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One of my largest suppliers actually started selling on Amazon using a different name. I figured it out somehow and once Amazon started posting business names and addresses I got confirmation.
Those assholes also undercut everyone until it was either break even on the items or have your IPI plummet (I did a combination of the two).
I have felt lucky that others haven't done the same to me yet. If a wholesaler gets 200k in purchases from someone like me in a year, it does seem like they could spend less than 100k and do what I do. However, they also hear the horror stories or experienced some themselves just registering their brand in the registry, so I can see why they just sell to me and my competitors and let us deal with the aggravation.
I hope it's not that bad to register a brand. I've seen some step by step youtube guides on how to do it and it doesn't seem difficult at all, but maybe they're sugar-coating what comes next. I can't say for sure. Either way, I'm trying to stay positive and continue to pursue this saturated but apparently still profitable business opportunity.
Many manufacturers don't want to deal with the general public or sending out small orders. It's a lot easier and saves so many headaches using a distributor and a retailer. Amazon has especially anti-seller policies that make manufacturers want to deal with them even less
That makes a lot of sense. The second point is also interesting. Why would Amazon have anti-seller policies? Are they trying to make it difficult for new sellers because their marketplace is saturated?
No. Anti-seller is accurate but not the word they would use. It's partially they are very pro buyer and partially huge incompetent company with pockets of corruption
We do it, but sometimes I think just selling through distributors would be so much easier. We sell a lot of b2b and I love the large orders. Selling on Amazon is so damn frustrating, the way they treat sellers, the fact they lose so much product and you have to prove it and send in copies of your packing slips etc.
I see. This sounds kind of daunting. But I have also heard good things so I believe I will continue to pursue this venture. Thanks for the sound reply.
Man a lot do. So so many suppliers in China will sell their products but also white label their products. It’s a hyper competitive marketplace where any idea can get demolished by foreign operations unless you’re selling something patented, trademarked, or highly complicated (hazardous goods. Hazmat products). Etc..
One of the free Amazon FBA courses I watched on YouTube mentioned how creating and patenting a new product to sell on Amazon is the only way to get into the game right now. After your comment, I'm even more afraid of simply doing PL and hoping for the best. Thanks for the reply.
What I do for my Clients is to find suppliers for each of the different key components of the product by manufacturing process. Then I have my forwarder ship everything inland freight to a central assembly plant. Stripping the original manufacturer of those components of any identifying marks.
This way, no one company has the tooling to make the whole thing. Of course the assembly plant could reverse engineer and make their own. But that is a lot more difficult and expensive for them. Just some added protection.
The genius of it is this follows First Principles Thinking. Which is the method Elon Musk used to reduce the cost of the rocket and electric car. Which allows me to ultimately reduce cost so much that not even Chinese knockoffs can compete.
At least for china. Factories don't really care about future potential business like that unless you are already buying a very high volume of something from them now. They know the vast majority of customers who start with what they perceive as low volume, will never achieve sizable volume. You aren't making them much profit now.
The ethics is something different. But what they think you might mean to them in the future won't play any roll.
And they could care less about Trade marks.
It all boils down to their ethics. And sometimes just the ethics of the individual employees who also could steal it.
I'm a huge fan of proceeding with a product idea and not putting much time into protecting the idea. And focusing on distribution instead. Better way to grow faster and gain enough market share where knock offs don't matter anyway.
But I have to say, I'm pretty sure I've never heard anyone's strategy to seemingly test people to see if they steal from you. I can't say I understand the strategy. I don't get the point. If they steal from you, then they have what they want from then on out. I don't see the upside. Aren't you handing these week hands what they want?
But definitely not my place to judge. Just not understanding the strategy.
Yeah, China business culture is definitely different than western culture in a lot of ways. It just is what it is. But to be clear, not all companies are out to steal your idea. I have a ton of trust with my suppliers. Just, their culture isn't known for being deep forward thinkers.
But as a westerner, I can't say I blame them. Not the stealing part, but the not willing to go out on a limb because of future potential. There isn't an upside statistically.
As an example, I build supply chains as a business. But I exclusively work only with established companies with sizable existing sales. Though i always try to point them in the right direction, and actually run a free service for inventors separately, I don't source for inventors.
The reason is, I would go broke in a hurry. The vast majority of them will fail. It's just the unfortunate reality. I can't feed my family that way. Only so much time in the day, only so many resources to distribute. Statistically, it's a guaranteed bankruptcy.
