Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Mon May 25 2015 13:25:15

eBay and Amazon Sellers Feel Mistreated by Chain Stores

By: Ina Steiner

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Small businesses say they feel mistreated by chainstores including Target, Kohl's, and Sephora. That's because the chainstores have been prohibiting resellers from making purchases on their websites and in their brick-and-mortar stores. 

It's not just online sellers who are upset - we heard from one reader who had been using such purchases to help stock his brick-and-mortar retail store.

On Thursday, we noted that Target was the latest retailer to crack down on eBay and Amazon sellers who use retail stores to source inventory in what's known as retail arbitrage.

Target responded to our inquiry after the article was published, explaining that while it had an existing policy allowing it to limit quantities on orders, it had recently established a new policy that gave it the right to prohibit purchases to resellers. (See today's Newsflash for details.)

Kohl's had similarly cracked down on resellers as we reported in March.

We've received letters from sellers who are upset at these new policies. One reader said he had shopped with Target for over 10 years. "They have provided my small variety store with a number of different items and my last statement with them is for more than five-thousand dollars," he said.

"The "excuse" I have read for Target concerning resellers and this new policy does not seem to make sense. If they offered a "loss leader" that was so much of a concern then why not put a LIMIT on units sold! Why turn away every reseller's business if you suffered a loss from a "loss leader" when it would have been so easy to control that situation!"

He pointed out that stores such as Walmart, Sam's Club, Costco, BJ Wholesale welcome "mom & pop" traffic. "Small businesses, restaurant owners,...they all visit these stores for bulk purchases and many use their resale numbers."

Another reader said she was cut-off from purchasing from Sephora.com last year after having spent thousands of dollars both to resell on eBay, Amazon, and her own website, and for her own personal use. 

"Sephora did not have any limits placed on their pages, faq's, products or terms of use page until the day I received the letter," she said. "In a further letter they did tell me that I could shop in their stores but not online."

She said she received an email from Sephora last year, and upon inquiring, received a response that said, "We regret that we are no longer able to accept any orders from you at Sephora.com based on our review of your account. We reserve the right to cancel any accounts or refuse to ship to certain addresses due to suspected fraud, unauthorized or illegal activity. We take these measures to protect our customers as well as ourselves from fraud or other unauthorized or illegal activity." The letter referred her to the company's Terms of Use.

In its Terms under Product Information, Sephora states:

The products available on the Sites and the Interactive Services, including any samples Sephora may provide to you, are for your personal use only. You may not sell or resell any products you purchase or otherwise receive from Sephora. Sephora reserves the right, with or without notice, to cancel or reduce the quantity of any order to be filled or products to be provided to you that may result in a violation of these Terms of Use, as determined by Sephora in its sole discretion.

Given the popularity of our products, and except where prohibited by law, Sephora may limit the number available for purchase, so that as many clients as possible may enjoy our merchandise. Specifically, and due to high demand, clients may be limited to the purchase of 3 Fresh, 3 Chanel, and 3 Make Up For Ever branded items per sku per transaction.

The retailer cited the section called Fraud Protection Program in its email to her, which she found upsetting. "I should have hired an attorney and may still as I feel that I was slandered," she said. "For goodness sakes, I was not selling drugs or anything else that was illegal but that is the way they made it sound. I did nothing wrong."

How should retailers strike the right balance when it comes to resellers? Should they stick to limiting the number of items on "loss leaders" or special promotional items as a way to ensure all customers have a shot at purchasing the items? 

Should they prohibit resellers from using scanners to check prices in a disruptive manner (see the video of a reseller filming the shelves of Kohl's).

A reader explained in a recent blog post: "I think part of the problem is some sellers buy at extreme discount and then expect the retailer to accept the return when the eBay seller can't sell it. Several store managers here know I buy for eBay (some even call me when they're about to do a major markdown), but they also know I don't return what I can't sell." 

