Study: Amazon goes all predatory on marketplace sellers
You’ve heard the expression “with friends like this, who needs enemies?” If you’re a seller on Amazon.com’s marketplace, that may explain how you’re feeling if you suddenly find yourself competing directly with the e-tailing giant. According to new research from Upstream Commerce, Amazon tracks third-party sales on its site and uses that data to sell the most popular items in direct competition with marketplace members.
Upstream reported that it came across Amazon’s activity while conducting a competitive analysis for clients of women’s clothing brands on the site.
In total, Upstream sampled 857 women’s clothing products initially sold by marketplace sellers and checked to see when Amazon initiated selling the same items. Within 12 weeks, Amazon began selling 25 percent of the top items first sold through marketplace vendors.
Is it possible that many of these products were planned purchases all along by Amazon, but that the company was slow to pull the trigger on the buy and merchandising the items online?
“We concluded that this is more than a coincidence because the numbers are extremely significant — and operational challenges are not enough of an explanation,” said Amos Peleg, CEO and co-founder of Upstream Commerce, in a statement.
Mr. Peleg said Amazon would normally be at a competitive disadvantage with late rollouts in a category that have selling cycles of between eight and 20 weeks. “It is worth being late only if you learned something during that time… something you can leverage for your bottom line,” he said.
“This is probably a case where product selection and merchandising are being informed by competitive intelligence — and on a large scale,” Mr. Peleg added.
This is not the first time marketplace sellers have questioned Amazon’s use of their data. Back in 2011 when Buy.com (later Rakuten.com) left Amazon’s marketplace, its then CEO Neel Grover told Internet Retailer, “We didn’t want to give them information on product pricing and sales that Amazon could potentially use against us.”
- Upstream Commerce Retail Intelligence Research Finds Amazon Muscles In On Its Own Vendors’ Best Sellers – Upstream Commerce
- Amazon Sees Marketplace Defections – RetailWire
Discussion Questions: Assuming it’s true, is it a wise practice for Amazon to glean data on its marketplace sellers for its own competitive purposes? What lessons can other retailers learn from Amazon’s use of competitive intelligence to help them gain an advantage in the marketplace?