What course of action would you suggest that the company take?

In my previous posts I have discussed many sites of the Amazon’s Pricing Algorithm: from describing what the issues were, through how it has effected the customers and retailers, to how the company is responding to all of these accusations. But it has come the time to address the final and (in my opinion) the most important question: How should Amazon itself act in order to bring positive change into its business?

I have decided to suggest a possible solution based on a specific deontological (Deon = duty; focus on duties or obligations) framework-Kant’s Ethics. This framework says that “In making ethical decisions we should first consider those decisions as potential universal truths: if everyone acted this way, would it be acceptable?”

In other words, if all companies (even the ones cooperating with Amazon) and retailers acted in the same- unethical way, would Amazon accept that? I believe that this is the best ethical framework to go by, because Amazon (being such a huge company) does cooperate with many smaller/ equal businesses. What if they all acted in the same way? (“Eye for an eye” if you will…)

I believe that deontological framework would be more successful in fixing this issue than teleological framework, because it doesn’t focus on outcomes as much. Amazon obviously is now very “outcome oriented” where they care about the fast and high sales, rather than how it makes others feel/ if it’s right or wrong.

First of all, I think that Amazon should treat their workers with more respect, by improving the working conditions. They should, also explain to customers how their pricing algorithm works and make sure that everybody is aware of it. I also think that they should show more support to small business owners by creating a “small retailers” filter option.

Also, I think that Amazon should make it clear what products they are making “extra” profits off of, so that way we can look for cheaper options.

When approached with a question about their actions, Amazon should be able to answer more in-depth instead of giving vague and unclear answers. As a customers, I personally do not believe companies that cannot even explain why they act in a certain way.

When it comes to customer reviews, Amazon has been blamed in the past for gifting high-status consumer reviewers with free products from publishers, agents, authors and manufacturers. I personally do not believe in that kind of approach. People might lie about what they actually think of a product in order to receive free “stuff”. How is that supposed to help us when judging if we want to purchase something?

All together- Amazon seems like a very successful company, and it definitely is very convenient to buy from. But they do need to work on their ethical values and make sure that they hold people responsible for stakeholder abuse. If they could fix these issues they definitely have a potential to grow even more.

I hope that you enjoyed learning about some of the issues that Amazon is dealing with!
Thanks for reading!

 

 

 

What are other people saying about this issue?

When typing the word “Amazon” into Google the first thing that comes up is the Online Shopping Platform that I have been discussing in my previous posts. To get the actual definition of what Amazon is I had to add the word “Definition” itself to my search. (To those who don’t know Amazon is “a member of a legendary race of female warriors believed by the ancient Greeks to exist in Scythia (near the Black Sea in modern Russia) or elsewhere on the edge of the known world”). But why am I even mentioning this? I want you to realize how huge of a company they are that they even taken over the original meaning of a word!

Since Amazon reaches so many customers of different ages and characteristics, their actions influence lives of millions of people. That’s why it seems more than appropriate for me to show what these people are saying about Amazon’s unethical behavior…

As ProPublica (an independent, non-profit newsroom that produces investigative journalism in the public interest) reported: “Amazon’s strategy hurt shoppers, many of whom end up paying extra at checkout, and ran counter to its professed philosophy of putting customers first”. ProPublica asserts that under Amazon’s ranking systems, shoppers who are not Prime members can end up paying more for products if the fail to scroll more deeply into results. After reading the indepth report that ProPublica created, I do truly believe that they are right about Amazon mistreating their customers.

Third-party sellers trying to make it on the Amazon Marketplace have two things much more important than their prices to worry about:
-Winning the Buy Box
-Following Amazon’s strict seller rules.
“The Buy Box, if you don’t already know, is the section on a product page where potential customers find the “Add to Cart” button that begins the process of buying. Many sellers on Amazon offer the same items, but Amazon awards only one seller the precious position of being in the Buy Box at any given time”. Sellers who don’t win the buy box are placed on a page called “More Buying Choices,” on a list that Amazon describes as ranked by price plus shipping. “However, since Amazon doesn’t include the cost of shipping for itself and its fulfillment partners, the rankings on that page can be misleading”.

As Kate Erkavun (one of the small business third- party sellers on Amazon) says: “”If you don’t win the buy box, your chance of selling is low- Amazon is not really fair in terms of competition”.

As you can imagine, majority of Amazon customers never even click on the More Buying Choices page where third-party sellers like Kate Erkavun have their products. “Among the countless consultants and conferences devoted to winning the buy box, it’s well known that Amazon’s algorithm gives an advantage to itself, and to sellers who pay to join the Fulfilled by Amazon program”.

