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Comment by monkmartinez | Hacker News Reader

It will change again, you can rest assured of that. I think you have the right attitude toward it, FWIW. The FBA'ers out there are in a similar position and many of them rely way too heavily on Amazon for their income. These guys/gals started with/as affiliates... and have graduated to "branding" cheap chinese stuff.

I tried doing some FBA, but it felt super scammy. Research products that people are buying then just work the pay per click, give some products away for review, and try to "out manipulate" your competition. It is going to end badly for a lot of them. China is learning how to beat them at their own game. The guys that run seminars on this stuff... uggh... nuff said.

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I completely agree with your opinion on the FBA (Fulfillment by Amazon) crowd being the same boat. It's not a great feeling to have your business built on someone else's platform and I'm doing everything I can at the moment to reduce our reliance on Amazon.

I'm surprised that you felt that selling things via FBA is scammy. I have a full-time job but I also own a business that (currently) grosses about $150K on Amazon. I can honestly say that I don't feel like we've out-manipulated anyone or have done anything but create a very competitive product that we're able to sell at a competitive price.

I agree that it quickly turns into a very painful race to the bottom when dozens of vendors are selling variations of the thing (e.g. silicone grill gloves or meat claws), but it's completely different when you're able to take the time to create a really great product. It's been a rewarding experience; I highly recommend it to anyone who doesn't mind answering the occasional support email and is completely committed to excellent customer service.

Care to share a little about your products, or at least the product category you inhabit?

Sure! We operate in the toys and games space, but regardless of the space I'd follow the same process: 1) Locate a mid-popularity product with a ranking of < 4.3 stars and what appears to be profitable margins 2) Look over the neutral and negative reviews looking for improvement suggestions and complaints customers have 3) Figure out an improvement or a way to fix the issues

People will tell you what they want in the reviews. The hard part is figuring out a way to fix it for a price they are willing to pay. Price wins on Amazon every time, unfortunately, so you have to be prepared to sell for less or equal to the competition while at the same time having a superior product. We sell a product for around $20 when the competitor is priced around $18. Our product is 4.9 out of 5 stars with ~400 reviews while the competitor has significantly more reviews but only around 4.5 stars. It's obvious to customers that they're paying a slight premium for a better product when they purchase from us, so we're able to compete. That being said, there's one direct competitor that sells a 3.8-star product for $12 that outsells us 4:1, showing once again that price wins on Amazon's platform.

If you have a superior product, the rest will take care of itself. The marketplace may change and the market may change, but if you have a great product and you offer amazing customer service you'll be fine.

Of course, I'm glossing over tons of details here, but that's the gist of it. You're welcome to ask questions here or follow up with a PM. I'll be glad to help in any way I can.

I think the case of the 4:1 product at about half the cost but wall less positive reviews also calls in to question how effective Amazon's presentation algorithms are.

A logical solution would be to have their ranked search cherry pick the highest (number and score) reviewed results for focus within a given price category.

However I normally hate their ranked search since it's results normally don't seem relevant to my needs. Thus I tend to manually do that by sorting by price and then eye-ball filtering for quality/look in picture (yeah, I used that as a quick filter for poor quality).

It would be nice if I could instead directly assign weights to different type of metrics and have Amazon present the list according to my score based on perceived importance. They could use the data from that and actual buying outcomes to tune their default filter (that one might better balance high scores on multiple metrics being sorted to the top of the list).

Yeah, there are definitely too many FBA sellers who are 100% reliant on the Amazon audience for sales. No online store (Shopify etc.), no marketing, no email list etc. It's hard hearing those cases where seller accounts get turned off for some reason and the seller has to fight to get them item back online.

As for some being "scammy" - yeah sure, there's definitely a bit of people looking to make a quick buck on whatever they can at FBA. Every market has that. But the people I've seen have the most success on FBA do just what you mentioned

- listen to the customer via reviews - improve value via product fixes, bundling, packaging, etc. - provide good feedback & service

That said - I don't know how anyone selling commodity, off-brand stuff does it. I could see that being a huge race to the bottom as stated. The only people I know doing FBA stuff are going the private label route to avoid competing solely on price.

My brother actually makes a full-time living off of FBA now via private label goods. He really enjoys being his own boss and providing a BETTER product than what was available before.

