The FTC Aims to Eliminate Deceptive Practices in Online Marketplaces
Online reviews have become an essential part of consumer decision-making, offering buyers useful insights into products and services prior to making a purchase. As everyone knows, not all reviews are genuine. Unfortunately, deceptive practices plague online marketplaces like Amazon, leading to consumer mistrust and unfair competition. To combat this issue, the Federal Trade Commission (FTC) announced proposed rule changes on June 30th, 2023, which aim to crack down on deceptive reviews and testimonials.
Proposed Rule Changes
The FTC’s proposed rule changes seek to address various deceptive review practices, with a focus on protecting consumers and fostering fair competition. Some of the key changes include:
Prohibition of Fake Consumer Reviews and Testimonials:
One of the most significant issues in online reviews is the prevalence of fake reviews and testimonials. The FTC aims to address this by explicitly prohibiting the sale or procurement of any of these tactics to promote products or brands. This change will deter unscrupulous online sellers from manipulating reviews to deceive potential customers.
Review Hijacking:
“Review hijacking” refers to the act of associating a product with unrelated reviews from other products. For example, adding the reviews of an old version of a product to a new version creates a misleading impression of the new product’s quality. The proposed rules aim to combat this deceptive practice by enforcing stricter measures against sellers engaging in such activities.
Buying Positive or Negative Reviews:
Another common deceptive tactic is buying positive reviews to boost a product’s reputation or paying for negative reviews that harm their competitors. The FTC’s proposed rules intend to clamp down on this unethical practice, discouraging sellers from employing such tactics to gain an unfair advantage.
Company-Controlled Review Websites:
Some companies maintain review websites controlled entirely by the company itself or by its affiliates. Naturally, only positive reviews are published on these groups or sites. The FTC aims to address this issue by requiring transparent disclosure of the website’s affiliation with the company. There would need to be clear indications of whether the reviews are genuine or influenced by the company’s interests.
Selling Fake Social Media Indicators:
The use of social media indicators such as likes and followers to enhance the credibility of products has become common. However, buying or selling fake social media indicators only serves to mislead consumers and undermines the trust in reviews. The proposed rule changes aim to curtail the sale of these bogus indicators and to promote more authentic interactions on social platforms.
Addressing Inconsistencies and Challenges
While the FTC’s proposed rule changes present a positive step towards protecting consumers from deceptive practices, there are challenges and inconsistencies in their enforcement. Sellers and consumers alike have expressed concerns over the lack of consistency by online marketplaces like Amazon. Some sellers faced strict penalties for minor infractions, while repeat and pervasive offenders have evaded significant consequences. Sellers should actively participate in the public comment process for proposed rule changes, providing valuable input to enhance the effectiveness of these regulations.
In an era where consumer trust is paramount, the FTC’s proposed rule changes aim to safeguard online reviews’ authenticity and protect consumers from deceptive practices. The goal is to create a level playing field for sellers and foster a trustworthy online shopping environment.
Sellers need to adapt to these changes by maintaining transparent and honest practices while seeking genuine customer feedback. The focus should be on providing exceptional products and services, which will naturally lead to positive reviews, not on illicit shortcuts or black hat tactics.
Why You Should Be Selling on Amazon Japan
Japan is the world’s third-largest economy
Japan has only 120 million people, but the per capita income is quite high. The country is almost entirely comprised of Japanese citizens with less than three percent of the country being born overseas.
Tokyo is considered by most to either be the second largest or the largest metropolitan city in the world. The top ten Japanese cities by population make up 85% of the total population within Japan.
It’s a highly urbanized economy that is easily traversed by train. In fact, many citizens can get to and from work by train and never use a car. I lived in Japan for 2.5 years and never used a car other than a very few times using a cab. Otherwise, I traveled all over Tokyo and even the country by train. Thus, the vast majority of citizens have access to stores at a train station either coming or going to work every day.
How successful is Amazon in Japan?
Amazon Japan is the third largest marketplace within Amazon’s regional marketplaces, but Amazon is the largest online seller in Japan. That distinction formerly belonged to Rakuten. It is somewhat difficult for a non-Japan-based seller to sell on Rakuten due to language and other, shipping-related barriers.