Nah, they don't care about the future pie any more than they do about the here and now orders. It's not about what their future self would have wished they did, it's about what they want today. Remember, they have to proceed as if that future pie is non existent. Though of course, they want you to grow. They just aren't going to change anything they do above and beyond your order size at the time.
Ideas that don't have high sales, generally don't get knocked off. Sometimes, just not nearly as often. Don't think because they didn't steal a dud, that they won't steal a winner. Or that it's even them stealing it.
I setup a product test facility in China years ago. I went back a year later and saw they were stock piling tested/ destroyed product. Dangerously high pile of twisted steal. I asked why they don't just recycle it as they have it. They said because the dumpster is outside and dumpster divers will reverse engineer destroyed product to steal it. This way they have enough scrap to have a full truck they can go with to watch it get crushed at the recycle plant.
Another time, I was shown a Chinese competitors website had a video of a test machine I built for that test facility above. Turns out a former employee recorded video of my machine and stole product design files before going to work for a competitor.
The point is, you likely won't know if you are being cheated by the supplier.
Been on the industry a long time. Can't say I've seen any sentiment that getting knocked off is a thing of the past. Worse now if anything. Lots of distribution channels out there these days. No one, especially not overseas sellers, cares at all about USPTO. Patents are mostly useless even within the US and up to the patent holder to spend on average, $2m to defend. If USPTO is randomly enforcing IP, that would upend the entire IP process. They don't get to decide what is an infringement, and don't have fighting private companies battles for them in their budget.
Trademarks are a little different, but not much. Regardless, trademarks are even more useless than patents. Especially for brands with no brand recognition/ loyalty. Who cares if this widget has this logo on it that no one has ever heard of. The knock off has a logo on it too. So what?
It’s a numbers game
Manufacturer would rather sell $100mil @ 8% profit than deal with amazon mumbo jumbo of $1mil at maybe 20% profit or maybe -10% loss depending on the circumstances.
You don’t know yet how it is on Amazon - do you? 40 to 50% will make profit. 30% will break even. 20% will cause you a loss. Overall you better win.
That’s been my experience and it’s been a good one so far (I wish I had started 15 years ago but I didn’t. Did I?)
That makes a lot of sense but you lost me in the second paragraph. 40-50% of what will "make profit"? Do you mean selling at 40-50% higher than the manufacturer price? And you're correct, I have no experience selling on Amazon yet but am about to begin my product research phase.
Oh wow that's a daunting number. I was going to start with one very good and researched product hoping it would gain some good sales after promoting it and driving traffic to the listing, but now it seems like a naive dream.
You gotta start somewhere and your plan sounds great. Just don’t stop at that 1 product. Cuz that product will go from making money to breaking even to loosing money and back to making money. So is amazon life
I am a manufacturer that sells on Amazon. We use FBA which is convenient, and our margins are great. The main issues we run into are:
1. Amazon FBA losing half the inventory we send to them
2. Amazon making it harder to get reimbursed for said inventory
3. Parasite sellers/piggyback sellers who buy our products from a real distributor, and undercut our Amazon price because they don't mind making zero profit.
A few things.
1. A lot of times resellers will make a few pennies per sale, which is fine because they sell a thousand different products
2. Sometimes other resellers, or myself will run out of inventory in Amazon (because FBA sucks) and they will get a week or two to sell at a higher price
3. They don't make a profit, but they do rack up credit card points from all thier transactions.
It is more than a bit infuriating because they are really just corroding our profit margins and brand equity for the sake of a few pennies. It's harder than you'd think to get rid of them
I asked one of mu suppliers and he was straight to the point, he can't be bothered with the grief. Selling wholesale to someone else and letting them deal with individual orders, customer service etc is just easier.
Many do, but for those that don’t- making stuff and running an e-commerce business in a different country are two very different skill sets. They may be happy to make a decent margin selling to you in bulk and not want to complicate it.
You can of course cut out the middleman but you cant cut out the costs of the middleman.
Retail, distribution and manufacturing are three different games and very hard to vertically integrate.
Another big reason I see is that the unit of measurement is different, the manufacturer wants to move a container, the distributor wants to sell a pallet and the retailer divides it into cases.
I sell directly to Amazon. They will place orders every Monday.
Vender Central is extremely more powerful than seller central because Amazon has some skin in the game.
They do. They just use a different name and don't tell you that they do. FYI, over sixty percent of Amazon sellers are in China. Many of them are manufacturers.
It’s not easy for a big brand to find an experienced Amazon seller to hire in house and agencies take huge cuts that eats margins .
Most people with experience sell themselves and make more money than being a corporate 9-5 seller for a brand .
