Reply All - #124 The Magic Store

Episode Date: July 13, 2018

Sruthi asks a question “why does it seem like Amazon has suddenly gotten a lot sketchier?“ Alex investigates. Further Reading: Elizabeth Dwoskin on Amazon Buzzfeed's Nicole Nguyen on Amazon Fake Reviewers Learn more about your ad choices. Visit podcastchoices.com/adchoices

From Gimlet, this is Reply Off. I'm Alex Goldman. And I'm PJ Vote. And we're in the studio with Truthy Pidimannini. Hey, guys. Hi. Hello. You have summoned me and PJ to the studio to ask us for your help or something?

I have a question for you. I mean, I think it's a question for Alex specifically. Flattering. This thing happened to me recently that I do not understand, and I would like you to investigate, and then explain it to me. Okay. Okay.

So it has to do with Amazon. What happened was in March, my dentist, or I should say my kid's dentist, told me that I should purchase for one of my boys an electric toothbrush. And he was old enough, he graduated to an electric toothbrush. I have never purchased an electric toothbrush. I know nothing about them. So I went to Amazon and I was in a huge rush that morning. I remembered that the dentist said something, Philip Sonic hair. I saw one that seemed as if it was made by Philipsonic hair.

It was about $70. And I just clicked by one click. And I was like, okay, it's going to get here in two days. Two days later, nothing. Two weeks go by, three weeks go by. Finally, in April, I believe the date was April 6th, a box arrives. It is not an Amazon box. It looks very beat up.

And I open it, and there's this toothbrush that was so janky looking. Wait, I'm going to show you the photos. So it looks like this. Wait, let me see. There's a Philip Sonic hair logo, which looks like an old logo. Yeah. You know what it reminds me of? You know what?

Have you ever been in a farm, like a family-owned pharmacy where they haven't updated the inventory in a long time? And the shelves are a little dusty, but they have one of kind of everything you'd need at a pharmacy. This is the toothbrush they would have at that pharmacy. And you know, buying like a Pepsi from 1982. Exactly. Right. And so I looked in the back just to be like, where was this thing manufactured? And it was manufactured in the Netherlands, copyright date, 2013.

and the thing that I was most offended by is that it came with an adapter for Europe because it's a European toothbrush that I now need an American adapter to use. Oh, man. And so I went back to Amazon being like, what? Like, this was not clear, was it? And so I look, here's the one that I thought I was buying.

It also looks exactly the same, except this one says Amazon Choice. Look at the price. It's $40. It's $30 cheaper. So I was like, that's the moment when I was like, okay, I bought an old toothbrush from a different country that requires an adapter for twice the money. I took photos of the thing and I wrote a review of the store, a zoo store, London. I put up this review.

I get ready for work almost within an hour in my memory. I get a phone call. And I look at my phone and it's like a plus 4-4 number. And I was like, that's weird. Plus 4-4 country code. That's the UK country code? It's from the UK. Okay.

And so I pick it up and it's a person who has an accent. I thought it was an Italian accent. He was super polite. And he was like, hello, is this Shrithi? And I said, yes. And he's like, well, I work at the store where we sent you the toothbrush. And I'm so sorry that you had this like bad experience and like it was a misunderstanding. So he's sort of humming and hoying and just being polite. And then he says, listen, I will give you half of your money back right away. And the other half after you take down. on your bad review. Oh, no. That's so sketchy. So I mailed it back.

April, May. So, like, yeah, about two months ago, and I've not heard a peep, which, whatever, like, I can figure out how to get the money for the toothbrush back. That's not my question. The thing that I'm hung up on is, like, my feeling after this was, is Amazon basically going the way of Craigslist? like another website that I used to rely on a lot way back, like in the early 2000s. And now it's just a bunch of people trying to cheat. Yeah, they lost the war on the scammers. It's like, they overrode it at a certain point.

Right. And in that moment, I was like, wait, is this like the beginnings of what Amazon is going to be? I feel like in the old days when I bought something on the internet, I'd like check the tracking ID and look for it and blah, blah. And with Amazon, I'm like, I think at 11 o'clock I rolled over in bed and like ordered some. toilet paper. Like, that's the level of trust I have that almost doesn't feel like buying something. Yeah. You guys felt like you didn't have to research stuff anymore.