I sold my first FBA product, not a huge success, but validated the business model is real if you work at it. FYI - I've started compiling info for small-scale eCommerce sellers at http://www.privatelabelweekly.com for any sellers interested.

I was getting confused by the "FBA" term, so for those curious this almost certainly means "Fulfilled By Amazon" which is the program where you ship your product to Amazon, list it there, and they pull it from their warehouse and ship it - basically using Amazon as a drop shipper.

That's almost certainly a hard business to make money on - if you're doing common off-the-shelf items of any value, Amazon can simply add those themselves, and they're probably getting a better price on them with bulk purchases than anyone doing FBA can get. If it's direct sales of items you produce yourself then there are drawbacks if your items don't sell (high charges to ship them back to you apparently mean a lot of them end up being destroyed) or if you get targeted by scammers (e.g. NPR's Planet Money #724 "Cat Scam"[1], IIRC the "scam" part comes in with returns).

[1] http://www.npr.org/sections/money/2016/09/14/493810206/episo... and the Entrepreneur article it's based on https://www.entrepreneur.com/article/278622 in which people sell on eBay for 5-15% above the Amazon price, then simply order through Amazon and send as a gift. Returns go to Amazon and cost everyone except the drop shipper money.

I fell victim to this scam once, we lost our dog's favorite ball and looked on Amazon to get another, sadly, it was discontinued. Checking e-bay we saw some listings for the original ball. Ordered one and we eventually received, drop shipped from Amazon the new version of the ball. The seller clearly didn't update the autogenerated listing to the reflect the product Amazon was actually selling. I then returned the ball since I didn't want the new version and if I did I could have got it for Amazon for cheaper and easier in the first place.

Other than cases of false advertising (likely unintentional here but still annoying) who goes to ebay before just buying the item from Amazon (maybe foreign buyers?). Nearly 100% of the time the shipping will be more expensive and the return policy worse, never mind the entire experience.

> who goes to ebay before just buying the item from Amazon[?]

It's not so much people going to eBay then Amazon, it's people who go to eBay and never go anywhere else because it's obvious to everyone (in their mind) that eBay is of course going to be cheaper. They're buying through their preferred retailer, and their preferred retailer is eBay.

In my experience, eBay is usually cheaper than Amazon these days, especially if the buyer doesn't have Prime. Also because many eBay sellers still don't charge sales tax.

"who goes to ebay before just buying the item from Amazon"

My mom and dad. This is not tongue in cheek, it is my personal experience. I see many older people that still buy from eBay. They are a bit uncomfortable with the web already, but they got into buying some things on eBay, now they are used to it and they don't want to "learn something new".

I think eBay is a declining platform, but that cow still has a lot of milk left in it.

Most big sellers will list on both and eBay's fees are lower. So in terms of marketplace products you can likely find them cheaper on eBay.

> who goes to ebay before just buying the item from Amazon

I do, all the time. For one, the exact same products are often cheaper on eBay.

Second, it's much easier to discover the right items on eBay. Amazon search/sort/filter is absolutely terrible unless you're looking for a specific model or just want the best seller. It's a very fuzzy search, so you can't force an exact match on title.

eBay in contrast allows you to use booleans in the search terms, and makes it possible to filter by well structured category-specific data.

In Canada you can often find Amazon items resold on ebay with much more reasonable international shipping. With Amazon, shipping is almost always prohibitively expensive for items not available on the regional domain (amazon.ca).

In response to your 2nd paragraph. I work in e-commerce and strongly believe that Amazon uses 3rd party sellers to scout new products. If a seller's product gets too good they run the risk of Amazon moving on it. It's not just that Amazon can get it cheaper, they can afford to sell at a loss for as long as it takes to push out competition.

This 1000x. It didn't really make sense for Amazon to do all the initial work here when they can have others essentially paying them for the privilege of doing their market research for them while also shouldering all the risk.

Personally I'll be glad to see FBA and all the affiliate sites dry up as they negatively impacted the marketplace IMHO. Now that Amazon has the data they are going about cutting out the middlemen and leveraging their position to eat up the extra margin.

FBA and co-mingled inventories have destroyed my trust in the "Amazon" brand, to the point they're basically my last resort to find something and even then, only cheap generic things.

