Amazon expands fulfillment options, sues over fake reviews and rolls out a Mark Cuban Collection
June 3, 2016 11:40 AM
A roundup of recent Amazon.com Inc. headlines for the period ending June 3.
- Amazon plans to build and open two fulfillment centers in Edwardsville, Ill., which will bring its total number of fulfillment centers in Illinois to four. It operates one facility in Joliet, Ill., and last week announced plans to open a second one in the city. Each facility in Edwardsville, which is near St. Louis, will measure more than 700,000 square feet. Amazon announced plans for five new fulfillment centers in the United States in the past 30 days. Two weeks ago, Amazon said it was accelerating the expansion of its fulfillment capacity in the United States and would raise storage fees for merchants using Fulfillment by Amazon during November and December to ease the strain on its warehouse capacity during the holiday season.
- Amazon in Europe has rolled out the Pan-European Fulfillment by Amazon program, which Amazon says will smooth the way for marketplace merchants to sell to consumers across the European Union. Sellers ship inventory to one fulfillment center and Amazon will distribute and store it across its fulfillment center network in Europe, based on local demand. Amazon says there is no extra cost to the seller and merchants pay the local fulfillment fee, which varies by package size and country. Amazon has 29 fulfillment centers spread across seven EU countries.
- Over the past year Amazon has waged a sustained battle to root out and ban reviewers who write fake reviews for money. This week it began filing suit against the marketplace sellers who commissioned those fake reviews or posted fake reviews from accounts under their control. Amazon filed lawsuits for arbitration against three sellers this week, citing violations of the Lanham Act, consumer protection laws and breach of contract laws. Sellers named in the three suits are Michael Abbara, who is named as the operator of the Repz store; Kurt Bauer, who is named as the operator of the Barclin Home Products store; and the owner and operator of the storefront CCbetter Direct, a seller based in China. Amazon wants the arbitrator to prevent the respondents from selling products on any Amazon site, opening Amazon accounts, accessing Amazon services in any manner, and to keep them from assisting or aiding others in doing the same. The e-retailer also asks that the arbitrator make the respondents put any profits gained from sales of products on Amazon into a trust, with Amazon being the beneficiary.
“Our goal is to eliminate the incentives for sellers to engage in review abuse and shut down this ecosystem around fraudulent reviews in exchange for compensation. Lawsuits are only one piece of the puzzle,” an Amazon spokeswoman says in a statement provided to Internet RetailerPolicing fake reviews is important because research shows that consumers who interact with reviews convert at a 58% higher rate compared to those who do not, according to research from Bazaarvoice, a vendor of product review technology.
- While Amazon is intensifying its policing efforts of reviews in the United States, it is expanding reviews in Italy. Amazon.it launched the invite-only Vine customer review program there last month. With Vine, Amazon asks consumers who’ve established a track record of writing reviews other shoppers have deemed useful to post opinions about new products, which they get for free. Vine reviews are labeled as such and product manufacturers cannot edit them.
Mark Cuban merchandising
- Amazon this week announced a “Mark Cuban Collection” of products sold on the site. Cuban, the billionaire owner of the Dallas Mavericks and one of the investors on the ABC show “Shark Tank,” routinely advises entrepreneurs on the show to sell on Amazon. The Mark Cuban Collection is featured within Amazon Exclusives, the section of Amazon where sellers commit their products only for sale on Amazon, pay a higher commission (20% versus the typical 15%) to Amazon and in turn get more marketing exposure for their products. Read more about Tower Paddle Boards’ Cuban/Shark Tank/Amazon Exclusives success story here.
Amazon is No. 1 in the Internet Retailer 2016 Top 500 Guide. Amazon accounts for about 30% of U.S. online retail sales when factoring in the sale of products it stocks and sells itself, and the value of goods sold by merchants selling through the Amazon marketplace.