Speaker 1: It's that time of year again, Mistletoe, Santa Claus being
Speaker 1: crosby on heavy rotation in the soaper household and the
Speaker 1: holiday shopping season. And with every year that goes by,
Speaker 1: it becomes more and more likely that you'll be spending
Speaker 1: more of your hard earned dollars on a little site
Speaker 1: called Amazon dot com. Yes, Alexa has been playing a
Speaker 1: lot of being crosby in our household. And if you're
Speaker 1: a vendor who sells on Amazon, this is an all
Speaker 1: important time of year for your business. You're hoping for
Speaker 1: a rush of Christmas sales and you'll be doing everything
Speaker 1: you can to make sure that customers browsing on Amazon
Speaker 1: can find your goods. And occasionally people go to really
Speaker 1: really extreme lengths to try to get that edge over
Speaker 1: all the other vendors competing for business. That's what our
Speaker 1: story is about today, the rough and tumble vendor on
Speaker 1: vendor hand to hand click to click combat going on
Speaker 1: behind the scenes at Amazon Marketplace. Yeah, things like pumping
Speaker 1: your customer reviews with five star ray eetings is a
Speaker 1: way to game the algorithm and appear higher in the
Speaker 1: list of search results when customers are looking for a
Speaker 1: given product and counterfeiting popular items. That's something else that
Speaker 1: happens all the time. We'll tell you about Amazon's never
Speaker 1: ending quest to shut down this activity. It's like an
Speaker 1: epic game of whack a mole, where just as Amazon
Speaker 1: manages to crack down on one kind of bad behavior,
Speaker 1: another practice springs up in its place. But first, let's
Speaker 1: explain what exactly is Amazon Marketplace. Yeah, the name might
Speaker 1: not sound familiar, but if you shopped on Amazon, chances
Speaker 1: are you've already browsed products being sold on the marketplace.
Speaker 1: Amazon operates like a traditional retailer such as Walmart or Target.
Speaker 1: They buy things in bulk at wholesale prices and resell
Speaker 1: them to shoppers. But it also operates like a consignment shop.
Speaker 1: It lets more than two million merchants post their own
Speaker 1: things on its site and give Amazon a cut of
Speaker 1: each sale. That's the marketplace and is a major part
Speaker 1: of Amazon's business. By letting third party merchants sell goods
Speaker 1: on its marketplace, Amazon has been able to expand that's
Speaker 1: inventory far more quickly than it would have been able
Speaker 1: to if it operated only as a traditional retailer that
Speaker 1: buys stocks and then sells its own merchandise. In an
Speaker 1: annual letter to shareholders, CEO Jeff Bezos said that marketplace
Speaker 1: sales account for nearly half of all units sold on Amazon. Yeah,
Speaker 1: the marketplace is fifteen years old, but because of the
Speaker 1: way all the search results in Amazon are listed, it's
Speaker 1: not always clear which items are being sold by Amazon
Speaker 1: and which are being sold by independent merchants. A lot
Speaker 1: of our listeners probably buy from marketplace every week and
Speaker 1: and may not even know they're doing it right, But
Speaker 1: one of the best ways you can tell that a
Speaker 1: given product is coming from the marketplaces by the customer reviews.
Speaker 1: It's hard to overstate just how important these reviews are
Speaker 1: for vendors, how much lots of great reviews helps them
Speaker 1: boost sales, and how much negative reviews can really sink
Speaker 1: a product. Reviews are the currency of Amazon. That's right.
Speaker 1: Amazon really can't afford for shoppers to stop trusting the
Speaker 1: authenticity of reviews. A recent report from the research from
Speaker 1: feedwisor found that nine of Amazon shoppers wouldn't buy a
Speaker 1: product at all if at a fewer than three stars.
