Sellers should avoid flipping heavily discounted items
Internet deal sites let users buy heavily discounted products on Amazon. That’s why new third-party sellers embrace these sites. It’s cheap inventory to get started. What could go wrong?
Unfortunately, this is a very high-risk strategy it’s best to avoid.
Why these deal sites exist
Deal sites and rebate sites are not for the convenience or happiness
of the Amazon customer. These sites exist to help private-label sellers
launch their products on Amazon. They are also used to increase Best
Seller Rank (BSR) or gain product reviews.
There is an unspoken agreement between these sellers and the deal
site customers. Most of the customers on deal sites understand that a
product review is expected in return for the steep discount. When sales
are made and reviews posted, a product’s Best Seller Rank rises. This,
in turn, helps the product pop up higher in organic search results.
In most cases, the sellers using these deal sites are offering
significant discounts – so much that they are violating Amazon policies
against Platform Manipulation. As a result of these discounts, the
sellers are losing money on sales made via the discount sites. In
return, they hope to drive more buyers to their products.
What makes deal-buying dangerous
Third-party sellers purchase these deals and then flip them on their own Amazon accounts. But this is a risky strategy:
Amazon does not always accept invoices from Amazon-to-Amazon flips that involve third-party sellers.
Private-label sellers can easily file intellectual property
complaints against other sellers who pop up on their listings –
especially if their distribution is Amazon-only.
The private-label sellers are not going to remove their intellectual
property complaints, once filed against you. This makes it particularly
difficult to get the ASIN or account reinstated – whichever is the case.
What to do instead
There are lots of places to source products. Yes, they are more
challenging than deal sites, retail arbitrage and online arbitrage. But
they can help you develop a sustainable business:
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