E178: How Chinese Sellers Are Manipulating Amazon and Outsmarting YouSeptember in Ecom-Crew-Podcast
During our last visit to Montreal to film new course videos, we came upon a new gathering for Amazon sellers called the Orange Hat Summit. Unfortunately, we weren’t able to actually join the summit due to time constraints but we did meet a Chinese seller who was a speaker at the summit. Ours was one of the most brutal conversations I had, and it spawned an article written by Dave, and this podcast episode.
Although we were already familiar with the nefarious acts done by some sellers on Amazon, our conversation gave light to just how heinous some of these strategies are.
We should point out though that these tactics are not exclusive to Chinese sellers, but it is with little doubt that China is often at the forefront of formulating these strategies.
The following strategies are the most commonly used by Chinese sellers:
Opening multiple seller accounts
Some sellers have upwards of 20 accounts, some even under the name of their employees. This pads the risk of Amazon suspension–as one account gets closed, they just set up shop using another one.
Rampant review manipulation
Chinese sellers know that reviews = sales. Some sellers do something as innocent as rewarding buyers for 5-star reviews, while others buy reviews from review farms outright. Worse, however, is how they buy fake negative reviews against their competitors’ products.
Stolen buyer and seller data
This one is the biggie. We’ve heard of Chinese sellers using stolen buyer addresses in America to send them products as part of a fake review campaign, but we had no idea just how huge this strategy has become. Apparently, you can pay some rogue Chinese Amazon employee (or someone who has access to a rogue employee) and request reports on any buyer AND seller. If a seller can find out certain information about a competitor’s product, such as their sales and page view history, it can be extremely valuable.
All these strategies have made the playing field extremely unfair, especially when Amazon doesn’t seem to care at all. Add to this the fact that Chinese sellers don’t have the pressure of sales taxes, don’t have to conform to high safety and quality standards, and are pretty much immune from lawsuits, and the entire Amazon atmosphere looks pretty depressing for the average American seller.
With everything that’s happening, it’s tempting for any seller to try to dip their toes into the realm of black-hat strategies. But we know that a business built on sketchiness will not last long, and when Amazon finally drops the hammer, those who play by the rules will be left standing.
If you want an in-depth detail of these strategies and how Chinese sellers pull it off, make sure to read this blog post written by Dave.
Thanks for tuning in to this episode. Until the next one, happy selling.
Full Audio Transcript
Mike: This is Mike and welcome to episode number 178 of the EcomCrew Podcast. Today I have my trusty partner in crime Dave Bryant back on the show with me. We just got back from Montreal and I don’t want to go — this will go out a couple weeks after that once it finally goes out. But we’re going to be talking about some of the stuff we discovered in a meeting up in Montreal. It just happened to be that there was another Amazon convention going up there. I think it was called Orange Hat. I literally had no idea that it was going on. Unfortunately, it started the day that I left.
If I had known better I would have planned to try to attend this thing because it sounds like there was a lot of information there that would have been really interesting to hear and people to meet as well. But we just happened to be in Montreal at the same time and didn’t plan that very well, didn’t know about it. But one of the guys that was there speaking at the event that I have met also at Global Sources over in Asia, we got together for a cup of coffee and chatted for about an hour. And a lot of the stuff that we’re going to be talking about here in this podcast stemmed from that conversation.
And I don’t know, it was tough to listen to. You’re sitting through this for an hour. There was a lot of things that I already knew were going on. We’ll be talking about that here. You’ll hear Dave and I talk about it. So, it wasn’t like it was a huge surprise. But I think that sometimes when you hear a bunch of things all together kind of all laid out at once, versus you’re going throughout your day, you hear some anecdotes here and there about what’s going on with Chinese sellers. It’s different, right?
