What didn’t Jeff Bezos know and when didn’t he know it?
Source: C-SPAN/User-Clip: McGrath Bezos

A Republican representative from Wisconsin may deserve some social media mocking for not knowing the difference between Facebook and Twitter after yesterday’s “big tech” Congressional hearing. What, however, can you say of Jeff Bezos?  Amazon’s CEO offered less than satisfactory answers to questions about his company’s vetting of third-party sellers and its alleged use of sales data to compete directly with the marketplace vendors and brands it claims are so important to its business.

Rep. Lucy McBath (D – GA) questioned Mr. Bezos about the information that Amazon requires third-party sellers to provide in its efforts to prevent the sale of stolen goods on the site. When asked how his company verified that information supplied by third parties was accurate, he said, “I don’t know the answer to your question.”

Mr. Bezos would not be the first CEO of a company not to know “how the sausage is made,” so to speak, but his lack of a ready-prepared answer is startling since it was common knowledge that the sale of counterfeit and stolen goods on the platform would be on the list of questions he would be asked.

For the record, Amazon introduced a program earlier this year that involves in-person verification of third-party marketplace sellers. When the pandemic hit, Amazon shifted to a video call verification system.

Mr. Bezos also said in his testimony that his company will pursue action with law enforcement authorities when and if it becomes aware of sellers engaged in illegal activities using its marketplace.

In response to a question by Pramila Jayapal (D-WA) about a Wall Street Journal report earlier this year that Amazon has leveraged sales data from third-parties to launch competitive private label items, Mr. Bezos cited company policy that prohibits that activity.

“I can’t guarantee you that that policy has never been violated,” he said. “We continue to look into that very carefully. I’m not yet satisfied that we’ve gotten to the bottom of it, and we’re going to keep looking at it. It’s not as easy to do as you would think because some of the sources in the article are anonymous.”

BrainTrust

“Jeff Bezos has jumped the shark.”

Jeff Weidauer

President, SSR Retail LLC


“Perhaps not knowing is purposeful. Not knowing prevents you from having to say “yes we do that. It’s part of our growth strategy.””

Steve Montgomery

President, b2b Solutions, LLC


“If he had to go before investors, it’s beyond a doubt that he would have proper answers.”

Ken Lonyai

Consultant, Strategist, Tech Innovator, UX Evangelist

Discussion Questions

DISCUSSION QUESTIONS: How important is ending the sale of stolen and counterfeit goods to Amazon’s future success? What about allegations that it is using data to compete directly with third-party sellers on its platform?

Poll

Do you think Amazon came out ahead or behind in its public relations battle with critics after yesterday’s Congressional hearing?

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39 responses to “What didn’t Jeff Bezos know and when didn’t he know it?”

  1. Mark Ryski Avatar
    Mark Ryski

    Ending counterfeit goods is an ongoing challenge, but I don’t think it’s impacted Amazon’s success in any material way. The allegations about competing directly with third-party sellers are more problematic. The fact is, sellers can choose to be on Amazon or not, however, given its size and place in online retailing, the choice for these sellers is difficult: sleep with the enemy (Amazon) or try to go it alone without the massive distribution from Amazon? This is not a new issue, and I was unsatisfied with Bezos’ answers to these questions.

  2. Zel Bianco Avatar
    Zel Bianco

    Did he really not know the answers to those questions or was he displaying his version of CYA?

  3. Suresh Chaganti Avatar
    Suresh Chaganti

    Jeff Bezos’ performance is disappointing, but expected. Apple, Amazon and Facebook bend over backwards to portray an image that they are not very big, and claim innocence or ignorance about indulging in anti-competitive practices. It is laughable.

  4. Bob Phibbs Avatar
    Bob Phibbs

    Does Amazon care? Nope. Their goal will be one bill each month for your digital subscriptions, healthcare, banking, insurance, and even merchandise. Make no mistake the data is all Amazon is about as it digitally connects the dots to steal market share and keep customers close. Selling on Amazon is still a deal with the devil.

    1. Gene Detroyer Avatar
      Gene Detroyer

      “Keeping customers close” is the objective of every business. “Their goal will be one bill each month for your digital subscriptions, healthcare, banking, insurance, and even merchandise.” Shouldn’t it be?

      Yes — if you are going to do business with Amazon, do it with your eyes wide open.

  5. Dick Seesel Avatar
    Dick Seesel

    I have a problem with the sale of stolen and counterfeit goods on Amazon — especially because it violates the bond of trust between company and customer. I take less issue with using data to develop private label goods.

    If you’re Macy’s, or Kohl’s, or Target, you evaluate the sale of products from your own suppliers — especially the national brands — in order to uncover trends and opportunities in your own labels. (And sometimes those branded suppliers lose shelf space to private label goods, just as they do in grocery stores.) Is what Amazon doing all that different, or is the issue its sheer scale and ability to read and react to the data?

