Is Walmart the New Amazon?

This week’s story Amazon’s Enforcement Failures Leave Open a Back Door to Banned Goods in The Markup was sobering.  A lot of times when I talk about bad actor behavior, it is more along the lines of how they are cheating the system and hurting honest sellers. 

This story and this set of dirty seller tricks can also be deadly.  It’s a heart-breaking story.  I wanted to talk about it because as thorough as the journalist was, he couldn’t cover the part of the story of how bad actors get away with it.  I could only give him anecdotes, not hard evidence.  These are not normal sellers who made a mistake.  They use tricks to fool Amazon.

So often when an honest seller is taken down for selling a banned or restricted item, they get mad because there are other sellers who are selling that item – sometimes even Amazon itself.  I often tell them the algorithm will catch up with those other guys and to have faith in Karma.  But the truth is, some of these guys will never get caught because they’ve gamed the system. 

Since my client is honest, telling him/her how the trick is done is usually not productive and only makes them madder.  I say, “let’s focus on you” instead. 

The bottom line is that Amazon is not policing its banned and restricted goods and is sometimes even selling them itself because of flaws in its system.  Bad actors get around Amazon’s rules by:

• Listing in a non-related category, like bongs in home goods/vases
• Disguising the item. Pretending a banned gun part is a paperclip tray, for example (complete with picture!).  The buyers, however, know exactly what they are getting.
• Getting the item into Amazon’s Choice. By using the trick of placing items directly into buyer shopping carts (from “account farms”) some of these items are labeled as Amazon’s Choice with very few sales and sometimes poor buyer reviews. This not only gets the item greater visibility in search, but Amazon’s algorithm and scoring system perceives this product to be “good” and less likely to be taken down for minor offenses. The badge is a shield, in other words.
• Manipulating organic search. You know how when you go to the Amazon search bar and start typing, possible searches start to auto-fill? That may not be organic. Bad actors can manipulate that as well and put THEIR specific search terms at the top of the auto-fill list.  That’s why when the reporter typed in “pill press,” he saw “pill press for making pills Xanax.”  It wasn’t that tens of thousands of people were looking for pill presses to make fake Xanax.  It was a plant.  And when you clicked on the autofill, the bad actor’s listing came up first because they had optimized their listing for that keyword.
• Knowing Amazon enforcement is run by an algorithm. The reporter, who was a brand-new seller, was able to keep listing banned parts even after the algorithm caught him a couple of times and took down the listings.  The “frequently sold together” feature on the listings are not tied-in to Amazon’s enforcement algorithm, so Amazon can’t figure out if a product is being used for illegal acts.  An example in the story was equipment to make hash oil using the highly dangerous butane method. 

In addition, Amazon announced last year that it was going to get rid of most of its Vendor Central employees and rely on the algorithm to make purchasing and replenishment decisions.  This could explain how some of these banned products ended up being sold by Amazon itself.  If the bad actors had access to Vendor Central and created their own listings, the algorithm would make the decision to buy and sell the item based on its profitability/volume algorithm.  No human would actually be looking at the item and saying, “Hey! This isn’t a paperweight! It’s a gun part!”

Warehouse workers are focused on checking in inventory and sending it out to buyers.  No one there is familiar with Amazon’s lengthy list of banned products, no one is going to raise the alarm.  They aren’t paid to do that, and they don’t have time to do that.

• Understanding that Amazon is reactionary. Whenever a bad actor comes up with a new way to manipulate the system, they know they have months to possibly years before Amazon learns about their trick and stops them. They are constantly adding new keywords to the algorithm, but not all tricks can be caught by keyword (like the paperweight).  The manipulation of organic search has been around for more than a year (maybe longer) but Amazon hasn’t done anything to fix it yet.
• Understanding that there is an acceptable level of failure in the system. Once a trick is getting media attention, Amazon might act. But one of the reasons so many bad behaviors are not fixed is because they may fall under the acceptable level of failure.  Just as Amazon finds a 2% defect rate to be acceptable in most retail goods, it has an acceptable level of bad actor presence and behavior on the platform.  That’s why you often see Amazon spokespeople saying things like “only X% of the goods on our platform are counterfeit/banned/dangerous” – fill in the blank here.  The numbers are small as a percentage, but huge as an absolute number.