Problems at the Everything Store
Amazon’s founder and CEO, Jeff Bezos, always planned for his company to become “The Everything Store”—an online place where literally anything could be purchased conveniently at the lowest price. He realized that one company can’t stock everything, so early in its history, Amazon made deals with companies like Target and Toys “R” Us, enabling them to sell their products on Amazon’s website. Bezos was happy to provide the sales platform because it expanded the inventory available to his customers, plus Amazon got a cut of each sale.
Today, millions of small and large companies sell billions of dollars worth of products on Amazon’s site. Each item on Amazon can be bought from one or more of numerous sellers including Amazon itself (acting as the retailer) or various third-party retailers (in which case Amazon is just a middleman). However, some of these other marketplace sellers, many from third-world countries, began selling inferior and counterfeit items to unsuspecting customers around the world. Despite its vast resources, Amazon struggles to police all of these millions of sellers worldwide, and you can’t count on the company to keep unreliable components off its site.
Not Their Fault?
Amazon has been sued multiple times by people hurt by defective products purchased on its site. The stories include a family from Tennessee whose home was burned down by a hoverboard’s defective battery and a student from South Jersey who got injured when his phone charger exploded in his pocket! The sellers in these cases were sham businesses, fronts for foreign distributors beyond the reach of American courts. Lawyers for the plaintiffs argued that Amazon should be held responsible for its marketplace, asserting that it knew or should have known about the dangers of the defective products on sale on its site. So far, however, the law has always come down on Amazon’s side. The perspective taken is that a market operator like Amazon or eBay can’t be expected to control what others do in its space; after all, should Starbucks be liable if criminals organize their crime while in the coffee shop? Just as Starbucks can’t police every conversation taking place within its walls, Amazon can’t control all the sales happening within its electronic space.
Even Amazon’s Own Supplies Are Problematic
The problems on Amazon, however, go much deeper than just the marketplace: even items that it sells directly (not through a third-party seller) may be cheap knockoffs. In October 2016, Apple produced research during a lawsuit that a stunning 90% of Apple-branded chargers being sold directly from Amazon were fakes! More recently, Daimler has sued Amazon for the same issue with car parts, pointing out that in addition to the financial and reputational loss this caused, the sale of defective car parts is a danger to the public. Because these sales are Amazon’s own (not a marketplace retailer’s) and the lawsuits are coming from large adversaries, it is much harder for Amazon to shrug off these claims. But until Amazon is forced by the courts or its customers to clean up its act, purchasing from Amazon is taking something of a gamble.
Buy Cautiously or Stay Away
Of course, Amazon remains an extremely popular site, and the vast majority of its sales are fine. You can limit your risks by sticking to items sold directly from Amazon, (keeping them on the legal hook), and paying attention to any suspicious signs including bad packaging or foreign lettering. Take advantage of Amazon’s generous return policies whenever anything seems even slightly amiss. On the other hand, retailers like Home Depot and B&H, which do not have questionable supply chains, have matched and even beaten many of Amazon’s prices and services. Perhaps it’s time to give your business to them.
Want to dig deeper?
Try these related articles
How GEICO Customers Can Easily Save Even More $