    1. Suresh Chaganti Avatar
      Suresh Chaganti

      Amazon’s strong arm tactics extend beyond that. The Wall Street Journal documented a number of instances where they engaged companies with bait for acquisition, sought proprietary information, and promptly launched competing products.

      I am personally aware of instances where Amazon is forcing brands to sell on Vendor Central based on the data they see on Marketplace.

      There is a suspicion in the seller community that Amazon sponsors some level of unauthorized reselling of the products that are not on Amazon yet. They then use this data to approach brands to put products on Marketplace or Vendor Central.

      The last one may sound like a conspiracy theory, but seeing WSJ’s investigative reporting, I’d not be shocked if it turns out true.

  6. Mohamed Amer Avatar
    Mohamed Amer

    Mr. Bezos is fully aware that the Amazon brand is built on trust. Consumers trust the value received, the Prime service promise, the ease of enjoying the multitude of consumer offerings, and the trust consumers have placed in Amazon regarding their data. That is the background against which Mr. Bezos must confront his inner demons of crushing any and all competitors; he cannot ignore his company’s trust issues with third-party vendors while relying on the consumer trust he has worked hard to create and earn. Amazon cannot have it both ways.

  7. Jeff Weidauer Avatar
    Jeff Weidauer

    Jeff Bezos has jumped the shark. This one-time entrepreneur has joined the ranks of untrustworthy company execs who deceive and obfuscate to protect the bottom line, all while claiming ignorance of his company’s misdeeds.

  8. Gene Detroyer Avatar
    Gene Detroyer

    If I am the CEO of a trillion dollar company with over 800,000 employees, I may tell a subordinate that we must vet third-party vendors. That person will send the message to the next level down, then the next and the next. Finally a team will be put together to establish a program.

    I assume it is getting done. If I have any follow-up, the extent of it is asking that subordinate if it got done. End of conversation.

    If I am asked how, I answer the question honestly: “I have no idea.”

    I will add personally, nor should I have any idea.

    1. George Anderson Avatar
      George Anderson

      Don’t you think he should have known he was going to be asked that question or something similar to it in advance and been ready to answer it? Mr. Bezos’ apparent unpreparedness for obvious questions seems very un-Amazon-like to me. The company and its communication reps are as good as it gets in my experience. “We’ll get back to you” responses are a far cry from that.

      1. Gene Detroyer Avatar
        Gene Detroyer

        Should he have known the question was coming? Yes. Should he have had an answer, yes. Should it have been in excruciating detail? No. Should he know the details of the process on an everyday basis? … Not if he is doing his job as CEO.

        We have this idea that CEOs know exactly what goes on in their companies. CEOs are not the sheriff, they are a leader.

        My company, Allendale Pharmaceuticals had great experiences with Walmart and Amazon as customers. On the other hand, Walgreen’s refused to pay us (until the lawyers got involved) and Target continually took unjustified deductions. Why? Because they could. Do I believe that the CEOs of either of those companies knew what was happening? No way.

      2. Ken Lonyai Avatar
        Ken Lonyai

        “I don’t know the answer to your question” equates to “excruciating detail” for you Gene? Were your example companies’ CEOs testifying before Congress?

        You must really be smitten with Bezos/Amazon to be apologizing for him so extensively in this discussion.

      3. George Anderson Avatar
        George Anderson

        The question isn’t whether he should know every single detail of how his business works as CEO. It’s whether he should have known in a public forum that these specific questions were coming (the answer being yes) and should he have had simple, concise responses when asked (the answer here also should have been yes).

      4. Gene Detroyer Avatar
        Gene Detroyer

        I agree. He should have had a paper ready to read with a very simple and concise answer. For that he would have been skewered as he is now as dodging the issue.

        Did he handle it well? No. Are our expectations of what a CEO of a large company knows ignorant? TOTALLY!

    2. Rick Moss Avatar
      Rick Moss

      Gene, you are saying, in essence, that it’s a CEO’s responsibility (to his shareholders, I imagine) to be willfully ignorant of matters he is being questioned on by the U.S. Congress. Perhaps true, and all the more tragic, if so.

      1. Gene Detroyer Avatar
        Gene Detroyer

        He should have know the question was coming. He should have been prepared to give a BRIEF overview. If Congress wanted to know details, then bring in the guy who is running the vetting program.

        I will go one step further. If he knows the details of how it is done, he is not doing his job as CEO, he is getting too involved in the everyday business of a company that has 800,000 people and a value of $1 trillion.

  9. Lisa Goller Avatar
    Lisa Goller

    Ending the sale of counterfeit goods is vital to Amazon’s future success. Companies that earn our trust earn our business. Fraudulent players put Amazon’s consumer loyalty at stake. Amazon’s recent launch of a Counterfeit Crimes Unit shows it is willing to take action against shady suppliers to restore consumer confidence.

    As for private label, it depends whether Amazon accessed more detailed, proprietary data than most retailers receive. Whether that is the case is currently unclear. Private label has always been built on the notion that “imitation is the sincerest form of flattery.” Retailers see what’s selling then replicate popular products to get in on the action.

