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Grow Your Business Sales & Marketing

Beware of Amazon Seller Scams

Beware of Amazon Seller Scams
Credit: BigTunaOnline/Shutterstock

A lot of small businesses use Amazon Marketplace to sell products to a wide audience. Amazon directly sells some products to customers, but more than half of the products sold on the platform are from third-party sellers.

Selling on Amazon is easy, and many businesses rely on the platform for most of their sales. Sellers compete to get customers, rank high in search results and get the coveted "best seller" tag. However, sometimes the competition turns sour. Some sellers are sabotaging their competition to get ahead.

We talked to business owners who sell on Amazon about scams they've encountered. Here are six ways Amazon sellers are scamming the competition.

Tyler Colón, marketplace specialist at ROI Swift, said his company has seen a number of seller scams.

"Most recently, a client of ours had received a negative review for their product, and at the end of the review a competitor's product was specifically mentioned as a more suitable product with a link to the product page," he said.

In that case, ROI Swift reported the violation to Amazon Seller Support and got the review removed because it directly mentions a competing product. However, not all scams are as easy to resolve.

Getting positive reviews is usually a good thing, but it can be very harmful when they are obviously fake. With fake reviews, you lose credibility and Amazon may take down your listing.

"Basically, the seller would purchase your product through many different accounts," said Mark Ortiz, founder of ReviewingThis. "They would then leave extremely positive feedback, to the point that they seem to be obvious fakes."

When this happens, real customers might notice the fake reviews and not order your product. More alarmingly, Amazon will take down your listing if it seems like you planted the fake reviews on your own listing. Getting your listing back up can be a frustrating and long process.

"Amazon took down our listing once, when we were flooded with 30+ very positive reviews in a 24-hour timeframe, which was way above the typical review ratio we receive," Ortiz added.

Other sellers have also depleted Ortiz's inventory. A year ago, a week before Black Friday, Ortiz noticed an order of more than 2,000 go through on Amazon. At first, he was thrilled.

"That order size was broken up between seven different buyers, but each buyer was buying several hundred in quantity," he added. "At first, I was elated that I was moving that much inventory so quickly."

However, he had limited inventory on hand, and a "sold out" tag was placed on his listing. Then, three weeks later, he received a return request for all the products sold earlier.

"It's safe to say that a competitor decided to freeze my inventory just to increase sales on their own," he said. "I was basically frozen out of the marketplace for close to 20 days, with zero sales to show for it."

"We have been a victim of several sellers trying to convert listings I created for our ZVac brand to their brand," said Justin Haver, vice president at GoVacuum.com. "Usually what happens is, when a product has good reviews, they will convert that ASIN listing to their branded product."

Haver said Amazon is getting better at shutting down brands that do this. However, he recommends adding your products to Amazon and then submitting them to Archive.org to protect your images and listings. "This will prove that your content was live on that date and time. Next, I suggest to copyright-register the images with Copyright.gov for the images you have that are unique."

Steve Wimmer, brand manager for TriNova, said TriNova sells on Amazon Marketplace because it can compete with large brands on the platform.

"The ability to show up right next to a major competitor, with no way to buy your way to the top, is priceless," he said. "The consumer chooses based on merit and price, not some legacy shelf space or lower price generated by the economies of scale."

However, TriNova has also been victim to several scams, including negative review upvoting.

"Competitors will find 1-star reviews and upvote them until they are all that appears on a product detail page," said Wimmer. "A customer looking at the listing will be exposed to only the 1-star reviews and be much less likely to convert. We have seen this reduce conversion by as much as 50 percent."

The orange "best seller" label is a coveted, highly competitive tag on Amazon. Some sellers try to get the tag by switching the category the competition is in.

"Having an orange 'best seller' tag boosts sales by 30 to 60 percent depending on how competitive the category is," said Wimmer. "Ruthless competitors will work with the Amazon catalog team to switch your products into a different category so you lose the tag."

Saige Driver

Saige received her Bachelor’s degree in Journalism and Telecommunications from Ball State University. She is the social media strategist for Business.com and Business News Daily. She also writes reviews and articles about social media. She loves reading and her beagle mix, Millie.