Selling through Amazon Japan is likely the best marketplace option.
Does Amazon Japan have FBA?
Yes, Amazon FBA is available in Japan, and there are many fulfillment centers across the country.
If you don’t use FBA, you’d have to use a local shipping/distribution company. That is going to be too costly unless you already have a large presence and brand recognition in Japan.
You don’t have to speak Japanese, but you should work with someone that does!
Of Japanese consumers, less than seven percent speak English at a business fluent level or better. This means you must communicate in Japanese in order to sell your products.
Remember, translation apps like Google Translate are not sufficient to adequately sell to a Japanese consumer. It may allow you to communicate at a basic level in Japanese and get around town as a tourist, but it will not allow you to ‘sell’ your product. You will say or do something that is obviously wrong, which will violate an Amazon policy or lead to a suspension before you can even get started. It is highly recommended that you hire translation and localization services as part of your launch plan.
Start selling on Amazon Japan
Given the density of populations around urban areas, space is at a premium throughout Japan. This means big and bulky products are not ideal, and the packaging for all products is almost as important as the product itself.
The customer base is used to shopping in stores every day, so your competition is not only with online, but in-store as well. This is because almost everyone rides a train at least once a day, and there are stores within most stations. In fact, there is the equivalent of malls at major stations, and customer service at these stores is quite good.
The Japanese customer base is used to spending twice as much time on a product detail page researching products vs. Americans or Europeans because they are able to get this sort of information from sales associates in stores.
Also, a Japanese buyer would almost ‘feel badly’ if they had to return something, as if they had not researched the product enough. This means returns represent less than one-half of what a seller would see in the US or German marketplaces.
And while having multiple images on your detail page matters on the US and EU marketplaces, this matters even more from a conversion standpoint on Amazon Japan.
As an example, the average American male often knows their neck size and sleeve length. A Japanese consumer, in contrast, likely knows not only their chest size but also the distance from shoulder to shoulder and the actual centimeters of the distance from heel to toe.
If you don’t include such specifications on your detail page, you will likely lose a sale to a competitor who has more robust detail page content. Create A+ content for all detail pages, and when in doubt, add more text to describe your product.
How do you compete effectively on Amazon Japan?
Promotions and loyalty programs are more important than in the US and EU, though the average price is typically a little higher across similar product categories.
The competition will run discounts almost every day, and their in-store price may be different than the online price.
The typical loyalty program in Japan is based on points, similar to how you might think about airline miles. In fact, offering a 10% price discount or the equivalent of 10% loyalty points would have a higher conversion with the points.
Amazon Japan offers points to its customer base and it would be recommended to figure out how to participate in double point promotions that Amazon may offer for participating Amazon sellers. It’s a fairly low-cost method to increase conversion and is typically a lower cost than simply running a price discount.
Shipping promotions are not typical since Amazon can ship same day to approximately 85-90% of Japan and next day to essentially all of Japan, including Okinawa and Sapporo.
The competing online marketplaces mostly rely on sellers to ship the merchandise, though they do offer shipping in many cases that is “next day.”
Again, this is essential because most customers are used to shopping every day without any incremental distance to get to a store.
How to avoid a suspension on Amazon Japan
Many of you reading this article may already do business with Amazon in other countries. So you probably already have really low expectations with Seller Support.
If you do something wrong and have problems with ordering, shipping, detail page information, or anything in Seller Central, getting this corrected is likely more difficult in Japan than in US or EU simply due to language barriers.
Amazon’s Seller Support teams are almost all Japanese-only speakers (less than 1% of sales off Amazon.jp is from the English-translated version of the site).
And, Amazon.jp is often stricter than other marketplaces when it comes to following various Amazon policies.
This means doing your homework ahead of time and being diligent about following Amazon’s stated policies are even more important when doing business with Amazon Japan. And, this may make it even more relevant to hire those who are used to doing business in Japan and already have a business history with Amazon.jp.
Bottom line: should you sell on Amazon Japan?
While some of these points may seem complicated or daunting, the potential of selling on Amazon Japan is a very loyal customer base. Meaning, once you convert and please a Japanese consumer, you have a very good chance at a repeat purchaser.