Yeah. It felt like what Amazon is saying is we did that research for you. Right. All right. I will look into this and see if I can figure out if something happened at Amazon. Okay. So, first of all, I talked to zoo store London and they told me they didn't want to do an interview for the story, but they feel like they didn't wrong you in any way.

Like, you got your toothbrush. They say their prices are competitive with other toothbrushes of the same style. And with regards to the European plug, they say the product can be used in USA and Europe as it is built with voltage compatibility. That's so ridiculous. Like, of course, a thing I buy in Europe can be used in the U.S., but you need an adapter. Like, why would an American, like, why would a person in the U.S. buy a thing that's meant to be used in Europe? I disagree with them strongly, but go on. But as I was trying to deal with your toothbrush predicament, I ended up learning a lot about Amazon itself.

Okay. So the first thing that you need to know, and I think you already know this, is the toothbrush that you got, you did not actually buy it from Amazon itself. You bought it from a third-party vendor selling on Amazon. Yeah, zoo store, London. Right. Third-party vendors are a huge part of what makes Amazon successful. Like, they're a huge part of the sales, I think in 2017. Over half of all sales on Amazon were from third-party vendors, not from Amazon itself.

That's crazy because I feel like everything I order, almost everything comes in Amazon boxes. It can come from an Amazon box and still be from a third-party seller. Okay. But the problem is that Amazon has like a very complicated relationship with these vendors. This relationship started almost at the very beginning of Amazon. So like 2000, Amazon is the structurally. young upstart getting its ass handed to it by eBay, basically. eBay is the is the Amazon of like the late 90s.

Oh my God. It's crazy. How long ago this seems. But also like I remember that eBay kind of sucked to use because it was like you never knew when you try to buy something if the seller was going to rip you off or not. Right. Yeah. eBay was terrible.

I like bought two records on it. And then I was like, oh, this is way overpriced. And I feel like I'm being cheated all the time. Yeah. I impulse bought a RV that I could not afford. And then never went. Like a mobile home? Yeah.

No, like a like a like a like a van again. I had this idea that I wanted to drop out of college and get like one of those VWs that has like a pop top. I realized that I couldn't afford it or to drop out of college. And so I never completed the auction and never used eBay again. Oh, but you bought it. Yeah. Yeah, yeah, yeah, I won. And then what?

Just didn't pay and didn't go on the website to see who was yelling at me. It's like you raised your hand at an auction house and then hit under a seat. It just like walked out the back. It was like $12,000. I don't know why I thought I was going to be able to get anyone to. give me $12,000. But what I was trying to say was that at the time, eBay was the successful one, and Amazon was like, all right, well, maybe we should do what eBay does.

So they try doing auctions, and it doesn't work. Amazon did auctions? Yeah, for a little while. But the thing that they stumbled upon that was like a big success was just taking other people's stuff and tossing it into their inventory as though it were all the same as just Amazon selling it themselves. So third-party vendors are like kind of a big risk for Amazon because they They can only control the way that these people behave to a certain degree.

It really is this thing where Jeff Bezos was like, I want this store to have every single product. And so, like, getting stuff from third parties was basically just like a magic trick to make it look like they had more stuff in their window than they actually did. They were just like, hey, we're going to, we have all this too, even though it's not actually ours. Right. And that magic trick totally worked.

It just made the place look like it was massively stocked with things. So in 2006, Amazon did something that actually made it a lot easier for anyone to become a seller on Amazon. Basically, they were like, we'll do all of the shipping for you. All you have to do is ship your product to our warehouse and we will take care of any order you get. We'll also take care of your customer service and your refunds. They're basically saying, like, you can wear a giant, infinite warehouse and you can, like, have one of our aisles, basically. Like, you pick the stuff that goes in it. Exactly.