Speaker 1: So there's a lot of incentive to try to gain
Speaker 1: the system, especially on Amazon, which drives so much more
Speaker 1: commerce than other sites, and that's where all these underhanded
Speaker 1: tactics really come into play. At stake are the billions
Speaker 1: of dollars people spend on Amazon Marketplace every year, and
Speaker 1: as we do more and more of our shopping on
Speaker 1: the internet, the stakes are really only getting higher. I'm
Speaker 1: Brad Stone and I'm Spencer Soper, and in this week's
Speaker 1: episode of Decryptid, we'll hear from some of the people
Speaker 1: who make Amazon Marketplace work. We'll hear from a vendor,
Speaker 1: someone who has faced threats to his business because of copycats,
Speaker 1: as well as one of Amazon's top reviewers to understand
Speaker 1: just how influential those customer reviews can be. And we'll
Speaker 1: off to the businesses trying to spot and stop customers
Speaker 1: from getting duped by the fake reviews. Let's start by
Speaker 1: taking a trip to South Carolina. Come in, all right,
Speaker 1: so you're ready to talk Amazon reviews totally. It's my
Speaker 1: favorite topic and you don't know what to do with me.
Speaker 1: That's me arriving in Greenville, South Carolina to meet you
Speaker 1: sell A Houseman. Just Sella is a top reviewer for Amazon,
Speaker 1: and she's even written a book about it called Naked
Speaker 1: Truths about getting Product reviews on Amazon dot com. Seven
Speaker 1: insider tips to boost sales. One of the first things
Speaker 1: to Sella explained to me is why these reviews matter
Speaker 1: so much to merchants. A cool side effect of these
Speaker 1: reviews is that sellers can get direct feedback on what
Speaker 1: their customers like and don't like about their products. But
Speaker 1: the real reason is landing a high ranking in Amazon
Speaker 1: search results. Here's Gacella. This is a computer system that
Speaker 1: works purely on algorithms. So the second you go and
Speaker 1: buy any product, the sales ranking of this product is
Speaker 1: going to improve. At the same time. You may designed
Speaker 1: to review this product. Now it gets a review. And
Speaker 1: here's why this is important. If a product has a
Speaker 1: good sales rank and also a lot of reviews, Amazon's
Speaker 1: s c O ranking pushes this product on its own.
Speaker 1: Seeing her in her home in the Greenville suburbs, ge
Speaker 1: Sella comes off like a college professor, passionate about her
Speaker 1: subject matter and eager to share her knowledge. We chatted
Speaker 1: over coffee while her cats lurked nearby, and Gescella told
Speaker 1: me that she first got interested in Amazon reviews as
Speaker 1: a book author because she knew they would be key
Speaker 1: to her success. So she figured the best way to
Speaker 1: learn about them was to begin writing them herself. Being
Speaker 1: a top reviewer on Amazon has to be a pretty
Speaker 1: odd business to be in. Just Selah told you she
Speaker 1: gets two fifty emails a month from sellers hoping she'll
Speaker 1: write a good review of their products. Yeah, she's become
Speaker 1: quite a magnet. And because she gets pitches from so
Speaker 1: many sellers, she also has some insight on the schemes
Speaker 1: they come up with to help boost their ratings. Here's
Speaker 1: one anecdote she had about how she was approached by
Speaker 1: a Chinese seller. They said, hey, we're going to offer
Speaker 1: you a couple you buy this product for ten percent
Speaker 1: of the price, some of them for one percent of
Speaker 1: the price, but you had to buy it was reduced ridiculously,
Speaker 1: and then please review. If they went through the entire
Speaker 1: is killed out top reviewers and they offered these some
Speaker 1: digital device or Christmas lads in this time of the year,
Speaker 1: they'd suddenly have a huge spike in which they sold
Speaker 1: at one percent of the price, which Amazon ignores, sold
Speaker 1: is sold regardless of how much yourself had. A huge
Speaker 1: bag of a hundred and fifty product is coming in
Speaker 1: over three days as a purchase oh, so this is
Speaker 1: a key detail. Even if you buy something at a
Speaker 1: steep discount, Amazon's algorithm does not care exactly. All Amazon
Speaker 1: sees is that you paid for it. It doesn't matter
Speaker 1: how much. Amazon is not a person. That algorithm says,
Speaker 1: oh my god, this book is this product is in demand,
Speaker 1: in demand, in demand, and it shows the same product
Speaker 1: and all kinds of sites as if it were a
Speaker 1: best seller. Other people see this product and they go,
Speaker 1: oh my god, look at that product shoots up and
Speaker 1: regiuss in the best seller category group area of vicinity.
