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FTC Reveals Amazon’s Alleged Illegal Strategies, Including a Secret Pricing Algorithm, in Billion-Dollar Profit Boost


FTC Reveals Amazon’s Alleged Illegal Strategies, Including a Secret Pricing Algorithm, in Billion-Dollar Profit Boost

In a new court filing, the U.S. Federal Trade Commission (FTC) has disclosed several alleged illegal strategies employed by to enhance its online retail profits. The filing, initially submitted in September, revealed additional details on Thursday, shedding light on the inner workings of Amazon’s pricing tactics.

Amazon is accused of utilizing a confidential algorithm known as ‘Project Nessie’ to identify specific products for which it anticipated other online retailers would follow Amazon’s price increases. The FTC alleges that Amazon used this algorithm to extract over $1 billion from U.S. households. Amazon’s spokesperson, Tim Doyle, has refuted these claims, stating that the FTC has “grossly mischaracterized” the pricing tool and that the company discontinued its use several years ago. According to Doyle, Nessie aimed to prevent price matching from driving prices so low that they became unsustainable.

The pricing algorithm was initially tested in 2010 to assess whether other online retailers monitored Amazon’s prices. It aimed to raise prices for products that were likely to be tracked by competitors. When outside retailers matched or increased their prices in response, Amazon purportedly continued selling the products at inflated prices, resulting in $1 billion in excess profits.

The FTC lawsuit further alleges that Amazon temporarily paused the algorithm during high-profile events like Prime Day and the holiday shopping season, only to reactivate it when public attention waned.

In addition to these claims, the FTC asserts that Amazon sought to conceal operational information from antitrust authorities by using the Signal messaging app’s disappearing message feature and destroying communications between June 2019 and early 2022.

Furthermore, the FTC contends that Amazon forced sellers under its Prime feature to use the company’s logistics and delivery services, despite many preferring cheaper alternatives. The FTC claims that an unnamed Amazon executive expressed concern about weakening Amazon’s competitive advantage by allowing sellers to operate their own warehouses.

Amazon’s fees for sellers who utilized its fulfillment services reportedly increased from 27% in 2014 to 39.5% in 2018, according to the FTC.

The complaint also highlights Amazon’s differential treatment of large online stores like, which are not allowed to sell on Amazon’s platform. Amazon CEO Jeff Bezos cited scale and competitive factors for this distinction during a deposition.

In a redacted section of the lawsuit, Amazon is alleged to have deterred Walmart from offering discounts to online shoppers who picked up their purchases from Walmart stores in 2017.

These revelations shed new light on Amazon’s pricing and competition strategies, raising significant questions about its practices in the e-commerce sector.

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Amazon Prime Day 2023 Early Results are In, Numerator Reports

68% of Prime Day Shoppers Extremely or Very Satisfied With Deals; Average Order Size and Household Spend Up From 2022

Numerator, a data and tech company serving the market research space, has published early read results from the first 32 hours of Prime Day 2023. Data is updated throughout the two-day Prime Day event on Numerator’s live Amazon Prime Day tracker and includes: verified spend, order, item and basket metrics; shopper demographics; and verified Prime Day buyer survey data, powered by Numerator’s omnichannel consumer purchase panel.

Prime Day purchase data findings:

  • The average Prime Day 2023 spend per order is $56.64 (compared to $53.14 from the same period on Prime Day 2022). So far, 39% of orders were placed for $20 or less, and 30% were for more than $100.
  • Over half (57%) of households shopping Prime Day have already placed 2+ orders, and 11% placed 5+ orders within the first 32 hours of Prime Day.
  • The average household spend is approximately $134, with 1 in 5 households (20%) spending more than $200.
  • Among the top five items sold, two are household or grocery products and one is Amazon branded: Temptations Cat Treats, Amazon Fire TV Stick, Liquid I.V. Packets, Apple Watch Series 8 and Melissa & Doug Toys.
    • Additional items in the top 10 are the Echo Dot 5, Laneige Lip Products, Celsius Sparkling Drinks, Orgain Organic Protein Powder and Energizer Batteries.
    • On Prime Day 2022, three of the top five items were Amazon branded, and on Prime Day 2021, all of the top five items were Amazon branded.
  • The typical observed Prime Day shopper is a high income, suburban female, age 35-44.