And so tons of new sellers come on to Amazon. And with that come, like, all of these new problems. Right, because, like, as you add people to the site, you have to, like, police them, basically. Yeah. And so Amazon has basically turned into this war zone between the company trying to keep the best stuff at the top of the search results and people who figured out how to gain the algorithm trying to get their own stuff to the top. So, like, what? What are people doing? I actually talked to a guy who worked for a company that figured out all kinds of crazy ways to get their stuff to the top of the search results.

Hello? Hey, Eric. Hey. Hey, this is Alex. How you doing? How you doing, man? I'm good. Eric lives in California near L.A., and about a year and a half ago, he started working at this company that sells household stuff on Amazon.

So what did you know about this company when you started working there? Nothing. Why did you choose this job to apply to? To be honest, it was really close to where I was living. It was like eight-minute drive. And it just seemed like it was okay. It wasn't a terrible job. So I just decided I tried out.

So part of Eric's job was to push this one product. And it is not a product that I expected to be like a product where there is fierce competition. It's a thing called organic wool dryer balls. Huh. What are wool dryer balls? I had the same question. Apparently they're like a natural, reusable alternative to fabric softener. He's supposed to make it.

So when someone goes on Amazon and searches for wool dryer balls, his company's dryer balls are the first ones that come up. And being number one is a big deal because you get way more sales in that spot. I actually talked to a seller who told me that they were selling five times as many of their product in the number one spot as they were in the number four spot. But there was this problem, which was that his bosses for a while now had been using a very specific strategy to game the Amazon algorithm. So they'd notice that if your product was in a lot of Amazon carts and wish lists, it would move up in the rankings. So they hired a bunch of guys in Bangladesh to just sit in front of their computers all day and add the company's dryer balls to their carts, add them to their wish lists, just click on their listings, and just leave them there. Never check out, but just leave them in the carts. And just like dryer balls.

Like these people in Bangladesh were just like, they were like, they were like, dry a ball. more dryer balls. Yeah. And for a while, this approach was really successful at fooling the algorithm. But then it seems like Amazon figured out what people were up to because Eric says that one day the trick just stopped working. And is it like one day they used to be at the top of the search results and the next day suddenly they just plummeted?

Yes. Okay. But Eric's company pretty quickly figures out the new thing that will send you to the top of the search results, which is user reviews. So they need to get as many reviews as possible, which is actually pretty hard because The reviews that matter to the algorithm are the ones that are left by people who actually bought the thing that they're reviewing. So we would hire a contractor in China. Okay.

And then they would get a bunch of fake accounts that are tied to random addresses in the United States, right? All over, like Virginia, Washington, doesn't matter. But then the product would actually get shipped to those addresses? Yeah. So the package gets shipped randomly to some address in the United States. and then the contractor that they hired would leave a glowing review for each of those products that they sent out.

That was the thing we saw like a few months ago. We were getting all these emails about people who were like, I don't know why I've just been getting random boxes of random Amazon products. That's what that was? Yeah. Like when people would say like,

hey, why did I just receive an Amazon package full of hula hoops? It was because some Amazon hula hoop seller had bought some fake reviews. And of course that means that his company was actually losing a lot of money for each review. You take a loss. You pay for the product and you lose the actual product.

So how does it become worth it? Because every listing that we had, okay, for the wool drive balls as an example, even though we spent like, I don't know what that is, $600, right? Every day we sold $120-ish to $200. So it's a small price to pay in the end. So off of like a $600 investment. Eric says that his company was making a couple grand a day and that they are still the number one dryer ball on Amazon. Eric's company wasn't unique in realizing that the algorithm had changed.

All across Amazon, people were like, oh, if I want to stay ahead of the game, if I want to be in the number one spot, I have to get more reviews. So suddenly, everybody's in the market for fake reviews. And I talked to this reporter who a couple months ago decided that you wanted to understand how this fake review market worked. My name is Elizabeth Dwaskin, and I am the Silicon Valley correspondent for the Washington Post. Which I feel like we just should mention is owned by Jeff Bezos. Right. So Elizabeth was working with this researcher named Renee Deresta, and Renee said to Elizabeth, like, hey, listen, I think I found like the fake review motherload, like where all of the fake reviewers.

hang out. So she and I were talking one day about how she had been looking at all these Facebook groups for Amazon reviewer clubs. And she said, why don't you go and check them out, see what they're like, because they seem to be totally scamming Amazon's rules. So I went in with her and these groups were just unbelievable because you go in for a second and you kind of announce yourself like, hey, you know, I'm interested in reviewing. DM me. And then suddenly you'll start getting dozens and dozens of DMs from or Facebook messages from sellers. And they just start going in rapid fire offering to pay you to review their products. So they're like, would you like kitchen knives? No. Would you like shower patties? No. How about retractable badges? How about Bluetooth headsets?

