Many of Amazon's third-party sellers assert that most of the "just launched" merchants on Amazon Marketplace are peddling products that simply don't exist, offering a low price to entice naive buyers.
Legitimate sellers are immensely frustrated by what they see as fraudulent competition -- some even think it's an attack on Amazon, perhaps Chinese corporate espionage. The direct financial impact on Amazon is hard to judge, let alone the damage to the website's brand, but sellers' outrage is very clear.
Amazon denies that "just launched" scammers have a significant impact on their platform. "Amazon has zero tolerance for fraud," a spokesperson emailed Inc. "We withhold payment to sellers until we are confident that our customers have received the products and services they ordered. In the event that sellers do not comply with the terms and conditions they've agreed to, we work quickly to take action on behalf of customers." Amazon also noted it works with law enforcement to combat fraud.
Here's how the scam supposedly works: Someone signs up for an Amazon seller account using fake information. They use software to identify the most prominent listings, then say they are also offering those products for sale. (Occasionally the fake seller will build up a couple of months of legitimate activity first, or hijack an established seller account.) People buy from the fake listings, and are told the product will be shipped in a couple of weeks. By the time they realize the product isn't coming, the fake seller has already made off with the money, and Amazon ends up eating the refund cost.
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