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Amazon’s Battling Shady Marketplace Products. Will Consumers Care Enough to Stop Shopping?

Amazon is facing an epidemic of banned, mislabeled or otherwise unsafe products offered for sale on its lucrative third-party marketplace that accounts for 58 percent of annual sales at last estimate.

Exactly 4,152 products reviewed by the Wall Street Journal’s (WSJ) extensive investigation were found to be unsafe, mislabeled to mislead, or banned outright by U.S. federal agencies. The findings point to the pitfalls for consumers buying products on Amazon they might not know are supplied by third parties as well as the company’s advantages over brick-and-mortar stores forced to comply with much more tightly enforced labeling and product safety regulations.

The supply chain integrity that governs Amazon’s first-party goods is virtually nowhere to be seen when it comes to the sprawling smorgasbord of the marketplace, whose vendors sold $168 billion worth of products last year, the retail and tech giant reported.

Many of the questionable products fall into the children’s toys and medication categories, but range from eyelash growth serums to balloons lacking the “choking hazard” label. And although The WSJ notified Amazon of products in need of attention, some effort was made to remove certain goods—just for similarly questionable items to reappear weeks later.

News of Amazon’s third-party product problem comes as Gen Z shoppers show signs of a waning allegiance to the dominant player in U.S. online retail—while shifting their $44 billion spending power elsewhere. More than 20 percent of Gen Zers polled by Yotpo claimed ignorance of—or indifference to—Prime Day while 70 percent noted their preference for the richer experience offered by direct-to-consumer brands.

But any fallout from this latest uproar could be tempered by Amazon’s longstanding reputation and customer obsession. Speaking about a report on brand intimacy, in which Amazon led the retail category, MBLM managing partner Mario Natarelli said of the recent spate of negative headlines, “They have gained goodwill and equity with consumers, and this can shield the brand in the short term.”

If Amazon can weather Prime Day warehouse worker protests to record its largest sales event ever and the aftermath of a hunt for HQ2 that saw the company pick two urban centers and ultimately pull out of one, it’s entirely possible the discovery of flawed marketplace product listings and unsafe product will result in little more than business as usual at the Seattle-based company, which just opened its largest office ever in Hyderabad, India.

An Amazon spokeswoman told The WSJ that safety is the company’s “top priority” and its technology blocked three billion listings last year. “When a concern arises we move quickly to protect customers and work directly with sellers, brands, and government agencies,” she said.

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