Chinese Sellers Are Manipulating Amazon - The Truth
If you’ve ever tried searching for items on Amazon not made in China you’ll notice how difficult they make it to buy American, Canadian or Europian. Try finding an electrical kettle not made in China, shoes not made in China or toys not made in China.
You might also notice that well known brands are dissapearing from listings, repalced by non-name brands, almost the entirety from China. Most are sold by companies in China selling directly to you from Amazon. The reason is simple, cut out the middle man. Traditionally, Amazon sellers sourced from the cheapest supplier, worked hard for positive ratings (by shipping quickly, providing great customer support and addressing any issues quickly). Pretty quickly all these sellers realised China was the cheapest and only option to make a healthy margin. But it didn’t take Chinese suppliers to question why they needed the local seller, when all they were doing was taking a cut. As soon as they realized they could ship directly to Amazon FBA centers, the sellers became irrelivant.
So today when you buy a cheap kettle on Amazon, the bulk of the money goes to Chinese suppliers and sellers. The shipping costs are mostly sent to China. The 15% paid to Amazon leaves the USA to pay minimal taxes in Europe. Next to nothing enters the economy locally. Here are a few statistics:
Over 250,000 Chinese Sellers Joined Amazon Last Year
40% of Amazon’s 2 Million Sellers Are Based In China
These sellers have no middle men to pay
So as long as consumers aren’t aware or interested where their products are made, local sellers and suppliers will make it extremely difficult to beat this cycle.
Now, to make things worse, you’ll have to dig to find positivily reviewed products that aren’t Chinese made, now that numerous reports of China gaming the system are surfacing (https://eu.indystar.com/story/news/environment/2020/07/31/brushing-scam-heres-how-seeds-china-might-land-your-mailbox/5542556002/). Customer reviews are the most important factors affecting a customer’s purchase decision on Amazon. So it’s no surprise that it’s also one of the most frequently abused tactics by Chinese sellers. Zach Franklin is a popular non-Chinese Amazon consultant of AMZKungfu is originally from Detroit but now lives in Shenzhen. In his opinion, at least 50% of Chinese sellers are using some form of review strategy against Amazon’s terms of service. And this is like conservative - “To many Chinese Amazon sellers, the question of how to succeed on Amazon has a simple answer: reviews equal sales”.
Chinese seller’s review strategy come in one of two varieties: compensating/reimbursing real customers for leaving a positive review, or making fake orders and leaving positive reviews through fake Amazon accounts. Many Fake review services, normally from China, aggressively solicit Amazon sellers, even from within Amazon’s Seller Central platform. This is a typical email that many sellers receive several times a week.
These fake review companies (almost always based in China) open hundreds or thousands of fake Amazon accounts known as “zombie accounts”. They then emulate customer browsing behavior so as not to rise Amazon’s suspicions. According to one Chinese selling consultant, who wished to remain anonymous, thse fake reviews generally start at $3 to $5 depending on how likely or not these fake reviews are to be picked up by Amazon.
Amazon has taken measures to fight fake reviews by blocking products from receiving any new reviews after they have received a suspicious influx of positive reviews. However, fake reviews continue to be a problem plaguing the platform.
In Shenzhen, the Chinese government has helped to develop numerous industrial parks such as China South City devoted almost entirely to ecommerce sellers. Provincial governments have also gotten onboard like Zhejiang who has developed “Cross-border E-Commerce Experimental Zones” focused on promoting cross-border ecommerce to local manufacturers and sellers.
Another advantage for Chinese sellers is Sales tax and product safety. In June 2018 the US Supreme Court ruled, more or less, that sellers could be held liable for collecting sales tax. The ruling seemed to grant a green light for Chinese sellers to gain a competitive advantage over their American competitors, by having a lot more flexibility in NOT collecting sales tax (the premise being that enforcing tax collection on Chinese and other international sellers is infinitely more difficult than on American sellers).