And they'll just go on and on and on, sweetening the deal. Rain ponchos. Some of these groups are huge. Like I found one called the Amazon Review Club that has 21,000 members. And do you have any idea, like, who is actually writing these reviews? Yeah, I actually talked to one of them. Okay. He goes by the name Globoi. Glue boy. Can you just, just to get a level on your voice, can you tell me it's super early where you are, right?

You're in California? Yeah, it's around 7.15 a.m. Well, I appreciate you waking up this early for me. Oh, no problem. I'm a student, so not too bad. So, Blue Boy's in college. He's 20, and he told me that over this past school year, he did dozens of paid reviews on Amazon. And he actually gets his hands on the product?

Yeah, he purchases the product. And then once he's got it, he writes the review and he does the refund. And he gets a refund. How much info do the folks who want you to review give you? Now it's a bit more complicated because they ask you to search kind of a generic term related to the item. And then, you know, click on a few items, look at reviews so that Amazon doesn't, you know, notice that all of a sudden a bunch of people are going to. going to this product directly. Do they ask for specific language in the reviews?

Are they like, make sure to talk about this particular thing? Yes, for some sellers. Some sellers will provide a, you know, they'll give you a review, but those usually sound very artificial, you know, just sound ridiculous reading it like a robot wrote it. Usually it's a, you know, Ritesrone personal review. He told me he was like, he was like, it's pretty easy to avoid detection.

Amazon is not super sophisticated about this, but I have some, like, best practices, which are don't review everything you buy. That looks super suspicious. Right. Don't review too many of the same type of product. That looks super suspicious. Right. Why does this guy keep buying Bluetooth headphones?

And then he said something which I loved, which is he was like, the hallmark of a fake review is that it's pretty much uniformly positive. And then there's, like, one tossed off negative thing that can easily be ignored. So if you're reviewing one of those, like, dashboard-mounted cell phone holders, you would say something like, oh, I've read some people say that it has trouble sticking, but if you clean the surface first, it's totally fine. It's so funny because I bought one of these, and it was really well reviewed. And I remember getting it and it didn't stick.

Like, it just kept breaking off. And I was just like, I don't understand. Oh, my God, I feel so, I'm like, been even more gamed than I realized. That's so funny. I did ask Amazon for an interview for this story, but Amazon, even more so than most tech companies, is very, very, very secretive. They do not do interviews. They did send me a comment, which said in part, quote,

inauthentic reviews made up less than 1% of all reviews on Amazon last month, but even one is unacceptable. However, Elizabeth from the Washington Post told me that she worked with an analyst and they found a number that was very, very different. According to her, in some product categories, actually more than 50% of the reviews seem suspicious. That was a very big discrepancy. Yes, it is. As far as your toothbrush goes, Shrethi.

Yes. After everything I have learned, the fact that you got a crappy toothbrush from another country that didn't work in the United States without an adapter. And was overpriced. Oh, my God. Does not feel like a crazy aberration to me. It feels like something that is half. happening more frequently. Mm-hmm.

And the thing that you guys were noticing, that it seems relatively recent that this has started happening more frequently, I think you're right about that. I think I know why all of a sudden it feels like Amazon is not a safe of place as he used to be. Like there's an actual thing that happened? Yes. I'll tell you about it after the break. Welcome back to the show.