Speaker 1: And now you have the reviews coming in on top
Speaker 1: of it. And that's when everybody else spies. And that's
Speaker 1: why I think that Almason be the way with it,
Speaker 1: because they realized what's happening. Okay, that last point is
Speaker 1: really important. Last month, Amazon changed the rules for customer reviews.
Speaker 1: Now Amazon gets to decide who's allowed to leave what
Speaker 1: they call a quote incentivized review. That's right. Amazon is
Speaker 1: something called the Vine program, and it's Amazon's way of
Speaker 1: deciding which customers can receive promotional products and review them. So,
Speaker 1: if I recall correctly, previously incentivized reviews were allowed, but
Speaker 1: the reviewer had to disclose that they received the product
Speaker 1: at a discount for their review. The problem was the
Speaker 1: disclosures were becoming so prolific on the site, so ubiquitous,
Speaker 1: it was actually tough to find that authentic review from
Speaker 1: someone who just bought the product with no strings attached exactly.
Speaker 1: And some consumers are actually getting frustrated by seeing all
Speaker 1: of these disclosures about getting free products, and that undermine
Speaker 1: this review system. That's so important because for customers sometimes
Speaker 1: the hardest part about buying something online is not being
Speaker 1: able to see it and touch it first. Consumer reviews
Speaker 1: help eliminate that guesswork, but only if they're authentic. And
Speaker 1: we should point out that reviews aren't just important to
Speaker 1: Amazon and their companies like Yelp and trip advisor and
Speaker 1: eBay and open table that rely on customer reviews to
Speaker 1: drive traffic, and they also grapple with complaints about gamesmanship
Speaker 1: and authentic reviews. Yeah, the gamesmanship has been relentless. And
Speaker 1: get this, just weeks after Amazon made those changes, Gessella
Speaker 1: told me sellers are already finding ways around it and
Speaker 1: are trying to keep Amazon in the dark so I
Speaker 1: can approach from a Chinese game up who writes to me,
Speaker 1: please review this product. We will send you a gift card,
Speaker 1: and then we pray that you don't tell. The phrase
Speaker 1: we pray that you don't tell already implies that they
Speaker 1: know they're doing the wrong thing. The same system is
Speaker 1: happening as before. The band that gives me the product,
Speaker 1: the gift card. I I'm buying the product, I'm driving
Speaker 1: up the products rank, and then they want my review
Speaker 1: and basically the same thing happened that before. Now we
Speaker 1: put ourselves into Amazon's position. They probably know them. They
Speaker 1: cannot say we're gonna stop selling gift cards, so that's
Speaker 1: not gonna happen. Obviously they cannot. So what they do
Speaker 1: is they come in break to Active and try to
Speaker 1: find these reviews with the algorithm. And that's the only
Speaker 1: thing that they can do. Now. Jo Selah wasn't the
Speaker 1: only one to notice something fishy happening with Amazon's reviews.
Speaker 1: So I took a trip to Brooklyn, New York. I
Speaker 1: just do what I do. SEE have to do what
Speaker 1: I think I can do what I think. I don't
Speaker 1: know what I do. I just do without change. Before
Speaker 1: we were all buying helps from Amazon around this time
Speaker 1: last year, and we kept not noticing that it would
Speaker 1: come really late, or it would come without Amazon packaging,
Speaker 1: or it comes with stamps from foreign countries that we
Speaker 1: didn't realize it was coming. So it looked really weird
Speaker 1: and suspicious. That's MINGUI Minx companies called fake Spot. It's
Speaker 1: a website that rates the authenticity of Amazon's product ratings
Speaker 1: and reviews. Basically tells customers whether they can trust the ratings.
Speaker 1: So an entire company dedicated to spotting fake ratings and reviews.