  10. Jeff Sward Avatar
    Jeff Sward

    Disappointing and disingenuous. He had to know going in that he would be expected to answer that question. It was a moment to either build trust or skepticism. So skepticism it is.

  11. Gene Detroyer Avatar
    Gene Detroyer

    Say I am the head of product development for my large supermarket chain. A new vendor comes in and sells us a new type of cookie, “New Cookie.” It is hugely successful and I notice its success as I check the weekly item sales. “New Cookie” is flying off the shelves.

    I tell my team, give me a new private label item just like “New Cookie.”

    Is that different from what Amazon does?

  12. Ananda Chakravarty Avatar
    Ananda Chakravarty

    Lets assume for a moment Bezos was completely truthful in his answers – the sale of stolen and counterfeit goods has been an ongoing problem and he has instituted (at least in name) programs to address the issue. More importantly, to be fair to Bezos, he has 2.5 million+ sellers on the platform and over $160 billion in third-party merchant goods sold on his site. The real question here is, what is the level of responsibility his platform has over sellers on his site and tracking counterfeits? For end-customers, the counterfeits are difficult to detect, only the brand names like Gucci, Ulta, Prada, etc. care about and take steps to stop the counterfeiting, but they are also depending on and growing business with huge markets in Asia – particularly China, which is known for many actors engaged in counterfeiting. For Bezos, he may truthfully not know or perhaps can’t know because of the volume of business. Putting impenetrable safeguards in place can be cost prohibitive and lawsuits to date are a lower cost of doing business. On the other hand, maybe he hasn’t prioritized the issue at all – how much is really negligence and a real tort against the consumer?

    1. Gene Detroyer Avatar
      Gene Detroyer

      “For Bezos, he may truthfully not know or perhaps can’t know because of the volume of business.” Or, as CEO, should not know.

      1. Ananda Chakravarty Avatar
        Ananda Chakravarty

        Gene, though I believe he might not have the details, I don’t believe as CEO he could not know the answers. The buck stops with the CEO. The CEO still has the responsibility for all actions of the organization. He should have been briefed on the potential question by his underlings and had a clear reply. I’m certain all of the key answers were at least partially scripted — especially when being televised. PR is critical to Amazon, and this would be no different. In this case, I suspect his legal counsel suggested, “I don’t know” is probably your best answer and to skirt the issue, and so it was given. I’m certain he would have some deeper details to share, and if not, has the power to find out.

  13. Liz Adamson Avatar
    Liz Adamson

    I have watched over the last couple years as Amazon has put more and more controls in place to keep counterfeit goods off of its marketplace. They are working on the problem and making progress, although there is still a long ways to go.

    As for Bezos’ answers, how can a CEO of a company as large as Amazon know all the details of the different processes used within the company? While I don’t expect him to be familiar with every detail, less than knowledgeable responses don’t make him look very good to the public and I do wonder if he couldn’t have been better prepared.

    1. Gene Detroyer Avatar
      Gene Detroyer

      What surprises me Liz, is that so many people expect this of CEOs. You ask the right question, “…how can a CEO of a company as large as Amazon know all the details of the different processes used within the company?”

  14. Neil Saunders Avatar
    Neil Saunders

    As far as I am concerned, the whole hearing is a waste of time. There are millions unemployed and politicians of all shades are completely unable to reach any agreement on how to provide essential benefits to those people. Meanwhile, they are spending their time grandstanding by asking questions to companies that have grown by focusing on consumers and relentlessly delivering what they want. Perhaps if politicians had the same focus and sense of innovation they’d achieve great deal more.

  15. Paula Rosenblum Avatar
    Paula Rosenblum

    Jeff Bezos was a Golden PR machine for years. That’s over now. Let’s face it, kids. His retail operations don’t make money, he’s a master of distraction and the company packaging is an environmental disaster waiting to happen.

    Jeff Bezos should find some good works to do, including taking better care of his employees.

    1. Gene Detroyer Avatar
      Gene Detroyer

      As of 2018, Amazon has knocked Google off the top spot as the best place to work in the world, according to LinkedIn.

  16. Doug Garnett Avatar
    Doug Garnett

    Amazon is no longer the naive startup which can get away with “I don’t know” as an answer. It should concern us all that Mr. Bezos attempted to use that answer to deflect questions he knew were critical.

  17. Ryan Mathews Avatar
    Ryan Mathews

    Counterfeits are probably more of a problem for Amazon than stolen goods, which feels more like a Craigslist problem to me since it’s hard to understand how it could scale. If something were on the low end, why go through all the hassle of selling it online? And if it were on the opposite end of the value scale — say a hot Basquiat painting — putting it on Amazon seems like a good way of getting caught. Counterfeits, because they can be scaled, are clearly more of a problem and Bezos clearly should have had a canned answer in his pocket. The fact that he didn’t leads the cynical to believe that a.) he is aware of the problem, and b.) he isn’t worried about it for one reason or another.