And so, we went to put together a podcast and just let people know some of the stuff that’s going on there, kind of pay it forward to let people know what Chinese sellers are doing. This is you can take it for whatever it’s worth. This is not doom and gloom or panic situation. It’s just being aware of some of the other things that are happening in the world and on a platform that a lot of us sell on. And I think in business and in life, it’s really important to be well informed. And from there you can make your own decisions on how you want to use that information in your business.
But that’s pretty much what this podcast is about. So without further ado, let’s hit the intro. And on the other side, that will get Dave Bryant in the house chatting about Chinese sellers, and what they’re doing in 2018 on Amazon.
Mike: This is Mike.
Dave: This is Dave.
Mike: And welcome to this edition of the EcomCrew Podcast. Dave, how’s the going, man?
Dave: The going is well; it’s good to be back in Vancouver after our weekend Montreal.
Mike: Yeah, we’re recording this just a few days after getting back from that trip. Michelle and I actually took two weeks up there, and did a bunch of New England stuff and visited Quebec City as well. So we combined that with a bunch of other stuff. I’m on my quest to get to all 50 states. I have now been to 48 after this trip.
Dave: What’s missing? Iowa I think, isn’t it?
Mike: Yeah, you’re listening. That’s good.
Dave: Yeah. I always wonder how you miss Iowa. You’re right there in the middle of the US and how do you miss Iowa?
Mike: So, there’s flyover states, there’s also like drive through states. So as you’re driving across the country, like on the interstate 10, you go through Alabama and Mississippi and we’re on 40, you go through like Arkansas and 70 is like I forgot what 70 was now. But I mean, however it happened, I just never made it to Iowa.
Dave: Wait, hold on. I have a question. Do you consider states that you’ve got to stop over on through an airport actually visiting the state?
Mike: Absolutely not.
Dave: Okay. All right, you have a legitimate 48 then.
Mike: The minimum I have to do to count it is have a meal in the state. That’s what I’ve — so it’s like stop and eat something at a minimum, but I’ve actually slept in almost all 48 states.
Dave: Wow. That’s quite the accomplishment. So Iowa and what’s the other one?
Mike: North Dakota.
Dave: North Dakota.
Mike: Yeah I’ve been very close. I was up in the northwest part of South Dakota and just never went up there which I kind of regret now.
Dave: Yeah well it’s close to Canada, so one day we’ll take a road trip me and you.
Dave: Yeah, so I think the tradition here is whenever we have something we don’t want to talk about we banter back and forth more because this is one of these topics that it’s brutal. We’re going to be talking about some of the stuff that that’s happening over in China on Amazon right now. And it’s interesting. I don’t want to use the guy’s name but we had a meeting with a Chinese seller in Montreal and that’s kind of what precipitated this podcast to come about. And this was not like a surprise I don’t think to us, but to have someone in a private discussion like just kind of lay out all the things that are happening with Chinese sellers definitely gave me the creepy crawlies, I don’t know about you.
Dave: Yeah, I mean living in China for eight months; it’s kind of something that I was unfortunately fairly well aware of because I’ve talked to enough Chinese sellers to know that they’re very innovative when it comes to different selling strategies in terms of manipulating Amazon. I think it’s important to point out too, that this is not throwing Chinese sellers under the bus. It’s not like they are unethical by any means and Americans or Canadians are on this high totem pole of high ethics. It’s just simply that Chinese sellers for whatever reason are more innovative and are kind of at the forefront of these different manipulative strategies that as we’re going to talk about, they’re doing pretty well.
Mike: Yeah, I mean, I equate this very much like to the early days of Google. So I don’t want to seem like a hypocrite when I’m talking about these guys either. I mean, I did the same types of things. I would buy tons of links and put off white text on a white background and all kinds of stuff like whatever you could do. I think when you’re in one frame of mind of just being scrappy and like there’s money to be made and you’re trying to — you’re working hard and doing anything you can to get to the top not thinking about — as I’ve gotten older, I think more about those repercussions and the type of person I want to be and also just building like a longer term business that isn’t subject to like being torn down overnight.