I also decided to see how people who work for Amazon really feel. As Susan Adams (Forbes reporter) writes, majority of Amazon’s workers give their company only one out of five stars! (Again, I am talking mostly about the warehouses workers- not the ones who work in the offices).

Now that you know what media, retailers and workers say about Amazon, are you still willing to support them as a company? Is this going to change your view on them? Do you think their actions are unethical- or are they just trying to simply gain profits (like any other company…)? Let me know in the comments below!

Thanks!

Sources:

Amazon Faces Questions Over How It Lists Prices
http://www.forbes.com/sites/susanadams/2015/08/18/how-people-who-work-for-amazon-really-feel/#3c21cd715c7a

Sales & Pricing Psychology for Maximizing Profits on Amazon

http://business-ethics.com/2016/09/20/12675-amazon-says-it-puts-customers-first-but-its-pricing-algorithm-doesnt/

Ethical Issues with Amazon’s Pricing Algorithm- What is the company saying about the situation?

In today’s post I will discuss what Amazon itself says about the issue with its pricing algorithm. As one can read in the article “Amazon Says It Puts Customers First. But Its Pricing Algorithm Doesn’t” by Julia Angwin and Surya Mattu on September 20, 2016 “Amazon often says it seeks to be “Earth’s most customer-centric company”. As an example of that, Amazon’s founder and CEO, was known to leave an empty seat during meetings to remind their workers to always think of the customer needs. But as the authors mention, they appear to be using their power over other retailers and algorithm to take advantage of customers.

Erik Fairleigh, (Amazon’s spokesman) said: “The algorithm that selects which product goes into the ‘buy box’ accounts for a range of factors beyond price. Customers trust Amazon to have great prices, but that’s not all. Vast selection, world-class customer service and fast, free delivery are critically important. These components, and more, determine our product listings” (Amazon’s statement http://www.propublica.org). Amazon’s spokesman refused to get more detail when answering questions “including the ones about why Amazon’s product rankings excluded shipping costs only for itself and its paid partners” (www. http://business-ethics.com).

 (Jeff Bezos- Amazon’s founder and CEO)

When one of the shareholder’s asked about Amazon’s practice of promoting products sold by other companies on its website. Bezos (Amazon’s founder and CEO) said “Amazon uses very objective customer-centered algorithms’ that automatically award the “buy box” to the lowest price seller, provided “they actually have it in stock and can deliver it” (www. http://business-ethics.com).

In other words, Amazon stands strong behind their pricing algorithm, refusing at the same time to get in detail while explaining how it works. I think in this situation it is fair to say that they are basically avoiding explaining their actions.

I personally think that Amazon is not dealing well with this issue. If majority of customers claim to be used/ cheated they should have a way of assuring them of their loyalty and honesty. Reading Amazon’s explanations makes me question their actions even more.

Thanks for reading!

Stay tuned to find out what other people are saying about this issue.

Sources:

http://business-ethics.com/2016/09/20/12675-amazon-says-it-puts-customers-first-but-its-pricing-algorithm-doesnt/

https://www.propublica.org/documents/item/3111034-Amazon-Statement.html

Amazon Sales Rank: Taming the Algorithm

Ethical Issues with Amazon’s Pricing Algorithm- background information about the company and its operations.

Welcome back! In today’s post I will give some more background information on Amazon.
They are “an American electronic commerce and cloud computing company with headquarters in Seattle, Washington. It is the largest Internet-based retailer in the world by total sales and market capitalization” (Wikipedia).
As one can read at the official Amazon webpage, “Around the world, there are millions of sellers, authors, and developers using Amazon products and services to reach new customers, publish their books, and build and grow their businesses. And they are supported every day by more than 240,000 Amazon employees”. They are big multi-billion company that not only hires many people, but also sells to many customers all over the World. “Amazon has separate retail websites for the United States, the United Kingdom and Ireland, France, Canada, Germany, Italy, Spain, Netherlands, Australia, Brazil, Japan, China, India and Mexico” (Wikipedia).
Amazon customers have many good opinions, especially because of their how quick and convenient they are. But, as such a huge corporation, Amazon brings a lot of attention to its actions. Since the beginning, the company has attracted criticism and controversy coming from multiple different sources. Some of them include: poor warehouse conditions for workers; anti-unionization efforts; works containing libel, facilitating dogfight, cockfight, or pedophile activities; and finally price discrimination (“Price discrimination is a microeconomic pricing strategy where identical or largely similar goods or services are transacted at different prices by the same provider in different markets” (Wikipedia).
While looking for their background information, I kept reading about how poorly Amazon treats their employees. They are often criticized by both their current employees, as well as their previous ones. In 2011 it was publicized that “at the Breinigsville, Pennsylvania warehouse, workers had to carry out work in 100 °F (38 °C) heat, resulting in employees becoming extremely uncomfortable and suffering from dehydration and collapse. Loading-bay doors were not opened to allow in fresh air as “managers were worried about theft”. And that’s just one of many controversies surrounding their unethical actions towards workers!