Speaker 1: It gives you some sense of just how widespread the
Speaker 1: issue is. If there's a cottage industry developing around online
Speaker 1: customer reviews. Yeah, and the timing of it to fake
Speaker 1: Spot only launched last year, but it's already getting millions
Speaker 1: of users. It works by cutting and pasting the u
Speaker 1: r L for an Amazon product into its search engine. Here,
Speaker 1: let me show it to you. Okay, so you've got these.
Speaker 1: You've got an Omega fish oil up on Amazon dot
Speaker 1: com and it's got three two reviews, mostly positive. It
Speaker 1: looks good. So how can fake spot help us? So here,
Speaker 1: we're gonna cut and paste the u r L for
Speaker 1: this product. Go over to fake spot, which looks like
Speaker 1: your normal search engine. You're you're entering the r L
Speaker 1: into a search bar and you click analyze Wow, an
Speaker 1: F grade of failing grade, just like an F on
Speaker 1: a term fail. The Omega fish oil with three two
Speaker 1: reviews and four and half stars, that those were bogus. Yes,
Speaker 1: So if you just counted on Amazon reviews alone as
Speaker 1: a time strap shopper, you might see those reviews and
Speaker 1: decided to buy the product. But if you take an
Speaker 1: extra step over at fake spot, you might have second thoughts.
Speaker 1: And I picked that Omega three fish oil because Ming
Speaker 1: said that healthcare products and beauty products in particular are
Speaker 1: susceptible to fake reviews. My wife is getting all these
Speaker 1: recommendations from our friends and like usually buy this cream
Speaker 1: or by that oil. And as we started reading and
Speaker 1: poking through the reviews, we realize that we weren't looking
Speaker 1: at reviews with with a more critical eye, and that
Speaker 1: we were just randomly accepting that that five. You know,
Speaker 1: this thing has one or two views and it has
Speaker 1: four stars, it mustn't be good. So we just and
Speaker 1: as you start digging in deeper, as when you realize, oh,
Speaker 1: sometimes people leave a review, it says, oh, I just
Speaker 1: got this product, will update my review, you know, once
Speaker 1: I tried the product, but they will leave it four stars,
Speaker 1: And like, well, you're leaving four stars from a product
Speaker 1: we haven't try it. But I think being in tech,
Speaker 1: you're probably trained to think about They started this in
Speaker 1: every all each of us started to see patterns. For example,
Speaker 1: you would see that everybody used the same language to
Speaker 1: describe the product. So for example and beauty, almost every
Speaker 1: review would say with things like oh my skin was
Speaker 1: so soft and supple, or the reviews would all be
Speaker 1: clustered around the same date and no of a suddenly
Speaker 1: look like twenty people dropped the review on this on
Speaker 1: one same day. It was like and these were like
Speaker 1: to us early early telltale sigence where something is wrong
Speaker 1: or that the reviewers would leave seemingly long uh reviews
Speaker 1: of the product, but it would make no mention specifically
Speaker 1: of what the product was. It would just say I
Speaker 1: loved it, I use it every day, It's fantastic, O
Speaker 1: I reckon highly recommend everybody use it, with like, well,
Speaker 1: that looks like a review that I'll go right for anything.
Speaker 1: So I found two things interesting here. First, both ming
Speaker 1: and gessella feel like these phony reviews are a fairly
Speaker 1: new thing, like in the last year or two. That's interesting.
Speaker 1: I mean, we've had customer reviews on the internet now
Speaker 1: for twenty years. The probably have been fake reviews all along.
Speaker 1: It's just that the stakes are so high and the
Speaker 1: levels of online commerce are so significant now that the
Speaker 1: problem is getting more attention exactly, becoming more prominent and
Speaker 1: and and not getting washed out. The second thing is
Speaker 1: Ming says, this product market for his business exists because
Speaker 1: consumers are conditioned to respond to and trust products with
Speaker 1: a lot of positive reviews. It's probably similar to the
Speaker 1: Pavlovian response that we experience when we see the word
Speaker 1: sale right. We feel like we're getting a good deal,
Speaker 1: even if the price may not be all that great.
Speaker 1: I fall for it all the time. And fake Spot,
Speaker 1: which has created a hundred and fifty million Amazon reviews
Speaker 1: to date, makes money from ad sales, but only enough
Speaker 1: to maintain its web servers. Min said he and his
Speaker 1: partners have some seed money, and they're primarily focused on
Speaker 1: the product right now, and they worry about monetizing the
Speaker 1: concept later. But here's how this search algorithm actually works.
