On the other hand, who doesn't have an Amazon account these days? Selling to a local independent store (especially these days when Safeway/Albertsons/Ralphs /Whole Foods dominates the landscape) means actually finding unscrupulous market owners and convincing them to take your product. And it's not like they have a warehouse to hold $200k worth of cereal either. Meanwhile, all you need to participate in FBA is an identity that hasn't been banned yet.
The other thing is though, this isn't jewelry and cocaine, it's cereal and baby formula. They could just, y'know, give it away. It isn't always about the money, especially if you're poor, and if you're poor, you know other poor people, and everyone can use a little bit of help. With food prices up, giving away a lot of free cereal makes you a lot of friends. Not as much as free cocaine does, maybe, but people still appreciate what you can give them.
Thieves aren't some cartoon villains, they exist among us other humans.