Are Hoarding Bots Stealing Your Sales?

Bots, the Good, the Bad & the Ugly 

Bots, what are they and what do you need to know about them? A bot is a software application that performs automated tasks or scripts. Bots perform relatively simple, repetitive tasks far faster than any human can. Bots have become ever-present for online retailers with both great results and some disastrous outcomes. 

There are good bots, bad bots, and everything in between. Bots are all over the Internet, doing more behind the scenes than we can even imagine. There are benign search engine bots that crawl the Internet, including your site, indexing information. There are chatbots and virtual retailers to reduce costs and create a seamless, unified customer experience.  

There are malicious bots coordinating distributed Denial of Service Attacks (DDoS). These attacks interfere with the operation of your eCommerce site, hoarding your inventory, scalping your products and services, and worse, denying your customers access entirely.

Hoarding Bots: Invasion of the Inventory Snatchers 

One type of bot that can threaten multiple parts of your operations and bottom line is a hoarding bot. Hoarding, in the bot world, goes by many names: inventory depletion, denial of inventory, inventory exhaustion, and scalping.

These malicious actors add product to carts, often products that are in hot demand and limited supply. Inventory quantities are reduced via soft hold, which wouldn’t matter much if it was a single customer who was considering a real purchase or had decided not to purchase. Except hoarding bots flood your eCommerce site tying up tens of thousands items in carts either never checking out and purchasing, or tying up product by continually re-adding it to carts until they have a buyer for your product.

Hoarding Bots & Their Malicious Motives

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What exactly are the motives of these hoarding bots? Sometimes it’s simply for disruption, but typically, they are hoarding and scalping your products. For example, imagine you are a retailer with a limited supply of a very hot product. A hoarding bot will infiltrate your eCommerce site and add all of this product to carts, re-adding it automatically as the soft hold expires.

When there are no more products to add, they know they have locked up your inventory and know precisely how much supply there is and they then list your products on sites like Ebay, Craigslist, Bonanza, and Stub Hub. In hijacking your inventory, they drive the prices up on “must have” items and then when the customer, YOUR potential customer, commits to purchasing the product, they will sell your product to them at steep markups often purchasing from you and shipping directly to the customer. 

What Do Hoarding & Scalping Bots Gain? 

These hoarding and scalping bots have their own no-risk business. They don’t have to build a brand, develop a social media marketing strategy, pay writers to write content descriptions, pay for advertising, or even shipping. You take all the risk and they act as a parasite feeding off your investment and effort. 

These hoarding bots hijack your inventory and then resell the items at often outrageous mark ups. They exploit your products, your investment, your employees, your branding, your warehouse, your systems, your shipping infrastructure and more all with zero risk. There is no downside for them but there are significant downsides for you and your business. 

How Malicious Hoarding Bots Threaten YOUR Business 

There are a number of ways hoarding bots can damage your business. These include: 

  1. Hoarding bots create an artificial demand but delay revenue meaning you aren’t selling products to your customers. 

  2. You will lose valuable product add-ons, accessories, companion purchases and impulse buys when you customer buys somewhere else because they cannot buy directly from you. 

  3. Hoarding bots can commandeer your inventory until demand is reduced forcing you to discount remaining merchandise considerably in order to move it, putting a big dent in your margins. 

  4. Bot attacks can alter the accuracy of your open-to-buy budgets impacting sales, and revenue free for future purchases. 

  5. The distorted data from these attacks can result in bad data for future marketing decisions and critical business decisions. 

  6. May result in changes in customer buying habits as they bypass you to go directly to an Ebay or Craigslist seller because you never have their most coveted products in stock negating your marketing and brand building efforts. 

 

What Can You Do to Stop Hoarder Bots in Their Tracks? 

For retailers and really any business with an E-Commerce site, vulnerability to bot attacks is an area for concern. Stopping bots from invading your business can be a continual process because as we continue to build better defenses, bad actors develop better bots.

Some companies have utilized faster times for soft holds before merchandise is returned to stock. Defining cart policies can help but often with hoarding bot attacks, they will swarm your site with accounts and have scripts that will automatically add products back to carts subverting your efforts to get products into the hands of your customers.  

Volumetric detection is useful in some instances, but bots are engineered to avoid discovery and the distributed attacks make detection efforts more difficult. In addition to reducing soft hold times, it can also be useful to put other rules in place such as limiting the amount of times a product can be re-added to the user’s cart.  

An effective step in beating back bots is by securing your site from bots attacks, in general. Today, the best way to keep bots from interfering with your eCommerce and keeping them out of your ecosystem altogether, is by using behavioral analysis to determine which users are bots and which users are humans. Behavioral analysis looks at a bevy of characteristics like the speed of operations and uses what we know about the important differences between human users and bots to identify automation tools and other behaviors that can indicate an attack.

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REACH OUT TO protect your e-commerce system from hoarding and scalping bots.

To find out more about how to protect your assets from bots, reach out today. We are ready to help.