Consequences of Amazon’s Free Products Removal
In order for companies to get credibility, they would essentially “pay” consumers to rate their products. In exchange for reviews, companies would send them freebies. There are thousands of reviews on Amazon, but companies who participated in this wanted to make sure that they could sell their products at a high price.
These product pushers sometimes wouldn’t even write the reviews, the companies they were writing for wrote them. Amazon tried to stop this by putting a “Verified Purchaser” system in place, but users could still get around that. Amazon recently banned “incentivized” reviews.
What are the consequences of banning “incentivized” reviews?
- Companies have to build credibility themselves
You may think, well yes as a customer I want to know that the company I am buying from is credible and sells quality products. However, from the company’s point of view, if they don’t have a lot of reviews, customers aren’t going to buy from them. Building up credibility on a website like Amazon isn’t easy when thousands of other companies are selling the exact same product as you.
2. Entry Barrier
Banning “incentivized” reviews creates an entry barrier in the market. This makes it difficult for new entrants to enter the market because of the competitiveness on Amazon. There are thousands of sellers and for a new seller to enter the market without any reviews makes it nearly impossible to create any credibility.
3. Users won’t leave reviews
Customers who receive discounted or free products, tend to leave reviews, but if they don’t receive anything, they’re unlikely to leave reviews. Amazon has a very strict policy on users who can give reviews. Customers must spend at least $50 and be a member for 6 months. By not incentivizing users, customers are very unlikely to leave reviews and this will decrease sales for Amazon.
So, was this a good or bad idea for Amazon to ban incentivized reviews?
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