a smaller piece of the cake, but the cake itself is as big as it has ever been, and doesn’t seem like it will stop growing in the next few years (NASDAQ:AMZN).

Source: Statista 2017

King continues:

[Now] the opportunity is great, some say that Amazon is too saturated but it is actually better than ever. It is not easier than it was 3-5 years ago to sell on Amazon.com, absolutely not. But if you treat it as a business, the opportunities are really good. What was a $1000 revenue a few years ago, could be $5000 today. If you’re not selling on Amazon, you’re missing the boat. I think there’s still a lot of products to be sold on Amazon, and the key is differentiation. As a seller, do some innovation, the Chinese are not really great at innovating creatively. It is going to be a fight. It is very important that Westerns know what the Chinese are doing because they must know what they’re against. Selling on Amazon is all about math and systems, and today Chinese understand it better than Americans do.

Let’s recap: what makes selling on Amazon today so hard for a newbie?

A. The staggering amount of competitors in each category.

B. Black-hat strategies that illegitimately hurt the business of other sellers in the same product category.

C. Amazon’s increasing number of private labels.

D. Amazon’s increasing controls that finally catch the guilty dirty players often at the expense of penalizing those that are probably innocent (how many times did you get your reviews wiped off or your account/listings suspended for apparently no reason at all?).

C. Increasing costs of advertising, generally on any e-commerce platform and social media.

2. Most Common Unfair Practices Today

Cheating, lying, stealing. There’s a lot of unfair practices going on in the Amazon game today. Cynthia Stine from eGrowth Partners has put together a very comprehensive analysis of what the account suspensions for illicit behaviors today on Amazon looks like: of 77% of the total suspensions, 30% comes from inauthentic goods, 21% from safety complaints, 17% from trademark infringements, 9% from review abuse. Some of the slickest tricks used today are as below (source: Cynthia Stine at Global Sources Summit Hong Kong 2018):

False Claims – Competitors bully you for free returns and file bogus policy violations

Fake Reviews – Competitors hire people to leave negative AND positive reviews on your account.

BR 2.0 Takedown – A competitor uses BR to take down all the other sellers for a bogus reason.

Stolen Trademark – A competitor files YOUR trademark with the USPTO and then uses it against you.

Vendor Central Takeover – A competitor files YOUR trademark with the USPTO and then uses it against you.

Whack-A-Mole – MF sellers who pop up on your listings and sell counterfeit or even completely different merchandise for a short time and disappear.

While we are not going to discuss in dept all of the practices listed above – many of which are initiated by players who do not come from China -, you might be interested in contacting Cynthia and her team of eGrowth Partners in order to know more on how to protect yourself against the bad players and how to prevent Amazon from suspending your account or how to get back your account that has been suspended for apparently no reason.

Let’s talk instead of other black hat strategies, starting from the uber-famous fake reviews.

Noah Heschman, who has given an amazing contribution to the previous article “The Secrets Behind the Success of Chinese Amazon Sellers, as Revealed by Insiders” on our blog, says:

One of the main ways that Chinese sellers have been gaming the system has been to create fraudulent reviews. It is conventional wisdom that there needs to be at least 20 product reviews with an average of 4 stars before customers will feel confident enough to consider buying a particular product. Previously, you could calculate that about 3% of unit sales would result in customers posting a product reviews. This means, that in order to get to 20 reviews, a seller would need to sell a minimum of about 650 units. This then becomes a “chicken-and-egg” scenario: how will a product sell that many units if customers won’t purchase it until it sells that many units? The answer: prime the review pump with fraudulent reviews.

Fraudulent reviews have been a staple of both online and offline marketplaces forever – even before the Internet: restaurants, movies, tourist sites – all relied on coercing customers into leaving positive reviews with financial incentives. But since there is no live salesperson online to convince customers to buy, reviews have become even more essential to make sales. Here are some of the ways Chinese (and other crafty) sellers used to accumulate positive reviews in the past – from innocent to downright nefarious:

* Sending customers emails requesting a positive review or dissuading a critical review; in exchange for a financial incentive such as a discount off of a subsequent purchase; or a free product

* Calling customers on the phone requesting positive reviews or requesting that a customer remove a negative review in exchange for financial reparations

* Random posting of positive reviews by seller employees, friends & relatives who have not actually purchased the product

* Utilizing “Review Farms” (massive sweatshops usually in India or the Philippines) to post reviews without actually purchasing the product

* Subsiding the purchase of the product by employee, friends and family – in exchange for a positive review – and sending them back the money through PayPal or other methods

* Utilizing “Review Marketplace Sites” – sites that deliver deep discounts (usually 80-90% off) to Amazon product reviewers in exchange for a review (these sites would either tacitly or forcefully require members to write reviews, even positive reviews in exchange for continued membership)

* Employ review-posting algorithms that would automatically post only a handful of reviews per day in order to fly under the radar. They would scrape review content from other similar products – either the seller’s or their competitors – construct the reviews. Sometimes they would even create hybrid reviews where the most positive keywords or phrases of multiple reviews would be combined

There are probably even more over-the-top methods of falsifying reviews – but these are the main ones I’ve encountered.

