Last week Amazon clamped down on Zlio and told the service that they could no longer promote Amazon products in the United States. Amazon informed the site of the decision with a generic email and so far Zlio has been unable to find out the reason behind it. Zlio President and CEO Jeremie Berrebi informed users this morning via an email. (Techcrunch Forums has a copy of the email.)
Zlio is an online service that lets people create their own store, and populate it with products from a number of merchants. Zlio automatically figures out which of their over 25 merchant partners have the best price. They then share affiliate revenue with their users. (See their example store.)
So why did Amazon make their decision? Kristen Nicole at Mashable suspects foul play, comparing it to Amazon’s recent campaign against Alexa comparison tool Statsaholic. That could certainly be the case: Amazon’s own aStore product functions very similar for merchants, except that it only promotes Amazon’s products. (I used to run a competing service to aStore that I stopped developing last August in part because of Amazon’s service.)
But I decided to dig a little deeper and see what justification Amazon may have had for pulling the plug on their relationship with Zlio. A quick perusal of the Amazon Associate’s Operating Agreement found that Zlio appears to be breaking at least a couple of terms.
First, Amazon requires that if you display prices “together with prices for the same or similar products offered through any web site or other outlet other than the Amazon.com Site” (as in a “comparison shopping” site), you must diplay both the lowest new price and the lowest used price provided by Amazon. Amazon’s ecommerce services can be finicky and doesn’t always provide all the information that Amazon.com has on each product, but it usually always sends the lowest new price. It appears that Zlio was sometimes only showing the lower used product price (example).
Second, Amazon’s operating agreement requires that associates display the term “In association with Amazon” (or a graphic to that effect provided by Amazon) somewhere on your site. I couldn’t locate that phrase or graphic anyone on the Zlio shops. A lot of merchants dodge this requirement, but perhaps with Zlio’s high profile and large number of affiliate stores they attracted the attention of Amazon. Further, Zlio uses the term “partner” when talking about their relationship with Amazon, which could also theoretically be seen as a violation of the operating agreement, which stipulates that users “may not in any manner misrepresent or embellish the relationship between us and you, or express or imply any relationship or affiliation between us and you or any other person or entity …”
Neither of these infractions are major, and certainly aren’t something that Amazon and Zlio could not have worked out — and of course they are just speculation on my part. I have no inside knowledge of why Amazon pulled the plug on Zlio’s use of the associates program. But as a way to cut Zlio out and push people toward aStore, perhaps they were sufficient as a reason to cancel their affiliation. Oddly enough, Zlio reports that their relationship with Amazon outside of the US remains strong and non-US users will still be able to sell Amazon products. To fill the void, Zlio is already expanding their merchant pool, working to add Barnes & Noble and “other large merchants” soon.
Update: Pete Cashmore has the original email Amazon sent to Zlio. It appears that the reason Amazon gave as to why they barred Zlio hinged on the way Zlio was sharing affiliate fees with their users.
