Amazon has carried out a major overhaul of its rules for dealing with suppliers in a last-ditch attempt to ward off an investigation by the Groceries Code Adjudicator, The Grocer can reveal.
Adjudicator Mark White had vowed to take action, along with the threat of a fine of up to 1% of the company’s UK turnover, unless Amazon made urgent changes to its procedures. Amazon has made a u-turn on a key area of dealing with suppliers’ deliveries.
It is relaunching the suppliers “dashboard” allowing companies dealing with the online giant to bring to attention to disputes over “shipment variances”, despite the original dashboard having only been launched in January.
But it has also backed down over a blanket ban, introduced last year, on accepting traditional proof of delivery from suppliers using its fulfilment centres.
Since the ban came in last year, Amazon has been accused of deducting “huge sums” from suppliers, in what one source previously told The Grocer was the “most outrageous breach of GSCOP for many years”. Sources claim Amazon has far more alleged variances than other retailers.
Amazon said it had now informed suppliers it was changing its approach to proof of delivery, meaning that “under certain circumstances”, traditional proof of deliveries would be used for those suppliers whose operation performance was “within targets”.
It also announced that the Receive Variance Dashboard introduced in January, which enables grocery suppliers to access real-time data for shipment variances, had been “relaunched”, with significant improvements based on supplier feedback making it much easier for suppliers to raise a dispute and get it resolved.
Suppliers could now raise disputes with just one click from the landing page, it added.
In July, the Adjudicator threatened to take action against Amazon, after the company, already at the bottom of the GCA suppliers’ league table, saw its performance worsen as its compliance score fell from 59% to 47%.
The Adjudicator has received evidence claiming many Amazon suppliers have been fined over alleged shipment disputes, with sums running into tens of thousands for single deliveries and the overall sum running into the millions.
Yet when the Adjudicator met suppliers several months later, The Grocer understands they claimed to be unaware of the dashboard, while the deductions remained unchecked.
As well as overhauling the dashboard, Amazon said its supplier facing platform now included the use of photographic evidence or additional details where delivery guidelines had not been met. It claimed this would make it easier for suppliers to identify delivery defects and avoid charges.
Meanwhile, it said next year it would launch a new shipments dashboard, giving suppliers more real-time data on their delivery status, including visibility of when their carriers have scheduled fulfilment centre appointments and their status, shipment details, and the ability to trace related chargebacks.
Amazon said it had also introduced minimum delisting notice periods, status updates and clearer explanations on cost price increase decisions, and shortened the resolution times for chargeback disputes.
James Bate, Amazon EU produce director, told The Grocer it had been explaining the changes to suppliers in a series of webinars and was determined to improve its relationship with suppliers and to climb up the GCA league table.
“We’re committed to building strong and sustainable relationships with our grocery suppliers,” said Bate. “We’ve been engaging with our suppliers more than ever before and listening to what they have to say. Their feedback has been the driving force behind key changes to improve how we work by increasing transparency, addressing common issues, and strengthening supplier support.”
British Brands Group director John Noble, who has been among those disputing Amazon’s treatment of suppliers, gave a guarded welcome to the changes.
“It is encouraging to hear the dashboard will be made more prominent and, hopefully, more effective,” he said.
”However, the jury is out on whether the new measures will be sufficient and effective. Suppliers must be paid in full for the products they deliver. Other retailers have effective processes in place to ensure this and Amazon has some ground to catch up.”
Another leading supplier source said: “Amazon is doing its very best to appear to be listening to suppliers and the Adjudicator’s concerns. On the question of whether these moves goes far enough, that’s another matter.
“The fact that suppliers receive far more reductions over alleged supply variances from Amazon than any other supplier suggests the fundamental problem lies not with suppliers but with Amazon. The very fact that it has to have a dashboard in the first place tells its own story, none of the other suppliers policed by GSCOP needs one.”
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