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An emerging black market offers Amazon sellers ways to cheat the marketplace (buzzfeednews.com)
113 points by minimaxir on April 24, 2019 | hide | past | favorite | 75 comments



Just today I was browsing for new wine glasses. I finally found the product that I wanted and checked out a couple of options on Amazon. The first two reviews for the pair[1] I liked were complaining that they received counterfeit items.

The reviews are verified reviews, but there's no way for me to know which third party they bought it from so I could avoid them.

I ended up buying them on the manufacturers website. The shipping might not be as fast, but I got a great discount by signing up on their newsletter and it ended being significantly cheaper than Amazon.

This isn't my first experience like this. The biggest pain point of shopping outside of Amazon is the checkout experience of a lot of smaller sites and slower shipping, but I would much rather get my items a couple of days later than have to deal with returning counterfeit items.

I'm surprised about how Amazon is dealing with this issue. It's the growth at all costs approach, taking care of this would hurt their sales numbers -- but that's a pretty myopic view of things. It's the kind of attitude that flooded Twitter with bots, since taking care of that issue would hurt their growth numbers that investors love.

I really hope Amazon fixes this since I like the idea of a one stop shopping experience, but maybe people buying from the manufacturers directly might be better for everyone involved. A universal checkout experience (one login, saves CCs and contact information) would make Amazon obsolete in my opinion.

[1] https://www.amazon.com/Riedel-Burgundy-Cabernet-Merlot-Glass...


Amazon commingles inventory, so it doesn't matter which 3rd party you select from the product page. Any one of them can inject the counterfeit into the supply and affect sales from the others.


Technically, every part with the same SKU in an inventory system should be able to be intermingled.

The problem is that the "SKU" concept is set up for selling things like drug stores selling bottles of Coca Cola, where hundreds of different franchised bottling plants will produce the same product under license, and so all have the right to slap the same SKU on the result, and it's kind of irrelevant to the consumer what licensed manufacturer produced the bottle.

While this is a common case for consumer products purchased in physical stores, it isn't at-all common for products purchased online. Apple doesn't license the manufacture of iPhones to anybody; thus, nobody but Apple should be considered a valid input for the iPhone-SKU bin in the warehouse.

Ideally, if you, as an Amazon seller, were to print the "Apple iPhone X US-version 64GB Black" UPC code on a box and send that box in to the Amazon warehouse, you should probably immediately get charged with mail fraud. Or maybe trademark infringement. (In fact, I can't see any reason why you couldn't literally trademark your own products' UPC codes, if you don't want anyone else using them.)


I do not think it is fraud to print the Apple iPhone X US-version 64GB Black code on a box that does in fact contain an Apple iPhone X US-version 64GB Black

Trademarking your UPC would not work, as someone reselling your product is protected by the first-sale doctrine. If I buy a bottle of Pepsi(tm), I can use Pepsi's trademarks when selling that bottle to someone else.


The first-sale doctrine indeed allows people to retail stuff they just bought. But in the case of Amazon, I’d almost say that the first-sale doctrine, followed to its natural conclusion, should better be called the “Man in the Middle doctrine”—that it would be perfectly fine and legal to

1. buy an iPhone from Apple,

2. install a wiretap into it,

3. repackage it as if it were a Brand New In Box iPhone,

4. and send it to Amazon to dump into their regular BNIB iPhone SKU bin.

That seems nonsensical, right? Maybe trademark won’t work, but something should be preventing that. Maybe Amazon would have to do it themselves—marking certain SKU as “allocated” to particular sellers, and voiding the SKU claim of any other seller who sends them said product, instead slapping a replacement UPC code on that product giving it a namespaced SKU particular to that seller.

To me, this would be like one of the key guidelines of journalism: if you can’t verify a claim from a source, you shouldn’t use that claim, but only mention that claim. I.e., Apple sells iPhones, but everyone else can only sell “iPhones.” They claim that they’re iPhones, but Amazon certainly doesn’t have a way to verify that they’re the exact iPhones Apple sells, so they can’t remove those quotation marks (or bin them in the same bin as Apple iPhones.)

