Amazon Takes a Hit From Zshop Owners

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Amazon continues to come under fire over holiday outages, this time from zshop owners who are losing business as a result.


Computer glitches have caused some zshops -- small businesses and individuals that pay $39.99 monthly to have a shop on Amazon's site -- to experience disappearing databases of their products, missed orders and overcharges.


"The day after Thanksgiving, when the Amazon site went down, what they did not mention was that a host of zshop dealers also had their entire databases wiped out," said Matthew Miller, owner of Mat Hatter's Books, a rare and used book dealer.


"I lost six solid days of sales and have nearly been driven into bankruptcy," Miller said. During the holiday season, Amazon has been a "rushed, poorly run company that has cost me 25 percent of a month's sales, with no explanation," he said.


Amazon mistakenly charged him for the product listing uploads, which are free for up to 5,000 items, and Miller said Amazon has not yet removed the charges.


"I was told that I had no room to upload this many items and would be charged 10 cents each to list them," he said. "I tried over 25 times the next four days to get it to work."


Another zshop, Dr. Tongue's 3-D House of Collectible Toys, also had problems with its product listings. Owner Mark Pederson went to the site to look for listings he had reloaded, but they were "nowhere to be seen."


Amazon declined to comment on the zshop owners' claims.


Pederson cited several other problems during the past two months, including receiving verifications of items sold but no follow-up e-mail notifying the toy shop that the customer's credit card transaction had been completed and that the item needed to be shipped.


In addition, a deposit of funds from Amazon to Dr. Tongue's account, which happens automatically twice a month, did not occur in November, Pederson said. Since late October, the site has not been sent a "transaction detail page" that shows whether the item has been paid for or whether the sale is still pending.


"My sales are off 10 [percent] to 15 percent from last year," said Pederson, who acknowledged that the sales drop could be attributed to the numerous additional zshops this season.


What really bugs Miller and others is the lack of zshop customer service response.


"They either don't know what's going on, or they will 'forward the complaint to the proper department,' " Pederson said. "Nine times out of 10, I don't hear back from them."


When an Amazon customer service agent finally contacted Pederson, the representative offered the company a free month of service for the problems.


"Wow, $39.99 free, after losing hundreds," he said.


But the uprising of the zshops is not the only problem Amazon faces. The e-tailer has faced extensive media attention from three outages since late November, along with a report from two stock analysts who recently went undercover at its warehouse.


In addition, Amazon and its employees are battling over union organization, and its ad agency, FCB San Francisco, resigned its estimated $30 million account with Amazon due to "fundamental differences" with Amazon's branding and advertising plans for 2001. Simultaneously, Amazon dismissed ad agencies in Japan, France, Britain and Germany.


At the same time, many analysts continue to give favorable reviews to the most-visited site on the Web this season. Pam Stubing, retail analyst at Ernst & Young, predicts that Amazon will be the only non-click-and-mortar company to survive long term. She praised Amazon's alliance with Toysrus.com -- each "contributes their area of expertise," she said -- a move that is responsible in part for Amazon's voluminous holiday traffic.


In addition, zshop owners with complaints want to maintain their partnerships with the popular site, primarily because of the volume of customers sent to their sites.


"They have been a hassle, but tolerable, due to the sales generated," one zshop owner said.


"I will still use Amazon because they monopolize the book industry and dominate the Internet," Miller said.


"Amazon, unlike others, is actually pioneering paths others won't touch. With that comes risks," another zshop owner said. Many retailers do not allow outside businesses to sell through their sites or allow direct links, such as ISBN numbers, the owner pointed out.


"We've been unhappy with them on several occasions, but overall we have been delighted that they are pioneering new ground," the owner said. "With that, of course, there will be downtime and things that get botched as they make changes to the systems software. That's common."
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