    As far as the data question, it seems to be an example of caveat venditor – let the seller beware. Amazon routinely brutalizes partners and actively sets up entire categories of vendors to fail. Anyone who enters into business with Amazon with their eyes closed is inviting disaster.

  18. Brian Cluster Avatar
    Brian Cluster

    As CEO of a company for 26 years and as one that helped build the company from the ground up, Mr. Bezos has a great deal of knowledge of how things work and the processes involved in bringing in new sellers. He should have been more forthright in the answer and should have specific steps that the company plans to take to address the issue.

    I find that the counterfeit issue is the most disheartening because it impacts the brands and ultimately the consumers. According to the OECD, counterfeit goods account for 3.3 percent of all goods sold online and we may all have counterfeit goods in our house right now. For consumers to trust Amazon more, Amazon will need to do a better job evaluating new sellers through better data and third-party validation, monitoring existing sellers, and having a process of rapid enforcement.

  19. Steve Montgomery Avatar
    Steve Montgomery

    Perhaps not knowing is purposeful. Not knowing prevents you from having to say “yes we do that. It’s part of our growth strategy.”

  20. Cynthia Holcomb Avatar
    Cynthia Holcomb

    Seriously, the richest man in the world cares about answering all these annoying questions in a congressional hearing? No. Characterizing Mr.Bezo’s responses yesterday, the word incredulous comes to mind. “It’s not as easy to do as you would think because some of the sources in the article are anonymous” stated Bezos commenting upon the WSJ report stating Amazon leverages third-party data to compete with the third-party sellers on the platform. Is this not common knowledge in the retail industry? Stolen and counterfeit goods? Is this not common on Amazon?
    There is a sea change in the world.

    Watching Bezos dodge the truth yesterday, demonstrates Mr. Bezos does not care about the suppliers enabling him to personally earn $13B in one day nor the dangers to customers consuming counterfeit goods. Amazon practices a form of competitor censorship, gobbling up the little guy. Like the powerful OZ, Amazon hides behind the curtain of tremendous power believing Amazon is too big to fail.

    What Amazon is missing is the human component. People do care about integrity and honesty. Time will tell how long consumers ignore the societal implications of the destruction of small businesses just to shop online at Amazon.

  21. Ken Lonyai Avatar
    Ken Lonyai

    Anyone defending/apologizing for this money glutton needs to be ashamed of themselves. If he had to go before investors, it’s beyond a doubt that he would have proper answers. Congress’ buffoonery at holding corporations/C-suite leaders accountable during/after investigations has sent a message that Congress can be had. It’s all a sideshow that both sides knowingly participate in for their own gains.

    There is no need for Amazon to care about fake goods and fake reviews–people keep coming back anyway and Bezos’ pockets keep getting stuffed.

    There’s no legislation, there’s no real concern. All there is are consumers that have to decide to vote with their dollars by supporting abusive behemoth companies or instead, small businesses that do better/have more customer respect–especially during this challenging period.

    1. Rick Moss Avatar
      Rick Moss

      Perhaps consumers are indeed starting to vote with their wallets, Ken. Note a new Rakuten Intelligence report that Amazon’s market share slid from 42.1 percent in January to 38.5 percent in June. During the same period, Target’s share grew from 2.2 percent to 3.5 percent. Walmart saw its share grow from 4.2 percent to five percent.

      1. storewanderer Avatar
        storewanderer

        Amazon will do what it needs to do to get its share back up. They are already doing things this quarter: I am getting free shipping, no minimum codes, 5% back when buying at Amazon with Chase Credit Card, etc. The issue I am running into on Amazon is their pricing is often not the best; I can do better with Walmart, Target, Kroger, in some cases even the drugstore chains with sales. I do think Amazon has by far the easiest website to order from. Some of these others are really awful.

        Target will not hold its share gain as they blew it on essential goods during the pandemic and have way way too many out-of-stocks throughout their stores, but Walmart may hold some of its share since they did a much better job having essential goods in stock. Also, in the case of Walmart and Target, are we counting buy-online-pick-up-in-store sales in those market share figures?

  22. Patricia Vekich Waldron Avatar
    Patricia Vekich Waldron

    Bezos and Amazon have officially jumped over to the dark side. Their breadth and depth is so great that they are the default choice for many consumers purchase decisions. Managing an organization this vast is no easy task and I don’t except a CEO to know all operational details, but I do expect them to prepare to respond appropriately to Congress. Bezos is no better than tobacco, airline and auto executives that effectively lied to Congress in the past.

  23. Craig Sundstrom Avatar
    Craig Sundstrom

    How important? Not very. It’s not something consumers really give much thought to — how often are they even aware they’ve purchased them? And those in a position to do something about it — or at least think about it — probably have more pressing concerns at the moment.

