Amazon Profits Rise as Do Fake Reviews and Inflated Ratings

Since the COVID-19 pandemic struck, Amazon added 50 million Prime members and made $26+ billion in profits. Also surging, however, are fake reviews that bolster ratings for vendors but sow mistrust among shoppers. Amazon made it easier to leave a rating, such as one-tap ratings that allow the consumer to submit a star rating without accompanying text, but the attempt to instill confidence among consumers has largely backfired. Amazon’s one-day shipping has also made it much harder for small businesses to survive the transition to online sales.

The Wall Street Journal reports that, according to ReviewMeta founder Tommy Noonan, the problem with one-tap reviews is that, “you can’t see the customer’s reasoning, or determine whether it might be a paid review.” He found, for example, that one pair of earbuds suspiciously “had over 5,000 five-star ratings and zero written reviews.” Amazon also added global ratings in 2020, featuring reviews from “countries such as Canada, the United Kingdom and Japan.”

The WSJ reporter found that, “while the reviews might be legitimate … [she] found multiple listings with ratings for completely different products.” When pointed out to Amazon, it “removed the offending ratings and the number of reviews plunged.”

Fakespot chief executive Saoud Khalifah noted that Amazon’s effort to get consumers to use the “report abuse” button is “the worst move for consumers ever.” “A coffee machine might have a completely different set of features in the U.S. versus the UK,” he said. Also popular are “old ways to manipulate reviews,” such as picking “a product to buy and follow[ing] instructions intended to boost a product’s ranking” to qualify for a rebate.

Facebook hosts “dozens of active review groups, some with thousands of members,” and a UCLA/USC study “tracked 1,500 products on Amazon with reviews solicited from Facebook groups. The researchers found that sellers continue to juice their listings with paid-for reviews because the benefit wears off after about a month — when unhappy purchasers start countering the high scores with low ratings — and because Amazon’s algorithms appear to put more weight on recent reviews.”

Elsewhere, WSJ reports that some small businesses risk losing their businesses if they shift from brick-and-mortar stores to online only.

That was the case for Charleston Gourmet Burger in South Carolina, which competed with Amazon’s free, fast delivery. As sales plummeted, the family had to pack and ship orders themselves because they couldn’t afford the third-party shipper — and “many potential buyers complained about shipping charges” and that the products took too long to arrive. That business left Amazon two years ago “because the fees were so high” but is now considering a return because it’s just too hard to compete with them.

Many small merchants “who don’t sell on Amazon are racing to ship products as fast as they can, either eating the extra cost or raising prices and watching their sales decline — while simultaneously coping with supply-chain bottlenecks.” And, no matter how hard they try, they can’t match Amazon’s supply chain infrastructure, where the “software-optimized workflow meant to drive down the cost of every online purchase.”

A handful of smaller companies are thriving, however, some of them turning to solutions “such as Productiv, which operates six distribution warehouses … [and is] testing systems with ‘follow-behind’ robots that trail warehouse employees … and then ferry to conveyors any items their humans pick from those shelves.”

Related:
Why Express, Urban Outfitters and J.Crew Now Sell Items From All Over Online, The Wall Street Journal, 6/15/21
Buyers of Amazon Devices Are Guinea Pigs. That’s a Problem, The New York Times, 6/16/21
The Amazon That Customers Don’t See, The New York Times, 6/15/21
Power and Peril: 5 Takeaways on Amazon’s Employment Machine, The New York Times, 6/15/21
Amazon Is Blocking Google’s FLoC – and That Could Seriously Weaken the Fledgling Tracking System, Digiday, 6/1/5/21