Summary More than 50,000 Chinese retailers who were flouting Amazons Terms of Service have been expelled, accounting for $15.4 billion in sales.
Our Take When the news originally broke that Amazon was actively courting Chinese manufacturers and traders to sell their products directly on the platform, many existing 3rd Party Sellers felt a sense of betrayal. Having helped Amazon build its business considerably, and then hearing that Chinese companies were being offered funding by Amazon was perhaps the first clear message that ‘Amazon is not your friend’.
Sure enough, competition intensified and many existing sellers found themselves struggling to understand how these new guys could amass so many reviews, and build rank so quickly. Now it seems what many suspected was actually happening and the playing field was being heavily tilted in one direction.
With this latest news, it seems that Amazon is taking significant action to level the field by expelling company's that have been using shady tactics to their advantage. This is good. Every seller should welcome competition - it makes you better after all, but it’s nice to know that it’s fair competition.
We can’t stress this enough - don’t do anything that is outside of Amazons Terms of Service. You will get found out and it will be painful. However, if you do fall foul of Amazon’s T&C’s and find yourself blocked or suspended, don’t panic. We have the most experienced team in dealing with these issues. Contact us now.
Here’s the text from original article which appeared in Web Retailer on August 27th 2021. The articles author was Andy Geldman.
The impact of Amazon’s crackdown on Chinese sellers who were flouting review rules is becoming clear. The lost sales could exceed $15 billion in total.
In July we started to hear reports that Chinese sellers were being thrown off the Amazon marketplace. This seemed to be due to review manipulation practices that have been going on for years. The full extent of the purge is now coming to light, via an organization that represents Chinese businesses. According to the Shenzhen Cross-Border E-Commerce Association, more than 50,000 Chinese retailers were expelled by Amazon, accounting for total sales of $15.4 billion. The Association’s president Wing Xin said the affected businesses now cannot pay their suppliers or get loans, and their staff are facing unemployment. The whole industry of Chinese manufacturers selling directly on Amazon “has been almost completely broken”. Amazon’s purge was larger than anyone realized Of course, Amazon’s review policy applies to all sellers, regardless of where they are located in the world. But all of the sellers suspended as part of this enormous purge were based in China, according to Marketplace Pulse. Some of the best known brands that are no longer available on Amazon include Mpow and Aukey. Their inventory has been frozen in Amazon’s warehouses while they plead with Amazon for reinstatement – an obscure and bureaucratic process that all too many sellers are familiar with. Shenzhen-based sellers, representing around 35% of China’s entire cross-border ecommerce industry, were invited to a meeting with the city’s Commerce Bureau to discuss their experiences and plan next steps. In response, the affected sellers are being offered two million yuan (around $310,000) to establish their own independent online stores. But while the very largest Chinese brands, such as Mpow and Aukey, might find some success through their own stores, most of the expelled businesses are unlikely to ever recover from The Great Purge. But don’t expect this to be the end of Chinese sellers on Amazon. Yes, some businesses will close down but others will replace them and begin building new brands. Their review practices will be crystal clean, or they will invent new methods to hide behind when they decide to cheat the system. Chinese manufacturers have many advantages over their Western rivals, and they go far beyond a willingness to buy fake reviews. Here’s the link to the original article: https://www.webretailer.com/b/news-digest-2021-08-27/?omhide=true&fbclid=IwAR1QD-oLfqB20w9ZbmYwyne6XF0h4P7qea2dxI4mnlRfiBFGA7Z1MLdZ0Ds