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Wall Street Journal Turns an Eye on Amazon Sellers

Remember the recent blog post, “Kohl’s Bans eBay and Amazon Sellers,” about sellers who buy items from chainstores to resell online, a practice some called retail arbitrage, and how some of those stores were starting to ban resellers?

The Wall Street Journal turned its eye on the practice and interviewed a few sellers along with one of the makers of a pricing app used by these “arbitrage” resellers. It uncovered some interesting numbers:

One individual seller sells about $30,000 worth of goods annually on Amazon, generating a profit of about $12,000.

Another seller sends a dozen employees to scout chainstores every day and expects to sell $10 million worth of goods on Amazon – though he didn’t reveal how profitable the business was.

It may not be clear in the article, but these sellers make up just one of the many types of merchants on Amazon. Another kind of seller with a growing presence on Amazon and other online marketplaces is the overseas manufacturer/distributor.

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And one of the issues that warrants closer scrutiny in any story about Amazon or eBay is the problem of counterfeits and the related topic of product safety.

Reaction from readers varied, with one writing, “the individuals who are reselling the products are selling used goods as if it were new,” and another wondering whether these sellers were paying income taxes on their profits.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.