Prime Day verified buyer survey findings:

  • Nearly 9 in 10 Prime Day shoppers (89%) said they were Amazon Prime members, and 86% have been Prime members for more than a year. Four-fifths (81%) have shopped Prime Day events in the past.
  • Nearly all Prime Day shoppers (97%) knew it was Prime Day before shopping the event, and 60% said Prime Day was their main reason for shopping on Amazon today/yesterday.
  • Two-thirds (68%) of Prime Day shoppers said they were extremely or very satisfied with the deals offered this year. 67% said this year’s deals were better or the same as last year, while only 15% felt they were worse than Prime Day 2022 (19% were unsure).
  • Over half (55%) of shoppers compared Amazon’s prices to other retailers before making their Prime Day purchases.
    • 35% compared prices at Walmart, 26% compared to Target, 13% compared to Club retailers, 10% compared to Department stores, 9% compared to Best Buy, 5% compared to eBay and 5% compared to Temu.
  • 65% of Prime Day shoppers said they have or plan to shop at other summer sales— 37% will shop Target Circle Week, 32% Walmart+ Week, 20% will shop Costco’s member’s only sale and 11% will shop Best Buy Black Friday in July.
    • 35% said they do not expect to shop any other summer sales besides Prime Day.
  • Top categories that Prime Day buyers reported purchasing are Home Goods (27%), Household Essentials (26%), Apparel & Shoes (25%), Consumer Electronics (21%) and Beauty & Cosmetics (20%).

Amazon Prime Day 2023: Categories Purchased
Percentage of Prime Day Buyers Responding as of 7/12/23 at 8am ET

Categories Percentage of Prime Day Buyers Purchasing
Home Goods 27%
Household Essentials 26%
Apparel & Shoes 25%
Consumer Electronics 21%
Beauty & Cosmetics 20%
Health & Wellness 19%
Toys & Video Games 16%
Pet Products 13%
Smart Home Devices 13%
Small Appliances 12%
Groceries 12%
Office Supplies 10%


Source: Numerator Prime Day Survey

Data on the Amazon Prime Day Tracker will continue to be updated throughout the duration of the Prime Day event. At the time of this release, Numerator purchase data insights were based on 36,079 Prime Day orders from 15,239 unique households. The Numerator Prime Day 2023 survey was fielded to verified Prime Day buyers beginning 7/11/23 and had 1,400 responses at the time of this release. 

About Numerator:
Numerator is a data and tech company bringing speed and scale to market research.  Numerator blends first-party data from over 1 million US households with advanced technology to provide 360-degree consumer understanding for the market research industry that has been slow to change. Headquartered in Chicago, IL, Numerator has 2,000 employees worldwide; 80 of the top 100 CPG brands’ manufacturers are Numerator clients.

Amazon Sheds Staff but not so much in Logistics

Amazon Sheds Staff but not so much in Logistics

Amazon is reducing the size of its workforce by 18,000 people. Widely reported in the press but apparently not formerly reported to investors, the e-retailer’s CEO, Andy Jassy, seems to have made the announcement in a blog post to his staff. He stated that the planning review for the year had “been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years. In November, we communicated the hard decision to eliminate a number of positions across our Devices and Books businesses….Between the reductions we made in November and the ones we’re sharing today, we plan to eliminate just over 18,000 roles”.

As Andy Jassy mentioned, Amazon had already indicated in November that it needed to reduce its head count by around 10,000 due to under utilization of capacity. However, the present message is not just more pessimistic in terms of the number of people who will lose their jobs but also focusses on parts of the business other than the logistics infrastructure. It seems that most of the job losses will be Amazon Stores, the ‘People, Experience, and Technology’ organization and the ‘Devices and Books business’. The clear indication is that Amazon had hired too many people.

However, from the perspective of logistics, this consolidation should not be over-done. Although Amazon has been rationalizing some of its networks and even selling-off some property, it is still expanding its fulfilment centres and transport resources. Indeed, it is noticeable that Andy Jassy does not mention logistics in his identification of parts of the business that will lose staff. Perhaps as far as logistics is concerned, it is more accurate to suggest that Amazon is re-calibrating its rate of expansion.

What is clear is that activity in the e-retail sector generally has fallen back, with FedEx’s CEO estimating that online retail spending in the US has fallen from a height of 22% in 2021 to around 18% of total retail spending. It appears that Amazon is able to absorb this, with organic growth sustaining asset utilization in its logistics infrastructure. However, others might not be so lucky.

amazon's amazon

New Investigation Reveals Troubling Issues with Amazon Contract Drivers

Amazon is one of the most powerful companies in the world. During the COVID pandemic, e-commerce surged, leading to more and more orders resulting in increased deliveries. Since 2015, the Seattle behemoth has leased or bought roughly 63,000 trailers and hundreds upon hundreds of trucks to pull them. Yet, Amazon does not own and operate all of its trucks. On the contrary, they depend on outside companies to haul the loads. As of August 2022, these numbered north of 1.5 million. 