So gaming the Amazon algorithm is not a particularly new phenomenon. It's pretty much been going on since third-party sellers were allowed on the site. But something happened 18 months ago that made this problem much, much worse. Elizabeth Dawskin, the reporter from the Washington Post, told me what happened, which is, you know, Amazon is starting to face competition from Alibaba, which is basically like Amazon and China and other international sellers like Amazon. And in order to try and remain competitive, they made the decision to allow international sellers on Amazon. It used to be that foreign sellers would have to go through a reseller. They couldn't sell directly on Amazon, just list directly on Amazon. And now they can. So if you're the manufacturer in China, you can just, in Shenzhen, you can just list directly on Amazon. Remember, some of these companies were probably just manufacturers. They didn't have their own brand identity.

Right. Suddenly, sellers in other countries, especially China, who have access to electronics that are being produced there, they don't. need to go to resellers in the United States anymore. They cut out the middleman. They can just sell whatever products, no matter how good or how terrible they are. Directly on Amazon. This was the turning point for a lot of sellers where suddenly they felt like it wasn't just some fake reviews. It was just a flood of fake reviews and that the whole review system was becoming totally gamed. I guess I don't, what I don't understand is like they let in a bunch of foreign sellers, things get worse. I don't actually understand like what happened there.

What about that made things worse? Well, first of all, it's just a ton more sellers to police. Just way more people who are jockeying for the top spot in the search results. And the other thing is that a huge portion of these sellers are from China. And if they're doing anything sketchy, it's almost impossible for Amazon to do anything about it. Like, it's very difficult for them to sue. Pretty much the only thing that they can do is ban these people. Huh.

But a seller I talked to told us that in China, there are services that have started popping up that can get you a new account very easily for like a couple hundred bucks. So even the worst actors on Amazon seem to evade banning. Right. And the thing is that fake reviews are not the only weapon in the scammer arsenal. They actually have a bunch of different methods. Like there's one very common scam called listing hijacking. And I talked to a seller who was actually a target of that particular scam. How should I identify you on the show?

I mean, you don't want to use your name. Can I use your first name? Yeah, yeah. So my first name is Harrison. Harrison didn't want me to use his last name because he's worried about attracting more attention from scammers. So one of the things that he sells on Amazon is barbecue utensils. And one day someone shows up on Amazon claiming to be selling his brand of barbecue utensils. And he started getting all these negative reviews because the thing they were selling bore no relation to the thing that he actually sold.

Oh, like, he's like, I make these special tongs and they're 60 bucks and people love them. And then someone's selling like $10 tongs and they're like, I paid $60 bucks for these tongs. Do you remember when you saw that your listing was hijacked and like what it felt like to see that? Oh, I mean, I'm on Amazon like all the time. So I caught it pretty quickly, but that feeling, it's like a combination of like anger and fear. Because you work so hard to make this work to build up this product that's selling well. And then you have somebody come in there who has done basically nothing. And all of a sudden just start stealing your sales.

And then the fact that there's nothing you can do about it, it's just like the worst stealing. So here's what's going on. If a bunch of people on Amazon are selling like the same flashlight, Amazon will put them all under one listing. And so to be the bestseller on that page, generally you have to have the lowest price. But the way that some people do that is by saying they have the lowest price, but then selling like a knockoff or a counterfeit of that product. So they effectively hijack the listing. And Harrison's only choice in this situation was to try and sell his real product at a price that was cheaper than what the counterfeiter was offering.

So at that point, it just becomes like a price war. So like we, you were constantly just lowing our price like one cent below the other. guy. How long did that go on? Oh man, I do this for weeks. Like, it was just like a ridiculous game. There's these tools also. They're called like auto repricers so that I don't have to sit there all day where basically I just set it up so that every time he lowers his price mine automatically goes one cent below his. So I would do this until he got to a price where it was like so low. I knew he wasn't making money. I think it was like it was like $8. And then at that point I I bought out, I bought every single one of his units, shipped it to an address, and therefore, I mean, he's out of stock.

That seems like a bad strategy. Yeah, because I feel like then that tong seller is like, oh, I got to get some more tongs. These things just sound like hotcakes. Did it work? He regained control of his listing. So it's funny. Who knew that Amazon was such an exciting place to work in? I know.

And it's really easy for counterfeiters to hijack listings. Like, I talked to the seller, and they were like, we sell products that are manufactured. in China. What do they sell? They didn't want to say. All they would tell me is that the item has tempered glass in it. Bongs. They're selling bongs.

