The Amazon-to-eBay Arbitrage Scheme ⇥ entrepreneur.com

It’s not just counterfeit goods on Amazon that are a problem for legitimate businesses. Jason Feifer writes for Entrepreneur magazine on a new scheme that marries Amazon’s generally low prices and dubious eBay sellers:

To see how this works in real time, I go to eBay and buy a Ripple Rug. There are five listings for the product on this day, and I select one from a seller called AFarAwayGalaxy. The price is $49.51; on Amazon, Ruckel sells it for $39.99. So, how’d this listing get here? Almost certainly, the seller is using some kind of software — made by DS Domination or a competitor — that scans Amazon for its best-selling products. (They can also do this on large sites like Walmart’s, though most seem to focus on Amazon). The software found the Ripple Rug, which, on the day in June I buy it, is ranked number 25 in cat toys. Then it copied everything in the Amazon listing and pasted it into an eBay listing –amusingly, right down to the part of the product description that says, “Thank you for viewing our Amazon version of the Ripple Rug.”

The price is usually set between 5 and 15 percent over the Amazon price. When I make the purchase, the person behind AFarAwayGalaxy simply goes to Amazon and buys a Ripple Rug — but instead of buying it for themselves, they designate it as a gift and have it shipped to me. Because I paid $9.52 above the Amazon price, that’s profit, which AFarAwayGalaxy can keep (minus Paypal and eBay fees). This seller has more than 11,000 items listed on eBay. That can quickly add up to real money.

Both Amazon and eBay failed to condemn the actions of these individuals, and they didn’t commit to making changes to prevent this practice. It’s deceptive, and it hurts individuals and businesses more than it has the potential to turn a profit for the weaselly sellers who dabble in it.