Amazon’s Proof of Work

I write a lot of reviews on Amazon. Partly because Amazon reviews is one of the last bastions of unpopular opinion on the internet, but mostly because I get free stuff out of it. I am a huge sucker for free stuff.

If you’ve had an Amazon account for any amount of time, it’s inevitable that you’ve been solicited for reviews by a third party seller. Usually the seller offers to Paypal a purchase refund in exchange for a five-star review. Sometimes the target product is in the $100-$200 range, like a security camera. Sometimes the product is a $10 phone holder, in which case the seller might pay you to search for some keywords, click around, and buy the product without need for a review.

Third-party sellers use tools like JungleScout to find product niches with high demand and low competition. Once a niche is identified, the seller orders a batch of merchandise from China, slaps a custom label on the box, and has the manufacturer drop-ship the lot to an Amazon fulfillment center. Manufacturers don’t form exclusive relationships, so dozens of sellers might hone in on the same product, resulting in page after page of identical listings sold under different brand names.

Amazon ranks the products based on a combination of sales numbers, reviews, and clickthrough:sales ratio; sellers buy reviews and sales in hopes of securing a coveted spot on the first page. No one is really harmed in the process – customers end up with the same product from the same manufacturer either way. In some ways it’s like Proof-of-Work – dumb and wasteful, but fair.

Here’s where I get confused. These are clearly the same product. Why don’t sellers consolidate to increase their margins? One theory is that sellers prefer to stay small, to reduce the downside risk of Amazon canceling their account and seizing the inventory. Another is that Amazon prefers the plausible deniability of using multiple third-party sellers. When issues arise (like a hoverboard spontaneously combusting), Amazon can claim to be a neutral platform and deflect the blame.

And maybe this is ultimately good for consumerism. If I were to search Amazon for a USB cable and get a single result at the best price, I would stop to think about whether I really needed a USB cable at all. Instead, Amazon returns fifty pages of results and my focus is on choosing whether I want the white one or the blue one; three feet or six feet.

We’ve become accustomed to having eighty bajillion options shoved in front of our eyes anytime we want something, because variety is the epitome of free-market capitalism. As long as we get to choose between five million brands of breakfast cereal, no one will ever stop to ask why we need to start the day with oats rolled in high fructose corn syrup.

And that’s my conspiracy theory of the day.

In 1989, Boris Yeltsin visited a Houston supermarket and was blown away by the available options. “31 different flavors of ice cream, зAEбцA!” It was enough to make the Soviets abandon communism.

One thought on “Amazon’s Proof of Work

  1. I find myself buying less and less stuff these days. I cannot justify it. Why buy a new graphics card when I have yet to get through my Steam library full of games that will run fine on existing hardware?

    A nation full of people like myself would create a depression (and shortages of Korean koh-jo-jang).

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