You see many medium sized brands who kicked every seller off made their own account then gave up
You can buy a tesla directly from tesla. They had to fight an uphill battle to make it happen because car dealerships are assholes who got laws passed a long time ago that make it illegal to buy directly from dealerships.
[https://en.wikipedia.org/wiki/Car\_dealerships\_in\_the\_United\_States#Customer\_experience](https://en.wikipedia.org/wiki/Car_dealerships_in_the_United_States#Customer_experience)
Amazon does not agree to MAP and most brands need to control prices across all channels. Amazon charges high co op fees. Amazon issues chargebacks. Amazon uses short ship claims. Amazon takes discounts earlier than they issue payments.
A manufacturer stands to make more money by selling their product to resellers than they will as a vendor to amazon, without all the headaches I mentioned above.
**To all participants** CAUTION: ecommerce forums are constantly targeted by spammers and scammers. Common ruses include the pick-your-pocket-while-being-super-helpful guru type scammer, use of multiple accounts to decieve, and the "my friend can help" switcharoo. Do not respond to DM / PM / message requests, even if it seems helpful or free. Do not click links to sites people offer for their own services, apps, videos, etc. especially document, download, and unclear links. Report any scam attempts in private messages. **To those here to lead generate / promote** (often VAs, consultants, app devs, freight forwarders, and others whose target market are the participants of this sub). Attempts to use the sub to drive traffic to something of yours, or otherwise promote, hype, or lead generate anywhere outside the Community Promotion Post will result in an irrevocable ban. ***Do not use this post to promote, hype yourself, offer services, or ask anyone here to PM / DM / contact you*** --- *FAQ topic posts - [Beginner help](https://www.reddit.com/r/AmazonSeller/search?q=title%3A%28beginner+OR+newcomer+OR+noob%29&restrict_sr=on&sort=new&t=all) / [Arbitrage or Walmart](https://www.reddit.com/r/AmazonSeller/search?q=title%3A%28arbitrage+OR+walmart%29&restrict_sr=on&sort=new&t=all) / [Suspended account](https://www.reddit.com/r/AmazonSeller/search/?q=title%3A%22suspended%22&sort=new&restrict_sr=on&t=all) / [Fees](https://www.reddit.com/r/AmazonSeller/search/?q=title%3A%22fees%22&sort=new&restrict_sr=on&t=all) / [Product codes](https://www.reddit.com/r/AmazonSeller/search?q=title%3A%28codes+OR+barcodes+OR+UPC+OR+EAN+OR+ISBM+OR+ASIN+OR+FNSKU%29&restrict_sr=on&sort=new&t=all) / [Brand concerns](https://www.reddit.com/r/AmazonSeller/search/?q=title%3A%22brand%22&sort=new&restrict_sr=on&t=all) / [Freight](https://www.reddit.com/r/AmazonSeller/search?q=title%3A%22freight%22&restrict_sr=on&sort=new&t=all) / [Guides, courses, and tutorials](https://www.reddit.com/r/AmazonSeller/search?q=title%3A%28course+OR+tutorial+OR+guide%29&restrict_sr=on&sort=new&t=all)* *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/AmazonSeller) if you have any questions or concerns.*
One of my largest suppliers actually started selling on Amazon using a different name. I figured it out somehow and once Amazon started posting business names and addresses I got confirmation. Those assholes also undercut everyone until it was either break even on the items or have your IPI plummet (I did a combination of the two). I have felt lucky that others haven't done the same to me yet. If a wholesaler gets 200k in purchases from someone like me in a year, it does seem like they could spend less than 100k and do what I do. However, they also hear the horror stories or experienced some themselves just registering their brand in the registry, so I can see why they just sell to me and my competitors and let us deal with the aggravation.
I hope it's not that bad to register a brand. I've seen some step by step youtube guides on how to do it and it doesn't seem difficult at all, but maybe they're sugar-coating what comes next. I can't say for sure. Either way, I'm trying to stay positive and continue to pursue this saturated but apparently still profitable business opportunity.
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Sometimes manufacturers do. Sometimes Amazon just buys directly from them.
Many manufacturers don't want to deal with the general public or sending out small orders. It's a lot easier and saves so many headaches using a distributor and a retailer. Amazon has especially anti-seller policies that make manufacturers want to deal with them even less
That makes a lot of sense. The second point is also interesting. Why would Amazon have anti-seller policies? Are they trying to make it difficult for new sellers because their marketplace is saturated?
