Amazon Marketplace Glitch Brings Early Christmas To Shoppers, Nightmare For Sellers

Every once in a while a company will suffer an online glitch that leads to consumers purchasing items at bargain-basement prices. While most of the recent buying free-for-alls came courtesy of deeply discounted airline tickets, an issue on Amazon’s UK marketplace Friday gave new meaning to the idea of a holiday fire sale when thousands of items went were priced for a little as one penny (or 2 pennies if you’re in the United States).

The Guardian reports that for about an hour on Friday evening the software used by third-party sellers to ensure their products are cheapest on the UK Amazon marketplace malfunctioned and reduced prices drastically, in some cases to just a few cents.

Unlike United Airlines, which refused to honor plane tickets purchased during a glitch in October, officials with Amazon say they have no choice but to fulfill orders in which consumers were already charged.

And so, while the glitch allowed consumers to scoop up crazy deals on thousands of goods including mattresses, batteries, games, and clothing, it put the pressure on sellers’ demand capabilities and their pocketbooks.

Martin Le Corre, who sells toys and games on Amazon tells The Guardian that had he not taken his store offline shortly after the glitch began he could be out more than £100,000 (about $156,666).

“We got a call from a competitor to say ‘do you realise all your listings at a penny?'” he says. “By the end of the hour, we had 1,600 orders. “People were buying 10, 50, 100 copies of everything. It is £50,000, £60,000, £100,000 of stock; we can’t even work it out.”

Although Le Corre’s store, MB Housewares, was able to deflect the brunt bargain sales, he says that about £30,000 (or nearly $50,000) worth of products had already been marked as dispatched by Amazon, meaning they could not be cancelled and shoppers would be able to keep the items.

Officials with Amazon say they are working to cancel orders that have not been dispatched, but sellers tell The Guardian that the cancellations were having a negative affect on their seller ratings.

TV and mobile phone seller, Stephen Palmer, says he thought the glitch was just a prank when he noticed a plethora of Amazon notification emails.

“One customer in Kent ordered 59 mobile phones, each for 1p,” he says. “That is stock worth £1,500 ($2,350).”

Palmer says the order was marked as dispatched by Amazon’s distribution center 24 hours after he called the e-tailer to try to stop his products from being dispatched in one penny orders.

Judith Blackford, who sells dresses though her store Kiddymania, says she lost about £20,000 ($31,300) overnight Friday and fears that she could go bankrupt as a result of the glitch.

Like Palmer, she first noticed there might be an issue when she received notifications of 150 orders. By the end of the evening, her Amazon account showed she had sold 675 items, some items valued at £100 sold for just a penny.

“I phoned Amazon but the support line was closed until the morning,” she says. “There was an emergency email, but they just said they were aware of it and looking into it.”

According to The Guardian, the company behind the marketplace software, RepricerExpress, markets itself on its website as a company that provides “the ridiculously simply way to increase your Amazon holiday sales.”

While the software glitch no doubt increased holiday sales, it did so at the sellers’ expense.

RepricerExpress chief executive Brendan Doherty, apologized to customers, saying the company was devastated by the issue.

“I am truly sorry for the distress this has caused our customers. We understand that you are angry and upset and we will endeavour to work to make good on this issue and to work to restore your confidence in our product and service,” he tells The Guardian.

A spokesperson for Amazon also apologized to sellers for the glitch.

“We responded quickly and were able to cancel the vast majority of orders placed on these affected items immediately and no costs or fees will be incurred by sellers for these cancelled orders,” the spokesperson tells The Guardian. “We are now reviewing the small number of orders that were processed and will be reaching out to any affected sellers directly.”

Amazon sellers hit by nightmare before Christmas as glitch cuts prices to 1p [The Guardian]