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Reputation management
Amazon pricing error
JackieBlue




msg:4311322
 2:03 pm on May 12, 2011 (gmt 0)

Hi folks. We had an automation error on Amazon last week. An automated feed changed the all the prices so that some items were way overpriced and some were way underpriced. It was discovered and corrected in about 8 hours - but not before 75 orders came in on products priced 90% off or more. We, of course, sent emails to the customers, informed of the error, and cancelled the orders. We also contacted Amazon and alerted them to the issue.

Most of the customers(and Amazon) were understanding. However, we have a very few who are angry and could cauase a great deal of harm from a reputation standpoint.

We have offered some freebies/discounts to these customers but I am still concerned. Any advice on how to handle these situations?

 

piatkow




msg:4311380
 4:02 pm on May 12, 2011 (gmt 0)

If its your error then, if you can absorb the hit, you should bite the bullet and honour the prices. Anything else opens you to bad publicity.

Of course the people who are complaining most probably had orders that had over and under pricing on different items cancelling each other out. They will demand that the be overpricing reduced but the underpricing honoured.

The legal side will vary by jurisdiction.

JackieBlue




msg:4311396
 4:22 pm on May 12, 2011 (gmt 0)

I'm ok legally - (wife is an attorney). couldn't honor the prices - too much money involved and then there would be no reason to worry about the reputation - I'd be out of business. Nobody bought the $5 item priced at $200, only the $200 item priced at $10!

jwurunner




msg:4311448
 5:24 pm on May 12, 2011 (gmt 0)

Hi,

By cancelling so many orders, your order defect rate may go above 1.4-1.5% Once this happens more likely than not Amazon will ban your account. Even if they told you it was ok, Amazon will usually suspend a seller for high cancellation rates and/or a high defect rate. Even if an order is cancelled, a customer can still give feedback and file an a-z for non delivery.
I would do the math and make sure you fall below the threshold for both order defect and cancellation. I would then ship the orders for the people that are upset.
Once you are banned from Amazon, they will not allow you back on. You need to weight the business impact of not having the Amazon selling channel vs the losses from selling below cost.
A few years back we made the same type of error. We decided to ship the orders, to prevent any backlash, and learned from our mistake.

Good Luck.

JackieBlue




msg:4311805
 1:12 pm on May 13, 2011 (gmt 0)

Thanks all. Our cancellation rate is very high - hopefully it will drop quickly. Amazon is not our largest market or anything but I would hate to lose it. Fulfilling those orders really wasn't an option - it would have taken us a year to make up the losses in the Amazon market.

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