The World of Foreign Amazon Sellers: Strategies and Tactics Revealed

As eCommerce continues to grow rapidly, it's essential to understand your competition and the strategies they use. In particular, sellers from various countries have been increasingly dominant on the Amazon platform. According to Marketplace Pulse, in 2020, more than 75% of new Amazon sellers were from a particular region in Asia. In this article, we will delve into the tactics and strategies commonly used by these Amazon sellers and how you can compete with them.

It is important to note that while these are common strategies and tactics used by those Amazon sellers from this region, it is a generalization, and not all sellers operate in this manner. Additionally, it is not just sellers from one specific region who use these tactics.

Now, let's first explore a few strategies often employed by these Amazon sellers.
Sales Volume Strategy
Many of these sellers, especially with factories, believe in achieving volume over profit. Their goal is to gain market share in hopes of reducing costs from economies of scale. The more they produce, the lower the cost, and eventually, they hope to earn a profit. Smaller factories also use this strategy to keep the factory line busy. Workers make money when there are orders, and without orders, good workers will leave. While this strategy can lead to competitive pricing, it often comes at the expense of brand, product quality, and customer satisfaction.

First-to-Second Strategy
There is a concept where being second to market is the safest and best approach to product development. The sellers who follow this strategy aim to be second to tactfully copy (yes, that is a term) a new and unique product recently launched and is selling very well. The idea behind this strategy is that being second does not have to pay for the cost of R&D and concept testing, but will enjoy a portion of the market share gained from the original seller.

Price Strategy
These foreign sellers often believe that achieving the lowest possible price is the best strategy, even at the expense of building brand equity. There are many costs to branding, quality assurance, and customer service, which are often deemed as excess costs in their pursuit of cost-cutting.

Now, let's delve into the tactics Amazon sellers often use from this region.
Fake Purchases and Reviews
The sellers from this region fundamentally believe buying fake orders and reviews is a means to an end in eCommerce platforms. Boosting your product listings with artificial sales velocity and reviews will trick the Amazon system into thinking your product is better than others, therefore pushing the product up organically. Since fake orders and reviews are a standard to compete in their home eCommerce platforms like Taobao, this tactic is normalized in the minds of these sellers.

Hijacking Listings
Hijacked listings occur when a third-party seller steals the buy box of an existing product listing by selling a different and usually inferior product at a lower price. Some sellers do this to eliminate slow-moving inventory by hijacking a popular listing. If left unchecked, a hijacked listing will end up with many negative reviews since buyers unknowingly receive shipments of products sold by the hijacker, which will not be as advertised on the product listing.

Incentivized Reviews
It's common for sellers to include a note in each product asking for a 5-star review in exchange for a gift (usually money). This is against Amazon's terms of service.

Malicious Reviews Manipulation
Instead of buying fake positive reviews for their products, these sellers may buy fake negative reviews targeted at their competitors' listings.

Malicious Listings Manipulation
It is suspected large companies from this region with a vendor central account can change attributes in a competitor's listing to trick the Amazon platform into delisting and deactivating the targeted product listings. Since these changes can be reversed over time, this is usually done before big sales holidays like Prime Day or Black Friday.

Below are some tips for competing with these strategies and protecting yourself from these tactics:
· Build a strong brand with a focus on quality and customer satisfaction.
· Monitor your listings for hijackers and report any suspicious activity to Amazon.
· Report any incentivized reviews

At One Apollo, we specialize in helping businesses navigate the complex world of eCommerce, including protecting their Amazon listings from malicious tactics and implementing strategies to compete in a crowded marketplace. Contact us today to learn how we can help your business succeed in eCommerce.