Amazon sellers fined hundreds of thousands! Beware of this operation

During the epidemic, Amazon continued to identify sellers as price fraudsters, and removed their products or even closed their stores on the grounds of "violating the principle of fair pricing." During that period, sellers could be seen discussing the issue of "price fraud" in the group almost every day.

Now that it is the peak season at the end of the year, Amazon seems to have relaxed its stance on price gouging, and few sellers have come forward to complain. However, Amazon has not been idle in the past two days, and has taken several sellers who were shut down and had their products removed from the shelves due to "price gouging" to court!

According to foreign media reports, Amazon earlier provided the information of three third-party sellers selling hand sanitizer to local law enforcement agencies on the grounds that they violated the platform's "fair bidding principle" and were "suspected of price fraud."

Amazon said that these three merchants sold more than 1,000 types of hand sanitizers on the Amazon platform between February and March, and their prices were much higher than other identical or similar products on the market. In the example, the merchant Northwest-Lux sold hand sanitizers that usually cost $20-35 for $79-129. Another seller, Mobile Rush, also sold products that were $1-3 higher than similar products.

Yes, you read that right. Just because the price was $1-3 higher, the seller’s products were removed from the shelves for price fraud. Not only that, the judicial department has recently announced punitive measures against these sellers. They need to pay a fine of more than $52,000 to New York State and compensate consumers for nearly $23,000.

In these two cases, the seller who set the higher price raised the price by three or four times. If the seller was convicted of price gouging, it would be hard to say anything. But the seller in the second case was fined and closed down for only raising the price by 1-3 USD , which was really shocking. After carefully checking the original texts of several media outlets, the data was not wrong.

I believe that when some sellers adjust prices on a daily basis, the amount of adjustment is more than two or three US dollars. If this is judged as "price fraud", wouldn't everyone be in danger?

After I re-checked some information, I found that the examples of these three merchants were very coincidental. They were caught just before Amazon adjusted its "price fraud" judgment algorithm.

February and March were months when price fraud was frequent and Amazon was frantically closing stores and removing products. At the time, many sellers and officials reported that the price fraud algorithm was unreasonable and did not take into account the skyrocketing production and logistics costs of goods caused by the epidemic.

Amazon specifically issued a statement in April, saying it would reshape the algorithm for determining "price fraud." It would add the increase in goods costs, labor and logistics costs to the algorithm's statistical factors, and would also implement a dynamically changing "price fairness principle" in combination with relevant local laws and regulations.

So since April, price gouging has become less and less common, and now it is rare to see sellers saying that their stores have been shut down because of fraud. The sellers who were fined just happened to be caught in February and March, which can only be said to be very unlucky. At present, none of the three sellers have appealed or made a statement against the fine. If they want to protest this vote, they still have a chance to dismiss the fine.

In August, there was also a price fraud investigation, but the sellers in this case joined forces with the Online Sellers Association to sue the federal government for the state government's price fraud investigation. In the end, the federal government ruled that when the state Attorney General Daniel Cameron tried to target individual sellers under state law, he violated the constitutional protection of interstate commerce and other provisions. The state government's fines for "price fraud" against sellers were left unresolved.

It seems that as long as we sellers are still selling on the platform, no matter how compliant we are, we may face some obvious and hidden dangers. Only by making plans for various situations in advance can we fully protect our stores and funds.