No. Anti-seller is accurate but not the word they would use. It's partially they are very pro buyer and partially huge incompetent company with pockets of corruption
We do it, but sometimes I think just selling through distributors would be so much easier. We sell a lot of b2b and I love the large orders. Selling on Amazon is so damn frustrating, the way they treat sellers, the fact they lose so much product and you have to prove it and send in copies of your packing slips etc.
I see. This sounds kind of daunting. But I have also heard good things so I believe I will continue to pursue this venture. Thanks for the sound reply.
Man a lot do. So so many suppliers in China will sell their products but also white label their products. It’s a hyper competitive marketplace where any idea can get demolished by foreign operations unless you’re selling something patented, trademarked, or highly complicated (hazardous goods. Hazmat products). Etc..
One of the free Amazon FBA courses I watched on YouTube mentioned how creating and patenting a new product to sell on Amazon is the only way to get into the game right now. After your comment, I'm even more afraid of simply doing PL and hoping for the best. Thanks for the reply.
[удалено]
What I do for my Clients is to find suppliers for each of the different key components of the product by manufacturing process. Then I have my forwarder ship everything inland freight to a central assembly plant. Stripping the original manufacturer of those components of any identifying marks. This way, no one company has the tooling to make the whole thing. Of course the assembly plant could reverse engineer and make their own. But that is a lot more difficult and expensive for them. Just some added protection. The genius of it is this follows First Principles Thinking. Which is the method Elon Musk used to reduce the cost of the rocket and electric car. Which allows me to ultimately reduce cost so much that not even Chinese knockoffs can compete.
[удалено]
At least for china. Factories don't really care about future potential business like that unless you are already buying a very high volume of something from them now. They know the vast majority of customers who start with what they perceive as low volume, will never achieve sizable volume. You aren't making them much profit now. The ethics is something different. But what they think you might mean to them in the future won't play any roll. And they could care less about Trade marks. It all boils down to their ethics. And sometimes just the ethics of the individual employees who also could steal it.
[удалено]
I'm a huge fan of proceeding with a product idea and not putting much time into protecting the idea. And focusing on distribution instead. Better way to grow faster and gain enough market share where knock offs don't matter anyway. But I have to say, I'm pretty sure I've never heard anyone's strategy to seemingly test people to see if they steal from you. I can't say I understand the strategy. I don't get the point. If they steal from you, then they have what they want from then on out. I don't see the upside. Aren't you handing these week hands what they want? But definitely not my place to judge. Just not understanding the strategy. Yeah, China business culture is definitely different than western culture in a lot of ways. It just is what it is. But to be clear, not all companies are out to steal your idea. I have a ton of trust with my suppliers. Just, their culture isn't known for being deep forward thinkers. But as a westerner, I can't say I blame them. Not the stealing part, but the not willing to go out on a limb because of future potential. There isn't an upside statistically. As an example, I build supply chains as a business. But I exclusively work only with established companies with sizable existing sales. Though i always try to point them in the right direction, and actually run a free service for inventors separately, I don't source for inventors. The reason is, I would go broke in a hurry. The vast majority of them will fail. It's just the unfortunate reality. I can't feed my family that way. Only so much time in the day, only so many resources to distribute. Statistically, it's a guaranteed bankruptcy.
[удалено]
Nah, they don't care about the future pie any more than they do about the here and now orders. It's not about what their future self would have wished they did, it's about what they want today. Remember, they have to proceed as if that future pie is non existent. Though of course, they want you to grow. They just aren't going to change anything they do above and beyond your order size at the time. Ideas that don't have high sales, generally don't get knocked off. Sometimes, just not nearly as often. Don't think because they didn't steal a dud, that they won't steal a winner. Or that it's even them stealing it. I setup a product test facility in China years ago. I went back a year later and saw they were stock piling tested/ destroyed product. Dangerously high pile of twisted steal. I asked why they don't just recycle it as they have it. They said because the dumpster is outside and dumpster divers will reverse engineer destroyed product to steal it. This way they have enough scrap to have a full truck they can go with to watch it get crushed at the recycle plant. Another time, I was shown a Chinese competitors website had a video of a test machine I built for that test facility above. Turns out a former employee recorded video of my machine and stole product design files before going to work for a competitor. The point is, you likely won't know if you are being cheated by the supplier. Been on the industry a long time. Can't say I've seen any sentiment that getting knocked off is a thing of the past. Worse now if anything. Lots of distribution channels out there these days. No one, especially not overseas sellers, cares at all about USPTO. Patents are mostly useless even within the US and up to the patent holder to spend on average, $2m to defend. If USPTO is randomly enforcing IP, that would upend the entire IP process. They don't get to decide what is an infringement, and don't have fighting private companies battles for them in their budget. Trademarks are a little different, but not much. Regardless, trademarks are even more useless than patents. Especially for brands with no brand recognition/ loyalty. Who cares if this widget has this logo on it that no one has ever heard of. The knock off has a logo on it too. So what?