  24. storewanderer Avatar
    storewanderer

    Maybe it needs to be explained in a way people will better understand: A significant portion of the products for sale on Amazon are actually a dressed-up streamlined product listing, but functions just like a fixed price listing on eBay. You have a mixture of items shipped directly from independent sellers (identical to fixed price listings on eBay), you have items being sold by independent sellers but shipped by Amazon (this is like the hybrid Ebay-Amazon model), then you have the items that are actually sold by Amazon and shipped by Amazon.

    I don’t think the average consumer is aware how many independents are selling things on Amazon. I think everyone assumes Amazon is Amazon and when you go buy there, you are dealing with Amazon. Amazon has promoted this with its sleek website and streamlined product listings, however, it is very clear when you click the list of available items who you are going to be buying from.

    As far as Bezos, do you think he is going to actually admit to selling counterfeit goods? I think his answer was calculated and designed as a way to avoid further discussion. Those questioning him are not subject matter experts and this wouldn’t be the first time a business executive is called before elected officials and “mouse trapped” due to the elected official chasing them into a corner.

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Mark Ryski
Mark Ryski
Trusted Member
3 years ago

Ending counterfeit goods is an ongoing challenge, but I don’t think it’s impacted Amazon’s success in any material way. The allegations about competing directly with third-party sellers are more problematic. The fact is, sellers can choose to be on Amazon or not, however, given its size and place in online retailing, the choice for these sellers is difficult: sleep with the enemy (Amazon) or try to go it alone without the massive distribution from Amazon? This is not a new issue, and I was unsatisfied with Bezos’ answers to these questions.

6
Zel Bianco
Zel Bianco
Active Member
3 years ago

Did he really not know the answers to those questions or was he displaying his version of CYA?

8
Suresh Chaganti
Suresh Chaganti
Member
3 years ago

Jeff Bezos’ performance is disappointing, but expected. Apple, Amazon and Facebook bend over backwards to portray an image that they are not very big, and claim innocence or ignorance about indulging in anti-competitive practices. It is laughable.

9
Bob Phibbs
Bob Phibbs
Active Member
3 years ago

Does Amazon care? Nope. Their goal will be one bill each month for your digital subscriptions, healthcare, banking, insurance, and even merchandise. Make no mistake the data is all Amazon is about as it digitally connects the dots to steal market share and keep customers close. Selling on Amazon is still a deal with the devil.

10
Gene Detroyer
Gene Detroyer
Trusted Member
Reply to  Bob Phibbs
3 years ago

“Keeping customers close” is the objective of every business. “Their goal will be one bill each month for your digital subscriptions, healthcare, banking, insurance, and even merchandise.” Shouldn’t it be?

Yes — if you are going to do business with Amazon, do it with your eyes wide open.

3
Dick Seesel
Dick Seesel
Active Member
3 years ago

I have a problem with the sale of stolen and counterfeit goods on Amazon — especially because it violates the bond of trust between company and customer. I take less issue with using data to develop private label goods.

If you’re Macy’s, or Kohl’s, or Target, you evaluate the sale of products from your own suppliers — especially the national brands — in order to uncover trends and opportunities in your own labels. (And sometimes those branded suppliers lose shelf space to private label goods, just as they do in grocery stores.) Is what Amazon doing all that different, or is the issue its sheer scale and ability to read and react to the data?

3
Suresh Chaganti
Suresh Chaganti
Member
Reply to  Dick Seesel
3 years ago

Amazon’s strong arm tactics extend beyond that. The Wall Street Journal documented a number of instances where they engaged companies with bait for acquisition, sought proprietary information, and promptly launched competing products.

I am personally aware of instances where Amazon is forcing brands to sell on Vendor Central based on the data they see on Marketplace.

There is a suspicion in the seller community that Amazon sponsors some level of unauthorized reselling of the products that are not on Amazon yet. They then use this data to approach brands to put products on Marketplace or Vendor Central.

The last one may sound like a conspiracy theory, but seeing WSJ’s investigative reporting, I’d not be shocked if it turns out true.

2
Mohamed Amer
Mohamed Amer
Member
3 years ago

Mr. Bezos is fully aware that the Amazon brand is built on trust. Consumers trust the value received, the Prime service promise, the ease of enjoying the multitude of consumer offerings, and the trust consumers have placed in Amazon regarding their data. That is the background against which Mr. Bezos must confront his inner demons of crushing any and all competitors; he cannot ignore his company’s trust issues with third-party vendors while relying on the consumer trust he has worked hard to create and earn. Amazon cannot have it both ways.

7
Jeff Weidauer
Jeff Weidauer
Member
3 years ago

Jeff Bezos has jumped the shark. This one-time entrepreneur has joined the ranks of untrustworthy company execs who deceive and obfuscate to protect the bottom line, all while claiming ignorance of his company’s misdeeds.

7
Gene Detroyer
Gene Detroyer
Trusted Member
3 years ago

If I am the CEO of a trillion dollar company with over 800,000 employees, I may tell a subordinate that we must vet third-party vendors. That person will send the message to the next level down, then the next and the next. Finally a team will be put together to establish a program.

