As the world comes to terms with exactly what the Coronavirus is and how it could potentially affect people, some Amazon Sellers have been trying to seize an opportunity. The result of Amazon sellers who try to profiteer from the Coronavirus outbreak is likely to lead them to an Amazon suspension.
The price of protective face masks has rocketed since news of the virus first broke, to such an extent than Amazon has now decided to take steps to curb it. Amazon has removed certain listings as well as sending cease and desist emails to opportunistic sellers that have hugely inflated the price of the protective masks in particular.
On Amazon’s marketplace forums, customers and sellers have been making complaints about ‘price gouging’. One person wrote: ”So I am about to buy 500 or so of those masks. The normal retail for a surgical face mask pack of 50 is about 10 bucks, perhaps 20 with shipping. Just search Amazon for surgical face masks. The real sellers are all sold out and what is left is prices that will quote $19.00 for a pack of 50 masks with $150.00 shipping charge… Thousands of listings by the same seller on every imaginable brand with quite an interesting less than 50% feedback.”
What is Price Gouging?
The term “price gouging” has been used to describe such practises, which also come under Amazon’s fair pricing policy.
This is how that is described: “Amazon regularly monitors the prices of items on our marketplaces, including shipping costs, and compares them with other prices available to our customers. If we see pricing practices on a marketplace offer that harms customer trust, Amazon can remove the Buy Box, remove the offer, suspend the ship option, or, in serious or repeated cases, suspending or terminating selling privileges.”
Certain opportunistic Amazon Sellers have fallen foul of this amid the Coronavirus outbreak, while in Italy - the country dealing with the most cases in Europe - authorities are now investigating the hiking in prices of mask and hand sanitisers.
According to American business news outlet CNBC, Amazon has also blocked or removed more than a million products from its third-party marketplace that made false claims about the coronavirus. A report added: “The company also suspended or took down tens of thousands of deals from sellers that it accused of charging customers unfair prices.”
“There is no place for price gouging on Amazon,” an Amazon spokesperson told CNBC in a statement. The spokesperson pointed to Amazon’s long-standing policy on fair pricing, which states that the company doesn’t allow pricing practices that harm consumer trust, such as setting a price on a product that is “significantly higher than recent prices on or off Amazon.”
The moves have been backed by Thompson and Holt managing partner Craig Gedey.
He said: “At what is a worrying time for some people, it’s completely understandable that Amazon will look to implement its clear policies both over the pricing and description of products. Sellers misguiding customers with false promises about their items, or over-inflating the prices at a time of demand, go against everything Amazon stands for as a company.
Amazon Marketplace Fair Pricing
We have already started to see Amazon seller suspensions related to the coronavirus outbreak. The main two reasons are 'price gouging' and Sellers making inaccurate claims about their products. The last time we saw this many sellers suspended for price gouging was when America was hit by a hurricane and sellers increased their prices on items such as water, survival kits, blankets, flashlights etc. Amazon doesn't like sellers profiteering from natural disaster victims.
It is the sellers responsibility. To Amazon, any sudden change in market conditions should be flagged and price hikes should be suppressed.
A lot of the Sellers who have been suspended for price gouging did not intentionally increase their prices, many of them use repricing software that automatically increases prices when certain products are selling fast, when demand is high and stock is low.
Amazon always aim to put the customer first, so practises like this are in danger of leading to Amazon suspensions for those involved. The good news is that Sellers who have genuinely made a mistake can appeal the Amazon suspension and have their account reinstated. The who Amazon reinstatement process usually takes 3-7 days depending upon the sellers history”
How to prevent an Amazon price gouging suspension.
If you use repricing software then you will be more at risk of a price gouging suspension than if you didn't. Amazon uses not only your previous prices, but other people’s prices as reference too when assessing your account.
Make a list of High Risk Items
List risky high risk items and look to remove the items from the repricing software for example if you are selling facemasks, supplements or anything slightly related to the current coronavirus outbreak. Once the outbreak/risk is finished you can always list the items in the the software.
Keep up with the News
If you don’t have your finger on the pulse of the market, at least make sure you follow the news both local and international. Try to focus on the big issues and how it will impact your Amazon business.
Set price limits
If you know prices are going to rise set a limit on the repricing software, don't get too greedy as Amazon will penalise you in the form of a suspension if they deem you to be profiteering from victims.
Don't change product descriptions
It is tempting to change the product description to include some 'buzz' words such as coronavirus but including these in any listings could cause harm. Do not make statements such as 'it will cure coronavirus', 'coronavirus free' etc.
Amazon Drop shippers
Dropshippers who use the Amazon platform should be extra cautious especially if they are using integrated software with their suppliers because suppliers who aren't bound by Amazons policies could increase prices which could cause a suspension for the drop shipper.
Common Sense approach
If you are in doubt of anything put yourself in the customers shoes and ask yourself 'is this Amazon profiteering from this?' if the answer is yes then it's best not to do it. Treat the customer with respect and Amazon will respect you as a seller and you will have a mutual relationship.
Have you been suspended for price gouging?
If you have found yourself with a price gouging suspension while selling on Amazon and want to get back selling in the quickest time possible, contact Thompson and Holt for a free Amazon suspension consultation.