That was my impression. It's like being a small player in any market - if any particular product does too well it will attract the attention of one of the big fish.

I don't think I'd sell through Amazon unless I had an exclusive product.

I think you have to see it as short term revenue. There are opportunities right now, but they might not be there for long and I wouldn't stake my business on them.

The problem isn't so much the length of opportunity as the fact that profits are effectively capped but losses aren't.

That happened to me once at a bookstore I worked at. We realized that a coursebook we sold decently in-store was getting ordered on Amazon a bunch too, to the point we'd sell out. So next semester we sent a bunch to FBA, sold them all. Next semester, same thing. After another semester of the same, we didn't get our order from the publisher on time since Amazon had cleared them out. We didn't know that was why they were late when we sent our batch to Amazon and Amazon's hadn't listed yet when we did either. By the time ours got there, Amazon was selling theirs for less than the wholesale cost we had just paid the publisher. We had to sell a few thousand books for a loss, since we couldn't return them to the publisher and shipping them back from Amazon would cost too much money anyway. Lesson learned.

They most definitely do. I worked for a company that had unsuccessfully tried to get amazon to carry their products. Eventually, one of their smaller retailers (that already did a lot of FBA) put the product up as an FBA item, and it sold reasonably well. Within 6 weeks amazon was calling wanting to buy the product from us directly. This was completely unheard of for us. Even if they were interested in the product, retailers NEVER called asking about it. But Amazon seems to know exactly what they want and when they want it.

Disclaimer: I've sold stuff via FBA. Not much - just enough to "try it out". Probably made about $100/mo during my experiment.

>That's almost certainly a hard business to make money on - if you're doing common off-the-shelf items of any value, Amazon can simply add those themselves, and they're probably getting a better price on them with bulk purchases than anyone doing FBA can get.

But Amazon does not really want to get into all product categories. Much of what many of us buy from Amazon is FBA, where Amazon themselves are not selling it. People who do not know FBA often do not realize they are not buying it from Amazon.

Regarding the Cat Scam: I completely disagree that it is a scam. In fact, the Planet Money journalist himself implied he felt it was a legitimate business: The people were providing value, and were making the FBA person's sales go up. He hurt himself by pulling the product from Amazon.

There is a reason Amazon allows drop shipping. It brings everyone money. Amazon, the FBA seller, eBay and the eBay seller. People try to paint it as exploiting unwary consumers, but that's true any time you have a price difference between retailers.

Effectively, the drop shipper provided the FBA seller access to another market (eBay), with a higher return rate. It was a net profit, not a net loss.

It may just be that for this one person it was reducing his profits, but in general, this strategy increases revenue, not decreases it.

Middleman sellers might not technically be a scam, but it's not often beneficial to all parties. I've spent some time working for a bookstore that has decent quantity of sales on Amazon, so that's where my perspective comes from. Some issues with middlemen:

- First, a lot of middlemen ALWAYS email the seller after placing an order, expecting the seller to omit any mention of the seller and how much the product cost on Amazon. Further, they request that the seller send a separate email with the tracking info for their orders. While this is probably find for random small sellers on Amazon, for larger ones like the one I was at, honoring all the middlemen's requests would cause HUGE shipping delays for all products, middleman or regular, just to deal with all the emails and special requests.

- Often they'll email again ("angrily", though it's just a canned response) if an item hasn't arrived 3 or so days after they placed the order. Even if the order was on a Friday night. And even if it's going from one side of the country to the other via the cheapest/slowest shipping method offered. So that's more needless emails to waste the seller's time.

- If there's an issue with the order, the middlemen often do not pass on details of the issue to the seller. Instead they just say (effectively) "There was an issue. I demand a full refund." Often issues can be resolved with exchanges or returns, but so many middlemen just demand full refund with no returns.

- Due to poor listings wherever the middlemen are relisting the Amazon products, the middlemen's customers often aren't aware of all the details of what they order. We'd regularly get things sent back and the complaint was "it's a used book" when that's exactly what was listed on Amazon.

- Some middlemen sellers are A-z Claim happy... Threatening to file a claim in their very first email to the seller, when they ask for no invoice or reference to the seller. We dealt with a few who would ask that you'd print out their own packing slip to send with the order and that you'd write their name on the return address of the package instead of your own.