And I think that that’s the thing that’s probably going to end up hurting them in the long run. I mean, but in the short term, there’s like tons of money to be made and it’s hard to blame them for making a living.
Dave: Yeah, and I think that the kind of the root of all this is that Amazon for the most part either turns a blind eye to it or they just do not have the facilities to crack down on this. And I personally think it’s probably more of the former where they’re turning a blind eye to some of these tactics because they’re searching out hyper growth and they’re not at this point in time really trying to go after sellers who are at the end of the day it’s kind of one shared pot. And if seller A is getting more sales than seller B, well it’s still the same gross sales. So there’s no incentive for Amazon to really crack down on this because it’s the same sales on Amazon no matter what. Whether it’s a malicious seller that’s getting the sales, Amazon doesn’t really care.
Mike: Yeah, I’m going to throw a little rebuttal to that. I think they like it. I think they do care because I think their having more fish in the pond like helps them in several ways. First of all, it helps keep prices down which is good and bad. It’s bad from the perspective of like they actually make less money as a whole because they get 15% of the sale. So if the prices overall drop on Amazon, it does hurt them on one hand, but on the other hand it keeps them competitive and it keeps people buying more which I think is probably the thing that they care more about.
And whenever you create a situation — I always use the Hoover Dam example on the podcast when I’m talking about this stuff where you have people doing this high risk work. And if they fall to their death, there’s another person that’s willing to just jump right up on the ledge. And the more people you have down at the bottom waiting that the better off you are. And I think Amazon also looks at that. Whatever that principle is in business, that also helps them as well.
Dave: Yeah. And it’s something I talked about in the article that I wrote up on EcomCrew is that what has happened is it’s this awesome romance that Amazon and China have going on. Chinese sellers are all over Amazon and they’ve heard all these get rich quick stories and they’re all over it and they want to do it. The Chinese government is thirsty for anything cross border commerce related and Amazon fits that bill. Amazon on the other hand, they want as flat of a supply chain as possible.
And part of getting that is through getting sellers who are closer to the source and the factories. Obviously that would be Chinese sellers themselves and not American and Canadian sellers. So, they’re going hard and aggressively after getting these Chinese sellers. And so this is also romance. And what’s happening is this melting pot of just bad behavior that we’re going to talk about here.
Mike: Yeah. So let’s start to kind of dig into it. I’m like assuming that the conversation I think in Montreal really helped precipitate this. And I think both of us had been pretty aware of all the things that you were saying that had been going on, but we always hear about them in pieces, I think, right? And you’re not like sitting down with someone for an hour, and just having them tell you like verbatim, step by step all the things that are happening. And I was just like, oh my God, this is just, it’s so brutal because I realized I’m playing on such an unlevel playing field.
And I’m not willing to take the same — what I perceived to be risk in my business that they are because they have the ability to let’s just start with the first one which is to create many multiple accounts. And that actually happens more rapid than I ever imagined and there was some information that we talked about both in Montreal and then also it came out at the same time in the Million Dollar Seller forum this week talking about how the average Chinese seller has 20 or more accounts?
Dave: Yeah, I haven’t seen that number thrown around. I do know from experience living in China, every single Chinese seller I know has multiple accounts. Not most of them, not some of them, every single one that I know has multiple accounts. And there’s a couple reasons for it. Number one is that they are bending the rules a little bit more, and so they need to have their risk hedged. And number two it’s just a lot easier to open multiple accounts in China. It’s a lot cheaper. For whatever reasons when you try to open an account in America or Canada, Amazon does a little bit better background checking on making sure that you’re an actual real person.
In China, my understanding is that they don’t have as sophisticated mechanisms to make sure that it’s not one person opening multiple accounts. And even if they do, what Chinese sellers are doing is that they’re having their employees open other accounts for them. It’s under the employee’s name, but it’s under the control of the Chinese company itself.
