We started buying truckloads of new retail merchandise about 18 months ago. Our t-shirt business has been slowly declining for some time and we felt it was time for something new. As a side hustle, I started buying truckloads from Target and selling the items on Facebook Marketplace. It took me by surprise to discover many sellers make a living on FB and we dove right in. We quickly started buying truckloads from other retailers including Amazon.
The tough sell came in when we received hundreds of one particular item and we exhausted the local need for that item. As a result, we started posting some of the items on both Amazon and eBay. COVID hit and this portion of our business really grew. Selling truckloads is fun and profitable.. what could go wrong? So many things, actually.
In our case, all the “wrong” things stem from ridiculous seller behavior and the blatant abuse of the Amazon Brand Registry. It seems that this week has been particularly problematic due to Prime Day and sellers “protecting” their turf. Never mind that in our capitalistic society, it is perfectly acceptable to offer a lower price on a branded item in order to win a sale.
My first example revolves around a charcoal face mask. If you’ve ever looked at these on Amazon, you know there are hundreds to choose from. We received 24 units of brand X in a truckload we bought from Amazon themselves. I scanned it, found the item detail page and noticed it had several sellers on it. We added our 24 units and went on to the next product.
Shortly thereafter, one person bought all of our available units. I thought that was strange but left it alone. The sale was pending for some time when I found some more units. I added those. Immediately an order came in for all available units again. This happened three times before I realized it was probably the seller who had the buy box buying them so we wouldn’t have any stock. The pending sales never came through either. It’s like they used a cc with no credit to tie them up and then just kept renewing it by choosing the same card when Amazon asked for a payment revision.
Finally, fed up with this, I added 999 units as stock and reminded myself to keep an eye on it so we wouldn’t oversell the item. Another sale came in for a bunch of units, but not all of them. It wasn’t too long after this that I received a policy violation for selling counterfeit items. Ah, yes. The bogus counterfeit item claim.
We’ve gotten several of these counterfeit claims from brand owners who find it inconceivable that another seller would compete with them on their own item. Guess what, sellers? Amazon sells your stuff to other sellers in bulk.
My guess is the stock comes from one of the following scenarios:
- An Amazon warehouse “lost” items and paid the seller for them. Eventually the units are found, and since Amazon now owns the units, they resell them.
- The seller made a wholesale sale to Amazon and they didn’t all sell. Amazon then sells its overstock via truckload.
- The seller was suspended from Amazon and had their FBA stock seized. Again, Amazon resells it.
Once this happens someone like me comes along and buys tens of thousands of units at once with the intention of reselling them. I likely paid less per unit than the manufacturer did, which means I can sell the items for less as well.
As you can imagine, and even empathize with, the brand owner is confused as to what happened. They are also angry they are losing sales to someone “they” didn’t sell items to. Many then vow to get revenge, remove the offending item, and, if they are able to, punish the competing seller.
They can’t just complain to Amazon though – they need a good reason to get the items removed. The First Sale Doctrine states that anyone who purchases a branded item has a legal right to resell that item as long as they have not materially different. So what are these brand owners to do?
They do the only thing they can do to stifle competition. They claim the items are counterfeit. In the “real” world, this is illegal and it is abuse. But Amazon isn’t the real world. Since they own the trademarks, that’s good enough for Amazon and no further questions are asked. The competing seller has the items removed and a policy violation is issued. And everyone know that if you get too many of those as a seller you will be suspended. Again, with no questions asked. Even more insulting is that in order to possibly get your account back you have to admit you did something wrong and promise to never do it again.
Let that sink in.
You purchase something lawfully. Even worse, from the owner of the Marketplace itself. Someone else objects to you selling your legitimate purchase. They lie about you. Amazon could care less if it is true and they punish you (after taking tens of thousands of dollars from you for the truckload.) And, if enough shady sellers do this to you because they don’t want competition, your business is destroyed.
I was actually one of the sellers who helped develop the first Brand Registry. It’s a good thing when used correctly. But it has been mutated to a point where select sellers even get to ding their competitors without Amazon ever get involved. Yep, it’s true. It’s called Project Zero – look it up.
So what happens after you get a violation? You can appeal by providing purchase orders or invoices from the manufacturer. Yes, the same manufacturer that has no idea Amazon themselves sold you their stock – So you’re out of luck.
Even worse, Amazon DOES NOT accept liquidation manifests as proof of purchase. Even if you bought the liquidation directly from Amazon. They will not accept a sale made by them as proof that you are not selling counterfeit items. They will not remove the policy violations and they will not reinstate the ASIN.
Check back tomorrow for more tales of shady seller behavior and for some tips on how to address this situation.