- Often, middlemen include "(NO INVOICE)" somewhere in the shipping address, as a further instruction to seller to omit pricing info. Removing that part from a more automated shipping process (like larger stores use) adds processing time and increases possibility of mistakes. Plus Amazon requires that orders be shipped to the address provided, so I'm still not even sure if it breaks Amazon's policies or not to remove that from the address.

- We would frequently get confused or angry emails or phone calls from customers who bought something from a middleman seller who in turn bought it from us, because they'd see that our return address wasn't the middleman's name, or we'd include a packing slip (middlemen don't always ask for it to be omitted, and we wouldn't always comply if they did anyway) with our info and they'd see the price it really cost. That means more customer service time spent on that, and an upset end customer.

This thread is about FBA, and I suspect you're referring to non-FBA sales here.

>First, a lot of middlemen ALWAYS email the seller after placing an order, expecting the seller to omit any mention of the seller and how much the product cost on Amazon

The order is fulfilled by Amazon, and the seller has no control over this. The middleman can email all he wants, but it's no use.

I don't think the middleman even has the ability to contact the seller easily. How exactly can they get the person's email address?

>Often they'll email again ("angrily", though it's just a canned response) if an item hasn't arrived 3 or so days after they placed the order.

Fulfilled by Amazon. The middleman is in entire control on the shipping. They want it faster? They should select faster shipping.

>If there's an issue with the order, the middlemen often do not pass on details of the issue to the seller. Instead they just say (effectively) "There was an issue. I demand a full refund." Often issues can be resolved with exchanges or returns, but so many middlemen just demand full refund with no returns.

This is Amazon policy for FBA. It is no different from you buying from Amazon or some other store and returning without an explanation. When you sell via FBA, you are required to accept this as a consequence. This has little to do with middlemen. I myself have had perfectly functioning items returned as defective, and I have no recourse.

>Due to poor listings wherever the middlemen are relisting the Amazon products, the middlemen's customers often aren't aware of all the details of what they order. We'd regularly get things sent back and the complaint was "it's a used book" when that's exactly what was listed on Amazon.

I too get pointless returns. As do almost all retailers out there. Why do you expect things to be different? As long as you sell via Amazon FBA, Amazon has a return policy you need to accept.

I could go on and on about your other bullets, but it is clear you are complaining about a different problem from the one in this thread. Most of these issues are non-issues with FBA. Customers will not get your contact info via FBA. Middlemen do not get it either. If a middlemen puts "No Invoice" on an FBA order, Amazon will deal with it (likely by literally shipping to that address).

Now getting to your case, where you are likely a business selling via Amazon, but not having them fulfill your orders, the larger thread is very relevant to you. If a big chunk of your business is dependent on Amazon's existence, you are vulnerable. It is hard for me to sympathize with you. At the end of the day, you list on Amazon because Amazon is creating value for you - despite all these annoyances. You are seeing all the annoyances of middlemen, but you likely do not know how much business they are generating for you.

2 questions:

1. For orders like (No Invoice), would it be beneficial for you to just cancel the order and not get the money (assuming Amazon gave you that option, with no repercussions to your Amazon rating)? If not, you are benefiting.

2. How can you tell which of your orders that go smoothly involve middlemen? If you cannot, you have no idea if it is benefiting you or not.

I get that you were talking about FBA... I was just ranting a bit about middleman sellers in general I guess. You didn't need to do a point by point explanation of why it doesn't apply to FBA, especially after you surmised I wasn't talking about FBA. ;]

I'm well aware about the dangers of relying on Amazon sales. Sadly in the used book world it's almost impossible to break free of it. The store does list on many different online marketplaces, but no matter how diversified, the majority of the sales come from Amazon.

To answer your questions...

1. I'm not sure if it's be beneficial to cancel the order if it were repercussion-free (which it most certainly isn't and never will be). I haven't done an analysis of money made versus time wasted yet, since Amazon will never make it repercussion-free. I have a feeling that even if it's still _technically_ financially worth it to not cancel the middleman orders, it'd be very close to being not worth it.

2. Middlemen are usually _very_ easy to spot due to their ordering habits and addressing habits, at least if they've ordered from us more than once. It's possible that some of the only-ordered-once people are middlemen as well, but last I looked, only a small percentage of them were likely to be (based on shipping names not matching Amazon names).

