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Amazon sellers face financial uncertainty after 1p automated pricing glitch
06 February 2016 | 22:49
Amazon has come under fire for failing to help the small family-owned businesses that have lost tens of thousands of pounds after a technical glitch caused their products to be sold for a penny.
The firm, which had sales of more than $74bn (£48bn) last year, has ignored calls to offer compensation to its selling partners, some of whom have lost up to £100,000 in the week before Christmas.
The sellers, many of whom are operating from their garage or spare bedroom, have demanded Amazon take some responsibility for the error caused by a third-party software glitch. Some have already instructed lawyers.
Amazon has accepted no liability for the losses suffered by its sellers, from whom it takes a slice of each sale helping it to make annual profits of $20bn.
Last year Amazon sold goods worth £4.3bn in Britain – more than the UK sales of Argos, Dixons or the non-food arm of Marks & Spencer. It paid just £4.2m in UK tax.
On Monday the company claimed that it had “reached out to all the sellers that were affected”, but many complained that Amazon would not speak to them on Monday.
On Sunday, Amazon said it was working to stop any more 1p orders being dispatched from its warehouses, but sellers reported shipments were still being sent out on Monday afternoon – almost 72 hours after the glitch occurred on Friday night.
The company that made the software causing the accidental sales bonanza issued a second apology on Monday, but has not offered compensation to sellers.
Brendan Doherty, chief executive of RepricerExpress, said: “I understand that this issue comes at the most important time of the year for our customers and I am deeply sorry by the disruption that has been caused. “We take a lot of pride in the levels of service we provide so everyone here is disappointed that our customers have experienced this issue. We will continue to work to provide the highest levels of service we can in order to regain the trust and confidence of our customers.”
The company, which boasts on its website that it provides “the ridiculously simple way to increase your Amazon holiday sales”, refused to speak to the Guardian.
Some sellers have already instructed lawyers to take action against RepricerExpress but expressed concern that the company, which operates from offices above a pub in Derry, could collapse if it pays out compensation claims.
Norman Younger, who suffered big losses when hundreds of products from his Just Catering Supplies company in Manchester were sold for 1p, said he had no hesitation in suing RepricerExpress. “They’re a very small outfit, they’re likely to go bust, but they should have thought about that shouldn’t they,” he said.
“Amazon should take a certain responsibilty. Amazon always go on about the importance of the customer experience, what about our experience?
“You can’t expect to screw people into the ground, and then not help them out when something goes wrong. It would be nice if they could help us.”
Younger said an Amazon employee had told him that the company would “sort it out” but had not explained what it planned to do. “I’d like to think they would follow through on their word, but we’ll have to wait and see.”
Another seller, Stuart Cameron, has instructed lawyers and has asked other sellers to join him in joint legal action against RepricerExpress and Amazon.
His lawyer Nick Dewhirst, of Little Man Law, said: “The only recourse is to look at the person who caused the loss. He [the chief executive of RepricerExpress] appears to have held his hands up in that his company made an error.”
Craig Constantinides, chief executive of computer games retailer Go2Games, said his company has lost £10,000 but could have lost more than £300,000 if the firm had more stock in Amazon’s warehouses, from which orders are sent out automatically.
“It’s very difficult to understand how this can have happened, thousands and thousands of pounds lost in minutes,” he said. “We have only had automated responses. No one will call us. A phone call would be nice, even it is just to say sorry.
“Amazon is going to stand very far back from all this. You would expect a juggernaut like Amazon to step in and help.”