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Do you get emails alluding to new schemes to become wealthy utilizing the internet?
If so, me too. Recently an email from an e-commerce instructor (who shall remain unnamed) had enough details to give clues as to the "new" technique to make profits.
Apparently the email referred to “Amazon-to-eBay arbitrage” which takes advantage of vendors utilizing FBA (Fulfillment by Amazon) for access to the many millions of Amazon.com website customers.
"Fulfillment By Amazon Delivered More Than 2 Billion Items In 2016 posted by SGB Media on Jan 4, 2017 has more details about FBA:
Amazon announced its Fulfillment by Amazon (FBA) service delivered more than 2 billion items for Marketplace sellers worldwide in 2016. FBA items shipped worldwide grew more than 50 percent during the holiday season, while Prime members ordered millions of items from sellers in the Seller Fulfilled Prime program offering free two-day or next-day shipping.
“2016 was a record-breaking year in sales worldwide for sellers on Amazon. The Amazon Marketplace empowers brand owners and retailers of all sizes, many of them small businesses, to reach customers around the world,” said Peter Faricy, VP for Amazon Marketplace. “In fact, according to our economic studies, sellers have created over 600,000 new jobs outside of Amazon. Sellers are choosing Amazon because we help them build and grow their businesses with impactful programs like Seller Fulfilled Prime, and we’re proud of the fact that sellers are reinvesting their success into their local communities by creating jobs.”
“As a growing business and brand owner, the Amazon Exclusives and FBA programs helped us accelerate our business to achieve more than 100 percent growth in sales this year,” said Ben Arneberg, co-founder of Willow & Everett. “The FBA service handles the work of packaging and shipping orders to customers, which gives us the time to create new products that customers will love. We had our most successful Black Friday and Cyber Monday ever, and on Prime Day earlier in the year our sales boomed more than 10x compared to last year.”...(End excerpt)
Some have discovered how to profit from Fulfillment By Amazon without having to pay any of the costs. “Amazon-to-eBay arbitrage” is a lucrative way for some to risk little and gain much. Sadly, the arbitrage can result in the original vendor having to pay for returns and processing fees even though the original vendor never sold the item to the dissatisfied customer and has no opportunity to resolve the problem.
Details are found in "Why It's Nearly Impossible To Stop This Amazon and eBay Scheme" by Jason Feifer, July 27, 2016. Fred Ruckel invented a cat toy named Ripple Rug that he successfully sold on Amazon. com. Then he found out others were selling his product on eBay without his knowledge:
...He was finally a successful inventor.
Then his brother-in-law called.
“Did you see that people are selling your Ripple Rug on eBay?” he said.
Ruckel looked. It was true. Lots of people were selling it -- and not used, either. They were selling new Ripple Rugs. “I’m like, ‘Oh, man, what is that? They copied my stuff!’” Ruckel says. “I’m thinking, Where are they getting it? Is one of the guys in my factory selling it on the side? So I called up the factory, and of course I looked like a jackass.”
The factory was innocent. But as Ruckel kept digging, he discovered the true cause. It’s an industry of people who transform themselves into uninvited middlemen -- either as a form of reseller or, depending on your perspective, a parasite. They steal brands’ marketing materials and make money off their products, creating all sorts of consequences for small retailers like Ruckel. And yet, these people also represent a difficult new reality for entrepreneurs: In the increasingly complex world of e-commerce, everything about a brand -- from its reputation to its pricing -- can be up for grabs....
...To see how this works in real time, I go to eBay and buy a Ripple Rug. There are five listings for the product on this day, and I select one from a seller called AFarAwayGalaxy. The price is $49.51; on Amazon, Ruckel sells it for $39.99. So, how’d this listing get here? Almost certainly, the seller is using some kind of software -- made by DS Domination or a competitor -- that scans Amazon for its best-selling products. (They can also do this on large sites like Walmart’s, though most seem to focus on Amazon). The software found the Ripple Rug, which, on the day in June I buy it, is ranked number 25 in cat toys. Then it copied everything in the Amazon listing and pasted it into an eBay listing --amusingly, right down to the part of the product description that says,“Thank you for viewing our Amazon version of the Ripple Rug.”