So should retailers limit returns on items purchased by resellers?

Or should retail chainstores simply ban all resellers from their stores and websites, which seems to be the current trend?




Comments (83) | Leave Comment | Permalink

Readers Comments

Perminate Link for eBay and Amazon Sellers Feel Mistreated by Chain Stores   eBay and Amazon Sellers Feel Mistreated by Chain Stores

by: Tinker Belle This user has validated their user name.

Mon May 25 13:39:23 2015

This is the US of A, and nobody is allowed to prevent you from selling or giving away or whatever you want, items you legally purchase.

As Sephora said "Sephora reserves the right, with or without notice, to cancel or reduce the quantity of any order to be filled or products to be provided to you ..." this is the answer for them. Not telling you that you "can't" resell something.  

Perminate Link for eBay and Amazon Sellers Feel Mistreated by Chain Stores   eBay and Amazon Sellers Feel Mistreated by Chain Stores

by: sasikat9 This user has validated their user name.

Mon May 25 14:01:52 2015

Why are these people buying from retailers to resell on Ebay....

I would think distributors would be even a better buy. We buy from a distributor and get just about the same discount that your retailer gets on items.

But maybe these sellers don't have a resale license ( sales tax license in some states ).


I find it hard to feel sorry for them as we jumped through all the hoops and loops in order to buy at a discount.

Perminate Link for eBay and Amazon Sellers Feel Mistreated by Chain Stores   eBay and Amazon Sellers Feel Mistreated by Chain Stores

by: JordanMalik.com This user has validated their user name.
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Mon May 25 14:49:47 2015

There are plenty of solutions for the seller here.

First, there are plenty of stores (online and brick and mortar) where one can source.

If there are quantity limits for a store chain, the Amazon/eBay seller should simply buy lesser quantities. Or send a friend/friends.

The enforcement of these restrictions, by the way (just like a lot of other store policies) are generally short-lived.

Bottom line: if one door closes, go open another.

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This user has validated their user name. by: Tula

Mon May 25 15:28:55 2015

I can understand how the stores are feeling about this. If a reseller comes in and buys out a popular offering, it leaves nothing for other customers. Disappointed customers will go elsewhere to shop, which is exactly opposite of what the stores are trying to do with sales and loss leaders. They should limit how many can be purchased at one time and not allow resale licenses to be used. Those resellers who later try to return items give a bad name to those who don't. Like anything else, all it takes is a few bad apples to spoil it for the rest. I can't blame them for booting that sort of reseller. Can't say I feel sorry for those who boast and post videos of what they're doing, either. Giving away your sourcing secrets is just plain dumb and you can now see the consequences.

Perminate Link for eBay and Amazon Sellers Feel Mistreated by Chain Stores   eBay and Amazon Sellers Feel Mistreated by Chain Stores

This user has validated their user name. by: Rexford

Mon May 25 15:56:46 2015

I for one do not understand it.  A store opens for business to sell.  A buyer comes into buy.  Why is it any of the establishments' business what a buyer does with the item after the sale.

I can see it now though, since businesses in the USA own our politicians, look for them to mobilize and buy our politicians to change the laws in their favor.

How do these stores track this?  Any buyer can walk in with cash and purchase items. If a buyer finds a great deal on an item and wants to buy a lot of that item to give as gifts, will that buyer be blacklisted?

I do understand though why, if a buyer comes in and buys a ton of merchandise to sell elsewhere, and then tries to return the merchandise when it doesn't sell, a business would take issue.  I myself would be upset by this.

It sounds like these businesses are trying to micro-manage their buyers like some ecommerce sites try to micro-manage their sellers.  :)



Perminate Link for eBay and Amazon Sellers Feel Mistreated by Chain Stores   eBay and Amazon Sellers Feel Mistreated by Chain Stores

by: Sellerofall This user has validated their user name.

