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Comment by r00fus | Hacker News Reader

So is the value proposition simply to buy items on Alibaba and resell on Amazon?

Very interesting. I await the conclusion. How long do you think it'll take to sell the lot?

He's spent over $2500 and his main batch of products from China haven't even arrived in the US yet. They still need to clear customs as well, which could further delay the items if any problems come up. That puts a lot of holiday selling in jeopardy.

This seems pretty risky. --Plus he still needs to store the items, sell them, ship them, and deal with the customer service aspect.-- (Clarification: He doesn't actually have to do these things, but pay the FBA fees for Amazon to do them: https://services.amazon.com/fulfillment-by-amazon/pricing.ht...)

If his items happen to catch on and his supplier in China notices, there's also no real barrier to stop the suppliers (or friends of suppliers) from just cutting him out and creating duplicate product pages with slightly lower prices (which overseas suppliers have already succeeded at).

This is an experiment afterall, so it would still be interesting to see the results of a random person reselling items that aren't particularly unique and in a market with plenty of alternatives (handbags/accessories) with over sellers probably doing about the same thing.

Winners in this scenario: Amazon, Chinese factory owners, consumers.

Losers in this scenario: Chinese laborers, American "wantrepreneurs", and the environment.

Speaking as the frequent victim of flipped AliExpress knock off items purchased on Amazon (at 100% markup over the AliExpress price) -- I think you should put consumers in the losers column.

The quality is unacceptable/not as advertised? Then you most definitely are in the losers column, I agree.

It's rare that consumers win but most of my chinese made shit is way better than american, especially for the price.

Is the American stuff actually Made in USA, or is it American company that outsources manufacturing so it's still Made in China?

Why are the laborers losing? More demand for labor means higher wages and better conditions.

Hmm, I don't disagree with you, but my assessment of Chinese labor situations is that laborers are paid quite low wages and the living/working conditions in proximity to the factory are probably worse than if they were just subsistence farmers.

I feel similarly, because as an American laborer doing basic customer service in a high cost of living area, my wage is not enough to afford literally any discretionary spending.

If that was true, they would stay as subsistence farmers. If they are not doing that, they must have their reasons (probably that you're wrong and they're making more money).

That assumes they have a choice, which may not be the case.

Mass slavery would be a problem of a different order, and not really relevant to the economic discussion I think?

It's not necessarily slavery. If your hometown used to be a farm town, but a bunch of companies buy up all the farmland and convert it to factories and warehouses, you now no longer have a choice but to work in those factories and warehouses unless you move. And the cost of living increases because there's more competition for the same amount of living space because there's a bunch of engineers and management that are now living in the area where before it was just farm laborers and farmers. You might be getting paid the same as you were when you were farming but it's not stretching as far because everything else is more expensive.

That's not what happened in China, as far as I know.

It's the opposite problem in China. Too many farmers want to be industrial laborers. They have strict control (relative to other countries) preventing farmers from moving to cities. While totalitarian, it makes sense to reduce the speed of urbanization. Switching from agrarian to industrial is very disruptive. You don't want too many unemployed laborers in your cities.

We are talking about a country where tens of millions of subsistence farmers died in one of history's worst famines, subsistence farming isn't something anyone does if they have other options--one or two bad years can mean starvation.

The common scenario in China is that if someone can get a factory job they go do it, and then they send as much money as they can back to their family, so that nobody starves.

Please take this question in the most pleasant, friendly, and honestly curious tone: Since your neighborhood is so expensive, why don't you move to a less expensive neighborhood or even a different city?

Not a problem at all :) For me, I am already in the cheapest neighborhood that is reasonably close and liveable to my job. I am not the world's most employable person, so I really have a hard time leaving stable jobs in search of higher paying ones.

But mostly, I am in this area for my girlfriend, who needs to be here for her very high paying job that is more niche and non-transferable to other cities I feel. One day our finances will maybe be linked, but for now I am content to just barely break even :)

I believe that he does not have to worry about storing or shipping or selling the itemsas Amazon does all of that through the FBA program.

No experience with purses or bags but what I see a lot with homewares, where I do have experience, is that something starts to become a big seller and within a few weeks there are 4 or 5 versions of the same thing from different fba sellers.

What happens then is that either one brand becomes dominant or sales start to decline because there is a lot of confusion and reviews for the poorest version get mingled with the original.

Then there is the ultimate accolade, which happens from time to time, it becomes an amazonbasics product. The rest is history.

> within a few weeks there are 4 or 5 versions of the same thing from different fba sellers

If you have a successful product, could you mitigate this by secretly creating an additional 4 or 5 FBA accounts yourself? The 4 or 5 FBA accounts would have different photos and slightly different descriptions, but would be selling the same product. The purpose of doing this:

- Since all your FBA accounts are selling the same thing, there is no risk of some of them being poor quality and getting bad reviews.

