Thursday, May 20, 2010

Pricing Issues On Amazon When They Merge ASINs Incorrectly

One of the more frustrating experiences as a seller on Amazon in 2009 was the increase of cases where the buyer receives the wrong item because Amazon has merged two SKUs together incorrectly, assuming they were the same product. 

What's even more frustrating are the times when a seller receives less than they intended on a transaction, because the merge has caused the seller to offer a more expensive item for a lower price.  Not only does the seller have to pay for retreival of the incorrect item, but they are forced to honor the impossibly low price on the item the buyer thought they had purchased.

The reason Amazon merges them together is because they have a desire to reduce clutter on their website by having only one listing for each unique product on the site.  They have instituted a system that catalogs items by UPC code, and requires sellers to associate a product with the UPC code before it is uploaded to the catalog.  This would logically result in a catalog that is limited by the fact that any attempt to launch an item with an identical UPC code would result in linking to the existing listing.

The problem is the fact that the database at Amazon isn't really looking for authentic UPC codes, but rather is using the validation of the check sum number at the end of the UPC code's string of numbers to verify that the code is inherently valid by it's mathematics - not that it honestly represents the product being advertised.  As a result, in order to create a duplicate listing, all one has to do is create a fake UPC code that has a valid check-sum number at the end, or purchase a UPC from numerous vendors at inexpensive prices.

As a result, Amazon's effort to curb duplicate listings is a never-ending game of whack-a-mole.  Or in this case, whack-an-ASIN.  So far, their ability to merge listings for like products, while significantly more efficient with new automation launched in 2009, is still at best a draw in the war with merchants who have a financial motivation to create the clutter Amazon hates.  In the battle for the buybox, having your own listing, even if just for days or weeks, may mean significant additional orders that would not be obtained by being seller #14 of 26.

I can't say I have any inside knowledge about how the decision-making tree is laid out at Amazon, when they decide to merge two listings.  But, what I can say is that we can't seem to go a week without an error caused by a bad merge.

Amazon definitely fixes things back once we report them, and sometimes with lighting quick response times.  That is impressive for a company of their size.  But, the havoc wreaked on buyers who need things by a deadline, or for sellers who already have razor-thin margins, this practice is more than just annoying. 

I have personally witnessed buyers who otherwise would have gotten a great deal on something that delivered very quickly after the order was placed turn into cases where they promise never to come back again - it's just so difficult to understand why the effort to make the site less cluttered can justify the collateral damage to buyers and sellers who have no ability to control or navigate the situation.

My solution is that if there must be tolerance for something, it should be for a small degree of clutter in duplicate listings that take a little longer to merge, rather than all these bad buying and selling experiences that are driving people away.  The drive to be hyper-efficient in policing the site for like items means that mistakes are made - because machines still are dumber than humans.  For the moment.

I think the insane drive to have the lowest price on Amazon is a factor in this too.  Without an algorithm that so heavily weights the lowest price, sellers would not be creating the massive amount of clutter in extra listings because they would instead get more of the buybox percentage by staying on the primary listing.  Just like anything, the behavior changes with the winds of the profit motive.

In the end, we know that Amazon isn't about to change their marketing away from having the lowest price.   It's the one thing we can count on going forward.  The only way to overcome this is by someone either developing a universal product catalog that is a true authority on UPC codes, or with new programming that helps sellers identify mismatches and fix them before buyers become entrapped in a bad merge transaction nightmare.

I just wonder how many people have to have this experience before action is taken.