Amazon Product Reviews Due Diligence

Amazon aggregators are purchasing brands for millions — only to have the entire brand get “review-wiped” shortly after. Is this happening every time an acquisition occurs? No, of course not. But how many multi-million dollar mistakes is an FBA acquisition company prepared to make? Amazon acquisition firms employ some of the brightest M&A minds in the world to assess, calculate, evaluate and negotiate with Amazon brands —  but if they fail to conduct a thorough analysis of the brand’s product reviews, even the most funded aggregators are flying blind. 

We developed an advanced, accurate and innovative system to help FBA acquirers  analyze the risk level of a brand’s product reviews. By combining our one-of-a-kind software with our deep knowledge of the red flags that indicate review manipulation, our solution assists the industry’s leading Amazon acquisition firms in making more informed investments. 

How It Works

Our review analysis reports include a complete overview of any patterns or “overlaps” that indicate the brand is relying on review manipulation for their success. In addition, we analyze the brand’s history of review wipes, the review velocity, activity in social media review groups and rebate websites, and review content that indicates prohibited activity by the seller (such as bribing customers to remove a review). We summarize our findings with an overall risk score according to our metrics, and provide an informal analysis from our team about the findings in our report. 

Contrary to popular belief, it’s not just Chinese sellers getting suspended for review fraud — it’s important to understand to what extent a brand has engaged in fake reviews before you make an investment. Our review analysis reports for FBA acquisition companies provide a deep level of understanding on the prevalence of review fraud within a brand. 

Below, we've included a sample PDF of our review due diligence reports.

Hidden Risks for Investors

Amazon places a tremendous amount of value on buyer trust. As a marketplace that has become a household name for most American consumers, the lingering problem of fake reviews on the platform has plagued Amazon over the years. After all, how can consumers trust a platform where fraudulent reviews are so rampant? The growing concerns about fraudulent review practices on the Amazon platform have reached a breaking point at the same time that the rise of Amazon acquisitions has caused the marketplace to take a drastic turn.

A new phase of the Amazon marketplace has emerged over the past year or so: Amazon brand acquisition companies. With a handful of companies raising billions in venture capital to buy out the most successful private label Amazon brands, sellers are in a rush to cash out. And why not? It’s a business model that works from every perspective: sellers cash out, while acquisition firms can easily quadruple their initial investment. 

due diligence

Product Review Analysis

When considering whether or not to purchase a brand, how are the new Titans of Amazon assessing their risk of review-related problems in the future? As a group of companies that pride themselves on having the most cutting edge technology available on the platform, one would imagine a highly effective method of detecting review fraud is present among FBA acquirers. However, many of these multi-million dollar companies rely only on searching rebate websites and Amazon review groups on Facebook to conduct their due diligence of that brand’s product reviews. Not surprisingly, this is far from the deep level of research needed when the stakes are so high for investors.

Acquisition firms need highly specialized assessments of the darker areas of the Amazon platform — the areas that aren’t obvious at first glance, the areas that can only be dissected with a highly specialized type of due diligence. These are the areas of the platform that no Amazon seller will be too eager to draw attention to — especially while discussing a potential sale with an investor.  The level of review manipulation present in any particular brand is a crucially important aspect for every FBA acquisition firm to scrutinize in their due diligence process, but reviews are a complicated area. Acquisition companies are shooting for the top brands. As a result, the level of review fraud present on any given brand poses a major risk for acquisition companies. 

Amazon won’t hesitate to take action on an account when review fraud is identified. That may happen in a few months, a year from now, or even longer, but even the most profitable Amazon brands can fall victim to a review manipulation account suspension. The bottom line: from an acquisition standpoint, this could mean a substantial decrease in the value of an investment. Fortunately, it’s possible to fully identify review manipulation in order to calculate a more exact risk level. 


Review Due Diligence Services

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