With this many trucks on the road accidents are inevitable. But, a recent Wall Street Journal analysis claims those hauling trailers for Amazon are unusually dangerous. The Journal combed through data on 3,512 Amazon-contracted trucking companies. These companies were singled out as they had been inspected by authorities three or more times since February 2020. This group alone was responsible for 75% of the company’s tractor-trailer shipments. Some of the more damning findings were the following: 

  • 388 had an unsafe driving record score, ranking them in the worst 5% (of their peers). 
  • Amazon contractors with troubling scores were twice as likely as similar contractors to be involved in a crash. 

Amazon states that trucking contractors must have safety ratings better than “conditional” to drive for the company. However, the Journal discovered 48 companies that ranked “conditional” driving for Amazon in early 2020. Amazon spokespeople reported the addition of a new safety threshold in February where contractors needed to score “substantially better” than the government’s established threshold. Further analysis revealed, however, that 375 companies continued to haul with scores lower than the established minimum and 60 (of the 375) with “worse-than-required” scores. 

Well before the pandemic, Amazon executives recognized the capacity of traditional freight companies was lagging behind the company’s projected needs. In 2012 they began purchasing trailers and bypassing freight middlemen, choosing instead to deal directly with trucking companies. The Journal spoke with former Amazon executives who went on record stating that the company tends to favor trucking contractors with impressive on-time records. Those that missed delivery deadlines were either penalized or dismissed. 

Amazon has communicated that roughly 80% of those contractors with middling to poor safety records have been terminated. A Michigan State University academic who studies transportation safety validated the Journal’s analysis and concluded that those companies hauling Amazon freight are more likely to have less than exemplary driving scores than similar peers. 

This is clearly a public relations issue for Amazon. Time and additional data will tell if delivery safety improves over the coming year. 


“Amazon’s Robot Workforce Could Doom The American Worker” 

The year is 2030. Most humans have been replaced by machines in U.S. warehouses and factories. Millions of Americans are out of work and struggling to find jobs as robots pack, sort, ship, and carry out the myriad duties that just ten years ago were the purview of living, breathing workers. There are little job prospects in sight for these workers as automation has completely taken over numerous industries.

As fictitious as this sounds, it is not a scene out of a science-fiction novel, but instead a scenario that could occur in the very near future. Take, for example, Amazon’s recent launch of Proteus — the company’s first fully autonomous mobile robot. This should signal that much of the company’s workforce faces extinction by automation in the coming years.

Despite the inevitability that all industries will adopt some type of automation to improve productivity and profitability, it is important that lawmakers take steps now to protect the human workforce before big tech behemoths like Amazon begin to phase them out.

Amazon certainly has plenty of incentive to replace its human workforce with automated machines.

For instance, there are rumors that Amazon is worried it could run out of workers to hire for its U.S. warehouses by 2024 — putting  the tech giant’s service quality and growth plans at risk, creating additional motivation to embrace the capabilities of robots. Labor shortages would be a thing of the past.

The tech giant, which has a history of taking advantage of egregious tax loopholes, may even be using robots to game the system. For example, research and development expenses, a category that investment in automation could fall under, are deductible and eligible for capital expenditure tax credits. Meanwhile, only certain types of human capital investments are tax deductible.

With its concern solely on the company’s bottom line, Amazon has plenty of other motives to transition to complete automation; robots can’t unionize, they don’t get injured and require workers’ compensation, and they never go to managers and demand better working conditions.

While nobody but Amazon’s corporate executives know the full reason for the company’s speedy shift toward robotics, a good argument can be made that recent efforts by workers to unionize have played a significant role. The company has threatened to withhold benefits and wages from employees who support union efforts, terminated pro-union workers, and is attempting to overturn the Staten Island warehouse union victory.

Amazon is also notorious for its high injury rates among employees. In 2021 alone, 34,000 serious injuries were reported on the job at Amazon — resulting  in plenty of negative press. The company has made it difficult for injured workers to be compensated or receive time off, deprived disabled and pregnant employees of reasonable accommodations, and has even fired workers who voiced their concerns about inadequate protections.

It would be easy to dismiss this shift toward robotics as only an issue for one company — despite Amazon employing one out of every 153 Americans — but experts believe that automation could destroy up to 73 million jobs in the U.S. as soon as 2030.

With the threat of millions of Americans being forced out of work due to automation, lawmakers in Washington need to act immediately to protect their constituents’ livelihoods and the future of the American worker.

One step elected officials could take is to pass a so-called “robot tax,” which would force companies to pay a fee every time they replace a human worker with an automated machine. Such a tax would not only make firms think twice about replacing their human workforce, but the revenues from the levy could also fund programs to upskill or re-skill workers.

