This week Amazon made some changes to their terms of services. Even if you’re not an entrepreneur who sells on Amazon, there are things that will be impactful for you to hear as every channel and business model goes through a 3-year cycle. For more than a year Ryan has spoken about his prediction that the consolidation would happen in September of 2015.
Recently, I had the opportunity to meet with a well-connected employee at Amazon. During our time together, I showed him several loopholes that blackhatters were using to exploit Amazon’s algorithm.
Upon seeing this, he shared the loopholes with decision makers at Amazon, and within a few days, Amazon made the update to its TOS.
While I cannot confirm that these changes were directly made to address the issues that I brought up, they do appear to correlate. For this reason, I feel confident in saying that these changes are made to address black hatters and cheaters, rather than common marketing practices from good sellers.
If you are being affected in a way that is impacting your business, then you didn’t play the game right! If you have been building your entire business based on loopholes and haven been negatively impacted, then you were probably doing something wrong.
Amazon’s terms of service has always been vague, and the policing has been lack luster. The intent of the changes pertain to the manipulation of bestseller rank, which means the display of how well you rank in the store according to sales and the process of giving away discounted units in exchange for reviews. This language is being interpreted that the intent of this change is to limit and prevent black hatters, aggressive review getters, and services that sell or promise reviews.
It is largely known that by driving a significant amount of sales to Amazon either by using your own list or outside launch services is a great way to give the Amazon algorithm what it wants to rank you for keywords.
The term ‘manipulation’ has been used aggressively here on Freedom Fast Lane. Are there ethical forms of manipulation? Yes. All forms of sales and marketing is a form of manipulation.
The changes address the unethical manipulation of bestseller rank through faking sales and tricking the algorithm into thinking that one is a strong seller when they aren’t.
Black Hatters & Aggressive Review Getters
There has been a process that has worked for years where one could fake sales, inflate perceived sales ranks, and Amazon would reward those fake sales and rank the seller higher. The changes target people who incentivize reviews in an overt way as well as review getting services that promise reviews in exchange for discounts.
Amazon’s Overall Intent
Amazon’s overall intent is to create a fair marketplace for everyone who is selling. They are attempting to clean up the underhanded loopholes. Amazon is built to be a place where big brands are sold and multiple sellers compete for the best price. Amazon is not built to be a launching platform for new brands; however, that is what it is used for. Amazon doesn’t quite know what to do with that yet. When there are independent brands that look like they might be manipulating, Amazon can mistake that for a violation of the terms of service. There will be shutdowns that aren’t warranted as Amazon will make mistakes.
When Things Change
The intent is to target people who are unethically manipulating the search results, trying to get around the system. Stay quiet among the noise unless you are overtly doing something wrong. If you aren’t doing anything wrong, sit back and wait for it to shake out.
In business, when you have people come in and don’t play by the rules, they make it bad for everyone else trying to run a legitimate business and corrections need to be made. This is the case in every market, channel, and business model; it is healthy and necessary. Your job as a business owner is to put your company in a position to weather the storm and not be dependent on the things that got consolidated.
When things go through ambiguous adjustments, wait for things to shake out as sellers get consolidated, leave the marketplace, and get shut down. Focus on your long term strategy and how to grow your company over the next five years rather than what you can exploit over the next 6 months.
Launches Have Their Place
Launches will always have their place. If it is unethical to have a list of people who buy products at a discount or at full price, then very few people would be in business. The launch process existed a lot longer than Amazon has, but the game of the launch sometimes changes. Services that make launches easier will always exist, even if the overall strategy changes.
Questions to Ask
It is always a good idea to ask the question, “What happens if I am negatively affected by this?” or “How do I get independent of a place that is controlling my business?”
Most entrepreneurs based on Amazon are completely dependent on that channel. This is a cash flow business and not a sustainable business. At any point the channel can shut you down. Are you getting independent of Amazon? Are you building your customer list? Are you building up your own store? Are you pursuing other channels? Do you have sources of buyers and traffic outside of Amazon?
Once you have maximized the channel, you have two choices. 1) Try and protect your territory and being completely dependent on launches. 2) Get bigger and grow a real business as you have a sales channel that will fund you hiring more people and move into different channels.
Shut out the noise, stop freaking out, reinvest into your long term strategy, and use this change as a wake up call to think beyond where you are thinking and limitations. You will build a bigger and better business that will be more immune to changes.
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