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Amazon to pay $8 million for misleading customers

April Fool’s Day is a good marketing theme. With the right mix of humor and strategic promotions, you could win more buyers for this quarter.

Ecommerce news, on the other hand, isn’t a foolish matter. But that doesn’t mean we can’t deliver it in an entertaining, easy-to-digest way.

POST OF THE WEEK

BLACK MARKET

After that counterfeiting controversy in India, Amazon faces yet another penalty for questionable practices. This time, Poland fined the retail giant roughly $8 million for misleading consumers about product availability and delivery dates! 💰

Here are the deets, as reported by TechCrunch:

  • UOKiK, Poland’s consumer and competition watchdog, has been tallying consumer complaints against Amazon since 2021.
  • The complaints include those from shoppers who didn’t receive their orders, pushing UOKiK to start a formal investigation in February 2023. 🕵️
  • The investigation revealed that Amazon uses dark pattern designs to add a false sense of urgency to the purchasing process.

Wait, what’s a dark pattern design?

It’s a common tactic that uses deceptive elements on a website to:

  • Get customers to give up more than they need to; and
  • Agree to things they might not have control over (like signing up for a free trial that won’t notify you of the end period and proceeds to charge your card).

In the case of Amazon, it failed to explain to shoppers that their purchase is complete only after they receive shipment information—not after they click the checkout button. That’s why the retailer can cancel orders when they can’t fulfill them due to reasons like stockouts.

🛡️ Amazon’s defense

The company’s press office in Poland has issued an appeal statement, saying:

“We strictly follow legal standards in all countries where we operate and we strongly disagree with the assessment and penalty issued by the UOKiK. We will appeal this decision.”

Moral lesson: Be as transparent as possible to avoid misleading consumers. You may not be fined millions of dollars by Poland, but you’ll surely lose customers over a lack of clear communication.

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  • Creators apply to you: responsive UGC creators apply directly to your campaigns in minutes 
  • Delivered in 10 days: receive high-performing UGC for organic + paid social 
  • Simplified admin work: automated influencer agreements, payments, and digital content usage rights 
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  • Repeat + long-term collabs: build relationships with influencers and UGC creators 

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BITES OF THE WEEK

AMAZON NEWS

Did Amazon protect brands well in 2023?

ICYDK, Amazon invested $1.2 billion in personnel and technology to strengthen its anti-fraud initiatives in 2023. This highlights that despite issues about consumer mistreatment, the ecommerce giant remains dedicated to protecting buyers.

🎯 In its latest Brand Protection Report, the company listed the four focus areas of its brand protection strategy:

  • Proactive brand protection through meticulous seller vetting. This involved innovations that prevented 700,000 bad actors from creating new seller accounts last year.
  • Industry-leading tools and partners. The company recruited 15,000 experts—machine learning scientists, software developers, and investigators—to block all kinds of abuse against brands. Not to mention the new AI-powered tools it used to detect fraudulent activities.
  • Accountability. By partnering with global law enforcement authorities, Amazon’s Counterfeit Crimes Unit identified and disposed of more than 7 million counterfeit items!
  • Improved customer education. In January 2023, Amazon partnered with the International Trademark Association and DECA to launch the Unreal Campaign Challenge—a project that educated over 22,000 students about the danger of counterfeits.

Borrowing the words of Dharmesh Mehta, VP of Amazon’s Worldwide Selling Partner Services, the company vows to “not rest until we drive counterfeits to zero.” Sounds a bit ambitious, but looking at what Amazon has become from its humble beginning, it looks attainable in time. 💪

If you want to know more about the retailer’s brand protection achievements, read the 2023 Brand Protection Report.

SELLER REFRESHER

5 steps to be a successful private-label seller

One good thing about ecommerce is that you get to choose the business model that best fits your preference and capacity. There’s online arbitrage, dropshipping, and the less-known but potentially lucrative private labeling.

Private labeling means selling products manufactured by a third-party supplier under your brand. You may need higher initial investments than other selling methods, but it has high returns when done right. 📈

To know more about this ‘private’ venture, Helium 10 listed the 5 steps to get started with this selling method:

  • Product research. Find products that fit your budget and rank them according to profitability (number of monthly sales, product ratings, etc.). Better if you can also find niches that have a small but sure following.
  • Product sourcing. Once you decide on a product, it’s time to find a manufacturer. You must also prep all product documentation you need, such as product safety certification and complete product information. Pro tip: Purchase a GTIN to speed up the listing process.
  • Product design and branding. Branding your private-label product sets it apart from white-label generic items. Make sure you have trademark and copyright documentation in order.
  • Product listing. If you’re feeling tech-savvy, you can use Amazon’s new AI-powered product page creator to help you get started. 
  • Pricing. You can either price your product by analyzing your competitors OR have a product calculator to compute an ideal price.

Pretty straightforward, right? But of course, you still need to choose the best fulfillment method and then launch your product.

 🚀 Our advice? Tune in to our daily news lineup to stay updated on the best practices for launching your business to success.

Author : SellerBites
Faith began working on SellerBites in 2021, a weekly newsletter that provides sellers with the latest news and updates in FBA. With first-hand experience in managing various seller and vendor accounts, she understands what sellers face on this platform. Her background led to the conception of SellerBites, which main goal is to help people become better, more informed entrepreneurs in the Amazon marketplace.
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