I haven't really looked into middlemen sellers in FBA, since they never really bothered me much. Plus most of the stock that we send for FBA are things that don't move in store, and we've kind of given up on and are just trying to get a little bit of profit on. So we generally don't care about the FBA stock (beyond ensuring that any lingering stock is "disposed" before the 6/12 month fees hit if it's not selling).

I'm in the same boat @BeetleB. Sold a line of private label toys on FBA. Not a run-away success but definitely a great introduction to the market. My family members are also FBA sellers.

The thing that most people don't realize is that Amazon is moving away from selling everything itself. As stated by Ben Thompson in his excellent "Stratechery" blog (paywall):

> "...I wrote about the ongoing transformation in Amazon’s e-commerce business: while Amazon was originally a traditional retailer that bought products from manufacturers and wholesalers and then sold them on to customers, the company has been shifting to a marketplace model, wherein 3rd-party retailers sell to users on Amazon’s site through a program called Fulfillment by Amazon."

For some direct proof, check out the highlights from the 2016 Q4 earnings report:

- Sellers on Amazon’s marketplace accounted for 49% (!!!) of units sold during the fourth quarter

- Fulfillment by Amazon delivered more than 2 billion items on behalf of sellers in 2016 and the number of active FBA sellers increased by 70 percent.

In short, Amazon is in a good spot by creating the marketplace. They own the audience. Sellers on FBA "borrow" that audience & Amazon logistics in return for storage and sales fees. No need for Amazon to sell everything. FBA sellers do that for them.

FYI for any online sellers out there: if interested, I curate an eCommerce newsletter for the small-scale seller covering Shopify, FBA etc. at http://www.privatelabelweekly.com

Sources

1. https://stratechery.com/2017/planet-of-the-apps-deleteuber-a...

2. http://l.goodbits.io/l/l64vu14d

>> Amazon is moving away from selling everything itself

This is a 2 sided story. Yes Amazon is moving away from selling stuff itself - but they are building a platform that would make it easy and more affordable for manufacturers to sell directly to customers, and most of the jobs FBA entrepreneurs do today won't require expensive entrepreneurs to do.

For example:

Logistics:Amazon is working on an end-2-end logistic solution, from china to the US, fit for small and medium manufacturers.

Financing:Amazon, using their sales data etc, will offer credit to manufacturers, similar to a service done by alibaba today.

Marketing:Amazon has the customers, the software skills, and can build labor platforms that easily enable chinese manufacturers to hire more affordable marketers(cheaper than entrepreneurs), maybe similar to affiliates in skills and investment .

Product improvement:more than anything, it's a decision by manufacturers/entrepreneurs, the tools/data are already there. Also Amazon could build platforms for manufacturers to gauge demand and value of new features more easily, maybe similar to kickstarter

Returns and warranties: Fedex bought a company that does that(as a service) pretty well a few years ago, So Amazon will probably copy or outsource.

Sure, it will take some time, but i think FBA entrepreneurship is mostly a temporary thing.

> but they are building a platform that would make it easy and more affordable for manufacturers to sell directly to customers

Manufacturers really don't want to be sellers in most categories. As a manufacturer, you want to be paid just as soon as you produce the product because you want to reduce your working capital. So you sell to retailers and distributors on say 15 days or 30 days terms and get paid with certainity. In fact for a manufacturer, the "customer" is a distributor or retailer - end users aee called "consumer".

Retailers and distributors take on the risk of locking in their money into inventory until the product gets sold to final customers.

True. But some manufacturers in the Alibaba platform already solve these problems with alibaba's financing services , which remove all/most of their risk.

And if that all allows some manufacturers to offer cheaper prices, other manufacturers will have to do the same.

Sure you can.... but working capital financing always comes with a cost and typically it's quite high. If you're funding inventory with your own money which is generally cheaper than a working capital finance, you're still taking a hit on opportunity costs.

If you're a small manufacturer with an unknown brand, you may still be forced to go this route to sell your products.

If you're a hundred million dollar brand with consumer demand, you typically don't need to bother being a seller yourself as well and can easily pass on the risk to a distributor or retailer and turn around your cash faster.

Branding often trumps pricing. Most products in the world are not purchased with detailed price/features comparison analyses (soap, cola, food) because our minds would get exhausted making so many choices.