Mike: Yeah. So I mean, I think my tolerance or my willingness I guess to bend the rules would probably be different. Again, I don’t want to sound hypocritical because I’m always honest about everything. I mean, if I had an opportunity to have 10 seller accounts, and I pushed the envelope a little bit too hard on one of them, and they shut that down, and I could just gracefully switch over to number two, I probably wouldn’t lose as much sleep at night.
Dave: Exactly. And that’s the thing. If you have all your eggs in one basket, you’re going to make sure that basket is built to the highest standards possible. But if you have many baskets, well, you’re okay throwing away one or two. And that’s exactly what’s happening is that because these sellers it doesn’t sound like a big issue to them having multiple accounts. But when you have multiple accounts and they’re secret accounts, Amazon doesn’t know about them. They haven’t gotten permission to open these multiple accounts. It gives them that flexibility to bend the rules and take more risks than they would otherwise.
Mike: Yeah. All right so moving on from multiple accounts, let’s talk about the next one, which is on everyone’s mind these days, it seems to be one of these things that’s making a lot of press, which is just ramp it like review manipulation. And that happens on two sides. That happens on people getting fake reviews on their own products, and also leaving fake reviews on competitors’ products.
So, there were some pretty interesting revelations, at least for me, because I felt like I knew a lot of the ways that people were doing this. And I’ve done a really good job staying away from it because I do feel like the hammer is going to come down. Maybe I just convinced myself of that. Maybe it’s not really going to come down. Who knows. But yeah, talk about some of the things that we kind of uncovered. And I guess maybe you already realized, I didn’t realize it, but it’s pretty gross, in my opinion.
Dave: Yeah. And I think I’ll give a little prelude to that. I was talking to our buddy Zach Franklin. He lives over in Shenzhen. I think we’re going to have him on the podcast in the next few weeks.
Mike: Yeah definitely.
Dave: He’s basically an American who’s a consultant for Chinese sellers in China. And I was asking him, how many Chinese sellers are actually using fake reviews? And he said, at least 50% of all Chinese sellers are using some form of review strategy that’s against Terms of Service. And that 50% that was going to range from people doing incentivized reviews to around 5% of the sellers who are straight up simply buying fake reviews from what he calls zombie accounts.
Mike: Yeah, sorry I didn’t mean — the one thing that I don’t know, just kind of blew me away when we were talking to this gentleman in Montreal, he was talking about the people that — and I forget the exact dollar amount, you’ll probably remember better than I did. But what they do is they use a real address and they ship products to people and people are just like, what the hell is this thing? They don’t even know what’s showing up because — and I forget exactly how he was saying that they pick those particular people. But they’re shipping the products like to trick Amazon.
So it’s not like all going to one address all the time. They’re shipping to real people, to real addresses. And then those people don’t really have any way of returning it or knowing exactly what because like there’s nothing in the box with Amazon. So, talk a little bit more about that because that was crazy to me.
Dave: Yeah. So how it works is that Amazon is pretty sophisticated in making sure that reviews are legitimate, at least they try to be. So what they do is that if you’re ordering a product and sending it to a fake address, Amazon is going to detect that pretty quick. They’re going to realize okay, everything is going to the same post office box, and they’re going to either A, ban those reviews or B, not allow them to be verified. So, what these Chinese sellers are doing is, as Mike mentioned, they’re getting fake addresses and shipping real products through these fake addresses.
How do you get all these fake addresses? Well, this is kind of the big revelation I had talking with this guy in Montreal is that a lot of times what they do is they get an Amazon insider, an employee at Amazon in China basically steal customer information from Amazon, including their phone numbers and their emails. And then they contact these buyers, real people, and they say, hey, do you mind if we use your address and ship some free items there? And of course, who is going to say no to getting free items? And that’s how they’re getting the real addresses and contacting these people is a lot of times simply through stolen information given to them from Amazon employees within China.