Lawmakers could also learn from how the government handles environmental protections and require companies bidding on contracts to submit an impact assessment that outline the jobs robotics might eliminate, the types and number of jobs that might be created by the proposed project, and a plan to retrain workers who are directly affected by the use of robots.

Amazon and other businesses should not be blamed for wanting to make the transition to a robotic workforce, as all companies are tempted to cut expenses and improve their earnings. But it is important to recognize the potential threat these technologies pose for the U.S. labor market and, in particular, for the 1.1 million Amazon employees in the U.S.  We must implement policies that disincentivize tech companies from making an abrupt switch to automation that could eliminate the livelihoods of millions.

The complete adoption of a robotic workforce is no longer confined to the realm of science-fiction and if we want to prevent the rise of the machines from completely taking over industries, we need to confront this reality before it is too late.

Author’s Bio

Jason Boyce is the author of The Amazon Jungle and founder of Amazon managed services agency, Avenue7Media. Previously, Boyce was an 18-year Top-200 Amazon seller.

amazon's amazon

Amazon to Continue Expanding 

While reviewing your investment portfolio at the moment is an exercise in self-flagellation, if you own Amazon stock, it’s likely poised for a rebound at some point. The Seattle e-commerce behemoth has revolutionalized online shopping. But like most companies, Amazon started small – a Seattle office in the mid-1990s … and a dog. They eventually opened one warehouse which turned into 10 and now number roughly 110 in the US and over 180 globally. 

Amazon warehouses also have the distinct feature of not being referred to as warehouses. Rather, they’re fulfillment centers. They fulfill customer orders and are models of efficiency with robots and humans collaborating hand and switch. Despite logistical hiccups that prompted Amazon leadership to rein in their logistics expansion, the company is still looking to establish more warehouse projects moving forward. 

In late July the e-commerce leader was granted approval to build a 3.1 million-square-foot, five-story distribution center in western New York. Next will be Colorado and Southern California. Some had doubted the expansion of fulfillment centers would remain a priority for Amazon following the company’s first quarterly loss in seven years (reported in April). Growth was the slowest in two decades and online revenue was down 3%. This had followed a two-year run of record profits as the pandemic took hold and folks turned to online shopping. 

Yet, Amazon representatives explain that the capital investments in their fulfillment centers are long-term bets. Back in April Amazon communicated its objective of subleasing 10 million plus of warehouse square feet. While this sounds like a significant chunk, it would only represent roughly 2% of Amazon’s overall square footage. The first quarter of 2022 was characterized by overcapacity that contributed to $2 billion of extra costs. Moving forward, the western New York fulfillment center comes with a price tag of $550 million. The center will be known as a “sortable” fulfillment center. This is where goods are delivered in bulk to middle-mile and last-mile locations.

In terms of Colorado and California, the former will be home to a 4.1 million-square-foot facility and the latter a 3.9 million-square-foot center. Both will rank as two of Amazon’s largest fulfillment centers to date. To put Amazon’s pull-back and simultaneous expansion efforts into perspective, the firm has closed, canceled, held, or listed for sublease 25 plus fulfillment centers and delivery stations so far this year. But at the same time, they’re expected to onboard approximately 250 facilities before the end of the year. Some of these facilities will be the typical monstrous distribution centers while others smaller sites where orders are sorted and moved onto delivery trucks. 

The western New York fulfillment center will employ approximately 1,000 people. Multistory warehouses are rare in the US and Amazon expects 1,500 robots working in conjunction per floor. Clearly, the e-commerce giant is not slowing down due to some sour quarterly times.   

network warehouse risk

Amazon looks to Sub-let Warehouses as Growth Slows

The fall-off in e-retail activity has been significant and this seems to have left Amazon with too much warehousing space. Several US-based press sources are reporting that Amazon is looking to sub-let space in its fulfilment center network.

The news agency Bloomberg is stating that Amazon’s “excess capacity includes warehouses in New York, New Jersey, Southern California and Atlanta…the surfeit of space could far exceed 10 million square feet” with one anonymous person telling Bloomberg that it could be “triple that” whilst another said the “final estimate on the square footage to be vacated hasn’t been reached and that the figure remains in flux”.

This is not entirely a surprise. Amazon has been indicating that the market for e-retail had slowed and this was having implications for its physical network. Last month, Amazon’s CEO Andy Jassy commented that “our Consumer business has grown 23% annually over the past two years, with extraordinary growth in 2020 of 39% year-over-year that necessitated doubling the size of our fulfillment network that we’d built over Amazon’s first 25 years—and doing so in just 24 months. Today, as we’re no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network.”

