Small businesses count cost of error in RepricerExpress software that resulted in thousands of items going for a song
Boxes of goods at an Amazon warehouse. Photograph: Graeme Robertson for the Guardian
Rupert Neate
Sunday 14 December 2014 13.11 EST
There were Christmas shopping bargains galore on Amazon’s website over the weekend … for about an hour. Because of a technical glitch, the prices of thousands of items crashed to 1p – giving eagle-eyed customers a pre-Christmas treat while leaving scores of small family-owned businesses nursing heavy losses, with some warning they could enter the new year on the brink of bankruptcy.
From 7-8pm on Friday, software used by third-party sellers to ensure their products are the cheapest on the market went a bit haywire and reduced prices to as little as 1p. “Amazon is all kinds of broken,” one observer tweeted. “Mattress 1p. Heaphones 1p. Batteries, clothing, games all 1p. Someone messed up big time.”
Martin Le Corre, who sells toys and games via his MB Homewares store on Amazon, told the Guardian that the glitch in software developed by RepricerExpress could have cost him more than £100,000.
“We got a call from a competitor to say ‘do you realise all your listings at a penny?’ By the end of the hour, we had 1,600 orders,” he said. “People were buying 10, 50, 100 copies of everything. It is £50,000, £60,000, £100,000 of stock; we can’t even work it out.”
Le Corre immediately took his store offline, but more than £30,000 worth of orders had already been marked as dispatched by Amazon. Orders that have already been dispatched cannot be cancelled and shoppers will be able to keep the goods.
Amazon is working to cancel orders that have not been dispatched, but sellers complain that cancelling orders is ruining their seller ratings on the site.
Le Corre, who spent the weekend stock-checking in the company’s warehouse, said one buyer bought 95 boardgames that should have cost £12.99 each for 99p each.
“I’m kind of wishing I was on the other side of this,” he said. Earlier on Friday, Le Corre’s house purchase had fallen through. “We were a bit upset so we said ‘let’s relax and watch the telly and get a takeaway’. A few minutes later the phone rang to tell us 300 lines of stock had been reduced to 1p.”
Another seller affected, Judith Blackford, of the fancy dress company Kiddymania, said: “I have lost about £20,000 overnight. Having asked Amazon to cancel the orders they are still sending them out and charging me horrendous fees. Surely someone has to be accountable for this. I will be bankrupt at this rate by the end of January.”
Meanwhile, buyers were having a field day. Quirky Jezza tweeted: “I’ve just spend 80p on Amazon … for a few thousand pounds value … Loads of things are 1p … Hacked? xD. All of that in the last hour. I’ve ordered about 500 things in total tonight. I would laugh if any of them arrive :o”
Sellers rounded on RepricerExpress, whose website boasts that it provides “the ridiculously simple way to increase your Amazon holiday sales”.
Stuart Cameron said on RepricerExpress’s web forum that his entire inventory had been sold for 1p in less than two hours. “Heads are going to roll,” he wrote. “Solicitor first thing Monday morning. This has just cost me thousands and now we have to stock-check my entire warehouse.”
The chief executive of the Derry-based RepricerExpress, Brendan Doherty, apologised to his customers and said everyone at the company was devastated by the mistake.
He said: “I am truly sorry for the distress this has caused our customers. We understand that you are angry and upset and we will endeavour to work to make good on this issue and to work to restore your confidence in our product and service.”
An Amazon spokesman said: “We responded quickly and were able to cancel the vast majority of orders placed on these affected items immediately and no costs or fees will be incurred by sellers for these cancelled orders.
“We are now reviewing the small number of orders that were processed and will be reaching out to any affected sellers directly.”
Neil Saunders, the managing director of Conlumino, a retail research agency, said: “The situation demonstrates the dangers of relying on automated software to determine pricing. Coming at one of the busiest times of the year, it could have a catastrophic impact on the profits of those affected. Confidence in this pricing system will now be severely undermined.”
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