Amazon suspended multiple Chinese sellers with $1 billion revenue – So what?

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Marketplace Pulse is reporting that Amazon have suspended multiple Chinese sellers and they’re not small ones. They include some of the biggest white label brands on Amazon and Marketplace Pulse estimate that annual sales from the suspended accounts top $1 billion.

Although it’s not confirmed, if this is because of review manipulation as has been suggested it would be good news that Amazon are taking action against accounts involved in underhand practices. However the question has to be asked if this is enough?

To understand why this might not bother the account holders that much, you need to look at how Chinese merchants engage with Amazon. Whilst you are sitting at home or in your warehouse running your Amazon business, buying and selling products, that’s not how Amazon selling works in China. In China a manufacturer sets up operations to make a widget. They then rent an office space next to the warehouse and fill it with ‘Amazon merchants’ each working on their own accounts selling the widget, often under different white label branding. Each merchant looks like a unique business, but they are actually just employees working for the manufacturer.

Banning any individual merchant has what could be considered a negligible effect for the manufacturer. No one really cares that much as, much as it’s a temporary annoyance, there is an office full of merchants ready to take up the slack and carry on selling the same widget.

What Amazon haven’t done is to ban the brand on Amazon. Banning the main account that owns the white label product doesn’t stop anyone else selling against the same ASIN – Amazon haven’t banned ASINs and haven’t blocked brands from being sold, they may have merely suspended a few Chinese sellers accounts that have been caught out for breaking the rules.

There are a very small number of enormous Chinese selling operations on Amazon, each operating hundreds of what look like small accounts but are in reality all owned by the same families. They’ve set up joint shipping operations to ship to the US, UK and EU and the shipping companies look like they are catering for anyone and everyone that wants to use their services but the reality is that they aren’t that fussed about winning new business – their main raison d’etre is to serve the multiple merchant accounts that all sell from the same factory.

Today’s news that the marketplace has suspended multiple Chinese sellers, even if it’s true, won’t change much that’s happening on Amazon except it’s right that they ban accounts that are operating in an underhand manner. To really make a difference and hurt anyone however, they need to ban the brands and delete the ASINs. Without taking more draconian steps by banning brands and deleting ASINs, rather than banning a few white label brand owners, nothing much will change.

3 Responses

  1. “Without taking more draconian steps by banning brands and deleting ASINs, rather than banning a few white label brand owners, nothing much will change.”

    Well said!

    It is still the wild wild west for ecommerce on the marketplaces, this was why I was a bit miffed that onbuy wanting to be pushing for cross border. Based purely on my interactions with our customers and my friends I see a real enthusiasm currently for British products and local/British companies.

    The hard part is that we are pretty much fully reliant on the Far East for manufacturing. I am hopeful there will be a happy medium balance in the future and getting the marketplaces to be a lot stricter and educate the buyers is a step in the right direction.

    I have been asking for accurate location filters/ country company filters on marketplace search for a long time! I am not 100% saying I would not buy from a Chinese company but I would like to be able to filter them out so I can confidently browse UK or other country companies when shopping etc

  2. Sadly so long as the customer seeks out the cheapest price, it will drive the Chinese to operate like they do. Even if you have a product you want to bring to market, you have to get it done as cheaply as possible…so you go to China to manufacturer it. Then a few years later they copy it regardless of any copyright (often they build this into any contracts so after a set period they can use your design!).
    All driven by final selling price. Buyers wasnt it as cheap as possible… it simply puts money in chinese pockets no matter what end of the chain, retailer or designer.
    The key lies with the customer

  3. What Amazon needs to do is have a nice big “HQ or manufactured in China” filters.
    At least let the buyers figure out all the junk products. I’m ok with a US company using china to construct the product because they are then at least held accountable if major issues arise. But not a company in china and built in china. All those products with western sounding names of products but not really needs to go away.


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