Chukar Cherries suddenly couldn’t sell a single cherry on Amazon.com.
The Prosser, Benton County, company, whose chocolate-covered fruits and nuts have become gift-basket and trail-mix standbys among Washingtonians since the company’s founding 33 years ago, was kicked off the Amazon marketplace on July 19, courtesy of an automated email.
“Your Amazon.com selling privileges have been removed,” the email read. “Your listings have been disabled. Funds will not be transferred to you but will be held in your account.”
Amazon’s fraud-prevention algorithms had concluded that Chukar — which has been selling on Amazon’s marketplace since 2003 — was linked to another account, based just north of Shanghai, that the commerce giant had deactivated for violating Amazon’s policies. The seller account Chukar was supposedly associated with, DBING, doesn’t sell fruits, nuts or seemingly much of anything at all: It has just nine customer reviews, nearly all of them negative, with six shoppers saying they never received what they ordered. (DBING did not respond to questions sent through Amazon’s customer-service portal; no other records of the company could be found.)
Nor does Chukar have business ties to China. The company uses U.S. ingredients and employs local workers.
“The whole thing just doesn’t make sense,” Chukar Cherries founder Pam Montgomery said. “But that’s kind of Amazon for you.”
Chukar’s experience exemplifies how even as Amazon makes public-relations hay out of third-party sellers’ successes, it locks sellers into what can be a precarious, automated business relationship. Algorithmic errors and malicious competitors can lead to financially devastating account suspensions, or suck sellers into a grueling appeals process. Sellers may never be told what they did wrong or how to fix it.
“It is really critical to be on Amazon. It identifies you as a substantial business,” Montgomery said. “But it’s not easy.”
Amazon reinstated Chukar’s account on Friday, after The Seattle Times asked why Chukar hadn’t been able to sell any merchandise on Amazon.com for 67 days. In a statement, a spokesperson blamed a “bad actor” who had “created a false relationship to this seller, which led us to take action on this account.”
Amazon declined to specify who the bad actor was, what steps the person had taken to link the two accounts or what they might have hoped to gain from doing so.
“We are sorry for the poor experience,” Amazon spokesperson Cecilia Fan said in a statement.
Three marketplace consultants who spoke with The Seattle Times about Chukar’s case said whether or not a “bad actor” was at the root of the problem, much of the blame nevertheless lies with Amazon’s error-prone fraud detection software, difficult appeals system and paucity of human-powered account review, they said.
The Amazon marketplace’s sheer size — there are an estimated six million third-party sellers on Amazon.com, generating nearly $300 billion in annual sales — has led Amazon to rely on automated mechanisms for catching and punishing sellers breaking the law or violating its terms of service.
Amazon says it spent more than $700 million last year fighting fraud, abuse and counterfeit products on its platform. In recent months, it has taken a particularly close look at Chinese sellers. Since May, Amazon has banned nearly 55,000 Chinese sellers from the platform, largely for soliciting fake reviews.
Amazon’s crime-fighting technology isn’t perfect, though. In its quest to uproot nefarious sellers operating through multiple accounts, Amazon’s algorithms generate “a tremendous number of false positives,” said Lesley Hensell, the co-founder of third-party seller advisory firm Riverbend Consulting. “We work with clients on a daily basis who have been linked to accounts where either there’s a tangential linkage or there’s really no link at all.”
Amazon’s software looks for connections between accounts by trying to match business and warehouse addresses, banking information, internet service providers, IP addresses and the identities of sellers’ vendors, said Chris McCabe, the founder of consulting firm ecommerceChris and a former investigator of Amazon seller fraud.
Sometimes Amazon’s software can be overzealous. Hensell was able to get one of her client’s accounts back online, for instance, after explaining to Amazon that the business likely operated out of the same coworking space as another seller that had violated Amazon’s policies. Another client was suspended after Amazon linked the account with an account owned by the client’s ex-boyfriend of many years.
“Amazon’s technology to detect this definitely has flaws,” Hensell said.
Once Amazon has determined that two accounts are connected, it can be difficult to prove that they’re not, McCabe said. That’s what happened to Chukar Cherries.
Chukar general manager Tim Oten spent more than two months trying to prove his company had no relationship with the Chinese seller, DBING. Oten filed near-weekly appeals with Amazon, sending the retail behemoth information about Chukar’s business license, physical locations, authorized resellers and employees.
Over and over, he received an automated response: Amazon had “received your submission but (did) not have enough information to reactivate your account at this time,” according to correspondence reviewed by The Seattle Times. Oten called a helpline for sellers, only to be told by the representative that there was no one he could speak with who could help him understand what information Amazon needed to reinstate his account, Oten said.
Meanwhile, the threat of being permanently banned from selling on Amazon loomed.
“If we cannot substantiate the claim, your account will not be reinstated and this account will not be allowed to do business on Amazon in the future,” Amazon told Chukar.
Sales on Amazon make up less than 5% of the company’s revenue, an amount equivalent to “losing one of our No. 1 customers,” Oten said. “Like losing Bartell’s, REI or Whole Foods.” (Amazon purchased Whole Foods in 2017; Montgomery said Chukar’s relationship with Whole Foods remains positive.)
Bad actors do exist on Amazon, including many that have learned to weaponize Amazon’s fraud-detection systems against their competitors.
Federal prosecutors last year alleged that 10 Amazon employees took bribes as part of a conspiracy to boost the sales of some third-party sellers, in part by flagging their competitors’ accounts for fraud, which had the effect of suspending those accounts. A marketplace consultant and former Amazon employee pleaded guilty to involvement in the scheme earlier this month.
“Amazon has created a system where sellers know how to get away with abuse,” said a former Amazon retail executive-turned consultant, who asked not to be named so as not to jeopardize his clients’ relationships with Amazon. Amazon’s decision to rely primarily on algorithms, rather than human beings, to police the platform is understandable, given its sheer size, he said. But, he said, “the system is not working well.”
Chukar Cherries founder Montgomery said she’s not sure how much the company lost in sales while the company was blacklisted from the platform. Regardless, she’s not interested in seeking monetary compensation from Amazon. The company does the bulk of its business in the lead-up to the holidays, so she said she’s mostly just glad to be back on the platform before the shopping season begins in earnest.
She would, though, like Amazon to reexamine its fraud detection algorithms and hire more people to work directly with sellers whose accounts have been deactivated. (Amazon says sellers can call support representatives 24/7, and that 80% of sellers’ issues are resolved in less than a day.)
Amazon founder Jeff Bezos may also have some soul-searching to do, Montgomery added.
“He’s hurting a Seattle business, and Seattle has supported him,” she said. “Washington has supported him. That’s terrible.”
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