Wednesday, April 06, 2011

The Book Biz -- 1201 SE 7th Avenue Portland, OR -- What Amazon Allows


What are they?

A 'dropshipper', for the uninitiated, is a volume buyer of books -- college texts, art books, any item at all -- who then ships them on to buyers elsewhere. At much higher prices, to places many local sellers may not want, or be able, to ship to, e.g., Eastern Europe.

The above address -- 1201 SE 7th Avenue Portland, OR -- is one most sellers on Amazon greet with dismay when it appears as the destination of a sales order. There are a host of buyers at that address, all possessed of Eastern European surnames (their nationality being utterly irrelevant except as it connects them) whom most surmise are "dropshippers".

At least that's been their cover. There's no law against it and no reason, therefore, Amazon should not allow them to operate with impunity.

Except these folks generate a huge number of seller complaints. Why?

Because they chronically harass small sellers with bogus orders, subsequent email requests for unpaid expedited shipping and refund demands for flawless items.

It happens with such regularity buying books would hardly seem to be their sole object.

Long threads on the AMAZON SELLERS COMMUNITY are filled with similar complaints. These complaints are met with lots of pushback from a handful of repeat "posters" (whose posts number in the thousands, "posters" whose names are unconnected to any seller account and who post so frequently they could hardly be managing sales operations). These "posters" appear to be professional scolds. Acting anonymously, they repeatedly attest to the reliability of these "dropshippers" and uniformly bat down, sometimes nastily, the complaints and demand sellers comply dutifully with sales requests.

It's hard to tell, consequently, how much of the "dropshippers" buying is untroubled and headed overseas, and how much is systematic harassment.

Not coincidentally, a software company at the same address sells an automatic "book pricing" product -- a product that insures a seller's price will remain lower than his competitors' by automatically lowering the price to below that of a comparable book.

That company, too, is headed by persons of the same nationality (again relevant only as it suggests a connection to the dropshippers) and
a transparent connection to the dropshipping operation (whose seller name cannot be ascertained) has been suggested.

What both organizations have in common appears to be a form of

The dropshippers "buyer harassment" buys frequently target small sellers (and items) whose prices have undercut the outrageous sums some huge Amazon sellers ask for allegedly "new" out-of-print books. These huge sellers, who almost all certainly use pricing software on their cheaper books, can ask and get extravagant prices for rare "new" books when they are able to maintain a monopoly on books listed in "new" condition.

Both organizations at this Portland address appear to be coordinating what is essentially an 'arbitrage' operation. (They buy a 50-buck book to remove it from the market so the volume seller can sell their copies at $200 while degrading the value of the small seller's book through shipping wear and their assertion the book was never "new")
. This complements their predatory pricing software in instances where volume sellers specifically don't want software to automatically reset prices -- i.e., dropping their $200 allegedly "new" book to $49.95.

And Amazon would appear to benefit from these harassing practices. It keeps prices and Amazon commissions high
! So that while the pricing software sold at this address may make the price of many abundant, inexpensive book titles somewhat more competitive, Amazon gains far more by allowing these buyer/seller price-fixers to use the advantage of their size and coordination to maintain monopolies on "new" condition hard-to-find titles.

That Amazon is aware of these activities and account aliases and links (having spoken and written repeatedly to them) seems almost certain.

But, crucially, it would be hard to prove in court without access to all Amazon emails (including internal ones).

Why they don't stop them -- since Amazon is a power unto itself -- appears not unrelated to the fact pattern here presented.

But the real tortious question may be how much damage they do
not to sellers, but to buyers. When Amazon is faced with a class action they may move expeditiously to end these practices.