I don't think most people here have any idea 3P/FBA selling works. It takes a lot of work to get listed and move into new categories, and you can be removed very quickly for the slightest of reasons. This goes to show the scale of the problem in policing logistics at this scale (not to say that Amazon shouldn't be responsible for it).
I am not new to 3P/FBA myself. I ran a store in my college days 2010-2012, and know number of Alibaba, and Amazon employees who were directly involved into managing vendors.
Among Chinese vendors, there is a very ambivalent attitude towards Amazon. People know that Amazon is at a times can be n-times more profitable than an analogous listing on Aliexpress, or any other smaller platform, but at the same time an extremely zealous enforcement is a giant turnoff to proper vendors.
Nobody who is ready to play "by the rules" goes to sell on Amazon among Chinese vendors because you can spend tens of thousands of bucks invested in the store for it be deletes without any questions asked.
Add to that that better vendors will not be bothering with creating shell companies, or using fake IDs to get Amazon verification. This way, Amazon has driven off the few proper vendors from China they had, and now they have to deal with fly-by-night, quick money types as they are the only ones who are ready to tolerate this treatment.
I half think that its almost racketeering by amazon.
Lets suppose you go thru the work of finding low volume CD's...mainly from one-off bands that no longer exist or only had a single release. Then you establish an ASIN for each CD, eventually some fraudster appears and list under your ASIN (thanks to co-mingling of inventory). Once a 'fraud or counterfeit' charge is brought against that other seller, amazon 99/100 invalidates the entire ASIN.
So your inventory, although legit is now held captive by amazon in their warehouse. So they send you a nice little email that states: You can either pay us $4 to send you back your CD or you can "allow us to dispose of it for you".
That last bit is the real punchline. They will then proceed to sell your CD and keep 100% of the money. They routinely farm their sellers using such tactics.
If you are a legitimate seller, you want to be able to communicate with store representative. You want to be able to trust that the store wouldn’t suddenly pull the rug from under you without human contact. You don’t want your products to be displayed alongside fakes. It may be considered wiser not to engage with a store that lacks all of that.
Meanwhile, for a fly-by-night shady seller risk and uncertainty is par for the course, so they would remain and scout for new ways to game the system.
This was quite a few years ago now, I can only imagine Amazon is spending more money on the problem now vs then.
not to defend Amazon, but maybe the scale of the problem is too big - maybe there is a long tail of fraudsters similar to the long tail of illicit content on youtube.
This problem exists because Amazon wanted it to exist. They chose to do business in a way that avoids traditional checks and balances.
The scale of the problem is entirely on them.
I don’t keep up with the marketplace requirements as maybe I should, but historically the biggest difference was Walmart.com required sellers to be based in the US, and amazon.com allowed sellers from all countries. This hurdle alone can make sellers much easier to chase down and throw the legal book at them.
There is no defense for Amazon. The solution is simple. Put back the ability to filter for items shipped and sold by Amazon.com only, and stop commingling inventory.
Amazon will never do this because they don’t want to be in the retail business with 3% profit margins, they want to be in the platform business with 15%+ profit margins.
Hence I take my business to other retailers willing to sacrifice some of their profit margin to ensure I don’t receive garbage the first time.
I could hazard a few specific ideas in Amazon's case, but really I'm just extrapolating from the fact that I've seen that this is how it generally works at any sufficiently large company.
Like you will get nowhere arguing that billion dollar US controlled giants should get shut down or broken up unless it’s a last resort.
That's the issue Amazon absolutely does not want to happen. Getting locked out of their own marketplace or aggregated sales data would hugely undermine the value proposition in terms of de facto earning and profit taking potential, while at the same time undermining public faith in the overall market.
Amazon can't admit they can do anything about counterfeits because no one in their right mind wants to contribute to a platform that empowers and informs a potential competitor.
This is becoming what I consider velvet glove business combat 101 that no one openly admits to.
They control the scale of the problem, and can raise the barrier to entry for new 3rd party vendors at any time.
They might be spending money, but that doesn't mean the money is actually going towards fixing the problem at hand.
When I go to return an item, I can't even select that the reason for my return is that I suspect or know that the item is counterfeited. I have to lie and choose between several somewhat related options like "Inaccurate website description" or "Wrong item was sent" among other things.
To me, it seems like if Amazon were serious about addressing rampant counterfeiting on their platform, they would collect stats from the customers that suffer from Amazon's lack of quality control.
> The classic "control fraud" https://en.wikipedia.org/wiki/Control_fraud strategy is to incentivise your subordinates to maximise revenues while "neglecting" to check that they aren't engaging in fraud to do it. Then you can protest your innocence when the fraud comes to light.