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Thu Apr 22 2021 22:03:20

When Product Sourcing Takes a Criminal Turn

By: Ina Steiner

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Many people buy sale items at retail stores to resell online, but one father-daughter duo is accused by the government of using five-finger discounts to stock their online stores. 

The Atlanta pair are accused of paying shoplifters for goods stolen from CVS, Kroger, Publix, Target, and Walgreens. The items allegedly included over-the-counter medications (e.g., Prilosec, Nexium, Rogaine, and Claritin), shaving razors, oral care products, as well as health and beauty aids. 

The government alleged that for over 8 years, the pair sold millions of dollars of stolen retail product at below retail "and even wholesale cost" at its own websites, and through various online ecommerce platforms, including Amazon Marketplace, Walmart Marketplace, and Sears Marketplace. 

In an announcement on the Department of Justice website, the government said the Georgia dad pleaded guilty to one count of interstate transportation of stolen property, and the daughter pleaded guilty to one count of conspiracy to commit interstate transportation of stolen property. The pair will be sentenced in July.

Because of concerns over the legitimacy of sellers and products, marketplaces may periodically require sellers to submit invoices or other proof that they are authorized resellers. This can cause problems for online sellers who engage in what's called "retail arbitrage" - buying discounted products at a big-box store and reselling on sites like Amazon and eBay. (Do a search for "does Amazon accept store receipts as invoices?")

Do you think online marketplaces go too far in requiring sellers to prove their legitimacy, or not far enough to ensure the integrity of the items sold on their platforms?



Comments (8) | Permalink

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Perminate Link for When Product Sourcing Takes a Criminal Turn   When Product Sourcing Takes a Criminal Turn

by: postbuster This user has validated their user name.

Fri Apr 23 04:49:49 2021

I think that marketplaces go too far with this kind of measure when their services and support don't go nearly far enough for sellers.

These 'merchants' are the ones who give platforms the excuse to raise demands on sellers to be 'more upright' in their standard of listing and selling.
With all of the other million or so sellers who play by the rules and then get treated as if they are also like this father and daughter scheme, places like ebay and amazon cast a dark cloud on the real workers for their own profit.

The main point is, if all of these sites will require a 'higher standard' from sellers so it does not make them look bad, then the venues have a long way to go because to ask even more for sellers to be legitimate all while they run THEIR website just like the criminals in this report is nothing more than hypocritical.
Not selling illegally is already a standard, this will be another excuse for  overreach from big commerce.

If I had full trust in marketplaces, I don't think I would have a problem with submitting an invoice to prove I am legit.
But because of ALL of the executives and shareholders with their underhanded practices, that will never happen.  They have destroyed all of my trust for good.
And just like word of mouth advertising works for buyers, I use my own experiences to warn sellers not to use these platforms because of the abuse from the ones 'in 'charge'.

Perminate Link for When Product Sourcing Takes a Criminal Turn   When Product Sourcing Takes a Criminal Turn

This user has validated their user name. by: Rexford

Fri Apr 23 11:03:03 2021

Postbuster is right.  It is normally the merchants, retailers and luxury good manufacturers who are calling for these impediments to selling.

Don't punish everyone due to a few bad actors or make it harder for honest sellers to do business due to these bad players.

Perminate Link for When Product Sourcing Takes a Criminal Turn   When Product Sourcing Takes a Criminal Turn

by: shut1968 This user has validated their user name.

Sat Apr 24 03:04:43 2021

First Sale Doctrine....

They have no right telling people they can't buy and resell ANYTHING within reason.

Period

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This user has validated their user name. by: Marie

Mon Apr 26 02:23:48 2021

A friend of mine is going through quite a bit right now as Amazon shut him down for one small item out of 1000's he was selling.  Their form a a Vero violation.  He has submitted all the paperwork that shows he has the right to sell this item but they say it isn't good enough and has his selling privileges frozen for now.  He is a couple weeks into this.  Money being held and no new sales because of the freeze.

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by: Eagle This user has validated their user name.

Mon Apr 26 02:30:04 2021

They're giving drug dealers a bad name! lol

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by: leavingNY This user has validated their user name.

Mon Apr 26 05:25:43 2021

Many sellers buy wholesale lots at auctions, clearance items at retail stores as well as there are job lot type stores who clear out merchandise from going out of business stores. How is any seller going to prove they are an authorized reseller of these items ?  

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by: TomH This user has validated their user name.

Mon Apr 26 06:28:28 2021

Same thing here with Amazon as Marie reported for one of her friends experience.

I've now had 14 item take downs in the last year.  For new and used items. Same types of items I've been selling on Amazon for ten or so years. Mostly toys and games and puzzles. Trying to get a reversal of such actions is like swatting at snow flakes. I now just move on and don't bother. It appears to be another way Amazon is ensuring the deck is canted, just a little... lol

Perminate Link for When Product Sourcing Takes a Criminal Turn   When Product Sourcing Takes a Criminal Turn

by: fusgeyer This user has validated their user name.

Mon Apr 26 12:29:13 2021

This is why the INFORM act (Federal level, U.S.) and similar state legislation like Arkansas Act 555 (formerly SB 470) are gaining popularity among legislatures and big business.

I believe that the marketplaces should require that you are not a fencing operation. I do not see where providing a resale or tax certificate to a marketplace is overstepping. In most states, you have to have one in order to sell at craft fairs, flea markets/swap meets, and other public sales venues. If you are a legitimate business, then this should not be an issue.

However, if you are one of those individuals who has the time and patience to get stuff for free using coupons, legal discounts, etc and then are making money reselling items you paid taxes on, more power to you. In this case, you will need to use your creativity to show how you are a legitimate reseller. Again, that resale/tax certificate is worth the time and small expense.




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