Amazon.com is testing a new order-notification system that may give the retailer a perceived safety advantage over rivals like eBay and PayPal. New desktop software will provide encrypted order alerts, replacing the emails Amazon sends to third-party sellers.

Amazon's Marketplace sellers range from individuals selling a few used books per year to regional bookstore chains with thousands of daily transactions. After several seller accounts were compromised by scammers using phishing techniques in 2006, Amazon began a security crackdown and warned sellers it would discontinue the order emails this month.

"When Amazon scraps the emails, they'll be forcing sellers into a more secure environment," said Kevin O'Brien, founder of SpaceWare.com, a provider of software tools for Amazon sellers. "They'll also be forcing sellers to maintain their customer information in a more secure manner. This is good for sellers and buyers alike."

Since Amazon invited third-party merchants onto its site in 1999, it has sent order notifications via "Sold, ship now" emails containing buyer names, shipping addresses, and email addresses. Most sellers have used the emails as their primary customer-service tool, cutting and pasting the transaction details onto shipping labels and packing slips. Many high-volume sellers also depend on the emails, which they parse and import into databases.

Amazon's security crackdown started last year, when it began restricting public access to its seller email addresses. Seller email addresses had been visible to anyone visiting Amazon's site, then the retailer installed a secure Web contact form similar to eBay's Message Center. Now, initial contact between buyers and sellers must go through the encrypted Web form, unless the buyer and seller have already completed a transaction.

Easy access to email addresses had proved tempting for phishing scammers. Unsuspecting sellers received bogus messages demanding that they log into a Web site and "update" their Amazon account information. When sellers provided their login information, scammers could then hijack the accounts. Scammers used the accounts to create phantom listings for expensive items, then collected the funds until Amazon received nondelivery complaints and shut the accounts.

The problem is industry-wide, and another big target of scammers is eBay and its PayPal unit, both of which email transaction details to sellers. Besides Amazon's new encryption program, its major difference with eBay/PayPal is that Amazon sellers are required to use an internal system, Amazon Payments - the same checkout used for purchasing new items from Amazon. Buyers automatically receive $2,500 of money-back coverage per transaction with any Amazon seller. eBay/Paypal provides up to $2,000 in coverage, but only for certain sellers -­ those with exemplary feedback ratings of 98 percent or greater - and only when using PayPal to pay for the transaction. Otherwise, eBay provides up to $200 in buyer protection for PayPal-funded transactions.

Amazon's new software, Amazon Services Order Notifier (ASON), was released in late January and provides Secure Sockets Layer encryption. But the beta-test version of the software was short on convenience features, and sellers clearly were disappointed. "I can't think of any reason I need this new software. Am I going to lose anything by not downloading what appears to be a cumbersome and unnecessary program from Amazon?" was a typical complaint in the comments section of this post on my blog: http://weberbooks.com/selling/2007/01/missing-manual-for-amazon-services.html

Sellers complain that ASON doesn't allow customized packing slips or batch printing. However, providers of third-party software say the limitations of ASON may make their products more appealing to Amazon sellers.

For example, FillZ says it will add new order retrieval-features that take advantage of the underlying communication protocol for ASON but exceed its limitations:

• The ability to check for orders more frequently than ASON's maximum of once every 15 minutes.
• Exceeding ASON's storage limitation of only 30 days of previous orders, up to a maximum of 5,000 orders.
• Expanding availability to Mac users. (ASON runs only on Windows machines.)

Although ASON has some limitations, it also has some important advantages, said Shaun Jamison, business development manager at FillZ. "The upsides are no log-in requirement, and it's always running, and it's reliable," he said.

SpaceWare's O'Brien said ASON will certainly be improved as new beta versions are released. But no matter how much Amazon manages to improve it, some sellers have vowed to never use ASON. A vocal minority believes that the software will enable Amazon to spy on its sellers. O'Brien discounts that idea: "Amazon is rolling this out to improve privacy, they're not doing it to snoop on people."

Sellers who decline to use ASON or third-party software will still have a couple of options, though not as handy as Amazon's familiar emails. Sellers can log into their payments accounts on Amazon's site, and Pro-Merchants can download fulfillment reports in a spreadsheet.

Yet another problem with email notifications is spam filtering. To cope with increasing amounts of junk emails, some Internet providers have begun filtering out bulk messages more aggressively. Even emails from legitimate companies like Amazon and PayPal are sometimes deleted before reaching in-boxes. Amazon's ASON system overcomes this problem, since the software runs in the background and periodically polls Amazon.com and retrieves new orders.

Information about Amazon Services Order Notifier can be found online: http://www.amazon.com/gp/help/customer/display.html?ie=UTF8&nodeId=200121270.
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Steve Weber, a full-time bookseller on Amazon and eBay, is author of "The Home-Based Bookstore: Start Your Own Business Selling Used Books on Amazon, eBay or Your Own Web Site." For more information, see http://www.weberbooks.com/selling/selling.htm