Mon May 25 16:17:18 2015

@sasikat9 This is in reference to basically when Target puts out really limited releases of clothing from expensive designers that make an "affordable" line just for target randomly.  They sell out in seconds and use to be resold for double the price on eBay until everyone caught on and tried doing it.  You definately cant get these exclusive lines from a distributor and they are not talking about a standard Nike shirt or Frozen toy that every store carries

Perminate Link for eBay and Amazon Sellers Feel Mistreated by Chain Stores   eBay and Amazon Sellers Feel Mistreated by Chain Stores

by: sasikat9 This user has validated their user name.

Mon May 25 16:42:03 2015

@sellerofall.

I still don't understand the mind set. I've bought more than one limited edition, short supply, one time offering from my distributors over the past few years to sell on ebay, amazon, ecrater etc.

If I was a B&M store I would be disgusted if someone came in and bought all my marked down loss leaders and then BROADCASTED IT, and about all the money they are making.

Probably why most retailers put limits on things.

When one Broadcasts and rubs the deal into the B&M's nose I don't blame them for putting a stop to it. I would think anyone with half a brain would have gone into the store and bought just as much as they wanted, paid for it. walked out and kept their mouths shut...

No these nuts have to google it and broadcast it to anyone within earshot.  They got what the deserved.

Perminate Link for eBay and Amazon Sellers Feel Mistreated by Chain Stores   eBay and Amazon Sellers Feel Mistreated by Chain Stores

This user has validated their user name. by: iheartjacksparrow

Mon May 25 17:14:54 2015

During the last holiday season, Disneyland had signs everywhere that there was a limit of five per person of any Frozen item in order to cut down on people buying out a product line and listing them all on eBay.

I definitely think that retailers should refuse to take returns if it appears those items were initially purchased for the sole purpose of reselling them. If someone buys ten widgets, and two months later they want to return four of them, the return should be refused.    

Perminate Link for eBay and Amazon Sellers Feel Mistreated by Chain Stores   eBay and Amazon Sellers Feel Mistreated by Chain Stores

by: aim04744 This user has validated their user name.

Mon May 25 18:18:21 2015

You can limit my purchases but you CAN NOT tell me what I can or can not do with them after I purchase them. First Sale Doctrine applies. Once I purchase something in your store I own it. Mine. I can rip it into tiny shreds or resell it at will. If I am paying the price you are asking for it,then  you got what you wanted. and you can not take the return, fine by me too. I wont shop at stores who are heavy handed. (disclaimer* I did not participate in the LP Target buy out, nor do I purchase items on clearance and return them if they dont sell.)

Perminate Link for eBay and Amazon Sellers Feel Mistreated by Chain Stores   eBay and Amazon Sellers Feel Mistreated by Chain Stores

This user has validated their user name. by: Tula

Mon May 25 19:52:42 2015

I agree that stores have no business dictating what you do with an item you purchase. First Sale doctrine rules that. Limiting the number of items one can purchase is probably the best way to curb the abuse. Many stores are already cracking down on "serial returners", since some of them are actually returning stolen merchandise (a friend who works in a large store told me about this) or clothing that they treated as a rental.

It's too bad that those twits who just want their faces on Youtube have to ruin things for everyone. People have been doing retail arbitrage for years, but were smart enough not to abuse the system that allowed them to make some money. Thanks to the braggarts, there are now floods of ham-fisted amateurs trying to cash in, kind of like what happened after all those reality shows about antiques, pawn shops, and storage auctions came along. There's always that group who chases the newest way to a fast buck and doesn't care who they step on in the process. Some stores are going too far in their reactions, but I really can't blame them for not wanting to supply those who want to take their customers away.

Perminate Link for eBay and Amazon Sellers Feel Mistreated by Chain Stores   eBay and Amazon Sellers Feel Mistreated by Chain Stores

by: Ebay Seller-Ebay Buyer This user has validated their user name.