Speaker 1: The engine does two things. When you click for an analysis.
Speaker 1: It goes and logs every review that the product has.
Speaker 1: So let's say the product has five reviews, for example,
Speaker 1: it will look through all five hundred reviews and then
Speaker 1: at the same time, while I was looking for through
Speaker 1: the reviews, it will then also take the profile of
Speaker 1: each reviewer at all their reviews and his into account.
Speaker 1: If you have a lot of unverified purchases, which our
Speaker 1: purchases made outside of Amazon, but you leave the review
Speaker 1: on Amazon, that's a big telltale sign for us. If
Speaker 1: you have the date cluster thing, and so we have
Speaker 1: things that we put in place to to track aggressive marketing.
Speaker 1: So if you have a lot of date clusters, if
Speaker 1: you have a lot of reviewers, then because we go
Speaker 1: through the history. So let's say you have one reviewer
Speaker 1: that posted a product A, and then as we go
Speaker 1: through a check their history, we noticed that they were
Speaker 1: on products see this category product D the other category
Speaker 1: will know that they were a professional reviewer. Part of
Speaker 1: the problem here has to be that there's just so
Speaker 1: much for the merchants to gain as as well as
Speaker 1: the reviewers who probably are enjoying their their freebees. Exactly,
Speaker 1: they go hand in hand. Me and I talked about
Speaker 1: how much the lure of the freebee is driving all
Speaker 1: of this. We checked out the profile of one reviewer
Speaker 1: who was really cleaning up this guy and I won't
Speaker 1: name the name. Look at this review is starting from here.
Speaker 1: Here's another one on the twenty four. Here's not a
Speaker 1: one of the twenty four. Here's a not a one
Speaker 1: twenty four. Here's any one twenty four. Here's another one
Speaker 1: on the twenty four. So they're reviewing Spatula, pizza cutter,
Speaker 1: garden Staples, EO plugs, Essential Oils, and two days two
Speaker 1: days ago, drinking straws two more days ago. So you
Speaker 1: look at this and you already can even if I
Speaker 1: don't know who the person is in real life, I
Speaker 1: can make you and I can make it an informed
Speaker 1: judgment that says, who has time to sit down and
Speaker 1: write ten reviews on ten different kinds of products in
Speaker 1: ten different categories, And then two days ago did the
Speaker 1: same thing on a bike pump. Who's got room for
Speaker 1: all this? And they're all five stars? Love it? Love it, guys,
Speaker 1: love it. I don't care if they are real people.
Speaker 1: The engine books at this, and the engine will say
Speaker 1: something is wrong with Ultimately, though, is it ever going
Speaker 1: to be possible to catch all the fake reviews? Is
Speaker 1: fake spots algorithm or is Amazon search engine good enough
Speaker 1: to capture all of them? When you're accompany as big
Speaker 1: as Amazon, maybe it's like steering at large tanker. There's
Speaker 1: only so much you could do. Fake reviews aren't Amazon's
Speaker 1: only problem. The company is also fighting fake products from
Speaker 1: entering the marketplace. And this is one of those persistent
Speaker 1: issues that can be very difficult to really permanently put
Speaker 1: an end to, but a can dent customer trust in Amazon,
Speaker 1: and it's been in the press recently yet it has
Speaker 1: Most notably, Apple filed the lawsuit last month against an
Speaker 1: Amazon merchant that it alleges sold fake Apple products, some
Speaker 1: of them in safe, and Bergen Stocks announced it would
Speaker 1: off selling its footwear and Amazon in Now Amazon is
Speaker 1: upping the anti Earlier this month, Amazon filed to lawsuits
Speaker 1: against its own vendors for allegedly selling counterfeits on its site.