Stan Friedlander
Former Amazon Executive
Stan was a chief merchant/GM of multiple categories for Amazon in both US and Japan for 10+ years, including all apparel, footwear, jewelry, watches, handbags, sunglasses, luggage and costumes. He had full p&l responsibility over first and third-party marketplace sales and expenses for these categories, including all customer experience, marketing, shipping and personnel expenses. His teams ranged in size from 100+ and oversaw revenues of $3.5B+, and he has operated as an independent consultant since leaving Amazon, advising brands and sellers on their topline eCommerce strategy and helping with problem resolution. He has clients that range from $1M to $2B+ in annual sales revenue.
How not to lose your account (or top ASINs) during Prime Day
Prime Day means you can expect an increase in anti-competitive behavior. Be ready for this!
What kinds of abusive behavior results in a successful attack against a listing? Whenever there’s a ton of revenue on the line, consider that many sellers and black hat services will attempt takedowns of successful products even more than usual. The fraudster shops know how to get listings pulled overnight, and to make it stick at least for 48 hours. That’s why they offer services like this to brands, helping them take out their competition on one of the busiest days of the year.- Fake negative reviews usually complain about health hazards, injuries, difficult to use or cheap or fake products that resulted in a terrible buyer experience, or similar things. Amazon’s automated scripts capture ugly terms and flag ASINs for review by an investigator. Those ASINs go under their microscope for a few minutes of review, then in many cases they move straight to suspending the listing without providing key details on “Why” – that’s always up to you, the seller, to tell them. The sellers or black hat services know you’ll eventually get the listing back, right? But they can easily keep you down for Prime Day to score more sales of their own products, in place of yours.
- Keyword Abuse is often a factor during Prime Day. It occurs when another party adds illicit words to a listing which implies that the product is a pesticide, a drug, “adult” or an illegal product, for example. Attackers understand that Amazon’s teams react to keyword attacks the same old ways as they did before this type of abuse became a main abuse method. Make sure you are monitoring your listings for ANY ASIN contributions you did not make, so you can catch and delete them before Amazon suspends you.
- Fake safety health hazard complaints often show up at the last minute to trigger a compliance review process. Buyers will load up their complaints with phrases to make Amazon believe they must take immediate action against you, and your ASIN, to protect the buying public. Have all invoices pre-vetted for verification at the ready, so you don’t have to scramble to put together information about your supplier or manufacturer. Asking for documents from suppliers can take awhile, if they’re not around to respond.
- Many brands contacting us during 2022 have been hit with counterfeit or authenticity complaints against their own brand. In other words, they’re accused of counterfeiting their own products. As straightforward and bogus as this type of complaint should appear, Amazon internal teams could spend hours, days, sometimes weeks trying to understand that you don’t fake your own branded items. It’s just a fact of Amazon enforcement life right now. As discouraging as that sounds, you should be able to knock down those fake complaints quickly. Understand how to escalate stuck appeals, and don’t wait to act. Hire out for the right kind of help.
- Amazon is in full crackdown mode on supplier websites, invoices, and any sourcing info that they claim they cannot verify. How long have you done business with your supplier or manufacturer, and how much of that info is online and independently verifiable? An invoice or supplier that Amazon accepted fully a few months ago may suddenly get rejected without any rhyme or reason to the denial. Amazon is typically obscure about why documentation or appeals get denied, so you will need to decipher their reasons for them. Make sure they have a website and look like an established business or manufacturer.
What can you do to Get Ready in Advance?
Have Plan of Action-style language ready to go to cover for any surprise item condition or item quality complaints.