I would note that this is already partially done, in that Amazon warehouses do bin products with a given UPC code as a different SKU if they come in marked as “used.” All I’m suggesting here is a business rule that would change the definition of “used” used by the inventory system to include any secondary-market resale of the product—regardless of the condition of the product—if the product is anything that could be either cloned profitably or tampered with to some useful end.


I'm not an expert in this, but i think the first-sale doctrine only applies if the phone is in similar condition as the new ones you get from apple (or if it's used, you say that it's used, etc). The seller of the wiretapped phone would probably not be protected.


just a note: this commingling only happens if it is "fulfilled by Amazon" vs buying directly from the 3rd party through Amazon.


A bit more clarification, the page right now says:

"Sold by Spark Maestro and Fulfilled by Amazon."

While this is a 3rd party sale, it will be fulfilled from the inventory Amazon has from any other seller. It has to ship from the 3rd party to be safe from counterfeiting.


Not only is commingling inventory a seller choice, it is also not an available option for many products. Only certain pre-approved products are available for comingling. But the unfortunate thing is that as a buyer, you have no way of knowing which listing are from commingled inventory.


Not exactly correct; the seller has to allow comingling as well.


Does the buyer have any way to tell if an item is commingled, and if the seller they selected does not commingle? The pressure to get the buy box on competitive items means missing out on sales if you don't commingle.


It also only happens if they choose to do so. It's certainly the path of least resistance, but it's entirely possible for a seller to keep their inventory from being commingled while still using FBA.

https://feedvisor.com/university/stickerless-commingled-inve...


Unfortunately there's no way for a customer to verify that.


Not trying to be a jerk, but how do you know that?


If it's not fulfilled by Amazon, it ships from the manufacturer or retailer.


Amazon may comingle, not does comingle. This is largely determined by the vendor.


But it's impossible to check, so the general assumption should be that it's comingled.


I just paid more, with a worse experience, to buy toothpaste for my dog (trying to make him die with a mouth full of teeth) because I don't trust amazon to sell me non-counterfeit products.

Over the last 3 years, I've cancelled standing orders for cereal, hand lotion, granola, cat food, dog food, dog shampoo, human shampoo and human toothpaste because Amazon isn't trustworthy. They simply don't care about counterfeit products.


Until this moment I never considered that I could be harmed by buying things that go in and on my body from Amazon. Thank you.


I'm increasingly suspicious of all 3rd party sellers.

Even on Newegg, I'm usually avoiding the 3rd party sellers, unless it is such a specialized item that it isn't sold by Newegg themselves.

And I too am often looking at the manufacturer's website to see if I can order there. If they support Paypal for checkout, then I don't necessarily have to create yet another account and type in all my shipping details.


Amazon seems to have noticed this and keep making it ever harder to identify who's selling and whether you're buying from Amazon or not.

At this point I find eBay more trustworthy than Amazon.


How are they making it harder to identify the seller? I have never seen an item without the usual "sold/fulfilled by" information.


It's still there - downrated to being supplementary information somewhere below the buy buttons. It used to be highlighted, and in both the side box above the buy button and also in main product info right by the price which has now gone completely. If memory serves it used to be individually boxed or coloured, more as an actively highlighted "beware" this isn't from us.

I can only assume that's all intended to get more people to buy from sellers without realising.


I know this is slightly off topic, but I highly recommend forking out for the hand blown fatto-a-mano glasses. Worth every cent if you drink wine regularly. I like and have this set as they are a rather interesting range of colours [1].

1. https://www.riedel.com/en/shop/fatto-a-mano/cabernet-merlot-...


> A universal checkout experience (one login, saves CCs and contact information)

Better known as PayPal?


I lost confidence in PayPal after the massive eBay breach, probably unfairly. Need to revisit that, but it’s hard to ignore years of aversion.


