Gaming Amazon — how the online retailer’s reliability may be starting to falter
More and more stories crop up about Amazon and marketplace manipulation — what does this mean for the future?
One of the most interesting stories I read last week came from The Verge, titled “Bad Romance: To cash in on Kindle Unlimited, a cabal of authors gamed Amazon’s algorithm.” It’s a fascinating, deeply-researched read about Kindle Unlimited, the reading community around romance novels, and (perhaps most importantly) how some of Amazon’s pricing and compensation equations can be gamed, or tricked. On its own, this article is compelling. Coupled with other stories about Amazon manipulation, it’s perhaps illustrative of even greater trends.
Take, for example, this article from The Wall Street Journal about fake products and how they can ruin small sellers on Amazon. Or perhaps this podcast episode from Reply All about how these same sellers have become experts at fake reviews and placement. Amazon is a massive behemoth of a company, one that set records during its made up holiday a week ago and convinced cities around the United States to make the best offers to land its second headquarters. The company is in an enviable position right now, but if there are real problems with its marketplaces, that could signal trouble ahead.
Amazon as a company is appealing because its products are easy to find, are usually priced competitively, and are reliable. I have a Prime subscription, I occasionally buy books for my Kindle, and Amazon.com is usually the first place I go when I want to find the price for something, so I’m well aware of the reasons to use these services. Perhaps the company’s biggest calling card is how it literally made up a holiday in the middle of July and forced its competitors to match stride. Revenue and market share are good evidence of Amazon’s success, but this flexing of corporate muscle is even more illustrative of the company’s casual market dominance.
As the podcast hosts of Reply All argued in their recent episode, Amazon has risen to this success partially because people view it as a magic store where everything is available. From big-name electronic items to small, niche products, it’s hard to think of something that isn’t simply there on Amazon Prime. However, fake products are (theoretically, at least) a huge problem for this promise going forward. Reply All investigated how easy it is for sellers to sell fake products through Amazon’s marketplace with relatively minor repercussions. Since most of these sellers operate internationally, the most punitive punishment available is a ban that isn’t too hard to skirt around.
Authors trying to manipulate Amazon’s compensation algorithms for book reading is a perhaps less troubling issue (since these are still real products, after all), but it still raises questions about the long-term sustainability of services like Kindle Unlimited. As author Sarah Jeong noted in the article from The Verge, there’s no reason to think the strategies these authors employ will always remain hooked to the romance genre. While they haven’t yet, these tactics could easily mark the entire Kindle Unlimited storefront. Jeong’s article signals greater awareness of Amazon’s shortcomings in the author-compensation arena, and that awareness should continue to grow.
Amazon isn’t going away anytime soon. The company is riding on massive success that should only continue to grow. It’s interesting, though, to see these cracks in the armor of a company that seemed bulletproof before now. If Amazon’s reliability continues to falter, it could open the door for competitors to regain some lost ground or for a new company to step in. So far, Amazon hasn’t been able to stop people from manipulating its many algorithms for physical products and book-reading compensation. It will be interesting to see if this ever changes.