Maybe you're right about capital.

But branding - sure if you have $100M to advertise your product, you have branding power in the classic sense(cola/soap). But branding on the Amazon platform is of a much weaker form, more tied to reviews, and with a good product, it's not that hard to get those.

And the other case is of course of the $100M brand - he has the brand, not the reseller.

Yeah these are really good points @petra. Honestly I don't know what the future is. I lean more towards your interpretation about FBA selling being a short-mid term opportunity. Though I don't think it will just evaporate in the next 5 years.

The thing is - sellers should be using this opportunity to build up a brand by borrowing Amazon's audience while they can. AND simultaneously building their own storefront. But I don't see many talking about that.

I do also agree with @sfifs below that many manufacturers don't want to be bothered with marketing and selling, no matter how easy Amazon makes it. They seem to want to stay in their core competency, which is understandable but probably short-sighted on their part.

Will brands matter much,long-term ? In most products, once someone has got a few hundred good reviews(including some in reliable blogs and sites) they are good to go.

Or am I missing something ?

FBA is Amazon's way of populating their store shelves with someone else's working capital. It's only going to go up, not down because every dollar sold by the seller means a dollar if cash freed up from working capital requirements for Amazon.

Amazon's competitive advantage is the marketplace which gets an unrivalled number of eyeballs and their warehousing amd logistics operations. They're perfectly happy to rent these out to other sellers rather than lock in money into inventory - unless profits are outrageously high.

Just to throw an alternative view to the "FBA is a Scam" threads.

I had a similar thought when I first heard about it, but then decided that I should give it a try as I am always dismissing things out of hands for believing that they are scams.

One year later I've quit my job (full stack developer), and sell full-time on Amazon and have never been happier. My current listings generate the majority of my income and require just a few hours a month to maintain.

For the rest of my time I do whatever I want.

It's not that things are inherently scammy, or unscammy. It's just things are or aren't easy based on your ability/work ethic, and the competition is or isn't steep based on how uninspired you are when competing.

The whole "cheap chinese knockoffs" thing is dismissive and frequently inaccurate. The great majority of things that people purchase from Walmart/Amazon/Target are manufactured in China, full stop. Some of it is cheap, yes, but no more or less than the ones by the "name brand" private labelers.

And it's going to be great until you hit the top 100 list in your segment. Then the cockroaches will move in and sell knockoffs of your product and you can spend your days proving to seller central staff that they are in fact knockoffs, with the requisite purchases and returns from your new competitors. And the requisite requests for escalation and emails to jeff@ when the associates refuse to escalate.

Enjoy your pink cloud while it lasts. And maybe keep your full stack skills current as a hobby. But be assured, there is a competitor somewhere willing to flip your product for $0.01 profit per unit.

There is a hint of truth to the concerns you're articulating, but it shouldn't be enough to dissuade you (or anyone else) from doing this.

The argument that people will always pay for the cheapest reasonable alternative would suggest that grocery stores would only sell the cheapest, generic brands. People will pay for quality and social proof, perceived or otherwise. Two identical products but one with (say) 500 genuinely earned reviews over time will always feel like a safer bet.

My expectation isn't that Amazon FBA will be my career for life. I expect it will be a viable income stream for a few years while I reinvest this time (and some of the earnings) into more stable industries (I have so much time to play with VR now) and develop an SaaS (including one in the Amazon space, go figure).

It's true, people pay for cachet, social proof, etc. And when the competition uses the same ASIN and grabs the buy box from your listing of unique items, the sale goes to them simply because the add to cart button is associated with their product not yours as a result of winning the buy box. And when they win the buy box, they get the benefit of all the social proof you've cultivated via reviews on the product listing.

I'm not trying to dissuade you, or my mom, for that matter. Just sharing my experience as the HN ethic suggests I should. There's numerous strategies to deal with the Amazon cockroach problem, including staying one step ahead with better products. It's just it can get a little soul sucking...and best to know what to expect so you can prepare the best you can.

It's different than competition in a traditional market, where each competitor sets up their own storefront and does battle. On Amazon, you build the storefront, write the marketing copy, take the risks of choosing and testing products, building product reputations and testimonials, then Amazon enables literally anyone to come into what you've built, move your products to the back room, and sell their similar stuff on your end caps, and walk out of your store with the money you should have made.