Amazon is not the only company to be affected by the fall in demand for e-retail. UPS has registered a fall in e-retail volumes through its network and the e-retail grocery company Ocado saw sales in its retail business fall 5.7% year-on-year in Q1.

The clear implication is that the slowing market for e-retail is creating an overhang of capacity. Whether this will cool the rather heated warehousing market is far from certain. Logistics property developer Prologis continues to report high demand in many markets with supply still inadequate. However, they report that a good deal of this demand is driven by the need to manage congestion and problems of availability in supply chains.

E-retail has driven the growth of a large part of the logistics market both a domestic level and, to a lesser extent, at a global level. Its growth prospects in both advanced markets and others will shape logistics markets in the short-to-medium term.

e-commerce fraud

E-Commerce Fraud up by 178% over the Holidays: Trends and Predictions

A recent report recorded a rise of 178% in malicious e-commerce fraud websites observed from October to December of 2021, compared to the rest of the year.

What caused this impressive rise, how does this affect businesses who accept online payments, and how is the fraud landscape looking moving forward?

Malicious Shopping Websites on the Rise

Set up to coincide with the pre-holiday shopping period, an average of 5,300 new, malicious e-commerce websites per week were recorded from October to December, according to a report published by Check Point Research.

These scam websites were set up to resemble legitimate e-shops, often spoofing the appearance and branding of popular online shopping destinations, such as Amazon and Michael Kors. Customers would arrive by clicking through fraudulent emails or advertisements. They would get tricked into buying something, believing it was a legitimate product from a legitimate shop, at which point the criminal would acquire their card details and not ship them anything. Others tried to lure customers in through social media and hijacked accounts of friends and family.

This type of scam obviously targets consumers, in an attempt to steal their credit card details. However, a rise in this type of fraud also affects businesses, in several ways.

Here is how:

-Many of these stolen credit cards are later being used on legitimate e-shops, causing chargebacks. Each chargeback costs a business an estimated 2.60-3.20 times the price of the products lost, even if not believed to be the fault of the business.

-Chargeback ratio increases for stores where stolen cards are used. This incurs higher bank fees and even potential blacklisting of the merchant.

-The general drop in the trust of affected consumers in online card-not-present transactions can take a toll on the market in general.

-Extensive fraud brings reduced buying capacity for affected consumers, which affects commerce on a macro scale.

-Major rises in online fraud can make merchants overcautious, increasing false positives and declines for those who manage their own rules – and thus increasing customer insult rates.

-Customers who file a chargeback are more likely to do it again within two months, often at a new retailer (at a rate of 40% per Chargebacks911).

Fraud Trends 2022: Criminals Are Getting Bolder

It’s obvious that fighting fraud on a larger scale is of benefit to every company involved in the online economy rather than solely the persons or companies affected by individual cases. And, to that is added the obvious increase in fraud targeting merchants directly, with 75% of organizations across the world reporting an increase in fraud attempts over the past two years, per a 2022 report by MRC.

The good news is that it’s not only the fraudsters who are getting more sophisticated. Fraud prevention technology and methodology has progressed by leaps and bounds in recent years, reflecting the exponential increase in fraudster activity. As elaborated in a writeup on e-commerce fraud by SEON, fraudsters no longer only target stores dealing in luxury items and electronics. Every business can be a target, no matter whether it sells physical or digital goods. In fact, some of the most common methods of attack have been with us long before the internet; they’ve just been updated.

But which types of fraud are on the rise in 2022? Merchants are well advised to be on the lookout for the below, as well as always consult with their fraud vendors and/or analysts as soon as they notice any suspicious activity.

1. Return Fraud

Return abuse is an umbrella term that encompasses different methods, including ‘wardrobing’ – when customers buy clothing with the intention of wearing it once or twice and returning it – and receipt fraud – when someone falsifies receipts in order to return merchandise for a profit.

Return fraud may be an old avenue for criminals and amateurs alike, but it is still on the rise. According to Shopify, in the US, approximately 10.6% of all merchandise bought in 2020 was returned. That goes to show how important it is for businesses to be able to tell fraudulent from genuine returns. Per the same source, reducing returns overall could save the entire retail industry up to $125 billion a year.

The prevention of return fraud starts with efficiency in inventory management and sales records. The more accurate and organized your records, the less likely it is for an attempt to be successful. Some stores put new policies in place, such as weighing returned items. But it also has to do with accurately evaluating risk by assessing the intentions and legitimacy of shoppers using methods such as digital footprinting and device fingerprinting.