Mike: Yeah, I mean I don’t even know what to say. It’s like I thought maybe when I was first hearing, the guy spoke like 90% pretty good, fluent English, which is awesome because I can barely speak English myself. So, that’s my own original language. But I was like, am I hearing you correctly when you’re saying this? This is just insane to me what lengths people are going through. And that wasn’t the end of the stolen data thing. That was — let’s I guess if you want to move on to that now or if you have any more.
Dave: Yeah, just going back to the review thing before we move on. The shocking thing with a fake review is for two things. Number one is that there’s actually a market price for reviews based on how likely they are to get banned. So they go anywhere from about $2 for a review that may or may not get detected by Amazon but it’s a little bit has signals I guess, which may alert Amazon to it being a non credible review, all the way up to $5 for a review that’s going to look very, very legitimate and it’s very unlikely to get detected by Amazon. So there’s this market price for fake reviews on from Chinese sellers. And like I mentioned, they range anywhere from about $2 all the way up to $5 depending on how likely or not they are to get detected.
Mike: Yeah, nice. So again, the more stolen data stuff, which is this is where again, more creepy crawlies because I was just realizing that just like what a disadvantage we might have by not having some of this data. So, let’s talk about some more of that stuff.
Dave: Yeah, so this is the part which really shocked me. The fake reviews I think everybody knows that’s a problem on Amazon. Multiple accounts, most people realize that a lot of people have multiple accounts. But what a lot of people don’t realize and me for sure is that what’s happening in China is that Amazon has a lot of employees in China. And these employees in China have access to the entire Amazon VPN. So they can, even though they’re just in China, they can access different seller reports for any seller no matter where they are in the world. So what they’re doing is they’re leaking information in a few different ways.
Like I mentioned before, they’re actually leaking buyer information to different service providers. So you can buy real customer’s information, including their email and phone number. The other one which is very malicious that they’re leaking, anyone with a seller central account is probably aware business reports within their account where you can go and you can see a listing of all your products, how many sessions there have been for those products, how many times people have bought, and all these other type of very important data.
So, what these Chinese employees are doing though is that they are taking — they have access to everybody’s business reports for every seller in the world. And for a price, they will download you a business report for any seller you want. All you do is you give them the name of the seller that you want, they’ll download that report for you maliciously, of course, you’re stealing it. That report is going to give you all the session data, how many times they’ve sold an item, what their conversion rate is, all these great juicy facts and they’ll sell it to you for anywhere from about $20.
That’s kind of the I guess the wholesale price that the Amazon employees are charging service providers and then these service providers are reselling that for anywhere from about $100 to $200. So they’re stealing business records for your company and reselling them to other people.
Mike: Yeah. And you think about the advantage you gain by having that data versus people that don’t. I mean it’s pretty incredible.
Dave: Yeah, I mean, can you imagine if I can log, if I can see a business report showing me all of your products, how many times I’ve been purchased, what the conversion rate is, all that juicy data that is proprietary to you. That’s proprietary data to your company. I mean, that’s some of the most valuable data you can have. And somebody else is just selling it to your competitors.
Mike: Yeah. And then in addition to that, they also have like keyword ranking reports and conversion reports as well, which you don’t even really get yourself. I mean, I don’t know how to get that as an Amazon seller.
Dave: No, no. And I think that one is important to touch upon because this one — this is not necessarily supplier or competitor dependent, so it’s not necessarily going to screw you over. What this report does, I’m going to talk about here in a second. This report is really going to allow you to kind of optimize for Amazon’s A9 algorithm. So this report that Mike is talking about, it will show you basically, you pick an ASIN.
So, you pick a product and a Chinese employee will download a report for you that shows you A, how many times this ASIN ranked for pretty much every keyword, every search for on Amazon, what the probability when somebody searched for that keyword what the probability was that they went on to add this particular item into their cart, what the probability was that they went on to actually purchase this item and a few other different factors too. But the most important one is basically it shows you relevant to the keyword how many times people added a particular item to the cart and how many times they purchased it. So that gives you a lot of insight into how Amazon’s A9 algorithm works.