One of positive changes occurring in Amazon is the fact that now they are giving 6 weeks of paid leave for new mothers and fathers. “This change includes birth parents and adoptive parents and can be applied in conjunction with existing maternity leave and medical leave for new mothers”. But one might question, is it out of concern for their workers, or is it an effort to make up for their other terrible actions.
After reading about all of this- doesn’t it make you wonder if Amazon really is as great as they initially appear to be? It definitely makes me feel a lot less enthusiastic to buy products from them. Because if a company treats their workers so terribly, what would stop them from lying about their product’s quality or prices?
Stay tuned for more information, and to find out what Amazon has to say about all of that.
Thanks for reading!

Sources:

Amazon Says It Puts Customers First. But Its Pricing Algorithm Doesn’t.

https://en.wikipedia.org/wiki/Amazon.com

What Amazon’s workplace controversy says about the future of work

Ethical Issues with Amazon’s Pricing Algorithm

(Blog post #1- Identify an ethical dilemma in business that is currently being discussed or reported in the media and describe the ethical situation and dilemma.)

While searching through news the other day I came across an article that discussed the ethical issues connected with Amazon’s Pricing Algorithm. Let me start with saying that I am not very “technology smart” so the title itself seemed very confusing to me. But I gave it a chance and I decided to share this story today to hopefully help other “technology dummies” and discribe the ethical dilemma that Amazon’s customers are facing.

So in simple words- when going on the Amazon webpage, the customer is supposed to see the best deals (essentially products that have the lowest price but are also ranked the highest by previous customers). As the authors (Julia Angwin and Surya Mattu) mention they were searching for Loctite super glue. Amazon’s software took them through multiple combinations of price and shipping, some of which were cheaper than a customer could find at a local Walmart. “TheHardwareCity.com, an online retailer from Farmers Branch, Texas, with a 95 percent customer satisfaction rating, was selling Loctite for $6.75 with free shipping. Fat Boy Tools of Massillon, Ohio, a competitor with a similar customer rating was nearly as cheap: $7.27 with free shipping”.

Amazon’s webpage “threw aside” those offers, instead showing the product sold by Amazon itself for slightly more, $7.80. “This seemed like a plausible choice until another click of the mouse revealed shipping costs of $6.51. That brought the total cost, before taxes, to $14.31, or nearly double the price Amazon had listed on the initial page”. Why did this algorithm, which was supposed show the best offers, would push the customer towards a more expensive option? It came to find out that, about 75% of the time, Amazon “placed its own products and those of companies that pay for its services in that position even when there were substantially cheaper offers available from others”.

So in even simpler words- Amazon creates this fake illusion that a certain retailer of THE SAME PRODUCT is better just because they get a profit out of selling their products. So the customers end up spending more money on THE SAME PRODUCT, thinking that they are paying a higher price for better quality, where in reality they are just helping Amazon make more profit… Which is simply- unethical.

Customers are not sure why Amazon’s algorithm puts its own products ahead of better deals offered by others. “Perhaps Amazon is taking the view that its widely admired shipping and delivery offers the best possible satisfaction for customers, even if it costs more”.

“Another possibility is that the company is trying to encourage shoppers to join the Prime program, which offers free shipping on many items (including the Loctite super glue). When non-Prime customers initially view Amazon products, they are offered “FREE Shipping on eligible orders.” When they finally try to pay, the shipping fees are revealed along with an advertisement to avoid such fees by joining Prime.

But at the end of the day, customers are still under this impression that they are buying products at the lowest costs, when in reality they might be lied to.

Stay tuned to learn about Amazon’s background and their previous actions in my next post!

All quotes come from the “Amazon Says It Puts Customers First. But Its Pricing Algorithm Doesn’t” article written by Julia Angwin and Surya Mattu for the Business Ethics The Magazine of Corporate Responsibility on September 20th, 2016 (http://business-ethics.com/2016/09/20/12675-amazon-says-it-puts-customers-first-but-its-pricing-algorithm-doesnt/).