I assume it is getting done. If I have any follow-up, the extent of it is asking that subordinate if it got done. End of conversation.

If I am asked how, I answer the question honestly: “I have no idea.”

I will add personally, nor should I have any idea.

-5
George Anderson
George Anderson
Member
Reply to  Gene Detroyer
3 years ago

Don’t you think he should have known he was going to be asked that question or something similar to it in advance and been ready to answer it? Mr. Bezos’ apparent unpreparedness for obvious questions seems very un-Amazon-like to me. The company and its communication reps are as good as it gets in my experience. “We’ll get back to you” responses are a far cry from that.

10
Gene Detroyer
Gene Detroyer
Trusted Member
Reply to  George Anderson
3 years ago

Should he have known the question was coming? Yes. Should he have had an answer, yes. Should it have been in excruciating detail? No. Should he know the details of the process on an everyday basis? … Not if he is doing his job as CEO.

We have this idea that CEOs know exactly what goes on in their companies. CEOs are not the sheriff, they are a leader.

My company, Allendale Pharmaceuticals had great experiences with Walmart and Amazon as customers. On the other hand, Walgreen’s refused to pay us (until the lawyers got involved) and Target continually took unjustified deductions. Why? Because they could. Do I believe that the CEOs of either of those companies knew what was happening? No way.

0
Ken Lonyai
Ken Lonyai
Member
Reply to  Gene Detroyer
3 years ago

“I don’t know the answer to your question” equates to “excruciating detail” for you Gene? Were your example companies’ CEOs testifying before Congress?

You must really be smitten with Bezos/Amazon to be apologizing for him so extensively in this discussion.

1
George Anderson
George Anderson
Member
Reply to  Gene Detroyer
3 years ago

The question isn’t whether he should know every single detail of how his business works as CEO. It’s whether he should have known in a public forum that these specific questions were coming (the answer being yes) and should he have had simple, concise responses when asked (the answer here also should have been yes).

1
Gene Detroyer
Gene Detroyer
Trusted Member
Reply to  George Anderson
3 years ago

I agree. He should have had a paper ready to read with a very simple and concise answer. For that he would have been skewered as he is now as dodging the issue.

Did he handle it well? No. Are our expectations of what a CEO of a large company knows ignorant? TOTALLY!

-2
Rick Moss
Rick Moss
Reply to  Gene Detroyer
3 years ago

Gene, you are saying, in essence, that it’s a CEO’s responsibility (to his shareholders, I imagine) to be willfully ignorant of matters he is being questioned on by the U.S. Congress. Perhaps true, and all the more tragic, if so.

11
Gene Detroyer
Gene Detroyer
Trusted Member
Reply to  Rick Moss
3 years ago

He should have know the question was coming. He should have been prepared to give a BRIEF overview. If Congress wanted to know details, then bring in the guy who is running the vetting program.

I will go one step further. If he knows the details of how it is done, he is not doing his job as CEO, he is getting too involved in the everyday business of a company that has 800,000 people and a value of $1 trillion.

1
Lisa Goller
Lisa Goller
Active Member
3 years ago

Ending the sale of counterfeit goods is vital to Amazon’s future success. Companies that earn our trust earn our business. Fraudulent players put Amazon’s consumer loyalty at stake. Amazon’s recent launch of a Counterfeit Crimes Unit shows it is willing to take action against shady suppliers to restore consumer confidence.

As for private label, it depends whether Amazon accessed more detailed, proprietary data than most retailers receive. Whether that is the case is currently unclear. Private label has always been built on the notion that “imitation is the sincerest form of flattery.” Retailers see what’s selling then replicate popular products to get in on the action.

4
Jeff Sward
Jeff Sward
Active Member
3 years ago

Disappointing and disingenuous. He had to know going in that he would be expected to answer that question. It was a moment to either build trust or skepticism. So skepticism it is.

3
Gene Detroyer
Gene Detroyer
Trusted Member
3 years ago

Say I am the head of product development for my large supermarket chain. A new vendor comes in and sells us a new type of cookie, “New Cookie.” It is hugely successful and I notice its success as I check the weekly item sales. “New Cookie” is flying off the shelves.

I tell my team, give me a new private label item just like “New Cookie.”

Is that different from what Amazon does?

3
Ananda Chakravarty
Ananda Chakravarty
Member
3 years ago

Lets assume for a moment Bezos was completely truthful in his answers – the sale of stolen and counterfeit goods has been an ongoing problem and he has instituted (at least in name) programs to address the issue. More importantly, to be fair to Bezos, he has 2.5 million+ sellers on the platform and over $160 billion in third-party merchant goods sold on his site. The real question here is, what is the level of responsibility his platform has over sellers on his site and tracking counterfeits? For end-customers, the counterfeits are difficult to detect, only the brand names like Gucci, Ulta, Prada, etc. care about and take steps to stop the counterfeiting, but they are also depending on and growing business with huge markets in Asia – particularly China, which is known for many actors engaged in counterfeiting. For Bezos, he may truthfully not know or perhaps can’t know because of the volume of business. Putting impenetrable safeguards in place can be cost prohibitive and lawsuits to date are a lower cost of doing business. On the other hand, maybe he hasn’t prioritized the issue at all – how much is really negligence and a real tort against the consumer?