Mike: And what do you do then at that point, once you know that data to get the thing to rank for that keyword?
Dave: Well, I mean, number one, you can see obviously, what competitors are ranking for, what products they’re ranking for. So for example, if you have a tactical light flashlight and we see that this particular brand is ranking time and time again for flashlight high lumens, then obviously you can start targeting that keyword whether it’s in your title or your text or just kind of your traditional Amazon SEO tactics. But knowing what keywords are the ones that’s really driving the sales for a brand, you can imagine all the different ways that you can use that to your advantage.
Mike: Yeah definitely. I mean in fact we’re actually about to launch a tactical flashlight, and this is a part of this blog post. I’m not sure why you picked this or how you got this as an example, but there’s data here that I can use for my launch. I don’t know if this was like a sample report or something that was out there. But that’s actually kind of funny that there’s stuff here that I’ve never thought of. Like I’m looking through — you actually literally mentioned one, flashlights high lumen. I would never have thought that’s something that someone searches for. So now I will definitely add that keyword to our flashlight listing when we launch it here in a couple months which is — it’s crazy.
I mean, I don’t know. It’s again; to me it’s disheartening knowing that this information is like floating around out there. And it’s one thing to play in a level playing field. But when you’re playing in a non level playing field, and the stakes are as high as they are, it’s definitely a little a little disconcerting.
Dave: Yeah, absolutely. And the problem with these reports is that Amazon, you can argue on behalf of Amazon that it’s actually in their favor for these reports to be leaked, because what’s going to happen now, you with your tactical flashlight, you’re going to optimize your listing better and hopefully make a better listing and it’s going to increase conversion rates, and hopefully the sheer volume that’s going through Amazon, it’s going to get them more sales of tactical flashlights, hopefully.
So, it’s in their interest to have this information leaked. The problem is, is that not everybody has this information, and therefore whoever does have it has an upper hand. They’re not creating necessarily the best flashlights. They’re simply getting access to stolen information from Amazon. They’re better at getting the stolen information than you are producing a flashlight.
Mike: Yeah, it’s completely crazy. All right so moving on what’s the next revelation here?
Dave: Well, I think that’s kind of it for revelations, I mean the amount of stolen information that goes through Amazon. On the blog article if you go over to EcomCrew.com, you can see the article right now summarizing some of the different reports that you get. They can basically these insider Chinese employees are going to get access to pretty much any report that you have access to you for your private account, for any other seller account that you want. So, that I think is kind of the biggest revelation here, this amount of insider information that’s being flown back and forth.
Aside from that though, I think it’s just the kind of things that we all are aware of that number one, Amazon Chinese sellers particularly they’re a little bit more immune from sales tax and that scrutiny that’s going on right now especially with the Wayfair case. So, Chinese sellers are protected quite a bit by virtue of the fact that it’s a lot harder to seize a Chinese company’s assets if the IRS comes knocking than it is for an American companies.
Mike: I would say like there — I would be stronger with this. I would say completely immune and impossible to see. It’s like I mean what are they going to do? I mean what [inaudible 00:24:19] what is a state government going to do because it’s not a federal thing, it would be at least for sales tax like, what is the state of — like let’s just say that most powerful state California, what are they going to do? I mean they might be able to get Amazon to shut down the seller’s account possibly would be like the worst case scenario, but then they just open up another seller account.
So I mean, they’re not going to be able to force collection or compliance or franchise tax bond or anything like that. And when the United States government or a state government comes knocking on China’s door to do something about it, they’re going to be like flipping them a bird.
