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Comment by anigbrowl | Hacker News Reader

I feel terrible for this guy. But also...why did he spend so much time getting filtered by the customer service desk? This is what lawyers are for. If you have $7m of inventory, you are moving away from a small business and litigation is part of your life now. A friend in the legal industry says technology companies should budget 10% of their revenue for legal. Litigation is a miserable headache, but it sounds much less demoralizing than struggling with the service desk 100 times in a single year.

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This story doesn't seem to add up, at least at first glance.

It's not clear WHICH brand the OP is even talking about. He mentions "Hypervolt" in the first sentence, but that's not his company. Hyperice makes Hypervolt (https://hyperice.com/about-us/).

It sounds like this is a knock-off vendor complaining about another knock-off vendor. The OP, "David", links to a youtube video where the poster is "Jimmy Den" (https://www.youtube.com/watch?v=zb7U8vOE4N8).

Am I wrong here? Are fabless vendors, composed of a few people, who basically rebrand white-label shit from alibaba really making (and perhaps in this case losing) millions of dollars in time-frames of months to a couple of years ??

>Are fabless vendors, composed of a few people, who basically rebrand white-label shit from alibaba really making (and perhaps in this case losing) millions of dollars in time-frames of months to a couple of years ??

It wouldn't be surprising. I've looked into starting a side business selling some rebranded Ali/Bao items on Amazon, there are loads of niches you could corner. The thinking goes:

> The product is available for $X today, and Amazon takes a $3-5 cut.

> I can buy the product for $X-Z.

> I could sell these products with prime shipping for $X-Y, and make $Z-5-Y on each sale.

Doing that simple math often makes you think you could make a living off the scheme, even after accounting for packaging and inventory fees. If it works for a few months-years, you might double down and get into this situation.

Ultimately, I came away feeling like this is how dropship vendors find new product categories to move into: they wait for somebody to demonstrate that there's a sizable market for a product, then they add that product to their listings and cut out the competition. So you probably have 3-6 months on each successful product, tops.

It's a jungle out there.

You’re half right. Eventually sellers flood the market for that product and the profit goes down. Then as they get rid of their inventory the margin grows again.

So you have to stay on top of thousands of products, and your cost, in order to do well. It never stops.

They do but, well it depends. You need to find the right product at the right time balanced by multidimensional inputs (time, competition, having right connections, luck because you need conditions to be similar when you are ready to ship, and the fad needs to last long enough to make it worth your while etc. etc.) - so the hard part is finding "the" product. It is a lottery ticket. If it works out great, more often than not it will fail. There is a specific time window for a given product and it is not at all clear where in the timeline you are at so you need to guess. Whatever you are attempting WILL eventually fizzle (people will lose interest, most people that are interested will get one, the competition will get insane and will eat your margins) - the question is when. If it is sooner than you thought, you will lose a lot of money. If it is later than you thought, you will make a lot of money.

As an e-commerce store owner myself with a small amount of experience selling on Amazon, I consider this to be a good idea. I do admit to a instinctual aversion to lawyers. My tech-bias is to grind forward through the "official" routes. Use the existing systems that Amazon put in place. (Though perhaps my tech-bias should push me to "hack" around obstacles using things like lawyers)

This reminds me of the recently popular article https://jessesingal.substack.com/p/i-fought-the-paypal-and-i... which also gave some great legal advice for routing around useless customer service.

Next time I will be quicker to seek a lawyer

Of course your friend would say this.

Said friend is a leading light in the tech/capital ecosystem and the opinion is rooted in long awareness of how much tech companies actually litigate and what the economic tradeoffs. Your dismissive reply is like dismissing a scientist/engineer for suggesting a technology company needs to keep investing in R&D if it aims to maintain a technical advantage over its competitors, and it's a pretty lazy comeback.

The DIY approach clearly didn't work out for the author of this article, who went from running a successful consumer product business to insolvency in the space of 18 months.

I didn't say your friend is wrong. As for "leading lights", looking at the state of tech and capital in general, there is really not much proper leading going on.

> The DIY approach clearly didn't work out for the author of this article, who went from running a successful consumer product business to insolvency in the space of 18 months.

Is that what happened here?

Many of the comments seem to indicate that "David" attempted to clone a product, but was out-cloned by others?

Would your legal friend be able to advise him on how to be more successful with his counterfeit product vs other counterfeits?

But his complaint is not that he was out-cloned, in the sense of his competitors gaining a greater market share because buyers preferred their product. His complaint is that his competitor repeatedly lied to Amazon about his products and theirs, in the former case making false claims that limited his access to the market, in the latter case securing favorable product categorizations for their own devices (classifying them as electronics instead of consumer goods and paying lower seller fees as a result). In short, his competitor went behind his back to the market operator with false information around 100 times.

Now maybe he's lying abut all this and has employed such tactics himself against others, but you haven't even addressed his claims.

Well.. he stated it was a clone right in the first sentence.

So when people filed claims against him on Amazon, how were they "false" given he acknowledged he is cloning someone else' product?

As others have posted, his story reads as follows:

- I found this great product on amazon

- I launched my own 'high quality' and "proprietary" version

- Others did the same thing

- someone failed complaints on amazon against me for my clone.

The rest of the stuff you outline fits with many other complaints here and why Amazon has "jumped the shark".

Speaking about addressing claims - Will your lawyer friend be able to help him with why his clone was removed from Amazon?

Again reading the posts, the single largest complaint people have on amazon is fraudulent clones, like what "David" made.

PS, his first run-on sentence just to save you the time from re-reading it.

"Our Amazon journey started in January 2018 when HyperVolt released the first massage gun on the market. We were so careful with this product that we began designing our patented design in February 2019 and launched our first massage gun on Amazon in July 2019; because our massage gun was unique and high-end, we began receiving a lot of 5-star reviews from the beginning, and we were Amazon’s best-seller from October 2019 to October 2021;"

As a friend in a tech industry, I tell all my friends to budget 50% of their revenue for tech investment and R&D. Oh and conveniently, I also have a company that can help them with these investments.

Seriously, don't swallow cock-and-bull statements like "legal should be 10% of your revenue". I remember years ago the landlord of my co-working space glibly told me that "as long as office rent is not more than 10% of your revenue you're good" in response to me pushing back to rent hike increases. Ridiculous conmen.

Except the friend isn't encouraging me to spend more in hopes of raising business. That's their comment on what existing companies typically spend on legal. Commercial and regulatory disputes are a fact of business life past a certain size.

Did you have a bad legal experience and think all lawyers are now out to get you or something? Conversely, do you think that not budgeting anything for legal expenses means your business will never be sued or need to sue anyone?

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