Amazon sellers suffer huge losses after pricing glitch

Amazon has come in for flak after failing to help small family-owned businesses that had lost tens of thousands of pounds after a technical glitch caused their products to be sold for a penny, The Guardian reported.

Amazon, which recorded sales of over £48 billion last year, had failed to respond to calls and offer compensation to its selling partners, some of whom suffered losses of upto £100,000 in the week before Christmas.

The sellers, many of whom were operating from their garage or spare bedroom, had demanded that Amazon take part of the responsibility for the error caused by a third-party software glitch, while some had already instructed lawyers.

Amazon refused to accept liability for the losses suffered by its sellers, in the process, making profits of $20 billion.

Amazon last year sold goods worth £4.3 billion in the UK – more than the UK sales of Argos, Dixons or the non-food arm of Marks & Spencer. The company paid only £4.2 million in UK tax.

However, though the company yesterday claimed that it had ''reached out to all the sellers that were affected'', many complained that Amazon did not speak them.

Meanwhile, the Irish Independent  reported that the glitch occurred between 7:00 pm and 8:00 pm on Friday, and affected firms that used the tool RepricerExpress.

The RepricerExpress software, which is designed to keep businesses competitive, automatically reprices items of stock if a cheaper version became available elsewhere online in a bid to keep businesses competitive.

However, a computer error led to hundreds of items being sold on Amazon at a fraction of their normal price.

An affected seller, Judith Blackford of Kiddymania, told Sky News she had taken a hit of (€25,100) overnight and could end up going out of business from the error. She added she started using RepricerExpress a few months ago and through an error in the programme her stock on Amazon was listed at 1p per item including delivery.

She had lost about £20,000 overnight and though she had asked Amazon to cancel the orders it was still shipping out her products and charging her "horrendous fees" Blackford said.