And should you complain, Amazon treats you like their bitch, this despite the fact that paying commission on every sale makes you a customer.

FBA seems a far worse business than affiliate stuff. Affiliates seem to have a lot more options (various affiliate programmes, ads as a fallback option, etc.), whereas an FBAer who buys bad stock or has their category become more competitive is out of luck.

> China is learning how to beat them at their own game.

Awesome, I hope that works out.

I've been super concerned when I've seen friends buy products off Amazon for 2-4x the cost I find the same product on AliExpress for. It's ridiculously common to find identical hardware with a huge markup and a random logo stamped on it on Amazon.

Some of the stuff is total junk, other things are actually quite good - but you may as well just buy it from the source and not pay a middleman several times the cost.

There's two types of situation on that one, though - one where the unbranded product is being sold through Amazon but still comes as un branded product from China.

The other is the product is being sold through Amazon (often shipping from the US) and either unbranded or "re-branded" by a more... reputable entity.

In the second scenario, it is absolutely worth it to me to purchase from Amazon. I get my product faster (since it's shipping from the US) and I'm not stuck holding the bag if it turns out to be a dud.

Even with Ali you're not stuck holding the bag - they have buyer protection like most other reputable shopping sites. Most of the time they'll just let you keep the product too and issue you a refund.

I've started ordering two (or more) of everything I buy from Aliexpress, just in case one is damaged in shipping, lost, or whatever. A lot of times both items end up being fine and I give one to a friend. Sometimes I take one apart to see how it works.

What is really interesting is that a lot of things that appear identical on AliExpress are actually fairly different when you open them up. It's weird, because there is innovation going on, but they go out of their way to hide it.

What really bothers me is that Amazon allows people to sell things that are shipped from China without making it blatantly obvious it is coming from China. I'm not saying it's hidden, but I use Amazon because I want stuff in a few days. If I wanted to wait six weeks I'd order from Aliexpress.

>I've started ordering two (or more) of everything I buy from Aliexpress

I ordered 2x the batch of an item (which was low enough cost that even though I only needed a few it was worth paying for several more) from eBay once in order to try and decrease the risk of loss in transit and also because I figured that even if both batches turn up eventually, one would arrive before the other. Even though it was two separate sellers, it turned out that the originating address was the same and they did combined shipping of the order so I got all of them together and at the same time. Now I had ordered these items well in advance of the latest date at which I would require them but still, having them combined, I felt a bit... cheated. What has been your experience in this on Ali? Do you frequently get the items shipped together?

I have never had a shipment from two different sellers combined. In fact, I've had a single order from one seller split in to multiple orders because e-packet is so much cheaper per ounce than larger packages of similar size.

Occasionally I'll place an order that has a guaranteed delivery date in a timeframe I'm okay with, and the seller will extend the purchase protection outside of that timeframe. The other issues I've faced are that sellers will either substitute items for dissimilar items or not ship items at all if they are out of stock. I've never had a seller contest a package not received or package not as described though. I think they just figure they'll make a few dollars here or there on people who have forgotten to contest the order.

There is a stated delivery timeframe though, if the sellers frequently miss that they will get suspended. If the product matches the description and comes within the quoted timespan, I don't think it should matter where it comes from.

The FBA thing and the seminars are a slow motion train-wreck waiting to happen. You are right in highlighting the folks running seminars. They are running such scams.

A good friend of mine jumped into the "amazing opportunity" he was presented with. He paid them $5,000 for an FBA course. Long story short, he ends-up importing a bunch of kitchen crap from China, dropping tens of thousands of dollars.

As things progressed, many of the people on the same course did exactly the same. Very soon you had page after page on Amazon with poor bastards selling the same products from China under different brand names and packaging. I mean, exactly the same damn product.

Here's an example:

https://www.amazon.com/s/ref=nb_sb_noss_1?url=search-alias%3...

Funny as hell if it weren't so tragic because of how these folks are suffering. People are losing their asses on this stuff. They are killing each other paying incredible amounts for Amazon PPC advertising. Amazon is laughing all the way to the bank and these vendors are bleeding right and left selling the same products, from the same suppliers in China at minimal, if any, profit.