Mon May 25 20:42:22 2015

Surprised any business would reject large orders.  Makes more sense to make more of your product than to reject large orders

Perminate Link for eBay and Amazon Sellers Feel Mistreated by Chain Stores   eBay and Amazon Sellers Feel Mistreated by Chain Stores

by: gizmo This user has validated their user name.

Mon May 25 21:28:46 2015

Hypo> You buy 100 for 50 each. They sell for 85 , you sell for 84. They suffer sales. No brainer.

On the Tax since , I buy storage auction, from time to time. Resale license comes into play. Any large purchases , for purpose of resale comes with tax duty. Purchase tax, as well as sales.

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by: gresham95 This user has validated their user name.

Tue May 26 00:32:51 2015

I do get where these stores are coming from. They want people to come in for a loss leader, buy it, and shop some more. If it isn't there, they likely are walking out of the store angry, and may not even be back. If you limit purchases (i.e. one per item for loss leaders) then wouldn't that solve the problem?) Another solution is to not allow returns on markdowns, or give a very narrow return window. I get that stores want to make things easy for customers.  

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This user has validated their user name. by: askalice59

Tue May 26 02:08:11 2015

The average American only has X amount of dollars to spend on anything and if they are spending it on resale items on eBay, they aren't going out to the the corporate stores to buy 'new' items. Target and most any retail department store depends on impulse buys. They need to drag people past things to get them to buy. Internet sales have hurt the malls and they are doing what they can to stop resellers. China does not profit on the resale of anything. Controlling our eBay sales reach with a 'special' cassini search engine was just the beginning of the end for small sellers. Now they are going to control our sources of inventory.

Perminate Link for eBay and Amazon Sellers Feel Mistreated by Chain Stores   eBay and Amazon Sellers Feel Mistreated by Chain Stores

by: Moonwishes This user has validated their user name.
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Tue May 26 02:18:27 2015

I do not comprehend the cry-babies that are being cut off from buying huge quantities of retail merchandise from retail stores. Those stores never agreed to be sources of inventory for stores at all.

Why all the problems now? Pure piggy greed. If these resellers had bought reasonable amounts of goods, they would have never been noticed, but by buying or attempting to buy huge quantities they got noticed. And they are taking away inventory that the stores need for loss leaders or the sales that stores have to draw buyers into their stores.

Perminate Link for eBay and Amazon Sellers Feel Mistreated by Chain Stores   eBay and Amazon Sellers Feel Mistreated by Chain Stores

This user has validated their user name. by: Rexford

Tue May 26 03:09:49 2015

As I read back through all of the postings I think that since no one buying what a store is selling is doing anything illegal, then the simple solution for the B&M stores is to place limits on certain items that they do not wish to be resold as several folks have mentioned above.

But again, it is really none of a store's business what one does with the item after the sale.

The morning of the big Lilly Pulitzer fiasco at Target, I actually had a co-worker call me wanting to know if I wanted to list the Lilly items that she had just purchased and take a cut (she does not sell on eBay).  I said no thank you.

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by: comet This user has validated their user name.

Tue May 26 03:19:21 2015

I have bought small quantities of good deals to resell on ebay--nothing like what we saw with the LP stuff recently tho!!!--and I would not expect the store to take back what I might not be able to sell.  I have probably also bought a limited number of things from other sellers on short supply stuff we cannot find deep in the country.

I do feel that these stores--TARGET I am looking at you!!!---are creating some of this as "hype"  for themselves.  First off--they just CLOSED all=-=ALL--Target Canada stores--so WHERE are the former shoppers of Target in Canada going to GET stuff they might want?  Several areas of the country don't even HAVE Targets--Vermont is one--whereas I can think of about ten starting 28 miles from me--

Are Target deprived buyers from Canada suppossed to get in their cars and DRIVE hundreds of miles to buy--what exactly? But---Target says--nope;  thou shalt NOT buy brightly printed frocks from Evil Ebay.