I honestly think there is a giant opportunity in building a network of warehouses with quality inventory API to enable smaller businesses to tap into that delivery network by keeping their inventory closer to the customers and offer 2-3 day shipping. i think saving on FBA fees + Seller fees would balance out shipping/storage fees for those businesses. It looks like some businesses have been created for selling on amazon and are constantly optimizing for amazon while other honest businesses are constantly outperformed by those 'expert' sellers. from my observations more businesses are understanding that being locked into amazon's platform is not a smart investment in long term.


I'd pay a 25% premium if I could ensure the products I want came direct from the actual manufacturer. I buy a lot of high end cosmetics online and it's so hard to source them without getting fakes from amazon. Currently amazon is overrun with counterfeits even more rampantly than ebay.

For example, here's a fake: https://www.amazon.com/Jeffree-Star-Blue-Blood-Palette/dp/B0...


>Just today I was browsing for new wine glasses. I finally found the product that I wanted and checked out a couple of options on Amazon. The first two reviews for the pair[1] I liked were complaining that they received counterfeit items.

Another example: I need new brush heads for my electric toothbrush. I haven't bought them yet, in part because I can't be sure that the toothbrush manufacturer-branded refills on Amazon are genuine. Going with a generic, compatible refill with good reviews is preferable in this case, aside from the lower price, because presumably no one will counterfeit it.


I just go straight to Walmart for such things now. The manufacturer branded heads are about the same price there as at Amazon. The only disadvantage I’ve seen buying in store at Walmart is that for generic heads they only carry their own generic brand (Equate) whereas Amazon has multiple generic brands. Even that is probably not much of a disadvantage, because I have more confidence in Equate generics than the assorted Amazon generics.


'Going with a generic, compatible refill with good reviews is preferable in this case, aside from the lower price, because presumably no one will counterfeit it.'

And my immediate thought was: 'amazonbasics'.


I have no reason to believe this is true, but OTOH I wouldn't put it past anyone. It could be a fake review by the manufacturer. List on Amazon to help you find the product, use fake review to drive you to the mfr website directly.


Isn’t that what PayPal is? A universal checkout experience.


> A universal checkout experience (one login, saves CCs and contact information) would make Amazon obsolete in my opinion.

Aside from the excellent checkout experience Amazon also offers good product search, a near complete product catalog, and cheap fast shipping.


You must be joking. Their product search is terrible - hundreds of irrelevant results which are impossible to filter in any reasonable way.


> a near complete product catalog

Typing in "<product I want to buy>" into any search engine offers me a near-complete product catalog, with all the same guarantees of consistency and quality (That is, none) that I can expect from Amazon, circa 2019.


Really? Google has changed for me that I would never get the full list anymore.


Also want to add that Amazon's customer service/return policy is great and their marketplace makes comparison shopping and thus competition easy ensuring cheap pricing for their customers.


>For just $5, Seller Mafia will “brush” an account, which is when a product page is stripped of all information except its reviews and listed with a new product, which is against Amazon’s marketplace rules. This allows a seller to inherit a positive star rating and high ranking for a product without ever selling anything. So a shopper may see a four-star product like a jade roller, but the listing has had previous lives as a garage opener and a step stool to earn that average four-star rating.

Ah, that explains several incidents where I rebought a previously purchased item by searching through the listings in my order history, only to receive a completely different product (I once received lace underwear when rebuying a specific shampoo for example).


Wow this is really sleazy.

This seems like something that Amazon could solve by having humans in the loop, but they probably have too much inventory.


This seems like something Amazon could trivially solve with software. Product name, description, and listing categories all provide obvious context about what is being sold, they could easily analyze these changes and detect abuses such as this.

I'm surprised they don't automatically scrub the rating and reviews (why not just automatically generate a new listing and list the old one as unavailable?) for such consequential changes to a product listing.


"Amazon declined to comment on the specific black hat consulting firms named in this story, but it told BuzzFeed News that these 'bad actors make up a fraction of activity' on the site."

So some number below 100% apparently.


This is one of my hobby horses. 1/1 is a fraction. Don't say something is a fraction, say it's a small fraction, or express it in ppm or something


Languages work this way when the meaning is unambiguous. No one is going to say "I used to live in London in the United Kingdom. The big one". No one's going to always say "So desu ne". No one's going to say "a small fraction" when "fraction" will suffice.