Dave: Yeah, I mean, it’s totally unfair playing ground, especially in the light of this whole Wayfair case that happened in June this year. Chinese sellers have a little bit more protection there, and the same thing with product safety. I don’t think Chinese sellers are necessarily putting out unsafe products no more than any other seller. But again, they’re protected from product liability claims, because let’s pretend somebody uses your flashlight and I don’t know they trip and fall on it and they try to sue you an American company, you have a lot easier to seize assets and you have to reply to that basically that lawyer’s letter demanding payment.
Chinese seller, they’re fairly immune, what are you going to do? Are you really going to sue a Chinese company for your broken leg? Probably not because what are the chances that A, you’re ever going to get them in court and B, that you can actually ever recover any money from them. And so what happens is there’s less of an impetus to comply with different product safety standards, have liability insurance, all these things that domestic sellers have to do.
Mike: Yeah, I mean not having to even carry liability insurance is another like massive advantage. Our liability insurance is now mid five figures. It’s ridiculous. It went up significantly because we added baby stuff to it, which I’m still questioning in my mind whether, that was a good idea or not. But I mean, and we’ve already had a couple of run-ins where people have threatened to sue us. Luckily, we’ve been kind of become unscathed so far with that. I was talking to our lawyer the first time one of these liability claims came up and she’s like, man, you’ve sold like $30 million of the stuff to this point total. It’s a miracle that you haven’t been sued by now.
This is just something that in the United States as a part of cost of doing business like this is going to happen. She actually — there was a number I forget, I don’t want to say because I’ve completely forgotten now. But it was I think it was in the $5,000 range. She’s like, if the guy is asking for $5,000 or less, you give it to them basically. You have them sign a piece of paper, but they can’t do anything moving forward but you give it to them. If it’s more than that you tell them to sue you basically and hope that it doesn’t go any further than that. And luckily it didn’t at that point for us, but this guy had made up a completely fake, I mean it was clearly BS.
I mean he had said that he had burned himself on one of our hot and cold packs, and said that he had put in the microwave for like 90 seconds, two minutes whatever it was, and the he had shown pictures of these burns and I mean it was really gross. That doesn’t even seem possible. First of all, we had all these safety warnings on our package and later on went on to explain, but that doesn’t matter. It doesn’t matter what you have written on your — I mean, you obviously want to have that there. It’s prudent to do and it will help. But at the end of the day, it won’t stop someone from suing you.
And I put the thing in the microwave for two minutes and put a thermometer, a medical thermometer in it and it was like 106 degrees or something which is nowhere near enough to cause any type of burn. And it was obvious that this was all BS. But again, it doesn’t stop somebody from — if the guy can find one of these unscrupulous lawyers, it won’t stop them from hustling you. And I’ve been through it in the online poker space. We had a trademark troll come after us that I mean it ended up being six figures to just to fight just to be right which is not – so I mean not having to worry about that aspect is another level.
And like you said, I don’t think that — I had to give these guys credit where credit is due. I don’t think that there’s any situation or I shouldn’t say any situation, for the most part, I don’t see it at least where they’re purposefully putting out defective or poor quality products because I don’t think that that is good business and they know that. But you can still be one peg or two pegs down from where other sellers that are US based might want to be from a safety and compliance situation because they have to worry about being sued, and you want to take it to another level of safety.
Dave: Yeah, and I think all that Amazon would have to do, they actually have a requirement that you need to have a million dollars in liability insurance to actually sell on Amazon. I’ve never known anybody that’s had that checked by Amazon.
Dave: So if you want to sell to Wal-Mart, they check that. That’s one of the first things that your vendor manager is going to check. It would take nothing for Amazon to make that a requirement to actually prove that you have that liability insurance. Again, it’s Amazon doesn’t care. They’re not going to be sued. In fact there’s been a lot of lawsuits against Amazon in recent past year or two where courts have upheld, yeah Amazon, you’re not liable for any unsafe products that your sellers are selling.
Dave: So again, they have no reason to make a requirement for you actually to prove your liability insurance.