And they told me that the hijacking of their listings with knockoff brands has gotten so bad that they're just going to stop making things that are easy to counterfeit. They were like, we're going to go into apps because apps are harder to counterfeit. They're going to sell apps on Amazon? No, they're going to sell apps outside of Amazon. They're like, we just don't want to sell physical goods. They're leaving Amazon. They were like,

we're going to still sell this stuff that we've got right now, but it's getting harder and harder, and this is such a huge part of how we make money, we might have to just abandon this completely. Hmm. It's weird because, like, I had a feeling that something was off. It's like hearing the stories makes it feel concrete in a way that I'm like, this really sucks because Amazon is just like this thing.

that makes all the cogs in my life, like, just go smoother? I feel like also the thing it makes me realize is, like, there was, like, two, like, relatively recent news stories where people bought stuff on Amazon that was, like, very dangerously defective and tried to sue the company. Like, there was a woman who she bought a hoverboard and it burned down her house. No. Yes. Amazon was selling it.

And, like, they were coming from, like, not super reputable sellers. And so at least some of them were setting on fire. And then there was this other woman who, you know, just got a dog leash off Amazon, and it was shoddily made. And so, like, it ripped when her dog pulled and a metal part, sprung back, knocked her glasses, broke her glasses into her eye. And so she was, like, partially blinded. And she was like, I want to sue the company. Like, they sold me a super defective product. Like, there's just, there's an expectation that the things you buy will not hurt you. But in both cases, Amazon went into court, and they said, like, we are not liable for

this because Amazon is not a store. What Amazon is, is like a platinum. Like the same way like Twitter and Facebook are platforms, Amazon is saying that's true for us, even though we're selling like real physical things. And like the court agreed with them. It's so weird because I've always heard Amazon, I mean, isn't their whole thing that they're the everything store? Yes. That sucks. I know. I mean, it just feels like this magic store that you guys thought it was is definitely not what it is today. It seems much more like a place that will put you in. touch with some dude selling tongs in Hong Kong and maybe you'll get a great pair and maybe you'll get ripped off. It's just like any other website now. Do you guys want to know? I ended up buying

the right electric toothbrush from Phillips Sonic Hair on Amazon. You still bought it. You still have to offer that. Of course. Because where else? Are you actually surprised? Yeah. No. I found it the right price. It was Amazon Choice. I got it in two days. And, yeah, my kid's real happy. Reply All is hosted by PJ Vote and me, Alex Goldman. Our show is produced by Shruthi Pinimanini, Fia Benin, Damiano Marquetti, and Anna Ful.

Our editors are Tim Howard and Sarah Saracen. Our intern is Jessica Young. We were mixed by Rick Kwan and Emma Munger. Fact-checking by Michelle Harris. Special thanks this week to Ben Fox Rubin, Nicole Wenn, Wenn, Joe Keshikanas. Brad Stone, Tommy Noonan, and Lauren Dragon. Our theme song is by The Mysterious Breakmaster Cylinder,

additional music from Bobby Lord. Matt Lieber is going to see a summer blockbuster on a 100-degree day in a theater that has its air conditioning cranked way up. You can find more episodes of the show on iTunes, Spotify, or wherever you get your podcasts. Thanks for listening. We will see you soon. I set off for Planet Decaf, hoping to find a little internet.

You stayed behind an Aida Power Bar. Gross. The turtle-necked inhabitants of Planet Decaf were friendly to me. They said if I put a chip in my helmet it would give me internet. And I believe them. But there was no internet. The chip put me into a state of slow motion. My movement became sluggish.

My words drawn out and meaningless. They held me captive, for years maybe. There was a lock on my helmet. I finally picked it with an acoustic guitar string. Right. Back where you are, I was only gone for three seconds. The time moves differently there. And the chip only slowed me down further.

It feels good to talk about this. Fuck, aren't you kidding me right now? No, I definitely shouldn't have believed them, but... Not reckless, I was gonna... It's messed up. Now, that's not even what I'm saying. I'm not believing you. You just want there. The first place in that situation.

Yeah, why is that? I think what we have to do next is gonna suck.