2. Triangulation Fraud

A little more complicated but equally popular with contemporary fraudsters, triangulation fraud actually has a very low barrier of entry, meaning it could be set up by criminals of varying skill and experience levels.

Triangulation fraud involves three parties: a legitimate customer, a legitimate e-shop and a fraudster.

1. The fraudster creates an e-shop website or adds fake products on eBay, Amazon Marketplace or similar platforms.

2. A buyer tries to buy from a fake online store, giving the fraudster their card details.

3. The fraudster buys the same product from a legitimate online store using a stolen credit card, and provides the legitimate buyer’s shipping address.

4. The buyer receives the item from the real store, but soon notices other charges on their card (as the fraudster has stolen their details).

5. The buyer starts a cashback process with their bank.

6. The legitimate merchant is hit with the chargeback, both losing the item and the money it costs.

Chargebacks are a very common pain point for businesses. As Zoho explains, they can be linked to actual mistakes by the shopper or merchant, but they also often accompany fraud. For example, a card owner charged for a fraudster’s transactions will request a chargeback, while some shoppers will use the chargeback process itself to keep both their money and the product (friendly/first-party fraud).

Although shopping and payment platforms such as Shopify and Stripe may have some built-in tools to stop fraudsters, these are not adept at catching triangulation fraud in particular. For this type of more sophisticated scheme, dedicated fraud prevention solutions are more suitable, deployed by the merchant to protect their own as well as their customers’ interests.

3. Account Takeovers

An ATO, or Account Takeover, is simply when a fraudster acquires access to an existing account belonging to a legitimate customer. This can be done through various methods such as phishing, brute-forcing and cross-site scripting.

What is making all the difference in 2022 is that the stakes have been raised. A few years ago, taking over someone’s account allowed a criminal to use it to conduct further fraud, perhaps to sign up somewhere, but there was rarely anything worthwhile within – always depending on the type of account hijacked.

Today, however, the public is increasingly encouraged to save their payment card details online: on their accounts on e-shops like Amazon and TK Maxx, in their browser profiles, in digital wallets made possible by open banking protocols, and on other digital accounts. As a result, a successful ATO is much more likely to yield usable credit or debit card details, which the criminal may use in the same store or elsewhere.

In their writeup on this phenomenon, NordVPN stresses how major breaches even in high-trust companies such as British Airways, back in 2018, have resulted in customers’ card payments details being stolen. Certainly, the size and reputation of a company is no guarantee that consumers’ card details are safe.

And, of course, the reputation of a company suffers greatly once it has been involved in such an incident. The public is already concerned about sharing personal information such as their full address and phone numbers – and payment details have so much more potential to cause harm. It does not matter whether the blame lies with the company, as in the British Airways example above, or perhaps with the customer, in the case of someone using a very weak account. The results are still detrimental to the business.

What’s more, the criminal may attempt to use (or test) the stolen cards on the spot, bringing more cashback troubles for the already unfortunate merchant.

There are simple steps to take as the first line of defense, like asking (or forcing) one’s customers to use multi-factor authentication, which is much more complicated to hijack. In the merchant’s backend, to mitigate against such an attack, end-to-end anti-fraud solutions deploy technologies such as machine learning, online footprinting via reverse email and phone number lookup, behavior analytics, velocity checks and device fingerprinting. Gathering hundreds of different data points, a fraud prevention platform gauges the level of trustworthiness or risk for each individual user and transaction, keeping out bad actors.

Key Takeaways

Overall, e-commerce fraud is clearly on the rise in 2022 – and beyond, according to predictions. Fraudsters are eager to take advantage of every opportunity and become early adopters of new technology, though they will also adapt and tweak tried-and-tested methods to get the upper hand. Sophistication is central to this challenge: As online fraudsters become increasingly sophisticated, so ought we.


About the Author

Gergo Varga has been fighting online fraud since 2009 at various companies – even co-founding his own anti-fraud startup. He’s the author of the Fraud Prevention Guide for Dummies – SEON Special edition. He currently works as the Senior Content Manager / Evangelist at SEON, using his industry knowledge to keep marketing sharp, communicating between the different departments to understand what’s happening on the frontlines of fraud detection. He lives in Budapest, Hungary, and is an avid reader of philosophy and history.

productivity supply chain 4.0 goods

Here’s How Supply Chain 4.0 Makes Your Organization More Efficient

There’s a growing interest in Supply Chain 4.0 technology, especially as logistics professionals cope with stock shortages, port delays, and other challenges. Advanced tech can boost productivity in warehouses and all other points of a product’s journey to its destination. Here’s a closer look at what supply chain management can do for those who invest in it.