Fake reviews are just one of the many ways that a competitor can hurt your business, do you want to know more about the hottest trends of black hat tricks today? See the list below:

Negative Reviews on competitors listings

As you can see here, review manipulation has gone as far as it could. Not only sellers would try to get positive reviews for their products and positive feedback for their account, but they can also directly or indirectly give their competitors product listings a lot of negative feedback. This, not only hurts overall star rating and conversion rate but in the mid-term could get the competitor’s account or listing blocked.

The newest trick is to post an unnatural number of positive reviews under the competitor’s listings, that would trigger Amazon’s algorithm and suspend the product immediately.

 Excessive Returns and negative feedback

To suspend a listing of a seller that is doing quite well doesn’t take a lot: after a big number of returns and complaints or negative reviews, Amazon will in most of the cases shut it down without even questioning the seller. This trick has been used by a lot of newcomers who find it a lot cheaper than beating their main competitor by doing the right marketing. We will see later how this could be helpful to who’s looking to get rid of hijackers (thanks to Howard Thai AKA “Professor of Amazon” for the precious tip).

Screenshot from Professor of Amazon WeChat group

 Listing Hijacking

Ever wondered how come your listings have been updated to a different category or to different content without you actually taking that action? This can happen if one of your competitor with a Vendor Account claims your products and starts messing around. Other than changing content and title, they might just assign your product to the “sex toys” category and make it completely invisible to the search results of Amazon.

Screenshot from Professor of Amazon WeChat group

 Inactive listing abuse

A listing that has been inactive for a long time but is still available on Amazon.com is potentially an easy prey to hijackers because the listing owner would probably not find out in the short term and won’t even notice that an inactive product listing has been illegitimately claimed. Finding this kind of easy candies for hijackers is super simple, just search on Google the following e.g.: site:amazon.com currently unavailable [your -target-product]. If you have inactive listings that you do not plan to replenish in stock, do us all a favor and remove them ??

 Review Hijacking

Yes, reviews can be hijacked too. How is this happening? How is this possible that this listing that is clearly not a powerbank by Anker, is showing reviews coming from an Anker battery pack? Don’t ask me please… – big thanks to Max Sood for spotting it.

 Fake Orders (Brush)

Brushing is one of the most common black hat strategies, that we have already introduced with the Professor of Amazon (Howard Thai) in the previous article about the Secrets of Chinese Sellers on Amazon – section Black Hat:

“One of the most pronounced Black Hat methods of Chinese seller in use right now is SD (Shua Dan刷单) also known as brushing. When a customer purchases on a site like Amazon/eBay or Walmart, a few months or weeks later they start to receive small envelopes addressed to them. They contain junket items they never ordered, worth mere pennies. The Chinese seller has completed what people in the industry call brushing “fake purchase” using someone else information. He builds his sales and can even leave his own review if set up properly. This is illegal to do in China but there is very little recourse and risk when they apply these tactics overseas. This is mostly done to give more prominence to high-volume sellers with good track records but anyone can benefit from it.”

 Creation of zombie listings to be manipulated later on

One last creative way of manipulating rank and listing life history is to create a listing and to let it on Amazon for a certain period of time, in order to replace the content later on. The zombie listing will be reactivated when it is needed, and its rank value will be restored by using various white and black hat techniques. You can find some zombie listings here and there, noticing that they have no rank, very little or zero reviews and most of the times their title, description, and images do not match.

And now, what is even scarier…

You might be asking yourself now: ok how do you know all of these things if you don’t run black hat yourself? Yes, indeed I have never done a single black hat action on any of the seller accounts I’ve managed, nor I suggest doing it, but today this kind of knowledge is pretty much accessible to any one who is willing to pay for it. The new trend in the industry is to sell expensive Black Hat Masterclasses, that as we have seen a few months ago were only available in China, exclusively to Chinese sellers, but today are being spread to potentially anyone who is ready to pay a lot of money for the courses.

Most of the times the teachers are Chinese people who have a good level of spoken English. One of my friends of friends once said: “it is more profitable today to sell reviews than to sell products on Amazon“. There’s a lot of online seminars around Amazon today, not all of them are explicitly white hat. They use the same good old digital marketing funnel to create leads by giving easy & free content first. hoping to close the real deal over a decent conversion rate on a second meeting registration only:

Do you want to know the best way to protect yourself from black-hat attackers? Keep on reading!

3. How the Game is Changing, and What This Means for You

READ MORE HERE (Original Article)