Be ready to explain the “root causes” that you’d expect to receive in a fake attack, which could mean anything around unsafe items (personal injury, health problems, problems from misusing a poorly described product, for example) or fake counterfeit claims, even if you’re the manufacturer of your own products. The way Amazon Product quality and Notice teams behave these days, any Private Label seller of their own branded products needs to be ready to defend the legitimacy of their own products. Automated scripts have proven unable to differentiate between resellers of other brands and sellers of their own brands. So be ready for that “buzzword” style attack and have appeals ready to go.How to escalate is just as important as where or what you submit
This is a complex topic, but for the purposes of Prime Day let’s make things simple. Don’t call Seller Support or Account Health teams for hours on end, unless they’re giving you viable, actionable information on why Amazon cut your listings down out of nowhere. Consider that Seller Performance investigators could take days or even weeks to read the contact correctly, let alone to provide a meaningful answer. If they don’t want to take the time to review your appeal, you’ll need to bump things up to their superiors, stating plainly why you’ve been forced to escalate to their higher-level squad. Understand who in the food chain is responsible for what types of marketplace management, and get their attention. At the first sign of a generic, canned denial response (or worse when there’s no reply at all) push past the teams that took action against your ASIN. Take it higher and get managers to review the team that took the action. If that means pestering executives to take responsibility when Executive Seller Relations swats away your legitimate appeal, then so be it. Don’t rely on one exclusive method, create a hybrid escalation of multiple paths, if possible. Make sure you always mention the teams you’ve already contacted to resolve the matter, be it Brand Registry, Account Health calls, compliance teams, Seller Performance or VP-level Amazonians. Give the dates you’ve contacted them, documents attached, and the nature of the appeals they completely ignored along the way. Explain that without their help, you’ll lose a ton of money.What Are Sellers doing to rectify Catalog abuse and Listing Sabotage?
–Why Can’t Amazon protect, or help me protect, my own brand? Speaking of Brand Registry, Amazon years ago began pushing the concept of brand protection teams to give sellers the confidence they needed to launch new products. Instead of offering more protection and helping sellers avoid the nuisance (or worse) of listing attacks, brands keep contacting us to say they’ve been hit with various attacks that took their listings down. Catalog abusers or an extremely well-connected services may sabotage brands by getting images replaced, detail page text removed or swapped out, categories changed, or they find themselves completely deleted. You see dog pages, on Prime Day, when their competitors sell through their units like crazy while you struggle to fix it. Amazon has no real solutions for this. –What do I do when Amazon ignores my requests for help? In nearly every instance, people waste time going to Seller Support or general email queues for relief, but many get “stall” replies that put them off while it is “reviewed.” Brand Registry has taken to sending these out during peak periods as well. Where does it all end? If you can’t get immediate action that removes improper ASIN contributions stemming from sabotage, go straight to the escalation queues with immediate demands. Escalate via Brand Registry, Catalog, and the abuse teams. Not sure where to send each new escalation? Take it to high level VPs, asking for them by name as needed, while laying out a timeline of all the places you’ve been with good info and no relief. Force them to act where their direct reports fail to do so. There’s lots of public info out there now about who runs what escalations process at Amazon, so whether those execs are testifying in front of Congress or quoted in national media, ask them or their direct reports to resolve the mess you’re in. Don’t be shy! –How do I report Abuse? Do I need to know exactly what and who it is, first? Have you confirmed from order patterns or tactics used who your attacker is? Are the attacks happening to every other seller of similar products in the category, except for one? That’s a good sign of who is behind it. But it’s not enough, on its own, to report abuse to Amazon execs. Gather up all that intel and get ready to report them while you appeal for reinstatement. –Does Amazon even know what’s going on, or understand how to stop it? Listing sabotage is well-known by Amazon internal teams now, and the solutions do not present themselves easily. If they transfer your case all over the company, trying to send you off into another team’s queues, put a stop to it right away. Don’t let them put you off or come up with an excuse not to act. If they don’t know how to fix it, or don’t care about an audit showing their ineptitude, find some Amazon “adult supervision” and insert them into the appeals process. And don’t let them get away with avoiding you. Email them, asking for management-level Amazonians to conduct an actual review so that you don’t waste Prime Day simply trying to be heard. By escalating to abuse teams, brand registry, Andy Jassy, Doug Herington and others all at once, you’re increasing the chance that Amazon takes real action to help you. Need help? We’re here for you 7 days a week. Contact us for help in resolving your issue quickly.New suspension notification for price gouging, as Amazon receives bad press
“Your account activity reflects unusual pricing in period of emergency, which is unfair to our customers and prohibited by Amazon’s Seller Code of Conduct. We reviewed your account further, and we have decided that you currently may not sell on Amazon.com. Funds will not be transferred to you but will stay in your account while we work with you to address this issue. If you have any open orders, please ship them.”