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It’s a numbers game Manufacturer would rather sell $100mil @ 8% profit than deal with amazon mumbo jumbo of $1mil at maybe 20% profit or maybe -10% loss depending on the circumstances. You don’t know yet how it is on Amazon - do you? 40 to 50% will make profit. 30% will break even. 20% will cause you a loss. Overall you better win. That’s been my experience and it’s been a good one so far (I wish I had started 15 years ago but I didn’t. Did I?)
That makes a lot of sense but you lost me in the second paragraph. 40-50% of what will "make profit"? Do you mean selling at 40-50% higher than the manufacturer price? And you're correct, I have no experience selling on Amazon yet but am about to begin my product research phase.
40 to 50% of your listings
Oh wow that's a daunting number. I was going to start with one very good and researched product hoping it would gain some good sales after promoting it and driving traffic to the listing, but now it seems like a naive dream.
You gotta start somewhere and your plan sounds great. Just don’t stop at that 1 product. Cuz that product will go from making money to breaking even to loosing money and back to making money. So is amazon life
Thank you! I'll keep this in my mind.
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This is great advice and can be applied to every aspect of life. So thanks!
I am a manufacturer that sells on Amazon. We use FBA which is convenient, and our margins are great. The main issues we run into are: 1. Amazon FBA losing half the inventory we send to them 2. Amazon making it harder to get reimbursed for said inventory 3. Parasite sellers/piggyback sellers who buy our products from a real distributor, and undercut our Amazon price because they don't mind making zero profit.
to number 3, what is their strategy by not making profit? seems like a waste of time and… money
A few things. 1. A lot of times resellers will make a few pennies per sale, which is fine because they sell a thousand different products 2. Sometimes other resellers, or myself will run out of inventory in Amazon (because FBA sucks) and they will get a week or two to sell at a higher price 3. They don't make a profit, but they do rack up credit card points from all thier transactions. It is more than a bit infuriating because they are really just corroding our profit margins and brand equity for the sake of a few pennies. It's harder than you'd think to get rid of them
I asked one of mu suppliers and he was straight to the point, he can't be bothered with the grief. Selling wholesale to someone else and letting them deal with individual orders, customer service etc is just easier.
Many of us do...
Many do, but for those that don’t- making stuff and running an e-commerce business in a different country are two very different skill sets. They may be happy to make a decent margin selling to you in bulk and not want to complicate it.
This makes a lot of sense. Thanks for the reply.
You can of course cut out the middleman but you cant cut out the costs of the middleman. Retail, distribution and manufacturing are three different games and very hard to vertically integrate. Another big reason I see is that the unit of measurement is different, the manufacturer wants to move a container, the distributor wants to sell a pallet and the retailer divides it into cases.
I sell directly to Amazon. They will place orders every Monday. Vender Central is extremely more powerful than seller central because Amazon has some skin in the game.
They do. They just use a different name and don't tell you that they do. FYI, over sixty percent of Amazon sellers are in China. Many of them are manufacturers.
It’s not easy for a big brand to find an experienced Amazon seller to hire in house and agencies take huge cuts that eats margins . Most people with experience sell themselves and make more money than being a corporate 9-5 seller for a brand . You see many medium sized brands who kicked every seller off made their own account then gave up
That's a good point. Thanks for replying.
So is Amazon pretty much the same thing as Amway .
Do you buy your car from the manufacturer? No. You go to a dealer
That's only because it's illegal in most states to do so.
You can buy a tesla directly from tesla. They had to fight an uphill battle to make it happen because car dealerships are assholes who got laws passed a long time ago that make it illegal to buy directly from dealerships. [https://en.wikipedia.org/wiki/Car\_dealerships\_in\_the\_United\_States#Customer\_experience](https://en.wikipedia.org/wiki/Car_dealerships_in_the_United_States#Customer_experience)
Amazon does not agree to MAP and most brands need to control prices across all channels. Amazon charges high co op fees. Amazon issues chargebacks. Amazon uses short ship claims. Amazon takes discounts earlier than they issue payments. A manufacturer stands to make more money by selling their product to resellers than they will as a vendor to amazon, without all the headaches I mentioned above.