So-==-where DO they get off claiming that they are abused?  Most of these items were heavily promo'ed;  they were in CERTAIN stores or only some stores had certain items in the promo--so who made this problem?

They did not just keep this all a secret and put the stuff out on the racks some randon Tuesday.

Walmart used to offer --and may still---to order whatever quantity of items you might want --I know my mother used this for a particular container she was buying for HER small business and was constantly on the prowl at local WM's to find it--and then she would buy all they had.  One day one of the workers noticed this and asked her what she was using them for--and how they kept not being able to supply other customers with this item--and he offered to order however many she wanted and because she was in the same plaza he even delivered them!   They knew she was selling them to go with a particular set up--she sold beads and jewelry items--and they were FINE with this.  One hand washed the other.

I don't really "get" what the whining is about--Target created an artificial shortfall and then promoted it--they have only themselves to blame.

As for Sephora etc---the "crime" here is NOT buying the stuff--or even re-selling the stuff---it is that sadly the re-seller was --in Sephora's eyes--attempting to take THEIR profits and customer base AWAY.  Is this true?  Who knows--again;  there is not a Sephora on every corner--and I don't know if they do mail order.  

Some business' welcome this sort of stuff--we have a local place that sells to the public two days a year and they are--and have been for 35 YEARS--happy to have you buy and resell.  Do they know I do this?  Hell yes--and they are happy to see me!

The only places I have found that get hysterical--and this IS funny--are THRIFT STORES.  For some reason they imagine that we are turning tons of profit AND stopping the next peron from buying whatever widget is on the rack or shelf.  One in my town actually kicked a local consignment store owner OUT after some one bought an item at one place;  decided it was not for her and re-donated it to the OHTER shop.  Did the OWNER of the consign do this?  Nope!  But--the other place took offense.  Do I still shop and re-sell from there?  Yes--but I also do not BROADCAST this!

You won't tell now, will you?  

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by: Surplus This user has validated their user name.

Tue May 26 07:34:47 2015

Wow the attitudes here are off the charts and explain alot of the problem buyers on ebay.  Lets see; Kohls, Target, who ever are in the business of RETAIL sales, you want to come buy large quantities of product from them to sell at RETAIL in YOUR store....Does anybody see a potential competitor here?  Why should any retailer knowingly sell to a competitor on a regular basis?  This doesn't seem like good business and its not....So Target and others are attempting to cutoff these buyers and rightly so.  Have I ever sold parts on a one time sale to a competitor?  sure when they were in a jam but not on a regular basis or in large quantities.  If you want to sell retail you have to buy wholesale.  Buying wholesale comes with a price discount and increased risk for the retailer as generally product is not returnable to the wholesaler as this is how business works.  Seems to me the whiners here want it both ways they want to make a profit with zero risk so they can return unsold product if they guessed wrong.  Life or capitalism in this case doesn't work that way.  No risk should equal no reward.....Nuff said

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by: Chicago48 This user has validated their user name.

Tue May 26 07:37:45 2015

As everybody stated, this is the USA and if these retailers were concerned they would put a limit on purchase.  In fact, if you look at retail ads and coupon ads, there is a limit to purchase.
However, I don't know how someone can buy from Sephora.com and resell at a profit unless they are buying "buy 1 get 1 free".  Sephora doesn't discount too deeply, normally 50%.  Same for the other retailers. How can someone go to sephora.com, buy the discounted item and pay for shipping, resell it and make a profit?  They would have to buy gobs of beauty products.

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by: Chicago48 This user has validated their user name.

Tue May 26 07:40:31 2015

I know at my local dollar store there are immigrants to come in and load up on their carts with multiples of stuff from toilet paper to soap, to you name it and they are restocking their shelves.  You just know it.  Now buying from the dollar store to resell makes sense for a small mom& pop store.  In fact, the dollar store has a website that encourages bulk buying.

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