Amazon Takes Heat Over Unauthorized Low Prices

It's time to review how products find their way on the site and to what extent seller reviews are accurate and prominent. That's what consumers expect and evidently what Amazon had to examine.

Joan Treistman, President, The Treistman Group LLC

As long as these products are not counterfeit, what is the problem? No matter if the 3P retailers are acquiring the merchandise through "leaks in the supply chain" or through more direct means, they own the merchandise and can sell it for whatever price they want. Isn't that free enterprise?

If manufacturers want to control their pricing better, it is up to them, not up to any retailer. It is not Amazon's problem.

The manufacturer sold the merchandise at whatever price they wanted. Deal done. Case closed.

Gene Detroyer, Professor, Independent

It's a little suspect when manufacturers unload goods "wherever" to make a quarter and then complain when those goods show up on the "gray market" of retailing. What goes around comes around. That said, Amazon's glow will fade if this practice goes unchecked for too long.

I personally rarely buy from the 3rd party sellers on Amazon. The level of trust in the whole gray supply chain doesn't work for me as a consumer. I'm guessing I'm in the minority on this 'ethics of the deal' discussion.

Anne Howe, Founder, Anne Howe Associates

This is a multifaceted problem. A consumer purchasing from a 3P vendor on Amazon (and other online sites) doesn't really know whether that Louis Vuitton bag is real or fake. Issues like this have been a continual problem with Amazon but they've proven adept at addressing these challenges.

Cathy Hotka, Principal, Cathy Hotka & Associates

3P sellers are only part of the issue. Direct selling by Amazon, often at prices below brick & mortar retailers and certainly lower when you factor in no sales tax, can cause friction between manufacturers and their brick & mortar customers, especially those that fancy themselves as providing their shoppers with the lowest possible price.

'iweinkselbaum'

Amazon is not only a retailer, it is a marketplace, where buyers and sellers meet. The question is -- can one portal be both?

Liz Crawford, VP, Strategy & Insights, Match Drive

I think Liz's question is a good one -- especially because sometimes you really have to check to figure out who you're actually buying from on Amazon. I find myself more and more wary of the sellers who have a bizarre assortment of goods for sale that doesn't really make sense. That says to me they're not in it for retailing, their in it for something else and the buyer should beware. Amazon has taken some steps to make it a little more obvious when you're buying from a marketplace seller, but they do need to be careful that others' reputations don't have an impact on their own as a seller.

Nikki Baird, Managing Partner, RSR Research

This is going to be an even bigger problem as more and more companies are turning to Unilateral Pricing. It does put Amazon in a challenging situation as they are not setting the 3P seller's pricing.

I don't see this as a major issue for the brands listed here, but for some consumer electronic brands it puts them in an extremely difficult position. They need to be on Amazon, but gray goods undermines their own pricing approach.

I also wonder if Amazon tried to stop those sales if it wouldn't be opening the door to the government reexamining these pricing policies. Not a good place for Amazon or the brands.

Doug Fleener, President and Managing Partner, Dynamic Experiences Group

"Gray market goods alone, according to a 2009 analysis by Deloitte, cost manufacturers $63 billion a year."

Pray tell, gentlemen, how someone's goods being sold on Amazon (or anywhere else) somehow "costs" them something. They haven't been stolen -- at least that's not claimed -- so presumably they've (first) been sold in the normal way to some reseller...and isn't that how people make (or lose) money?

But regardless of the semantics, what Amazon should or shouldn't do depends on who has more leverage. If they are hellbent on carrying a certain company's products, they ultimately they must accede to that company's requirements; OTOH, if the manufacturer really wants to be on Amazon, they should be prepared to suck-it up and be quiet.

'notcom'

Totally agree with Gene on this issue ... what's the problem and how is this any different than what retail has faced for centuries?

I think it's up to the manufacturer to stop or control the "leaks in the system." The smaller the leak, the smaller the problem. Who on their side is creating the holes and where are they? Amazon can't do that.

Amazon is just a tool that any manufacturer not only uses, but NEEDS to use. And considering the fact that Amazon is projected to be the largest retailer in the world in a few years, you'd think Ralph Lauren and the lot would turn to them and say, "Don't worry, we got this."

Lee Peterson, EVP Creative Services, WD Partners

I agree with many of the comments that we can't have it both ways. If manufacturers are unloading product, how can they complain they don't like the way it gets sold on the open market we live in? Who out there is not looking for a bargain? Bargain yes, counterfeit, no.

Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

I think Amazon needs to push into this to a point. It's needs to be addressed. but they do receive benefit from it.

John Crossman, President, Crossman & Company