Small businesses bankrupted overnight as Amazon sells their stock for 1p » SMEInsider

Small businesses bankrupted overnight as Amazon sells their stock for 1p

A technical glitch on the world’s best known e-commerce platform led product prices on the site to plummet, allowing customers to purchase items worth thousands of pounds for as little as 1p.

While Amazon claims to have cancelled the “vast majority” of erroneous orders by “responding quickly” to the situation, some companies report having had their stock wiped out in a single hour – and any orders which had already been confirmed as paid for or shipped cannot be reclaimed by sellers, said Amazon.

The affected businesses, many of which are small businesses and SMEs, have also been hit with processing fees from Amazon, with some bills reported to total thousands of pounds on orders which may have bankrupted the sellers in the process.

We cannot cancel or reimburse orders that have already been shipped or been charged to the customer,” the company stated yesterday.

Unsurprisingly, business owners that sell through the site are incensed. Many have banded together to hire legal representation, with a view to seeking financial reimbursement and avoiding bankruptcy.

One Cloudseller user, Mehboob Rasool, who uses the tool to sell furniture and electrical goods through Amazon,told CityAM: “At Christmas, sellers send more stock than ever to Amazon’s warehouses to sell. So we are talking about millions of pounds of orders.”

The glitch was caused by RepricerExpress, a system used by Amazon, which works by automatically reducing prices on competing products to keep these low for customers. Between 7pm and 8pm on Friday, an issue in the software caused ruinously low numbers to be supplied to Amazon’s website.

RepricerExpress CEO Brendan Doherty said in a statement that he was “truly sorry for the distress this has caused.”

He added: “We have received communication that Amazon will not penalise sellers for this error. We are continuing to work to identify how this problem occurred and to put measures in place to ensure that it does not happen again.”

 

  • neil

    It is a terribly shocking situation, but it does show the importance of directors of SMEs NEED to check contracts for any potential pitfalls and make a decision if any deal is right for them. Even large organisations have glitches and it is easy to always look to the good points, but a business you work hard to build can be wiped out overnight by a technical glitch – THINK what would happen if you had a fire at your premises and what would happen if your website was hacked etc. Always have protection and backup in place first then recover losses afterwards