“Why isn’t every good a lemon?…It’s fair to assume that the more good actors opt out of commingling the more they increase costs for Amazon and leave the online store itself on the hook for the subquality products entering its system from the remaining bad actors.”Financial Times Alphaville
April 4, 2019
“Some sellers blame the commingling of goods at Amazon’s FBA warehouses for the counterfeit contamination tarnishing the reputation of their profiles.”
Warranties and insurances help tell a story of product quality to both customers and vendors thereby protecting reputations and markets.
Reputations are valuable strategic intangible assets. Threats to these assets⏤ enterprise reputation risks, often mislabeled “brand risks” ⏤ need to be managed, and management needs to be overseen through reputation risk governance lest reputational damage or reputational harm result in long-tailed go-forward losses in economic value and/or political power. Because these intangible risks arise from the interplay of stakeholder expectation, experiences, and media amplification, parametric insurances for intangible asset risks, for reputational value, for reputational harm, and for reputation assurance help mitigate risk by telling a simple, convincing and completely credible story of quality reputation governance to stakeholders. This story telling effect is the expressive power of insurance complementing insurance’s better known instrumental power of indemnification.
Risk management, risk financing in insurance captives, and risk transfer through reputation insurances comprise the constituent elements of a comprehensive solution.
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