Amazon destroys $1.5m of sellers inventory – now homeless • Hacker News Board

Re: Amazon destroys $1.5m of sellers inventory – now homeless

#41

Post by ethanwillis » Wed, Oct 28, 2020, 4:52 AM UTC

gulfie wrote: post #31

ethanwillis wrote: post #9

The merchants must navigate a largely automated, guilty-until-proven-innocent process in which Amazon serves as judge and jury. Their emails and calls can go unanswered, or Amazon's replies are incomprehensible, making sellers suspect they're at the mercy of algorithms with little human oversight. This is something our modern society was and is not ready for. Bureaucracy and the bureaucrats that administered it is a…

This is _exactly_ the situation that this society came up with a new agreement to avoid. E.g. Presumption of innocence, and Habeas corpus to mention two.

I completely agree. I think the only difference is that we were under the assumption we would be dealing with 1. Governments 2. People

Re: Amazon destroys $1.5m of sellers inventory – now homeless

#42

Post by Johnny555 » Wed, Oct 28, 2020, 4:55 AM UTC

bawolff wrote: post #37

Johnny555 wrote: post #5

Earlier quoted context omitted.

Is there any insurance that would pay for merchandise that Amazon destroyed because they determined that it's fake? Why would the insurance company take his side when they could just side with Amazon and save $1.5M? He can produce invoices that show he bought $1.5M of legit merchandise, but how can he prove that what he sent to Amazon was not fake?

Why would insurance ever side with a person making a claim? It would be more cost effective to always deny claims regardless of legitimacy Answer: Because contracts and if the insurer breaches them courts get involved and penalties get handed out.

"Insured claims that they shipped $1.5M of merchandise to Amazon. Amazon claimed merchandise was counterfeit and destroyed merchandise after given the insured multiple attempts to retrieve merchandise which were not acted on. In the absence of any evidence that the now destroyed goods were legitimate, we are denying compensation for this claim."

He, of course, can try to sue his insurance company to pay the claim (happens all the time), but it's expensive and he's not guaranteed to win.

Re: Amazon destroys $1.5m of sellers inventory – now homeless

#43

Post by shajznnckfke » Wed, Oct 28, 2020, 5:01 AM UTC

lotsofpulp wrote: post #26

shajznnckfke wrote: post #16

There are a lot of complaints about allegedly fake merchandise on Amazon and people asking for a crackdown. This is what the other side of that story looks like. The old solution of Amazon mostly ignoring the fakes and just compensating people who complain avoids this scenario.

>The old solution of Amazon mostly ignoring the fakes and just compensating people who complain avoids this scenario. Being a proper retailer and sourcing goods from reputable sources, performing quality control, and then reselling them to the public without the commingling nonsense also avoids this scenario.

What does comingling have to do with it? Apparently Amazon was able to destroy this seller’s merchandise specifically, so it doesn’t sound like there was a problem identifying it among commingled inventory. I’m getting the impression from the comments here that a lot of people just have an axe to grind about commingling even if there’s no clear connection to the issue at hand (people do seem to bring it up on all sorts of unrelated stories about Amazon).

Re: Amazon destroys $1.5m of sellers inventory – now homeless

#44

Post by Areading314 » Wed, Oct 28, 2020, 5:02 AM UTC

ethanwillis wrote: post #9

The merchants must navigate a largely automated, guilty-until-proven-innocent process in which Amazon serves as judge and jury. Their emails and calls can go unanswered, or Amazon's replies are incomprehensible, making sellers suspect they're at the mercy of algorithms with little human oversight. This is something our modern society was and is not ready for. Bureaucracy and the bureaucrats that administered it is a…

The problem is not the automation, the problem is that a single authority has a complete monopoly on certain aspects of the e-commerce market. Full credit to Bezos and Amazon for their incredible execution in achieving this. However, monopolies are an example of market failure, and in this case, also an example of an authority able to act as judge + jury where the affected parties have no realistic recourse, while being accountable to no-one. This is why we need government to intervene and ensure competition is restored on both the buyer + seller sides in e-commerce.

Re: Amazon destroys $1.5m of sellers inventory – now homeless

#45

Post by bawolff » Wed, Oct 28, 2020, 5:02 AM UTC

Johnny555 wrote: post #42

bawolff wrote: post #37

Earlier quoted context omitted.

Why would insurance ever side with a person making a claim? It would be more cost effective to always deny claims regardless of legitimacy Answer: Because contracts and if the insurer breaches them courts get involved and penalties get handed out.

"Insured claims that they shipped $1.5M of merchandise to Amazon. Amazon claimed merchandise was counterfeit and destroyed merchandise after given the insured multiple attempts to retrieve merchandise which were not acted on. In the absence of any evidence that the now destroyed goods were legitimate, we are denying compensation for this claim." He, of course, can try to sue his insurance company to pay the claim (ha…

Indeed in this situation he's unlikely to win because he is pretty clearly in the wrong and his story is rediculous. My point is just that the insurance company can't just arbitrarily decide to side with amazon because they feel it (for that matter, amazon isn't really a party when it comes to the insurance) they have to look at the evidence and facts of the situation.

