Amazon Heavily Recruiting Chinese Toner And Ink Resellers to Sell on U.S. Platform, With Consequences …..

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Date: Thursday April 23, 2020 03:10:48 pm | Views: 1116
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    Amazon Heavily Recruiting Chinese Toner And Ink Resellers to Sell on U.S. Platform, With Consequences …..
    Amazon’s China Problem – A Case Study Focusing on the 3rd Party Toner Cartridge Category.
    Amazon likes to tell American consumers that buying from Amazon 3rd party sellers is supporting American small businesses.
    https://www.ispot.tv/ad/ZH1P/amazon-storefronts-darlyng-and-co
    Why Chinese Sellers Are Dominating Amazon And How To Beat Them ...
    By Anonymous.

    However, the majority of top Amazon 3rd party sellers are Chinese and that is because Amazon has been heavily recruiting Chinese sellers to sell on the US platform.

    “The number of top Amazon.com sellers based in China has surpassed US sellers”. https://www.marketplacepulse.com/articles/chinese-sellers-outnumber-us-sellers-on-amazoncom
    Amazon has been aggressively courting Chinese sellers since 2015.” – https://mywifequitherjob.com/why-chinese-sellers-are-dominating-amazon/

    The problem is that not only is Amazon heavy recruitment of Chinese sellers hurting American small businesses (contradicting their marketing pitch), it is also that the Chinese sellers are notorious for their fraudulent behavior on the Amazon platform.

    “In fact, Amazon’s China business is bigger than ever. That is because it has aggressively recruited Chinese manufacturers and merchants to sell to consumers outside the country. And these sellers, in turn, represent a high proportion of problem listings found on the site, according to a Wall Street Journal investigation” – https://www.wsj.com/articles/amazons-heavy-recruitment-of-chinese-sellers-puts-consumers-at-risk-11573489075

    There are a lot of “Black Hat” methods that fraudulent Amazon sellers use to game the system. One of the most common is to operate multiple sellers’ accounts. Amazon does not allow a single enterprise to have more than one seller account without a legitimate business reason and subject to many restrictions on each account. Having more than one seller account allows a seller to take more risk in cheating on the Amazon platform.  If one of their seller accounts gets caught cheating and consequently has its selling privileges permanently revoked, they always have another seller account to continue selling on the platform.

    “Given these risks, many Chinese sellers secretly open several Amazon Seller Central accounts, called “Stealth Accounts” despite this being strictly against Amazon’s terms of service. Having multiple selling accounts gives sellers the ability to take higher risks. – https://www.ecomcrew.com/chinese-sellers-manipulating-amazon/

    If you wanted to research Chinese sellers’ fraudulent behavior in action, there might be no better category to study than the 3rd party toner/ink cartridge category.  The 3rd party ink/toner cartridge category is saturated with bad actors from China.  In fact, some of the largest Chinese manufactures of ink/toner have opened multiple different seller accounts on Amazon and have been selling their cartridges directly to consumers (undercutting their wholesale customers) using multiple “stealth” brands to hide their true identities. 

    For example, there is a single enterprise located in the northeast that has had a lot of success selling on Amazon in the toner/ink category. Unfortunately for them, their cheating was recently exposed in a lawsuit (Seiko Epson Corporation v. FTrade Inc., No. 1:18-cv-05036).  Epson sued them for patent infringement and the Epson attorneys did a rigorous and exhaustive job of establishing all of the ways this single enterprise is selling on the Amazon platform using multiple different “stealth” sellers accounts and different “stealth” brands.  According to this lawsuit, the following brands are all operated and controlled by a single enterprise FTrade:  EZ-Ink, Value Toner, GPC Image, LxTek, Uniwork, and E-Jet.

      “On information and belief, defendants are jointly and severally responsible for the infringements of the Epson Patents as they jointly operated and continue to jointly operate and manage the infringing enterprises, including the corporate defendants and related d/b/a entities as a single enterprise by comingling resources, assets, operations, commercial activities, incur expenses and achieve profits jointly for the benefit of the combined enterprise, its owners and officers” – Seiko Epson Corporation v. FTrade Inc., No. 1:18-cv-05036

    It is estimated that the combined sales of all their toner and ink brands (EZ-Ink, Value Toner, GPC Image, LxTek, Uniwork, and E-Jet) that FTrade operates on the Amazon platform have combined sales in excess of $100 million per year. 

    Another benefit to operating multiple different “stealth” seller accounts is to utilize the “Flood the Zone” strategy and circumvent the “No intention to sell the same products or services in both accounts” rule. They can use their secret accounts to sell the exact same item but with just a different label. 

    An associate of mine who previously worked for a large Chinese Amazon seller in the pet industry described it to me this way, “In our company, we literally needed a diagram detailing all of our selling accounts so our staff could keep track of these accounts”.- https://www.ecomcrew.com/chinese-sellers-manipulating-amazon/

     A good example of this is Ftrade’s sale of 3rd party HP 63XL ink.  They use their secret seller accounts to not only sell in the same category (a violation) but to also sell the exact same products (another violation).  When Amazon shoppers search for 3rd party HP 63XL ink, it (falsely) appears to them that they have many different buying choices when in reality it is really just a single company selling the exact same thing but using different brands to “Flood the Zone.

