E178: How Chinese Sellers Are Manipulating Amazon and Outsmarting You

During our last visit to Montreal to film new course videos, we came upon a new gathering for Amazon sellers called the Orange Hat Summit. Unfortunately we weren't able to actually join the summit due to time constraints but we did meet a Chinese seller who was a speaker at the summit. Ours was one of the most brutal conversations I had, and it spawned an article written by Dave, and this podcast episode.

Although we were already familiar of the nefarious acts done by some sellers on Amazon, our conversation gave light to just how heinous some of these strategies are.

We should point out though that these tactics are not exclusive to Chinese sellers, but it is with little doubt that China is often at the forefront of formulating these strategies.

The following strategies are the most commonly used by Chinese sellers:

Opening multiple seller accounts

Some sellers have upwards of 20 accounts, some even under the name of their employees. This pads the risk of Amazon suspension--as one account gets closed, they just set up shop using another one.

Rampant review manipulation

Chinese sellers know that reviews = sales. Some sellers do something as innocent as rewarding buyers for 5-star reviews, while others buy reviews from review farms outright. Worse, however, is how they buy fake negative reviews against their competitors' products.

Stolen buyer and seller data

This one is the biggie. We've heard of Chinese sellers using stolen buyer addresses in America to send them products as part of a fake review campaign, but we had no idea just how huge this strategy has become. Apparently, you can pay some rogue Chinese Amazon employee (or someone who has access to a rogue employee) and request reports on any buyer AND seller. If a seller can find out certain information about a competitor’s product, such as their sales and page view history, it can be extremely valuable.

 

All these strategies has made the playing field extremely unfair, especially when Amazon doesn't seem to care at all. Add to this the fact that Chinese sellers don't have the pressure of sales taxes, don't have to conform to high safety and quality standards, and are pretty much immune from lawsuits, and the entire Amazon atmosphere looks pretty depressing for the average American seller.

With everything that's happening, it's tempting for any seller to try to dip their toes into the realm of black-hat strategies. But we know that a business built on sketchiness will not last long, and if and when Amazon finally drops the hammer, those who play by the rules will be left standing.

If you want an in-depth detail of these strategies and how Chinese sellers pull it off, make sure to read this blog post written by Dave.

 

Thanks for tuning in to this episode. Until the next one, happy selling.