It's natural language. Conciseness is high value.


But in this situation, it's still a useless statement.

Is 1/5 a small fraction? Yeah, I guess. Would 1/5 be a ridiculously huge amount of fraud? Also yes!

It really needs to be quantified.


Not to correct you as such, more to share a nice word: "concision" is a bit more pleasing than "conciseness" in my opinion.


Funny story but I actually used that all the time till someone told me it wasn't a word and I believed them. Truth set adjusted. Thank you.

It sounds so much more natural.


It does. People have a weird tendency (it's not that weird I guess, it's the same "force" that means less frequently used verbs are more likely to have regular conjugations) to just use <adjective>ness when there are so many beautiful words out there...

Don't get me started on "comfortableness".


Today you taught me a new English word, but I couldn't help but smile at the irony of the word's Wikipedia page (https://en.wikipedia.org/wiki/Concision):

> Concision (alternatively brevity, laconicism, terseness, or conciseness) is the cutting out of unnecessary words while conveying an idea.


> It's natural language. Conciseness is high value.

But in this case the imprecision could very well be deliberately weasely. The kind of people whose job it is to offer official comment are also the ones whose profession is to exploit the ambiguity of natural language to lead you to think one thing while the reality is a less obvious interpretation.


Exactly my point. Confusing is with the common understanding when they mean something else.

They aren't lying, exactly.


Perhaps, in this case, the fraction is closer to 1/1 than they care to admit.


I'm glad I'm not the only one that has a problem with this phrase. I feel liberated to start mentioning it now.


Don't get me started ;)

I'm sure Amazon has stats on fraudulent transactions; would it hurt them to say "two sales per thousand are fraudulent"?

Also, the light that burns twice as bright burns one eighth as long.


This all seems completely intentional on Amazon's part. Why? Because it sends people to the amazon branded version of the item, one they sell directly, or a substitute. This is clearly an action they are taking to under cut their 3rd party sellers. Amazon can and is doing this. And it is working. Why would amazon want 3rd parties to sell something that sells well, when they can take the sale directly away from competitors? Co-mingling is just their excuse that covers up what they themselves are doing. A very convenient straw man for a problem that they don't want to solve in any other way that doesn't benefit only them in the end. This is a long play to have their cake and eat yours too.


Something that I don’t see alot of people mention that is another huge problem on Amazon is that many products are exactly the same white label products with different logos and slight variations. Lots of the same alibab products slightly customized. Some consumers are paying way more than others for the same product.


Coincidently this week the podcast "Decrypted" featured an episode that details how difficult it is to compete on the Amazon platform, especially against Amazon itself. [0]

[0] https://www.bloomberg.com/news/audio/2019-04-22/as-amazon-ge...


Yeah, it turns out that, for tons of product categories, the value is in controlling the customer relationship, not in merely offering goods for sale. Who woulda thought?

The way you get around this, by the way, is by doing the hard work of establishing a brand that customers are willing to pay for. Even then, a certain segment of the market is going to go for low-price. Nothing you can do about that.


I’ve stopped buying from third party sellers on amazon. And I’ve bought a lot less from amazon proper too. Probably started about 4 years back.


I quit Amazon a while back. Because of what I bought from them, counterfeit garbage was less of a problem for me than for some, but their shitty dark patterns and information sharing pushed me over the edge.

If they put a quarter of the effort into seller fraud they put in to making in as difficult as possible to actually comparison shop in their store...

What finally pushed me over the edge was when 3rd party sellers started text messaging me. Fuck that noise, Bezos, I'm out. (No, not a direct Amazon action; no, that seller did not need my phone number; and yes, it is Amazon's problem.)


I did the exact same thing as you around the same time-frame and with the amount of comments I see on here extolling Amazon I assumed I was an outlier. What made you tail off? I was in the UK and I started noticing that while they had originally been cheaper for most things, they were not and the convenience (or inconvenience if I was out when a package was delivered) didn't really offset that particular delta. I made the exception for about a year after I caught on to that in order to buy second hand books because typically they would retail for 1p with a ~£2.50 postage fee but I stopped that after a while for various reasons (travel, ebooks, relocation).