Facilitating Productivity and Reducing Worker Strain

Hard physical labor is a regular occurrence for people who have many supply chain jobs. Getting relevant training about how to bend, lift, and avoid strain from repetitive tasks can pay off in helping them stay injury-free and able to give maximum output. However, some companies are also investing in robots to help even more.

In one case, a distributor of adult incontinence products pursued robotic palletizing to streamline its receiving process. An associate begins by scanning a label on a carton to tell the robot a product is on the way that must be unloaded soon. The robot then refers to 20 patterns stored in its memory to decide how to build a pallet based on the incoming items. Once the robot creates the pallet, the goods go to a picking location or storage area.

There are many other opportunities to incorporate robots into Supply Chain 4.0, too. Some autonomous mobile robots bring goods to warehouse workers so those employees don’t have to leave their workstations and take the extra time and energy to replenish what they need.

Other robots work beside supply chain employees, saving them from some of the more laborious or error-prone tasks. Robotic machines excel at duties that require them to do the same movements for hours on end. They don’t get tired and, as a result, can prevent fatigue in humans.

Minimizing Packaging Waste

Supply chain management technology can ensure that each product shipped out of a warehouse has just enough packaging to protect it for the rest of its journey. Packaging has seen numerous user-friendly improvements over time. Creating perforations in materials lets people tear off pieces of cardboard or bubble wrap without using scissors.

Often, these perforations create a clean opening, helping people use the package for other reasons rather than throwing it away. Plus, many food wrap packages have integrated blades that let users cut the foil or parchment at the desired length. These examples show how smart packaging decisions can reduce waste, thereby pleasing consumers and helping manufacturers conserve resources.

However, there’s still room for improvement. Most people can recall occasions where they ordered a small item online and received it in a gigantic amount of packaging. That’s an unwanted outcome for everyone involved. However, Supply Chain 4.0 could make such situations happen less frequently.

Amazon developed a system that uses computer vision and machine learning to determine the type of packaging a particular item needs. The model can detect an object’s size, plus packaging details, such as whether an item is inside a plastic bag or a glass bottle. It also recognizes perforated parts of the package.

When the model has sufficient confidence in the ideal package for a given item, it can select it automatically, which increases efficiency. However, when the confidence level is lower, the system can flag that instance. In such cases, a human reviews the specifics and makes a judgment call. This approach helps Amazon meet its aims to cut down on packaging used. However, it also means items should arrive well-protected, but not overly so.

Achieving Better Visibility With Supply Chain 4.0

Supply chain management can get tricky because it often involves predicting demand based on known factors and making educated guesses about the unknown ones. What makes a certain product highly desirable worldwide while seemingly similar items don’t sell nearly as well? Which steps should supply chain professionals take to avoid long-term outages? Technology can help address those all-important questions.

One study found that artificial intelligence-driven demand planning caused a 50% drop in the product volume affected by extreme forecasting errors. Then, overall forecasting mistakes went down by a third. Those outcomes likely occurred because artificial intelligence can efficiently process large amounts of data and pick up on things humans would miss without technological help.

Decision-makers at computing brand Dell created a digital model of the company’s supply chain to help it cope with the ongoing semiconductor shortage. That tool enables running various simulations so that leaders can plan how to best handle the most likely scenarios.

One way Dell uses the simulated situations is to determine which products will probably become increasingly difficult to source. The company compensates by designing many items with interchangeable or reusable parts as one practical strategy for dealing with current and near-future conditions.

In another case, Unilever unveiled a digital twin that found the optimal batch time by calculating how long it took to produce the necessary quantities of shampoo. Having that data enables consistent production output and helps managers spot bottlenecks within a factory or elsewhere that could cause supply chain strain if left unaddressed.

Measuring Outcomes With Data and Metrics

Supply Chain 4.0 technologies typically don’t give optimized outcomes immediately after implementation. Instead, people in authority must examine the available data and make relevant tweaks accordingly.

Fortunately, that’s becoming easier to do with data analysis tools and sensors that automatically gather data for future review. Perhaps a factory leader hoped to increase weekly output by at least 25% after installing several logistics robots. A platform that collects and analyzes real-time data could show how close the facility is to meeting that goal.

Alternatively, a company may deal with a persistent problem of machines breaking down unexpectedly and significantly hindering the workflow. Connecting smart sensors to the problematic equipment could make it easier for maintenance workers to identify issues before they cause factory shutdowns.

Many decision-makers are understandably hesitant to invest in a lot of Supply Chain 4.0 technology at once. They’d prefer to see evidence of the positive effects of such spending first. Luckily, it’s progressively easier to get it.