Mike: Amazon has a lot more money in their lawyer testing than you do.
Dave: Well yeah.
Mike: All right, so I mean, we’re kind of getting to the end of the — we always run over, we always run over on these things. But are there any other last minute things here we want to talk about before signing off for this lovely episode?
Dave: No, I think one disclaimer that we should make is that Chinese sellers overall, I mean, they’re doing this simply because they can. A lot of sellers in China simply just want to build a real defensible brand, just like me, just like you Mike, just like any of our listeners. The only reason that they’re doing this is simply that Amazon is letting them flex their muscles a little bit and bend the rules. And that’s part of the reason why this is happening. It’s not necessarily that Chinese sellers are these bad, evil businesses. They just want real businesses like me and you. But again, Amazon just gives them a little bit of rope and they’re running with it.
Mike: Yeah, like I said earlier, I definitely don’t look at them as the bad evil kind of thing. I mean, I definitely lived 20 something years of my life like with that mindset of just like I’m going to go make money. And it wasn’t like — I don’t think they’re doing it to — they’re not hurting people or doing anything that’s like immoral or anything like that. I mean it’s like a game right, like you got an opportunity to get an edge or whatever, and it’s all a risk balancing thing in business and life. And they’re playing a different game, or they’re playing on a different set of rules.
So, that’s the thing that — so I don’t blame them. I mean it almost makes me want to move to China and set up a Chinese company and play under those same rules. I’m definitely not going to do that, but that’s the thing that’s frustrating. And I don’t even know — I hope the preferred outcome is here because then you have to also look at Amazon’s point of view and what would you do if you were Amazon and not be hypocritical there as well? And I get where this is good for Amazon as well. I think it’s big corporate greed at that level. And I think that’s one of the things that’s wrong with a lot of things these days. But besides that, I think this is just the world that we live in. There’s not much we can really do about it.
Dave: Yeah, yeah, I agree. And Amazon also seems to a lot of times take the mindset that they don’t really deal with problems until there’s a negative — I hate to use a swear word, but shit storm of negative PR that hits them, and then they actually take measures to correct it.
Mike: Yeah, I definitely think that that will be the impetus for change without question. If their public image gets tainted by some of the stuff, they will quickly make a change and that happened like a couple of times. I mean, that’s why the whole review thing happened in 2016. I mean, there was a couple of really prominent articles that pushed things in a different direction. And if something happens where people become more aware of some of the things that China is doing or the sellers are doing, or things that are hurting the consumer, then I think that something will happen really quickly. And until then, it will probably continue to go on the way that it is.
Dave: Well it’ll probably take EcomCrew to push Amazon into the right.
Mike: Yeah our massive influence.
Mike: Cool man. Well, thank you for coming and doing this. I really appreciate it. It was awesome seeing you. I wish we got to see each other in person more often.
Dave: Yeah, well the next one is on you. You’re coming up north.
Mike: Yeah, and then…
Dave: I guess you did just come north.
Mike: I did.
Dave: Coming north and…
Mike: Just north and north instead of northeast.
Dave: I guess.
Mike: But yeah, it was definitely cool and later today we’re recording one of our behind the scenes webinars for EcomCrew Premium. For those of you who haven’t heard about that, once a month Dave and I do a behind the scenes webinar of all the things that we’re doing, products we’re launching, landing pages that we’re building, Facebook ads that we’ve been running and a bunch of other really cool stuff.
So, this is a — we’re recording this on a Wednesday. This will go out on a different day. But later today we’re going to be doing that which has always been a lot of fun. So, go over to EcomCrew.com/premium to check that out. And until next time everyone, we’ll just say, happy selling and we’ll talk to you then.
Michael started his first business when he was 18 and is a serial entrepreneur. He got his start in the online world way back in 2004 as an affiliate marketer. From there he grew as an SEO expert and has transitioned into ecommerce, running several sites that bring in a total of 7-figures of revenue each year.