Books are about the only thing I still buy at amazon. It probably started with a purchase I made that kept delaying shipping, but the price was like 20% better than anywhere else and I didn’t need it anytime soon. After a couple months and like 6delays I canceled the order and decided to start buying from bestbuy and Walmart. (Also Barnes&noble locally but their website is bad and their app is even worse.)

Oh the other thing that definitely turned me off is searching for something like a hoodie and getting a page full of results that each give ranges of prices from $10-$50 and the only one for $10 is an xxs in dingy white and everything else is $50. (Just made that example up)


That’s the same on AliExpress, if you search for SD cards you get offers for $0.01 cards and when you look at the offer you chose capacities and the 0.01 offer is for a 1 megabyte SD card that is sold out.


Walmart.com used to be a nice place where you could buy things that you weren't sure if they were counterfeit or not on Amazon, however was saddened to learn they also introduced third party selling and have been getting more fake products on there lately: https://www.reddit.com/r/BeautyGuruChatter/comments/bh1i95/f...


I’m not sure it’s possible to filter out third party.


I saw an interesting example of cheating during one of Amazon's sales. Someone had posted an "updated" version of a board game that wasn't updated, it was just a different language version. It was hard to tell if the release date was updated but everything on the page pointed it to being the same product. However it was prices higher of course.


What I find really interesting is that Alibaba inside China has already solved this problem in Tmall and Taobao (it doesn't really work for international sellers).

Once you've built up a buying history and reach the level of VIP you get a guaranteed refund policy while claims are being investigated. If you request a refund you get the refund while they investigate.

Also refunds for counterfeit are triple on Tmall (optional on Taobao) which makes it fairly easy to figure out if something will be real or not. The seller also has to have a bond of different amounts which is public so you know how much they trust their own products.

I thought that this would be interesting since Amazon just pulled out of China. This is probably one of the main reasons they struggled here. (I live in Shanghai as an expat)


Any single thing there is not-insignificant demand for will have a market. Think of any possible thing and google “buy [that thing]” and you will find a seller or a story about sellers.

The question is what Amazon will do about it.


Say sellers banded together to form a communal market site. The market would be jointly owned and controlled. What are the barriers to that? Is it just a mass coordination problem?


Why create a new site?

Create an association of manufacturers, selling on Amazon , with guarranteed no-co-mingling, and authenticity.

I wonder if Amazon will go along with that?


People have strong brand loyalty to amazon. These days you can get pretty much everything for cheaper on ebay. The only reason to use amazon is if you need the item super quick like less than 2 days.


Amazon’s strength is their logistics network. Any co-op you’ve just described will have an incredibly difficult time competing on shipping prices and speed of delivery.


Yeah Amazon clearly dwarfs the logistics capability of nearly anyone, but as far as the 2-day delivery advantage Amazon has, there are some companies making competition in the space: ShopRunner is one I'm aware of and I'm sure there's others.


Amazon should just sent employees to those black hat seminars, learn how they work, and block them. As long as there's a market for black hat services, Amazon can find it as well as anyone, sign up, and block it.


I'm an Amazon consultant and I wasn't aware that super urls were black hat until recently. Even today, "gurus" or big Amazon software companies promote urls and launch services.

I think Amazon usually catches on and starts suspending sellers after 6 months to a year after an exploit is discovered but that is a really long time. Even then a lot of these issues are probably small beans compared to the major abuse I see on their platform from Chinese sellers. I can't imagine what kind of counterfeit problems they might have but they have been making changes so I'm sure they'll figure it out within the next year or two. Changes like more seller suspensions for manipulating sales rank, TOS updates, requiring photo ID for new sellers, vendor central updates, and more.

In the long run, it won't matter what third party sellers do because Amz will probably sell directly themselves the 20% of the catalog that makes 80% of their sales whether through their own secret private label brands or their vendor program.




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