Re: Amazon destroys $1.5m of sellers inventory – now homeless

#46

Post by ethanwillis » Wed, Oct 28, 2020, 5:04 AM UTC

erik_seaberg wrote: post #40

I keep wondering why Amazon deals with guys like this instead of going to Calvin Klein’s wholesaler. He wouldn’t have better prices for legit merchandise, right?

I think the idea is that it allows for Amazon to remove some strength from the official wholesaler side. If the wholesaler isn't the only source of goods they have less bargaining power. But at the end of the day the wholesaler has to sell to someone. Here are my thoughts on how this relationship could work to Amazon's advantage.

Think of this scenario:

  **Wholesaler**: Give us $10 per unit to list our 
  products on Amazon.

  **Amazon**: No, we'll pay $15 per unit from a 3rd 
  parties you sell to, but we won't tell you who.

  **Wholesaler**: Whatever, we'll still make sales at the 
  end of the day.

-- Some time passes --

  **Amazon**: Hey 3rd parties, if you store all of our stuff in the warehouse we'll be an awesome partner and increase your profits a bit!

  **3rd parties**: This is an awesome deal!

  *3rd Parties* who are unaware of the fight between the 
  wholesaler and Amazon sees their business going great 
  buys lots of stock from the wholesaler, sends it all to 
  Amazon, has a lot of their sales going through Amazon, 
  etc.

-- Some more time passes --

  **Amazon**: Hey Wholesaler, we have these 3rd parties 
  and 90% of their revenue is through our platform. You 
  are going to list your product on our platform at $5 
  per unit or we're going to either A: Delist the 
  products and kick the sellers off our platform and/or 
  B: We're going to use our business intelligence to 
  launch AmazonBasics™ versions of your product(s) and 
  throw your customers to the wolves while your demand 
  crumbles into to dust.

Today YOU are here. This is how they use their monopoly power to get an unfair benefit over the existing manufacturers/wholesalers. And they can use 3rd parties, small businesses, as a way to get leverage. These 3rd parties will go and get business loans, they'll build up their inventories, they provide an abstraction that's hard for the wholesalers to fully peer through to, etc. These 3rd parties are just a pawn in Amazon's games with wholesalers. For every dollar Amazon burns giving these 3rd parties more money than the wholesaler they're really just leveraging indirectly the credit of these 3rd parties and throwing them to the wolves if they don't get their way. Simply a pawn in a game for Amazon to consolidate more power.

Re: Amazon destroys $1.5m of sellers inventory – now homeless

#47

Post by bsder » Wed, Oct 28, 2020, 5:04 AM UTC

ethanwillis wrote: post #9

The merchants must navigate a largely automated, guilty-until-proven-innocent process in which Amazon serves as judge and jury. Their emails and calls can go unanswered, or Amazon's replies are incomprehensible, making sellers suspect they're at the mercy of algorithms with little human oversight. This is something our modern society was and is not ready for. Bureaucracy and the bureaucrats that administered it is a…

This is simply Kafka's "The Trial" at scale.

This will continue until these companies start losing large monetary value cases in court.

Re: Amazon destroys $1.5m of sellers inventory – now homeless

#48

Post by ikeboy » Wed, Oct 28, 2020, 5:09 AM UTC

erik_seaberg wrote: post #40

I keep wondering why Amazon deals with guys like this instead of going to Calvin Klein’s wholesaler. He wouldn’t have better prices for legit merchandise, right?

Selection and risk. In clothing especially, people can have hundreds of thousands of individuals skus and only a handful of units on most of them. Amazon doesn't want to stock the long tail.

In some areas people have unique deals and ways to get products cheaper than Amazon, or they pay more but accept a lower profit margin.

Re: Amazon destroys $1.5m of sellers inventory – now homeless

#49

Post by philliphaydon » Wed, Oct 28, 2020, 5:11 AM UTC

dsabanin wrote: post #18

Johnny555 wrote: post #6

Earlier quoted context omitted.

If his story is true, it doesn't even sound like Amazon had any evidence that his merchandise was fake. One person didn't like the fit and suggested that it could be fake, another complained about a damaged box and again thought that meant it was fake, and the other two didn't like the way it was packed. For all we know, the complaints were from a competitor that knew exactly what would happen.

Amazon could've just bought some and checked it?

They had it in their inventory. They could look at what they ship out.

Re: Amazon destroys $1.5m of sellers inventory – now homeless

#50

Post by bgorman » Wed, Oct 28, 2020, 5:11 AM UTC

Areading314 wrote: post #44

ethanwillis wrote: post #9

The merchants must navigate a largely automated, guilty-until-proven-innocent process in which Amazon serves as judge and jury. Their emails and calls can go unanswered, or Amazon's replies are incomprehensible, making sellers suspect they're at the mercy of algorithms with little human oversight. This is something our modern society was and is not ready for. Bureaucracy and the bureaucrats that administered it is a…

The problem is not the automation, the problem is that a single authority has a complete monopoly on certain aspects of the e-commerce market. Full credit to Bezos and Amazon for their incredible execution in achieving this. However, monopolies are an example of market failure, and in this case, also an example of an authority able to act as judge + jury where the affected parties have no realistic recourse, while be…

How is Amazon a monopoly when customers can easily purchase an item from eBay, Walmart, Target, Aliexpress, and many others.

Amazon is often the most expensive option for me.