Amazon could have benefited by collect data from your sellers to launch products under their own brand. According to a report by The Wall Street Journal, former company employees confessed that they accessed sales information for specific products that later served to launch articles under the AmazonBasics brand.
Despite the fact that Amazon has repeatedly stated that they do not use the data of sellers to compete with them on their platform, the truth is that this practice has been carried out by various area managers.
The most obvious case is that of an organizer for the trunk of the car manufactured by FORTEM, from which a 12-month report was generated with detailed information on sales and additional expenses in commissions and advertising. The product was unique in its category since its launch in 2016, until AmazonBasics released three variants from the same trunk organizer in October 2019.
Although this strategy is prohibited on Amazon, former workers said those rules are not applied uniformly and that there are ways to avoid them. Collecting specific data was a common practice followed by some in order to benefit the products manufactured by Amazon.
Currently the company’s proprietary brands make up 1% of retail sales, although its goal is to grow it to 10% by 2022. The newspaper mentions that some executives had access to data that contained proprietary information that they used to research the best-selling items against which they wanted to compete.
Extracting the information was standard practice before creating a new product
Extracting the information became commonplace in Amazon’s operating processes when they wanted to launch electronic products, suitcases, sporting goods and from other departments. Detailed reports like that of FORTEM, or furniture maker Echelon Products, were used to investigate the development and subsequently launch a product that competed directly with them.
Amazon released a statement saying they analyze sales and store data “to provide the best possible experience for their customers,” however, “strictly prohibit employees from using vendor-specific non-public data to determine which products. launch their proprietary brands. “
This is the third scandal the company faces in less than a month. It was previously noted for “mistakenly” hiding products from other vendors that offered faster shipping than Prime. Added to this is the controversy over dismissal of a worker who led a strike by demanding better protection conditions for employees against the pandemic of the coronavirus.
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