Another hit in the war of the algorithms, and a very costly one for retailers.

Suppliers may argue that it was an obvious mistake and they could therefore refuse to deliver the orders; purchasers can argue that orders already dispatched cannot be cancelled and they are entitled to keep the goods. It appears that the sellers are faced with a stark choice: they can either honour the orders and go bankrupt, or they can not honour them, to the serious detriment of their rating in the marketplace and/or face repercussions from Amazon, and then go bankrupt.

It will certainly be difficult to claim in respect of orders that have already been fulfilled. However, retailers should keep a very careful record of all their losses in terms of products supplied and fees paid to Amazon. In addition to the loss in respect of the orders that have already been fulfilled, there is the reputational damage to retailers.

This calls for retailers to put in place some form of seller insurance and other protective measures to safeguard them against further glitches.