Speaker 1: This problem isn't just unique to Amazon. In China, Ali
Speaker 1: Baba has had a knockoff problem for years. eBay probably
Speaker 1: has just a big of a problem, but it doesn't
Speaker 1: get as much attention, and it's it's it's bad for customers,
Speaker 1: frankly because it hurts the merchants who are trying to
Speaker 1: sell authentic products on sites like Amazon. Yeah. To get
Speaker 1: a better sense of that, I spoke to Brett Rosenswag,
Speaker 1: who sells something called the Urban Shelf on Amazon. It's
Speaker 1: a product he invented himself, a small plastic shelf that
Speaker 1: connects to a bed and you can store your cell
Speaker 1: phone while it keys and other items close at hand
Speaker 1: while sleeping. See, I'll pull it up here. Oh I see,
Speaker 1: so it so Yeah. Well, so they're trying to disrupt
Speaker 1: the lucrative night table industry, I see, by just replacing
Speaker 1: it with this little kind of cafeteria tray thing that
Speaker 1: you'd stick into your bed. Yeah, and I think they're
Speaker 1: they're geared more towards the you know, bachelor or the
Speaker 1: college dorm student, that sort of thing where there might
Speaker 1: not even be room for a night's stance. Okay, So
Speaker 1: how's Brett doing with the Urban Shelf? He says, sales
Speaker 1: of the Urban Shelf tend to spike in the summer
Speaker 1: July and August, when students are getting ready for college,
Speaker 1: and sales were growing, but then he noticed copycat products
Speaker 1: selling on Amazon for much less than his Here's Brett
Speaker 1: telling me about how he decided to buy one of
Speaker 1: these counterfeits to see it for himself. He got it
Speaker 1: shipped to his home. When the package arrived, it actually
Speaker 1: came in a box and the box had our label
Speaker 1: super imposed on the ex chair of the box. So
Speaker 1: they actually gone the distance to construct their own Urban
Speaker 1: Shelf box for the Urban Shelf send it over and
Speaker 1: it was also rand wrapped in nice I mean it
Speaker 1: looked very you know, very professional, aside from few spelling
Speaker 1: mistakes on there. You know, imitation is a sin, serious
Speaker 1: form of flattery. I was a little adder, but at
Speaker 1: the same time I was like, oh, these these rats
Speaker 1: just stole my design. I feel I feel cheated. I feel,
Speaker 1: you know, like someone took my took kind of like
Speaker 1: my baby in and and ran away with it. So now,
Speaker 1: Brett said he checks Amazon every day for the Urban Shelf,
Speaker 1: looking to see who's selling it. He keeps an eye
Speaker 1: out for potential fakes. His biggest worries that the fakes
Speaker 1: are inferior, so customers buying them who confused them with
Speaker 1: the original will be displeased and his product will get
Speaker 1: a bad reputation based on the knockle. Has he had
Speaker 1: any success at all trying to keep these copycats off
Speaker 1: off the web in general or Amazon in particular. Yeah,
Speaker 1: in Amazon particularly, said he spotted counterfeits about five times
Speaker 1: and that Amazon is generally quick to knock them down
Speaker 1: after he reports them. They have an automated system, and
Speaker 1: he said sometimes he's had to go through that system
Speaker 1: and report the fakes multiple times, but generally Amazon is
Speaker 1: quick to act. Well. At first, I was like, you
Speaker 1: know what, this might go away, and me they just
Speaker 1: have a few of them. Then after a month, I
Speaker 1: I still saw that our sales started to dip a
Speaker 1: little bit because people were buying this lower price shell.
Speaker 1: So this got me concerned and we began to figure
Speaker 1: out how to get them off of the listening so
Speaker 1: I had. Eventually I ordered one as a test sample.
Speaker 1: I received it in the mail, I took some pictures,
Speaker 1: I sent it in to Amazon fraud department and ended
Speaker 1: up getting that seller's listing removed. That's the only guaranteed
Speaker 1: way that you can. You can make it happy. You
Speaker 1: can call, you can, you know moan and the emails,
Speaker 1: but they want to see physical evidence of an order,
Speaker 1: which is a test by pictures of the fraudulent shell,
Speaker 1: pictures of the legitimate product, and actual concrete proof so
Speaker 1: that you're they're not just kicking off some seller by
Speaker 1: word of mouth. Given all these headaches of selling on Amazon,
Speaker 1: it's pretty incredible so many merchants stick to the site.