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Gene Detroyer
Gene Detroyer
Trusted Member
Reply to  Ananda Chakravarty
3 years ago

“For Bezos, he may truthfully not know or perhaps can’t know because of the volume of business.” Or, as CEO, should not know.

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Ananda Chakravarty
Ananda Chakravarty
Member
Reply to  Gene Detroyer
3 years ago

Gene, though I believe he might not have the details, I don’t believe as CEO he could not know the answers. The buck stops with the CEO. The CEO still has the responsibility for all actions of the organization. He should have been briefed on the potential question by his underlings and had a clear reply. I’m certain all of the key answers were at least partially scripted — especially when being televised. PR is critical to Amazon, and this would be no different. In this case, I suspect his legal counsel suggested, “I don’t know” is probably your best answer and to skirt the issue, and so it was given. I’m certain he would have some deeper details to share, and if not, has the power to find out.

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Liz Adamson
Liz Adamson
3 years ago

I have watched over the last couple years as Amazon has put more and more controls in place to keep counterfeit goods off of its marketplace. They are working on the problem and making progress, although there is still a long ways to go.

As for Bezos’ answers, how can a CEO of a company as large as Amazon know all the details of the different processes used within the company? While I don’t expect him to be familiar with every detail, less than knowledgeable responses don’t make him look very good to the public and I do wonder if he couldn’t have been better prepared.

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Gene Detroyer
Gene Detroyer
Trusted Member
Reply to  Liz Adamson
3 years ago

What surprises me Liz, is that so many people expect this of CEOs. You ask the right question, “…how can a CEO of a company as large as Amazon know all the details of the different processes used within the company?”

0
Neil Saunders
Neil Saunders
Noble Member
3 years ago

As far as I am concerned, the whole hearing is a waste of time. There are millions unemployed and politicians of all shades are completely unable to reach any agreement on how to provide essential benefits to those people. Meanwhile, they are spending their time grandstanding by asking questions to companies that have grown by focusing on consumers and relentlessly delivering what they want. Perhaps if politicians had the same focus and sense of innovation they’d achieve great deal more.

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Paula Rosenblum
Paula Rosenblum
Active Member
3 years ago

Jeff Bezos was a Golden PR machine for years. That’s over now. Let’s face it, kids. His retail operations don’t make money, he’s a master of distraction and the company packaging is an environmental disaster waiting to happen.

Jeff Bezos should find some good works to do, including taking better care of his employees.

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Gene Detroyer
Gene Detroyer
Trusted Member
Reply to  Paula Rosenblum
3 years ago

As of 2018, Amazon has knocked Google off the top spot as the best place to work in the world, according to LinkedIn.

1
Doug Garnett
Doug Garnett
Member
3 years ago

Amazon is no longer the naive startup which can get away with “I don’t know” as an answer. It should concern us all that Mr. Bezos attempted to use that answer to deflect questions he knew were critical.

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Ryan Mathews
Ryan Mathews
Active Member
3 years ago

Counterfeits are probably more of a problem for Amazon than stolen goods, which feels more like a Craigslist problem to me since it’s hard to understand how it could scale. If something were on the low end, why go through all the hassle of selling it online? And if it were on the opposite end of the value scale — say a hot Basquiat painting — putting it on Amazon seems like a good way of getting caught. Counterfeits, because they can be scaled, are clearly more of a problem and Bezos clearly should have had a canned answer in his pocket. The fact that he didn’t leads the cynical to believe that a.) he is aware of the problem, and b.) he isn’t worried about it for one reason or another.

As far as the data question, it seems to be an example of caveat venditor – let the seller beware. Amazon routinely brutalizes partners and actively sets up entire categories of vendors to fail. Anyone who enters into business with Amazon with their eyes closed is inviting disaster.

3
Brian Cluster
Brian Cluster
Member
3 years ago

As CEO of a company for 26 years and as one that helped build the company from the ground up, Mr. Bezos has a great deal of knowledge of how things work and the processes involved in bringing in new sellers. He should have been more forthright in the answer and should have specific steps that the company plans to take to address the issue.

I find that the counterfeit issue is the most disheartening because it impacts the brands and ultimately the consumers. According to the OECD, counterfeit goods account for 3.3 percent of all goods sold online and we may all have counterfeit goods in our house right now. For consumers to trust Amazon more, Amazon will need to do a better job evaluating new sellers through better data and third-party validation, monitoring existing sellers, and having a process of rapid enforcement.

