Short term gain vs. long term pain

Tommy Noonan got tired of finding fake reviews on Amazon. He’s not a software engineer by trade, but he created ReviewMeta.com, which has analyzed 203 million reviews on Amazon and found that 11.3% of reviews (22.8M) are fake. In some product categories, like headphones, half of the reviews are fabricated. One of the “badges” Amazon touts for product authenticity is their “Verified Purchase” badge, which Amazon has been using as part of their ranking algorithm since 2016. However, this badge doesn’t actually verify anything, because sellers find people on Facebook to refund their purchase and throw in a commission in exchange for a 5-star review.

“Amazon is a $900B company with thousands of brilliant engineers. I majored in construction management. It seems like they should be able to figure this one out.” – Tommy Noonan

If a construction manager can spot fake reviews, why can’t the thousands of engineers at Amazon do the same thing? Amazon claims that less than 1% of the reviews on their site are untrustworthy. Anyone who actually shops on Amazon – particularly in electronics – knows that’s not true.

The huge uptick in fake reviews has come as Amazon has pursued Chinese sellers selling direct on Amazon, who all sell a bunch of similar knock-off products. They’re in a race to the bottom, and generating fake reviews is what they have to do to compete.

Recently there was a great article in The Hustle that illustrates the problem: the author got paid to review a 3 pack of iPhone lightning cables that almost blew up his phone. You and I might very well buy an “Amazon Choice” item with over 5,000 5-star reviews, just like those cables, and my iPhone X might very well pay the price. Who am I going to blame when this happens? I probably wouldn’t have even noticed that Amazon wasn’t actually the one who sold me charging cables with messed up voltage that blew up my phone – but I bought it from the Amazon platform.

What does Amazon gain from all of this? A 15% commission on sales. That’s a short term gain for the long term pain of losing trust in their platform.

Jeff Bezos is a smart man, but this is an amazingly stupid trade-off. Your brand represents the experience that customers have with your company, and that brand experience directly ties back to whether or not a consumer will return to your business or product. I talked at length about this in Unlocking the Secrets of the Challenger Sale, and while it’s hard to quantify the amount of brand damage Amazon is doing by allowing this to happen on their platform, it’s clear they are taking a big gamble.

This is a question we should all ask ourselves in our own businesses: what are we doing for short term gain that has a long term price? Is it worth it?

All the best,

Bill Bice
CEO