Third-Party Vendors Abound on Amazon. Here’s How to Shop Smartly
Check your Amazon purchase history. Chances are, your last haul contained items from a third-party vendor, not Amazon itself.
As the retail giant has relinquished a greater share of its platform to independent sellers, products that don’t meet basic safety and labeling standards are ending up on customers’ doorsteps.
A recent investigation by The Wall Street Journal highlighted more than 4,000 listings on Amazon of products that “have been declared unsafe by federal agencies, are deceptively labeled or are banned by federal regulators.” The listings included makeup, medications, children’s toys and hundreds of other everyday products.
Amazon altered or deleted many of the listings and said in a statement that it takes measures to ensure the products on its site meet or exceed safety standards.
To compound the issue for consumers, it can be difficult to distinguish between listings directly from Amazon and ones sold by third parties. Amazon also offers a service called Fulfillment by Amazon (FBA) to its vendors, providing package delivery and customer service for third-party sellers in exchange for a cut of the sales price.
The effect, for consumers, is that a product sold on Amazon, shipped by Amazon in an Amazon-branded box may actually originate from a third-party source.
Here are five ways to check that what you’re buying on Amazon is safe.
Tips to Ensure Your Amazon Purchases Are Safe
Buying on Amazon is getting complicated for safety-conscious consumers. Third-party vendors account for an estimated 60% of Amazon’s merchandise sales, according to the company. So it’s important for shoppers to first identify who they’re really buying from.
That, plus a few more tweaks to your online shopping habits could save you a lot more than money in the long run.
1. Vet Third-Party Sellers
A third-party vendor is simply a company or person who sells products on Amazon that is not Amazon. Many household name brands set up Amazon shops to better reach customers.
Many lesser-known vendors do the same thing. Creating a seller profile on Amazon is relatively easy, and the vetting process does not, for example, include outside testing at a lab, like what is required to get a product onto a shelf at Walmart.
For shoppers searching for a given product, you can see shipping information, price, the title of the listing and average customer ratings from the results page.
What’s missing is the vendor’s name.
To find and vet the vendor, you have to click on the product from the results page. Underneath the large font of the listing title, you’ll find the vendor’s name — usually in the form of a blue hyperlink — in much smaller text.
The link takes you to a list of other products the vendor is selling. For big brand names, this step might be all you need for verification. But for smaller vendors, this page won’t give you much information about the company.
If you don’t recognize the name of the vendor, Google it and look for at least one of these things:
- A website with verifiable information, such as a list of employees, location(s) and contact information.
- A social media presence that seems authentic.
- Better Business Bureau or Glassdoor reviews.
- Other recognizable retailers that carry the vendor’s products.
To see Amazon-only products, you must select the “Amazon.com” option. “Amazon Warehouse” search results could include third-party products that are fulfilled — but not directly sold — by Amazon.
2. Look Deeper Than the “Amazon’s Choice” Label
Type just about any product name or category into Amazon’s search bar, and you’ll get reams of results. The first few products are typically sponsored by vendors who pay to appear higher in search results. The next result is likely to be “Amazon’s Choice,” a recommended item with a logo at the top left.
That logo can appear on products regardless of the supplier, and it’s not a marker of safety. An Amazon spokesperson told The Penny Hoarder that “Amazon’s Choice” is based on price, shipping speed and reviews.
The Journal found that dozens of mislabeled or unsafe product listings from third parties had the “Amazon’s Choice” recommendation.
Amazon declined to elaborate when The Penny Hoarder asked if human employees are involved in choosing what products become “Amazon’s Choice,” or if the process is entirely algorithmic.
3. Review the Reviews
Amazon’s terms of service forbid fake reviews in strong language and even threaten legal action. But in practice, fake reviews are rampant.
A search by The Penny Hoarder for social media groups soliciting product reviews found a thriving underground community with tens of thousands of participants. In effect, vendors trying to game the review system post products in invite-only Slack channels or closed Facebook groups.
When a new member joins, sellers send direct messages asking for a product review. In return for a positive review, the vendor reimburses the product and shipping costs for the review writer, plus sweetens the deal with a small commission, usually around $5 — a small price to pay if the vendor ends up higher in the search results or receives the coveted “Amazon’s Choice” logo.
There’s also the problem of hijacking Amazon reviews. The Penny Hoarder found a vendor that hijacked reviews by first selling incandescent light bulbs, which received hundreds of glowing ratings. Then the vendor changed the listing to cosmetic products, while keeping the positive feedback on the light bulbs — making the new item look like a highly-reviewed, great purchase.
Amazon says it’s aware of the hijacking issue but maintains that 99% of its customer reviews are legitimate.
The takeaway? Third-party vendors are actively trying to game Amazon’s system, meaning overall ratings can be misleading. Read through numerous reviews, not just the enthusiastic five-stars. Take some time to look at the “meh” ones and negative ones as well.
Ensure the language used in the review matches the product. Cosmetics shouldn’t have reviews or questions regarding wattage or brightness (and vice versa).
An Amazon spokesperson told The Penny Hoarder that consumers should report fake reviews to the customer service team.
4. Beware of Certain Types of Products
Multiple federal agencies set standards on different types of products to protect consumers. The majority of consumer merchandise falls under the jurisdiction of the Food and Drug Administration (FDA) or the Consumer Product Safety Commission (CPSC).
In a process known as private label selling, The Penny Hoarder outlined how some Amazon vendors skirt these regulations by purchasing products from overseas manufacturers where safety standards are lower or nonexistent, tacking on a new logo, then reselling them on Amazon as a third-party vendor.
The Journal’s investigation highlighted several types of items that you should be wary of because they run a higher risk of being unsafe should they come from an unsavory source:
- Products or accessories that touch your skin, especially ointments and makeup.
- Masks, helmets or anything that covers your face.
- Products for children or babies.
- Lithium-ion batteries, or products that contain them.
- “Anything that plugs into the wall.”
5. Still Not Sure? Buy It Elsewhere
If you’d rather not don your detective hat to hunt down every vendor you buy from on Amazon, you can always opt to purchase the products elsewhere, either at a brick-and-mortar store or from another website.
The Penny Hoarder’s guide to online stores with free shipping offers 35 alternatives to Amazon.
Several big box retailers like Best Buy, Target and Walmart run e-commerce sites where your chances of buying from an unregulated vendor are slimmer. For example, The Penny Hoarder found that Target screens potential business partners’ product certificates and licenses before sending them an invite-only application to become a vendor. Walmart’s process isn’t invite-only, but the vendor application requires a business tax ID, meaning its vendors must be legally registered businesses in the U.S.
Adam Hardy is a staff writer at The Penny Hoarder. He specializes in ways to make money that don’t involve stuffy corporate offices. Read his latest articles here, or say hi on Twitter @hardyjournalism.