And then you have the Chinese suppliers who got wind of this and are doing two things:

First, they raise their prices. How stupid do you have to be as a supplier not to recognize something is going on when you get call after call from would-be entrepreneurs using exactly the same script to negotiate with you. These suppliers are nailing people for all they are worth.

Second, they are listing their own products on Amazon at the best possible prices because, well, they are the manufacturer!

And then, to make things even more interesting, people following these amazing formulas start importing stuff that runs right smack into intellectual property issues. So, the patent or trademark owner files with Amazon and the listings are suspended. The inventory now can't be sold and, to make matters worst, the vendor has to pay through their teeth to have it shipped out of Amazon. Ship it where? None of these people are real businesses with real warehouses and employees! So now they have a a few pallets full of crap they can't sell almost anywhere in their garage and living room. In some cases IP owners have gone as far as issuing C&D orders to these vendors.

The whole thing is absolutely surreal. Carnage is the first word that comes to mind when I think of the results. Sure, as always there are examples of folks who are just killing it because they got lucky, chose the right product or whatever. I'd say 95% of the folks who enter into these FBA "get rich quick, work from home, travel the world" schemes would have made more money if they took $5,000 and burned it.

As for my friend, some $35,000 later he quit and licked his wounds.

Not mentioned is the damage to consumers. These desperate, low capital, no-experience vendors are importing absolute crap from China. There are stores of phone chargers that go "poof" and other crap product issues right and left. And, if you dig deep enough, it will almost always land on some poor fucker who thought he or she was starting a business that would set them up for life.

Could be the scam of the century. The only people getting rich with consistency are those peddling the courses.

Makes the MLM guys sound like amateurs.

The arms merchants are always the ones who come out ahead, whether they're selling pickaxes to miners or (apparently) get rich quick courses to would-be Amazon FBA businesses.

It's sad on one hand, but with the Internet and all the information out there, it's getting harder and harder to feel sorry for people falling for any kind of scam. I had relatives that fell for the whole Amway thing a long time ago, and they couldn't do a quick Internet search for "Amway scam" like they could today. Would they get taken in today? Not a chance. Before you hand over $5K to someone, does it really hurt to do a quick search to see if it's a scam or if you're likely to be unsuccessful?

I pretty much consider any money-making pitch I get to be a scam by default, which saves me the trouble of looking it up.

It's easy to find evidence that it's a scam/bad idea. It's also easy to find evidence that it's not a scam and that the place that told you that it was a scam is the real scam.

Just having access to a lot of information does not produce an informed population, especially when there aren't really any controls on that information.

Yet there are so many people taken in by Arbonne these days.

You have to take into consideration that the seminar peddlers are really, really good. Some people just don't seem to have that internal voice. You know, this one:

https://www.youtube.com/watch?v=OWwOJlOI1nU

Hits that sweet spot of people who are motivated enough to start a business, but not smart enough to realize this is a blatant scam/money pit. There's a lot of crap out there these poor folks fall for. If only they were a little smarter, or were content playing video games all day, they'd be far better off.

Yeah, I think FBA and scumminess have sort of gotten confused.

FBA is just a delivery/fulfillment mechanism. Nothing more, nothing less. You have inventory in an Amazon warehouse, they ship it out for you and take a cut. Nothing inherently scummy about that, they're providing a service maybe you don't want to deal with.

The seminars are different, where they're pitching a whole supply chain/way of business which has a last step of fulfilled by Amazon.

I think FBA is a pretty amazing thing that gives huge market access to small retailers, and it's a shame it's gotten caught up with these ponzi scheme seminar sellers.

Absolutely agreed. We use FBA. It isn't the cheapest way to warehouse and fulfill but, yes, it has many advantages.

Yeah, the seminars and what they teach are the problem. I know a guy who dropped well over $100K on seminars during a period of a couple of years. Horrible personal outcome.

On top of that the FBA also seems to enable massive tax fraud. There was a report on German TV recently that the vast majority of products for certain categories that are produced in Asia (mostly China) shipped via FBA on amazon.de don't list any sales tax on the recipes and it seems the sales tax is simply never collected (the companies usually don't even have a tax number). Seems like very massive tax fraud, not sure if Amazon could be sued over this for enabling tax fraud at least it seems they are pretty lax about it. Iirc due to English laws, amazon.co.uk requires that every seller has a tax number.

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