Compelled Perfection - The New Business Weapon

I've noticed a trend developing over the last few years. It's where large businesses that hold virtual monopolies force both their customers and suppliers to be perfect and penalise them if they aren't, while delivering a rubbish experience themselves.

Image by Alexa from Pixabay

What Do They Gain ?

The motives for doing this kind of thing vary, but it benefits the large business in many ways.

1. They can generate revenue by imposing fines or penalties.
2. They can save significant costs by using minor failures to follow the (often Byzantine) policies they impose as an excuse to refuse to provide a service.
3. They can also save costs by passing the burdens of automation and compliance onto their partners.
4. Imposing costs, penalties and a massive administrative burden onto smaller businesses is a way for larger businesses to eliminate potential future competitors right at the start.
5. Forcing suppliers to aspire to deliver perfection can dupe consumers into thinking the company itself is actually efficient.

Case Study 1 - Amazon

Amazon's treatment of their marketplace sellers (or as they call them "internal competitors") is a good example of compelled perfection.

As a seller on Amazon, there is a massive burden of policies that have to be adhered to. This includes requiring the submission of extensive product documentation by sellers rather than going to the manufacturer for it - naturally, if you've got a top selling item, this allows Amazon to then source it for themselves and sell against you.

But the biggest issues are around delivery expectations (sellers are expected to deliver on very tight timescales), and the assumption that if a buyer claims something isn't right they are automatically believed and evidence from the seller is normally ignored.

As an example, if a customer claims non-delivery, sometimes it's true, but even if the tracking data from the courier clearly shows it was delivered Amazon will normally deduct the funds from the seller and refund "their" customer.

There are dozens of other situations like this where Amazon expects sellers to be perfect, even though their own service is often actually pretty ropey. It's a key part of how they maintain their reputation.

Amazon are a company I describe as "very good at giving away other people's money".

Case Study 2 - Royal Mail

Royal Mail's latest move is interesting. Every year at the end of March they have an annual price increase. It's not the only increase, but that's a separate discussion.

Mostly, it's an increase for public consumers of their services, and is usually a much more accurate guide to real inflation than the government figures. Businesses are often on contract, with prices increasing based on the anniversary of the contract.

But this year, they've applied significant increases to penalties and surcharges for businesses.

After nearly 20 years of posting with them and never having had any feedback about the quality of the post we're sending, in the last month or so I've started seeing surcharges appearing on the invoices. It's things like "unreadable barcode", or "label incorrectly applied". Funnily enough, it works out to be around a 3% increase consistently applied to each invoice.

It's notable that there is no information or evidence provided to enable us to identify which specific parcels were supposed to be a problem, and no images of the issues, just a brief error code. There is also no way to appeal the surcharges (although I'm considering a formal complaint followed by legal action based on lack of evidence).

Royal Mail themselves have been delivering an increasingly appalling service, with a notable increase in lost, misdelivered or late parcels. The process to claim for losses is complex and time consuming, and again they act as judge jury and executioner.

It's clear that their strategy is to treat customers as if they're doing a huge favour by deigning to carry their post, while making revenue from business customers by coming up with any excuse to levy penalties with no leeway for occasional human error despite their own failings.

What Can We Do About It ?

It's very hard indeed to push back against near-monopolies like this. But it can be done, if you are determined and stubborn enough.

The hardest part is finding an alternative way to achieve the same thing. That way, you can go nuclear without worrying about what happens if they close your account. Although of course you should always stick to the truth and ensure they can't try to sue you for some clause hidden in the depths of their small print.

Once you know you've got a way to (for example) replace the revenue you'll lose if you're not selling on Amazon, or another way to get parcels to customers reliably (more reliably than Royal Mail....), then you can consider next steps.

It might be legal action, it might be publicising the abuses or appealing to regulators. Or it might just be walking away and making sure they never see another penny of your money ever again.

It definitely should include supporting small local businesses that don't pull these kind of shenanigans !