Hurricane Irma Resulting In Claims That Amazon Is Price Gouging: What We Know
Online giant Amazon is no stranger to public scrutiny, but the e-commerce retailer is facing a new round of accusations as Florida residents prepare for the potential devastation of Hurricane Irma. The company reportedly has allowed prices on basic emergency supplies like to surge out of control as the Category 5 storm draws closer to the sunshine state.
Here’s Why Bottled Water Is So Expensive on Amazon Right Now
Expensive water is on sale at Amazon.com, prompting accusations that the e-commerce giant is gouging prices to capitalize on back-to-back catastrophic hurricanes afflicting Florida and Texas. Amazon says it is not gouging- and it is working to prevent the practice on its site. “We do not engage in surge pricing,” the company said in an emailed statement.
Affordable prices have boosted the reputation of a supermarket for eco-snobs. (Germany)
Attacke auf Walmart, Lidl, Aldi – Amazon löst Preis-Krieg aus
Bereits in den ersten Tagen nach der milliardenschweren Übernahme der Öko-Supermarktkette Whole Foods lässt Amazon die Preise purzeln: Avocados kosten plötzlich 1,49 statt 2,99 Dollar und das Pfund Wildlachs aus Alaska 9,99 – das sind fünf Dollar weniger als bisher. „Das ist nur der Anfang”, verkündet das Werbeschild in der Filiale in Brooklyn, New York.
Shockingly, Amazon lowering Whole Food’s prices may negatively affect other grocery stores
Amazon Doesn’t Need to Make Money on Groceries, Putting Pressure on Wal-Mart, Kroger
Amazon.com will bring lower prices to its new Whole Foods division on Monday. It also will bring a new rule book, further pressuring an already struggling supermarket sector.
If you’ve recently received a safety complaint, it’s time to start pre-empting a suspension
We’ve seen a spate of these suspensions:
“Hello,
You currently may not sell on Amazon.com because we received safety complaints regarding the items listed. Funds will not be transferred to you but will stay in your account while we work with you to address this issue.
To sell on Amazon again, please send us a plan with actions you took to resolve the issue and prevent similar complaints. Do not limit your plan to issues with specific orders. Get help creating your plan in Seller Central Help (https://sellercentral.amazon.com/gp/help/200370560). To send us your plan, click the Appeal button next to this email on the Performance Notifications page in Seller Central.
We will review your plan and decide if you may sell on Amazon again. If you do not send an acceptable plan within 17 days, we may not allow you to sell on Amazon. Failure to successfully appeal this decision may result in us permanently withholding any payments to you and any FBA inventory of the items that caused safety complaints may be destroyed at your expense.
You can see your balance and settlement information in the Payments section of Seller Central. If you have questions about those, please write to payments-funds@amazon.com.
You can see the health of your account in the Performance section of Seller Central: https://sellercentral.amazon.com/gp/seller-rating/pages/performance-summary.html…
To talk to someone about this email, ask our Seller Support team to contact you (https://sellercentral.amazon.com/hz/contact-us/performance).
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Complaint Type: Safety Materially Different Complaint”
Even Trump is getting in on the tax action
Trump’s attack on Amazon has some basis in truth
President Donald Trump attacked Amazon again on Wednesday, saying the e-commerce giant is responsible for killing jobs and damaging “tax paying retailers.” While 140 characters can’t capture the nuance of Amazon’s complex tax situation, Trump’s claims aren’t entirely baseless and could potentially gain support from a number of states.
South Carolina filed a complaint alleging that Amazon failed to collect taxes on sales made by third-party merchants
As the Multistate Tax Commission (“MTC”) is putting the burden on 3rd party sellers to collect and pay sales tax to states in which they have FBA inventory, South Carolina is alleging that the burden should be on Amazon.
Amazon faces a tax fight in South Carolina that could change how online sellers do business
President Trump has repeatedly attacked Amazon and its CEO Jeff Bezos for dodging financial obligations, tweeting as recently as June that the company avoids “paying internet taxes.” While the president’s claims have remained vague, at least one state is now making a similar allegation — and providing some substance to back it up.