A manager could start by calculating the money lost due to equipment failures. They could then measure how much smart sensors save by alerting people to issues before those machines become inoperable. Since so many connected technologies can gather data, they prove whether certain investments provided the efficiency gains people hoped for at the outset.

Supply Chain Management Technology Is Undoubtedly Valuable

These examples show how moving ahead with Supply Chain 4.0 plans could generate impressive results. However, that doesn’t mean people will get those advantages in all cases. They can massively raise their chances of success by considering the biggest supply chain obstacles affecting a business and how advanced technologies could help resolve them.


Emily Newton is an industrial journalist. As Editor-in-Chief of Revolutionized, she regularly covers how technology is changing the industry.


Washington Cannot Let Amazon Water-Down Consumer Protection Legislation

The holiday season is a reminder that with more Americans than ever heading online to do their shopping, lawmakers must continue taking action to prevent consumers from falling prey to internet scammers. That’s why it was welcome news when Amazon recently reversed course on its longstanding opposition to bipartisan consumer protection legislation in Congress that would require third-party online marketplaces to verify independent sellers, with the goal of reducing counterfeits and stolen goods from these platforms.

But while Amazon’s public change of heart seemingly paves the way for the eventual passage of the bill, known as the INFORM Consumers Act, lawmakers must ensure that the retail giant and other tech companies do not work behind the scenes to water down the legislation and render it toothless. Counterfeits pose great harm to consumers and small third-party sellers, and Congress must pass strong, comprehensive enforcement mechanisms to adequately protect both groups.

Amazon’s decision to endorse INFORM was certainly a surprise. Just this summer, Amazon launched an aggressive lobbying campaign to kill a more robust version of the legislation. But while Amazon ostensibly supports the current bill, it has reportedly unleased its lobbyists in the Beltway to weaken it. While lawmakers such as Sen. Dick Durbin, one of the bill’s co-sponsors, say they refuse to let this happen, they should remain on high alert.

This is because we’ve seen Amazon’s playbook for publicly supporting legislation while simultaneously working to weaken it behind the scenes. For instance, Amazon CEO Jeff Bezos won praise earlier this year when he embraced President Biden’s plan to raise the corporate tax rate. But behind the scenes, the company enlisted an army of lobbyists to maintain the research and development tax credit, which has been estimated to save the company hundreds of millions of dollars a year. As I’ve said before, Bezos’s support for a corporate tax hike is meaningless if the company can continue to engage in egregious tax avoidance schemes.

And it’s not just Amazon; other Big Tech companies have resorted to similar “two-faced” tactics to weaken legislation. In April, an investigation by The Markup uncovered how some of the country’s most powerful technology companies, including Facebook and Google, advocated for mostly toothless privacy protection legislation in statehouses across the country — all with the intention of preempting state lawmakers from taking stronger action in the future.

Now with the prospect of a comprehensive consumer protection measure being signed into law, Congress must resist Amazon’s arm twisting. Counterfeits are far too serious of a threat, and watered-down legislation will fall short of creating the bold transparency measures that are desperately needed. Online counterfeiters have been known to peddle toys and children’s products, putting those most vulnerable in grave danger. These products fail to go through robust safety testing, meaning there is potential for serious health consequences.

But what many may not realize is the impact that counterfeits have on third-party sellers. As someone who works with Amazon sellers every day, I know exactly how legitimate businesses suffer when criminals sell fakes at below the market value. Small businesses are doing everything they can to fight these criminals — even if it means spending hundreds of thousands of dollars to do so.

Many of those selling fakes from the comfort of their own homes and hurting American businesses are overseas. According to the Department of Homeland Security, a staggering 85 percent of contraband items seized by U.S. Customs and Border Protection came from Hong Kong and China. Nonetheless, Amazon’s marketplace has become a hub for China-based sellers.

Amazon has no problem touting all of the measures it has taken to clean up its third-party marketplace. But, as I have explained, it’s a common tactic of Amazon’s PR department to just share the numerator — and not the denominator. Thus, the $700 million it invests to fight fraud is pennies in the bucket when you consider that Amazon’s worldwide gross merchandise volume is estimated to be $490 billion.

It is critical that Congress advances the INFORM Consumers Act as it stands today. While I welcome Amazon’s endorsement of the common-sense measure — along with the other third-party marketplaces that recognize the benefits it would bring to e-commerce shopping — I can only hope it is sincere. Working behind the scenes to weaken this bill will be devastating to the millions of shoppers and sellers who have come to depend on Amazon’s third-party marketplace.


Jason Boyce is the author of “The Amazon Jungle” and founder of Amazon managed services agency, Avenue7Media. Previously, Boyce was an 18-year Top-200 Amazon seller.