- You discourage other sellers from entering your market because the market looks crowded.

- You can set different prices on your 4 or 5 FBA accounts and thereby capture people who are willing to pay a premium and those looking for the cheapest price.

Maybe this explains the phenomena better than my theory of stuff being rapidly copied. Crowding the market with different versions your own product is a fairly common tactic elsewhere, afterall?

You sure can, if you want the Amazon Death Penalty. Muliple accounts are clearly prohibited by the TOS. They will find out, the seller forums have plenty of threads of people crying about getting caught.

And as an added bonus, you get to pay $2 each to have your units destroyed or $2 each plus shipping to get them back. And by “plus shipping” that means the standard package rate non-Prime customers pay. So if all your units are on the same shelf (never happens because FBA strategically ships between fulfillment centers) then you pay for one big box. Otherwise you get one package at full price for whatever is on that shelf or bin that the picker pulls your merchandise from. Times however many shelves your stuff is on.

Also, different accounts might help you erase bad _Feedback_ but product reviews stay with the product listing regardless of who sold it.

Edit: I should have put destroyed in air quotes. I believe this is where the items that have the “Warehouse Deals” badging come from. No proof, just a suspicion.

You can ask a few friends/relatives to open the account?

And use your friend’s computer for all access to that account, making listings, booking shipments, customer service. Because the tracking and identification they use makes Panopticlick look like a kid’s toy.

And whose tax id will you use to meet the 1099-K requirements?

I asked Seller Support about this because I started consulting to help people sell on Amazon, and was concerned about getting caught in a dragnet over multiple accounts. They said as long as my clients didn’t sell the same items it probably would not be a problem.

I mean literally ask them to start these FBA shops. Are cartels prohibited by Amazon? How hard is it to get away with it still?

This is false. The return fee is 50 cents a unit flat, no shipping costs added onto that.

I've talked to people doing this but it's a lot harder than it seems. Accounts need to be totally separate, different company/tax id/ phone/bank/IP address etc, then managing different shipments for each is complicated, etc

With homewares, especially food related I worry about quality and the plastics used etc... seems hard to trust some random FBA.

> That puts a lot of holiday selling in jeopardy.

Nah, he already missed the holiday selling. Even if it arrives on the 14th, he’s got 3-5 business days under normal conditions for FBA to scan the merchandise into shelves. Items are not sellable until that time. Also, since it’s the rush, count on 7-10 business days for that check-in to occur. And the last viable selling day is the 21st for Prime Customers.

Amazon’s guidance to merchants is to have merchandise arrive no later than mid-November for the holiday season, and to not count on restocking midstream.

Seems so. Honest question: what's to stop the manufacturer (or anyone who knows the manufacturer) from making copies and selling them themselves? Do business owners who sell this sort of thing on Amazon just have to stay ahead of the curve or are there protections in place for this sort of thing?

Manufacturer gets paid even if the reseller can't sell them. No need to take risk on the US market if someone else is willing to bear it.

I don't think the alibaba shops have much interest in doing the legwork to list their own items on Amazon. They rely on other people (like the author) to do the research and marketing legwork, and hold the bag for unsold goods. They are focused on moving volume and keeping the factory at capacity.

The bigger threat is Amazon itself, if your product is successful enough there will soon be an Amazon Basics branded version undercutting you and showing up higher in search results.

Yes, they have. I only saw numbers, but 50% of new sellers on Amazon Europe is Chinese. I expect the same for the US.

I also read an interview once where they got analysed on the US store, with frequent typos, but better images then in the past.

Speaking of typos: s/then/than/.

Nice one, I blame auto correct, swype and 3 language dictionary

Amazon can also create a competing product.

Trademarking MIGHT protect against people using your logo and brand name.

They typically do not, how this works is Amazon buys out your store and puts in under their own white label ie: amazon basics brand. Lot of FBA businesses have this exit strategy planned out from inception and are building stores simply to sell them in the end, rinse and repeat.

There is nothing stopping Amazon from getting in contact with the original manufacturers and selling it themselves if they see good sales number for a product. This usually happens after 1-3 months of good sales.

Source: I previously worked in the Amazon price optimization field, and basically all our customers experienced this.

Well, they often have white-label stuff.

Depending on the factory you buy at, they will let you customize more than just the logo and box.

Using different materials, adding tools etc.

Sometimes you get an edge over others because your product is just made of different plastic and comes with a nice bag.

The value prop is in getting the item much quicker via Prime. It's also a form of arbitrage.

It's called retail arbitrage

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