Cross-border dropshipping annoys independent merchants! Amazon (AMZN.US) AI sales test project sued

The Zhitong Finance App learned that around Christmas, Sarah Burzio noticed that her stationery business welcomed some mysterious new customers during the peak holiday sales period — a series of orders from anonymous email addresses associated with Amazon.com Inc. Sarah Burzio didn't sell her products on the retail giant's website, but she soon discovered that Amazon copied her product list and used the buyforme.amazon email address with a similar garbled suffix to place orders on behalf of Amazon customers. “To be honest, I wasn't worried at first because we were actually getting customers,” she said.

Complaints then began to appear. Amazon product pages automatically generated by an experimental artificial intelligence tool don't always match the correct product in Sarah Burzio's inventory. At one point, a consumer thought she would receive a softball size relief ball — a product Sarah Burzio's Hitchcock Paper Co. didn't sell — but ended up receiving a smaller version sold at her store in Northern Virginia.

Sarah Burzio said, “People received the wrong item when they ordered these Christmas and holiday gifts and asked for a refund.” “We have to explain that this is Amazon doing this, not small merchants like us. We shipped exactly as we received the order we received.”

Between Christmas and New Year, small shopkeepers and crafters who found their products listed on Amazon began sharing their experiences on social media and reminding their peers. Six small store owners said they found themselves selling products on Amazon's digital marketplace without their knowledge. Some people — especially sellers who deliberately avoid Amazon — think their consent should have been obtained in advance. Others pointed out that the incident was quite ironic: Amazon used AI tools to search for products across the network, while suing each other for Perplexity AI using similar technology to buy products on Amazon. Perplexity denied wrongdoing and called Amazon a “bully.”

These controversial product pages are automatically generated by Amazon to allow consumers to buy products sold by other retailers. While this strategy may result in unattainable sales for independent sellers, it also raises questions about where the customer relationship belongs and who is responsible when issues occur. Some retailers said the pages displayed incorrect product images or misrepresented wholesale prices. Merchants using Shopify's e-commerce tools claim that the system flags Amazon's automated purchases as potential fraud.

Jewelry artist Karla Hackman from Santa Fe, New Mexico, spotted several of her creations appearing on Amazon after seeing a warning in the artist's social media group. She said, “I'm fighting alone. If 100 orders pop up all of a sudden, I might not be able to handle it. When someone takes your proprietary, copyrighted work, you should have asked for my opinion. This is my business, not theirs.”

In a statement, Amazon spokesperson Maxine Tagay said sellers are free to opt out. She said Amazon's two programs — Shop Direct (link to another retailer's website to complete the purchase) and Buy For Me (copy the product page and complete the purchase without leaving Amazon) — “are all projects we're testing to help consumers discover brands and products not currently sold in Amazon's own stores, while helping businesses reach new customers and drive incremental sales.” “We have received positive feedback on these projects,” she said in an email statement.

However, Maxine Tagay did not explain why it was included in these programs without informing the seller. She added that the number of products covered by Buy For Me has exceeded 500,000, while the project was around 65,000 when it went live in April last year.

Independent seller Chua said that after she sent an email to a support email — branddirect@amazon.com — her products have been removed from Amazon and she never intended to sell on Amazon. She said, “I just don't want my products to appear there. These products are designed and purchased by ourselves; it's not a place we want to go. It's like Airbnb popping up and trying to sell your house without your permission.”

Chua also claims that she has received a call from an intellectual property attorney. As of noon on Tuesday, 187 other merchants had filled out a questionnaire she set up to find out how common it is for Amazon to list products without request.

Among those who filled out the questionnaire was Amanda Stewart, the founder of Salt Lake City-based retailer Mochi Kids. For many years, she ignored Amazon's requests to join the platform, but last week she discovered that most of her inventory was listed on Amazon no matter what. Her order records show that more than a dozen transactions came from a mysterious Amazon address. “I'm really shocked that our entire product catalog is on it,” she said.

Amanda Stewart is concerned that these product pages may infringe the copyright of product photos or violate agreements between her and her vendors, most of which are independent brands, prohibiting the resale of products on Amazon.

For many years, Amazon has invited independent merchants to sell on its platform, and these businesses now account for around 60% of Amazon's sales. These merchants actively partner with Amazon to directly manage their product pages and pay commissions to Amazon. Juozas Kaziukėnas, an independent analyst who has been tracking the Amazon marketplace for a long time, said that today this practice — essentially “incorporating” merchants into Amazon stores without their knowledge under certain circumstances — seems unprecedented.

Juozas Kaziukėnas said: “They seem to have become more aggressive and are starting to introduce brands they have not chosen to join. They just included a bunch of random e-commerce websites. It's a very messy way to force this feature to start.”

Sarah Burzio called Amazon's customer service line when she was trying to figure out what exactly Amazon was doing with her product page. An Amazon customer service agent asked her to provide her seller account ID — and Sarah Burzio has never had such an account before — then advised her to open an account and pay $39 a month before receiving seller support from Amazon. Sarah Burzio said, “When things started to go wrong, Amazon didn't set up any resolution mechanisms. It was just 'We did this for you, you should be thankful, now go fix it yourself. '”