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Steve Montgomery
Steve Montgomery
Member
3 years ago

Perhaps not knowing is purposeful. Not knowing prevents you from having to say “yes we do that. It’s part of our growth strategy.”

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Cynthia Holcomb
Cynthia Holcomb
Member
3 years ago

Seriously, the richest man in the world cares about answering all these annoying questions in a congressional hearing? No. Characterizing Mr.Bezo’s responses yesterday, the word incredulous comes to mind. “It’s not as easy to do as you would think because some of the sources in the article are anonymous” stated Bezos commenting upon the WSJ report stating Amazon leverages third-party data to compete with the third-party sellers on the platform. Is this not common knowledge in the retail industry? Stolen and counterfeit goods? Is this not common on Amazon?
There is a sea change in the world.

Watching Bezos dodge the truth yesterday, demonstrates Mr. Bezos does not care about the suppliers enabling him to personally earn $13B in one day nor the dangers to customers consuming counterfeit goods. Amazon practices a form of competitor censorship, gobbling up the little guy. Like the powerful OZ, Amazon hides behind the curtain of tremendous power believing Amazon is too big to fail.

What Amazon is missing is the human component. People do care about integrity and honesty. Time will tell how long consumers ignore the societal implications of the destruction of small businesses just to shop online at Amazon.

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Ken Lonyai
Ken Lonyai
Member
3 years ago

Anyone defending/apologizing for this money glutton needs to be ashamed of themselves. If he had to go before investors, it’s beyond a doubt that he would have proper answers. Congress’ buffoonery at holding corporations/C-suite leaders accountable during/after investigations has sent a message that Congress can be had. It’s all a sideshow that both sides knowingly participate in for their own gains.

There is no need for Amazon to care about fake goods and fake reviews–people keep coming back anyway and Bezos’ pockets keep getting stuffed.

There’s no legislation, there’s no real concern. All there is are consumers that have to decide to vote with their dollars by supporting abusive behemoth companies or instead, small businesses that do better/have more customer respect–especially during this challenging period.

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Rick Moss
Rick Moss
Reply to  Ken Lonyai
3 years ago

Perhaps consumers are indeed starting to vote with their wallets, Ken. Note a new Rakuten Intelligence report that Amazon’s market share slid from 42.1 percent in January to 38.5 percent in June. During the same period, Target’s share grew from 2.2 percent to 3.5 percent. Walmart saw its share grow from 4.2 percent to five percent.

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storewanderer
storewanderer
Member
Reply to  Rick Moss
3 years ago

Amazon will do what it needs to do to get its share back up. They are already doing things this quarter: I am getting free shipping, no minimum codes, 5% back when buying at Amazon with Chase Credit Card, etc. The issue I am running into on Amazon is their pricing is often not the best; I can do better with Walmart, Target, Kroger, in some cases even the drugstore chains with sales. I do think Amazon has by far the easiest website to order from. Some of these others are really awful.

Target will not hold its share gain as they blew it on essential goods during the pandemic and have way way too many out-of-stocks throughout their stores, but Walmart may hold some of its share since they did a much better job having essential goods in stock. Also, in the case of Walmart and Target, are we counting buy-online-pick-up-in-store sales in those market share figures?

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Patricia Vekich Waldron
Patricia Vekich Waldron
Active Member
3 years ago

Bezos and Amazon have officially jumped over to the dark side. Their breadth and depth is so great that they are the default choice for many consumers purchase decisions. Managing an organization this vast is no easy task and I don’t except a CEO to know all operational details, but I do expect them to prepare to respond appropriately to Congress. Bezos is no better than tobacco, airline and auto executives that effectively lied to Congress in the past.

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Craig Sundstrom
Craig Sundstrom
Active Member
3 years ago

How important? Not very. It’s not something consumers really give much thought to — how often are they even aware they’ve purchased them? And those in a position to do something about it — or at least think about it — probably have more pressing concerns at the moment.

1
storewanderer
storewanderer
Member
3 years ago

Maybe it needs to be explained in a way people will better understand: A significant portion of the products for sale on Amazon are actually a dressed-up streamlined product listing, but functions just like a fixed price listing on eBay. You have a mixture of items shipped directly from independent sellers (identical to fixed price listings on eBay), you have items being sold by independent sellers but shipped by Amazon (this is like the hybrid Ebay-Amazon model), then you have the items that are actually sold by Amazon and shipped by Amazon.

I don’t think the average consumer is aware how many independents are selling things on Amazon. I think everyone assumes Amazon is Amazon and when you go buy there, you are dealing with Amazon. Amazon has promoted this with its sleek website and streamlined product listings, however, it is very clear when you click the list of available items who you are going to be buying from.

As far as Bezos, do you think he is going to actually admit to selling counterfeit goods? I think his answer was calculated and designed as a way to avoid further discussion. Those questioning him are not subject matter experts and this wouldn’t be the first time a business executive is called before elected officials and “mouse trapped” due to the elected official chasing them into a corner.

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