The price is usually set between 5 and 15 percent over the Amazon price. When I make the purchase, the person behind AFarAwayGalaxy simply goes to Amazon and buys a Ripple Rug -- but instead of buying it for themselves, they designate it as a gift and have it shipped to me. Because I paid $9.52 above the Amazon price, that’s profit, which AFarAwayGalaxy can keep (minus Paypal and eBay fees). This seller has more than 11,000 items listed on eBay. That can quickly add up to real money.
Someone orders the Ripple Rug on eBay, but the product shows up in an Amazon box. The customer is confused, goes to Amazon, sees how much cheaper the product is there and feels ripped off. “Who are they immediately mad at?” Ruckel says. “The people at Ripple Rug, not some person from nowhere!”
The customer then returns the product, setting off a crazy series of events. Let’s say I want to return the Ripple Rug I just bought. I’d push the “return” button on eBay. AFarAwayGalaxy would then go to Amazon, acquire a return label (which is free for Amazon Prime customers) and send it to me. But because eBay sellers can set their own return policies, AFarAwayGalaxy reserves the right to charge customers a 20 percent “restocking fee” -- which in this case would come out to about $9.90 -- as well as a shipping fee. Meanwhile, Amazon would charge Ruckel a return fee and ship him the product so he could inspect it. Almost always, Ruckel says, returned products have been opened and are covered in cat hair -- making them impossible to sell again.
So, in total: I could have lost more than $10. Ruckel would lose $19.51 (that’s the $2.05 per unit it costs him to stock at Amazon’s warehouse, $12.06 in nonrefundable fees for Amazon to process a sale and $5.40 in return fees). And AFarAwayGalaxy, the only person in this transaction to never spend a dime, just made enough money for lunch.
The fees add up. Ripple Rugs have been returned to Amazon 219 times -- that’s nearly $8,000 in losses since December -- and while Ruckel can’t prove they were all arbitrage-related, he says that sales through his own website have yielded only one return....
...And so, Ruckel has tried taking his campaign to the arbitragers himself. He’s gotten into email arguments with them. He finds other anti-arbitrage sellers and swaps strategies. One of those people, Eric Wildermuth, who sells a line of children’s hats called Snuggleheads, came up with a particularly sneaky punishment: He bought his own hat from an eBay arbitrager for $27 -- and then, before the arbitrager could go to Amazon and make the purchase, Wildermuth changed his Amazon listing price to $199. Result: The arbitrager could either lose $172 on the sale or cancel the purchase, which would damage the arbitrager’s eBay ranking. Wildermuth repeated this about 10 times. “I got these frantic calls [from the arbitrager]. He said, ‘Please don’t do this,’” says Wildermuth. “He knew what I was doing. And I let out a string of expletives.”
This summer, Ruckel tried a new approach: He put his own product on eBay and titled it “All other eBay sellers are fake.” A few weeks later, he stumbled upon an eBay listing with a familiar title. “All other eBay sellers are fake,” it said. It wasn’t his, of course.
Someone had copied that, too....(End excerpts)
Apparently Fred Ruckel's cat was the inspiration for the development of the Ripple Rug. The cat was playing with a rug that had become rippled and the inventor realized there was potential for a product.
The website for the Ripple Rug is:
The associated YouTube.com channel is:
SnugglyCat Inc. was created by a cat named Yoda (and her human parents Fred Ruckel and Natasha Ruckel). Yoda the Snuggly Cat, shares her life experiences, (visit her blog SnugglyCat), and provides insights that can help better the lives of other moggies. Yoda loves to get involved with all product designs and often participates (often without human permission), during the development phase. When Yoda isn't writing, or posing for photos, or making films, or playing with products, she enjoys watching the birds and dozing in the sunshine.
A SnugglyCat video follows:
Customer videos are compiled in "Cats Gone Wild":