Speaker 1: But it's also not that surprising. I mean, it speaks
Speaker 1: to how huge Amazon's customer bases and how large the
Speaker 1: commerce on the site is, and the fact that there's
Speaker 1: really no other website in the Western world that comes
Speaker 1: close to this kind of traffic. You can say that again,
Speaker 1: Amazon attracts three hundred million shoppers and it's marketplace model.
Speaker 1: That's pretty much anyone who wants to sell something get
Speaker 1: access to that giant pool of people. And it is
Speaker 1: pretty easy for sellers. I mean, it's much less capital intensive,
Speaker 1: time intensive, resource intensive than say opening up a traditional
Speaker 1: brick and mortar store or even launching your own website
Speaker 1: from scratch and then having to go market the site
Speaker 1: yourself on on search engines like Google exactly. And because
Speaker 1: of all that traffic Amazon brings these sellers, the money
Speaker 1: to be made as one of these third party vendors
Speaker 1: can be sizeable. Amazon has said more than seventy thousand
Speaker 1: marketplace entrepreneurs had annual sales exceeding one hundred thousand dollars.
Speaker 1: And there is a whole equosystem of other companies growing
Speaker 1: up around these sellers to support them, to help turn
Speaker 1: their distribution through Amazon into sustainable business. Yeah. In any
Speaker 1: given month, dozens of Amazon merchants can be found sitting
Speaker 1: in hotel conference rooms in Las Vegas, Seattle, and Los
Speaker 1: Angeles swapping ideas and listening to consultants discussed strategies. I
Speaker 1: actually caught up with one such consultant, Eric Heller E
Speaker 1: R I C H E L L E R and
Speaker 1: your title with Marketplace Signition CEO and founder. Eric actually
Speaker 1: used to work at Amazon, so he gives his clients
Speaker 1: tips from the inside. At Amazon, Eric used to manage
Speaker 1: the company's merchant strategies, but now he advises them independently
Speaker 1: through his company called Marketplace Ignition. Even when I got there,
Speaker 1: in that was well known even then, that idea of
Speaker 1: the virtuous cycle at Amazon of adding selection, and by
Speaker 1: adding selection, you add you add traffic because people want that,
Speaker 1: and then you add scale and and you know, add
Speaker 1: nose until you get to the next level, and you
Speaker 1: sort of level up the site and you can lower
Speaker 1: price and that will bring more people and start the
Speaker 1: cycle over again. The marketplace was of the ways Amazon
Speaker 1: was able to grow its product offering so fast. It
Speaker 1: was really clear even early on that people were always
Speaker 1: searching for items that we just couldn't stop fast enough.
Speaker 1: You know, we started with just books, music and books
Speaker 1: and books music video and the books music video DVD.
Speaker 1: And as we started to just add in, you know,
Speaker 1: let's try and consumer like tracks, let's try that. Thinks
Speaker 1: it was amazing what the search terms would tell you
Speaker 1: people still wanted and you couldn't grow that possibly fast enough.
Speaker 1: What's interesting is that, in comparison with the early days
Speaker 1: of the marketplace, he says he's now seeing online merchants
Speaker 1: paying ever more attention to getting good product reviews. So
Speaker 1: here's another person saying that's a new development. Here he
Speaker 1: is again, we've seen a complete shift over the last
Speaker 1: six to eighteen months where brands will come and we'll
Speaker 1: say you've got to help us with Amazon and say, oh, okay,
Speaker 1: are you having distribution challenges there? And they'd say, no,
Speaker 1: you know, we're being until we need to be more
Speaker 1: involved with Amazon because products have bad reviews. So there's
Speaker 1: a stat that Amazon talks a lot about. You've seen,
Speaker 1: and it's been around, probably in some form or fashion.
