It has come to the attention of the company that there is an issue on Amazon’s web platform concerning products that have been mislabeled, are unsafe, and are now subsequently banned from being sold on their seller pages. According to an article featured on the Wall Street Journal, there were more than 4,000 items found for sale that fit the description mentioned above (Berzon et al.). Sadly, of these products, half of them were children’s toys or medication, all of which were unsafe for use or consumption (Berzon et al.). This article details, in-depth, the issues on Amazon’s Marketplace, concerning third-party sellers and their consistency in using counterfeit products, as well as the mistaken sale of other products that are not up to the standard generally accepted on a platform like Amazon.
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In one situation, as explained on WSJ, a mislabeled helmet cost a young man his life. After purchasing a motorcycle helmet off of Amazon, Albert Stokes was riding on the highway. He ended up getting into an accident and his helmet flew off. He was pronounced dead at the scene, and medical experts say that a proper helmet could have saved his life. When it came to the compensation for the event and the mistake on Amazon’s end in selling a faulty helmet, the Stokes family settled for a $5,000 payout, even after Amazon did not take full responsibility for their third party seller’s mistake (Berzon et al.).
Situations like this, as the article goes on to explain, have called lawmakers to action and prompted them to look at other eCommerce platforms of the same nature. For years, Amazon has hidden under the protection of a single law, Section 230 of the Communications Decency Act of 1996, which helps to defend them against third party seller issues. However, it was a Pennsylvania case that was able to find a loophole and a way to hold them accountable for actions that sellers on their web platform have committed. According to Pennsylvania law, Amazon is considered a seller because they lack any formal vetting process for their third party sellers, and the U.S. Court of Appeals supported this. When faced with this dilemma, Amazon requested the case to be reviewed again, as with any big company, they did not want to face another fine (Berzon et al.).
After completing a full investigation, the Wall Street Journal found disturbing numbers, even more than what has been previously introduced. Many products displayed the following: lack of suffocation warnings, failure to pass federal safety tests, falsely listed as FDA approved, high lead levels, illegally imported drugs, lack of warnings for products unsafe to children under two years of age, falsely approved products by the UL, and lack of choking-hazard warnings. All of these products equated to thousands of products mislabeled, and all Amazon has been doing is paying fines and reminding their third party sellers to abide by the rules, but not completing any vetting process to ensure this does not happen again (Berzon et al.).
This has come to public attention because it is a severe issue and one that has many consequences if not dealt with properly. First and foremost, there is the issue of Amazon’s reputation, which surely could be injured because of a scandal like this. Amazon, which started out as an online platform for buying and selling books, has increasingly become, as stated on WSJ, “like a flea market” (Berzon et al.). With so many third-party sellers and their varying products, it has become hard to manage the image that Amazon presents, as there are many factors that determine what their company appears to be now in 2019. There has to be a form of security and further prevention of situations like this occurring, in order to ensure that customers trust and receive what they purchase, and sellers also abide by the rules of the marketplace.
Additionally, as briefly mentioned, there is the potential to lose buyer trust. On BigCommerce.com, an article published at the end of 2018 detailed the ways in which Amazon became the top eCommerce platform in the country (Dayton). When tabulating the numbers for their sales and their market share, they encompass more than their top three competitors, including eBay, Apple, and Walmart (Dayton). A staggering 95 million customers flock to Amazon just for their Prime Membership alone, and more than 50% of the platform contains third party sellers, thus making this issue extremely important (Dayton).
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With such high numbers and a large community of buyers flocking to the online platform, there must be some concern about maintaining and growing the customer base. If a scandal with mislabeled products and hazardous items happens again, there could be the potential to lose a good number of these customers. While there is still plenty of customers coming to Amazon’s stores, preserving the success they already have is essential. After all, with being the top company online currently, it is an assumption that the company would like to keep their current position.
Amazon must have a different response than merely paying fines, dealing with court cases, and attempting to control their third-party sellers. A vetting process needs to be established in order to ensure customer trust as well as better control over the world’s largest online commerce platform. If the company is to maintain its already massive success, committing to the needs and the requests of both the customers and the media has to occur. It is the goal of this document to outline the reasons why this must occur, but also to spark momentum in the right direction, so that Amazon’s success only continues to grow and prosper.
- Berzon, Alexandra, et al. “Amazon Has Ceded Control of Its Site. The Result: Thousands of Banned, Unsafe or Mislabeled Products.” The Wall Street Journal, Dow Jones & Company, 23 Aug. 2019, https://www.wsj.com/articles/amazon-has-ceded-control-of-its-site-the-result-thousands-of-banned-unsafe-or-mislabeled-products-11566564990.
- Dayton, Emily. “Amazon Statistics You Should Know: Opportunities to Make the Most of America’s Top Online Marketplace.” BigCommerce, BigCommerce, 18 May 2019, https://www.bigcommerce.com/blog/amazon-statistics/#10-fascinating-amazon-statistics-sellers-need-to-know-in-2019.
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