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Although review incentives-except those solicited through Amazon's own Vine review program-violate rules, for years the company was eager to have more Chinese merchants offering an abundant supply of low-priced goods via FBA and didn't seem to aggressively enforce its policies. But now Amazon is cracking down on pay-for-praise schemes, which can include other forms of consideration for reviews including free extended warranties, discounts or refunds, or gift cards, as the company looks to restore a sense of order to its previously free-wheeling marketplace. Starting in the second quarter, Chinese industry observers say, the company abruptly changed course and began suspending retailers and freezing their inventory at its U.S. warehouses. More than 50,000 Chinese retail accounts have lost their place on the platform, resulting in lost sales of 100 billion yuan ($15.4 billion), according to the Shenzhen Cross-Border E-Commerce Association. China-based retailers account for about half of Amazon's marketplace top sellers, up from 13% in 2016, according to Marketplace Pulse. Boosted by sales on Amazon, Anker Innovations Technology Co., which hasn't been accused of any ratings manipulation, last year sold about $1.4 billion of mobile chargers, cables, power cords, and other accessories, up from $378 million in 2016. During that period, Amazon's marketplace business continued to expand and overtook its online retail business, where Amazon buys inventory from wholesalers like a traditional store. Big-box competitors such as Walmart Inc. and Target Corp. are copying Amazon's online marketplace model.
Although review incentives-except those solicited through Amazon's own Vine review program-violate rules, for years the company was eager to have more Chinese merchants offering an abundant supply of low-priced goods via FBA and didn't seem to aggressively enforce its policies. But now Amazon is cracking down on pay-for-praise schemes, which can include other forms of consideration for reviews including free extended warranties, discounts or refunds, or gift cards, as the company looks to restore a sense of order to its previously free-wheeling marketplace. Starting in the second quarter, Chinese industry observers say, the company abruptly changed course and began suspending retailers and freezing their inventory at its U.S. warehouses. More than 50,000 Chinese retail accounts have lost their place on the platform, resulting in lost sales of 100 billion yuan ($15.4 billion), according to the Shenzhen Cross-Border E-Commerce Association. China-based retailers account for about half of Amazon's marketplace top sellers, up from 13% in 2016, according to Marketplace Pulse. Boosted by sales on Amazon, Anker Innovations Technology Co., which hasn't been accused of any ratings manipulation, last year sold about $1.4 billion of mobile chargers, cables, power cords, and other accessories, up from $378 million in 2016. During that period, Amazon's marketplace business continued to expand and overtook its online retail business, where Amazon buys inventory from wholesalers like a traditional store. Big-box competitors such as Walmart Inc. and Target Corp. are copying Amazon's online marketplace model.
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