A friend of mine who does online arbitrage takes advantage of this. She'll take the lowest non-prime eligible price, mark it up 5% then set it to be 'fulfilled by amazon'. She knows that people will prefer Prime, even if a lower total cost item is available via free shipping.

How does she get the items back to Amazon to let them fulfill them?

Maybe I wasn't clear. She finds items in other places, ships them to the amazon warehouse, then sets the price +5%.

Same. Especially with items like Apple accessories, this is really starting to hurt Amazon's reputation. Most of the reviewers for those products complain about receiving knock-off products and have no clue that they need to select the ones sold directly by Amazon to get the original one.

Heck, I do most of my buying on Amazon and am a technical person, and still find myself struggling to get it right.

What do you mean turn into ebay or Alibaba?

A few months ago I was trying to buy some bright LED bulbs, and I tried Ebay and Aliexpress. I ordered some 7 watt bulbs, but (repeatedly and by different vendors) I was shipped bulbs that were closer to 4 watts.

Given that it happened several times with several vendors, I suspect there's a systematic problem due to incentives - higher power bulbs command higher prices, and most buyers don't have the test equipment needed to detect the fraud; and even when someone does detect the fraud you just have to refund them and claim it was an accident.

Needless to say, if the conditions of the market mean that fraudsters out-compete honest sellers, all the honest sellers have to quit or resort to fraud, and the market becomes useless to consumers.

I've noticed this with makeup. Amazon sellers have twice shipped me fake makeup "dupes" (not real products by the real manufacturer) instead of what I actually ordered. Now I go to sephora and buy makeup because I'm too worried about purchasing more fakes.

As the other commenter suggested, I mean offering an endless stream of low quality products, not necessarily knockoffs, but simply bad products. Another commenter mentioned Apple accessoires, which is a good example - I think it would be in Amazon's interest to at least mildly curate these and other categories. Currently Amazon is close to useless when you don't exactly know what you want, which results in me researching elsewhere and buying on Amazon when I made a decision.

a guess: full of shoddy and/or unsafe knockoffs