Speaker 1: I can remember um since since I was there, but
Speaker 1: I have seen it recently to that a dollar on
Speaker 1: Amazon Translate send us more than seven dollars off Amazon
Speaker 1: in terms of influence sales. But you know, the good
Speaker 1: the good reviews on Amazon help you elsewhere. I also
Speaker 1: asked Eric about preventing fake reviews, something we already heard
Speaker 1: Ming and Jocela talking about earlier. Can Amazon ever get
Speaker 1: full control over this? This is always going to be
Speaker 1: bleeding edge and they're gonna be people pushing the edges
Speaker 1: of this system. If you said, do I think that
Speaker 1: at scale this is going to UM, this is going
Speaker 1: to influence UM Amazon to a point where we should
Speaker 1: all be concerned. I think Amazon has tamped down on
Speaker 1: the biggest component, and I think there will be some
Speaker 1: of this happening at the peripheral UM. I do think
Speaker 1: it will be harder for someone to get to scale
Speaker 1: using a system. We're getting a gift card. It's just
Speaker 1: hard to get a thousand great reviews that way, you know,
Speaker 1: I still think, for example, that there's probably gonna be
Speaker 1: review clubs going on. It'll be hard to track. I
Speaker 1: think what you're talking about with gift cards still going
Speaker 1: to be hard to track. And I think further the
Speaker 1: idea that you won't be able to really advertise that
Speaker 1: you're doing that without risking getting a lawsuit from Amazon.
Speaker 1: I think we'll will help tamp down some of it
Speaker 1: as well, but I think it will probably continue to
Speaker 1: exist and it will be a cat and mouse game.
Speaker 1: So what do you think, Brad, You're gonna take an
Speaker 1: extra critical look at those reviews this year when you
Speaker 1: shot for the Twins on Amazon? Or do you think
Speaker 1: you'll be cutting and pasting U r L s into
Speaker 1: fake Spot? Well? Fake spot is a great tool, and
Speaker 1: I'm appreciative that you pointed it out to US Spencer,
Speaker 1: but I think it's unlikely that Amazon's hundreds of millions
Speaker 1: of customers will will go to another site to bet reviews.
Speaker 1: I mean, I think you know, one of the reasons
Speaker 1: why people do flock to Amazon is because it's simple,
Speaker 1: it's easy to use it, have their payment info stored,
Speaker 1: it's one stop shopping, and they never have to leave
Speaker 1: their house. So you know, ultimate the Amazon has to
Speaker 1: keep pursuing these bad actors who exploit its platform, and
Speaker 1: we've seen them make some aggressive changes and big changes
Speaker 1: to the platform. But do you think that they're ever
Speaker 1: going to be able to fully contain this problem? Maybe not.
Speaker 1: I mean it's like everything on the internet. You know, spam,
Speaker 1: you know, misinformation. It's a cat and mouse game and
Speaker 1: you know, and this is sad to say, but I
Speaker 1: think that consumers have to get a little smarter about
Speaker 1: online reviews. I mean we can no longer take them
Speaker 1: as genuine expressions from other customers. I mean, they are
Speaker 1: what they are, and some reviews might not be authentic. Uh,
Speaker 1: some might be gamed, and it might be, in effect,
Speaker 1: just another form of marketing. And that's it for this
Speaker 1: week's episode of decryptod. Thanks for listening, and tell us
Speaker 1: have you ever had an experience with fake reviews or
Speaker 1: products on Amazon? You can write to me on Twitter.
Speaker 1: I'm at brad Stone and I'm at Spencer Soper. And
Speaker 1: if you're not a Twitter user, you can also write
Speaker 1: to our producer or Pio or even better, record a
Speaker 1: voice memo and send it to her at p G
Speaker 1: A D K A R. I at Bloomberg dot net.
Speaker 1: If you haven't already subscribed to our show on iTunes
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Speaker 1: please take a moment to leave us an authentic rating
Speaker 1: and review. It really helps. This episode was produced by
Speaker 1: Pia Gutkari aki Eto, Liz Smith and Magnus Hendrickson, and
Speaker 1: Emily Buso edited Spencer Soper's accompanying print story on the
Speaker 1: Amazon Marketplace, which you can check out at Bloomberg dot com.
Speaker 1: Slash Technology Alec McCabe as head of Bloomberg Podcasts. We'll
Speaker 1: see you next week.