             Item                                                   Brand               ASIN                   Monthly Revenue
    3rd party Ink for HP 63XL ink 2-pack    ejet                  B07THZYFB4     $239,426.98 
    3rd party Ink for HP 63XL ink 2-pack    Valuetoner      B01867HU24     $ 62,265.61 
    3rd party Ink for HP 63XL ink 2-pack      LxTek            B0187N11LS       $ 15,071.86 
    3rd party Ink for HP 63XL ink 2-pack    E-Z Ink             B07W1X23DJ       $ 58,447.76 

    This is very deceptive to Amazon customers but it seems to have work for FTrade because estimated sales for their all their brands combined of HP 63XL ink are $4.5 million per year.  This “Flood the Zone with same item but different brand” scheme is a pattern of theirs that’s gets repeated across many different items.

    Good reviews are a gold mine on Amazon. Amazon uses an algorithm to rank items in search results.  The higher an item appears in a search result the better for sales for that item.  Good reviews play an important factor in determining an items search results ranking.  Tricking the Amazon algorithm into bumping up an items search result ranking with the use of “Fake” reviews is a prime deceptive scheme deployed by these “problem” Chinese sellers.  There are few better ways to increase sales then to get lots of great reviews.
    In addition, there are many companies in China that sell both positive and negative reviews.

    You’ve also probably witnessed brand new listings accumulate hundreds of 5 star reviews within a week of launch. Well now you know how:)

    Often times, these Chinese sellers have hundreds of accounts. They don’t care if they get banned because they always have a backup. And as a result, they can violate Amazon’s terms of service with impunity.https://mywifequitherjob.com/why-chinese-sellers-are-dominating-amazon/

    “I would estimate right now, across all categories, around 30% are fake reviews,” Khalifah says. “Of the Chinese no-name companies, I’d say 95% of them are fake reviews.” https://finance.yahoo.com/news/rise-fake-amazon-reviews-spot-175430368.html

    “The problem has been intensifying since Amazon began to court Chinese sellers in 2015, according to data from Fakespot data” – https://www.cnbc.com/2019/07/12/prime-day-tips-for-spotting-a-fake-reviews-on-amazon.html

    As you would expect with any top selling brand in an Amazon category flooded with bad actors, there is evidence that FTrade brands use the Fake Reviews scheme.  Many of the brands controlled by Ftrade have appeared on “Fake Reviews for Sale” websites.  A recent visit to an “Amazon reviews for sale” website called http://www.merebate.com , it was discovered that many of Ftrade brands are buying fake reviews for their toners/inks.  See below:

    http://www.merebate.com/ProDetial.aspx?ID=1935

    http://www.merebate.com/Index.aspx?s=1&t=9

    Amazon heavy recruitment of Chinese sellers has not only brought in a wave of “Bad Actors” but has also hurt American small businesses.

    Cheap Chinese counterfeits drove Kevin Williams, a Utah seller of water-powered cleaning brushes on Amazon, to lay off six employees this year—most of his U.S. staff, he said” https://www.wsj.com/articles/amazons-heavy-recruitment-of-chinese-sellers-puts-consumers-at-risk-11573489075

    “ had flooded Amazon’s sheet fastener market, and many gained dozens of five-star reviews very quickly. Over the next eight months, sales tanked. “There were tears,” said Whaley. “We wondered whether it was time to look for different jobs.” She was forced to lay off eight contractors, half her staff at the time.  – https://www.buzzfeednews.com/article/nicolenguyen/amazon-fake-review-problem

    “It’s not rare for me to be on the phone with a grown man who is crying because he’s lost his entire business.”https://www.buzzfeednews.com/article/leticiamiranda/amazon-marketplace-sellers-black-hat-scams-search-rankings

    Amazon says publically it will take action against these bad actors:
    “We will continue to combat them, make it more difficult for them to hide, and work with law enforcement to hold them accountable by withholding funds and pursuing civil and criminal penalties.”

     – https://www.buzzfeednews.com/article/leticiamiranda/amazon-marketplace-sellers-black-hat-scams-search-rankings

    “Internal investigators also examine reviews and “non-Amazon forums” used for purchasing reviews, the spokesperson said. Amazon says it blocks or suspends accounts belonging to any of the parties involved.” https://www.buzzfeednews.com/article/nicolenguyen/amazon-fake-review-problem

    … Our team investigates suspect reviews, works with social media sites to stop inauthentic reviews at the source, pursues legal action to stop offenders from planning reviews abuse,.”  https://thehustle.co/amazon-fake-reviews

    Will Amazon do what they publicly say they will do?  Will they permanently block/suspend accounts, withhold the funds, and pursue civil and criminal penalties of bad actors?  A good measure to judge how much Amazon cares about the “Bad Actors” and the fake reviews on its platform is to monitor the 3rd party toner/ink cartridge category and the FTrade brands.
    The views and opinions expressed here are those of the authors and do not necessarily reflect the official policy or position of Tonernews.com.
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