Credit cards
Loans
Banking
Mortgage
For sure
Credit Monitoring
Personal Finance
Small Business
Taxation
Help with low scores
Invest
SELECT
All cards
Find the right credit card for you
The best credit cards
Best Credit Cards with Rewards
Best Travel Credit Cards
Best Credit Cards 0% APR
Best Balance Transfer Credit Cards
Best Credit Cards with Cash Back
Best Credit Card Welcome Bonuses
The Best Credit Cards to Build Credit
SELECT
All loans
Find the non-public loan for you
The best personal loans
Best Debt Consolidation Loans
Best Loans to Refinance Credit Card Debt
The best loans with fast financing
The Best Small Personal Loans
Best Major Personal Loans
The best personal loans to apply online
Better Student Loan Refinancing
SELECT
All banking services
Find the savings account for you
The Best High-Performance Savings Accounts
The best savings accounts from banks
Best Big Bank Checking Accounts
The best free checking accounts
Overdraft on loose checking accounts
The Best Current Account Bonuses
The Best Money Market Accounts
Best CDs
Best Credit Unions
SELECT
All mortgages
Best Mortgages
The Best Mortgages for a Small Down Payment
The Best Mortgages a Down Payment
The best mortgages without commissions
The Best Mortgages for a Credit Score
Variable mortgages
Granting a mortgage
SELECT
All insurances
Best Life Insurance
Best Home Insurance
Better Renters Insurance
Best car insurance
Travel Insurance
SELECT
All follow-ups
Best tracking services
Better Identity Theft Coverage
How to Build Your Credit Score
Credit Repair Services
SELECT
All Finance
Best budgeting apps
Best Expense Tracking Apps
Best Money Transfer Apps
The best apps and resale sites
Buy Now, Pay Later (BNPL) Applications
Better debt relief
SELECT
All Small Businesses
Best Small Business Savings Accounts
Best Checking Accounts for Small Businesses
Best Credit Cards for Small Businesses
Best Small Business Loans
Best Tax Software for Small Business
SELECT
All taxes
The best tax software
Best Tax Software for Small Business
Tax refund
SELECT
All low credit scores
Best Credit Cards for Bad Credit
The Best Personal Loans for Bad Credit
Best Debt Consolidation Loans for Bad Credit
Personal loans if you have credit
Best Credit Cards for Construction Credit
Personal loans with a score of 580 or less
Personal loans with a score of 670 or less
Best mortgages for credit
The best loans for difficulties
How to Build Your Credit Score
SELECT
All investments
Best IRAs
Best Roth IRAs
The best investment apps
Best Free Stock Trading Platforms
Best Robo-advisors
Index funds
Investment funds
Exchange-traded fund
Obligations
Of the many acts that can cause an Amazon merchant to get rid of the site, few are as devastating as promoting stolen goods. Amazon calls the habit “illegal and strictly prohibited,” and other people accused of such activity can be permanently suspended.
Dozens of small businesses have been kicked off Amazon in recent months for allegedly promoting stolen products to appliance brands such as Breville, Keurig, Levoit and SharkNinja. But the suspended sellers, who have spent years setting up their businesses on Amazon, told CNBC they had no idea they were promoting stolen products.
Amazon provided limited evidence to back up their claims, merchants said, leaving them scrambling over problematic merchandise. goods stolen from one of the many wholesalers, liquidation companies, and suppliers that supply your Amazon inventory.
Amazon’s independent distributor marketplace accounts for more than 60% of products sold on the platform. It is such a dominant force in e-commerce that it is the main, if not the only, source of profit for third-party distributors. Over the past decade, the immediate expansion of the market has fueled a parallel boom of counterfeiters and spammers looking to outsmart the system, pushing Amazon to improve the app.
Retailers, lawmakers and industry teams have drawn attention to the expansion of retail organized crime, saying online marketplaces have contributed to the problem. products
While merchants can be suspended for a range of behaviors, from selling harmful or expired products to poor visits and erroneous product descriptions, no claim is harder to beat than being classified as selling stolen items. These merchants say Amazon has little interest in giving them a momentary chance or a wonderful opportunity to protect themselves.
CNBC spoke to six recently suspended vendors. Each provided us with the names of their suppliers. A review of their invoices, communications with suppliers and other documents revealed an intricate network of overlapping wholesale and settlement corporations advertising similar products, adding Breville coffee machines, Keurig coffee makers, Levoit humidifiers, LG PC monitors, Shark mops and Ninja vacuum cleaners and appliances.
In an email to CNBC, Amazon said it works with the government and comments on “matters that are the subject of active law enforcement investigations. “
“Amazon allows independent distributors to list stolen products in our store, and we collaborate strongly with law enforcement, retailers, and brands to arrest and hold bad guys accountable, add withheld funds, cancel accounts, and fire law enforcement,” the company said. saying.
Two years ago, an Amazon distributor, we’ll call him Frank, went from promoting housewares with his own logo to running a wholesale business. With such a festival on the market, he felt it was safer to sell products that consumers know about. and accept it as true instead of advertising an unfamiliar logo.
On March 14, his thriving three-year-old Amazon company came to an abrupt halt. Frank, who asked that we not use his actual call for fear of retaliation from Amazon and its suppliers, said so the day Amazon told him about his account. He had been suspended for promoting stolen goods.
Frank said Amazon did not tell him which of its legions of products were stolen or provide important details that could track down violators. If he wanted to appeal the suspension and save his business, Frank would have to figure everything out himself.
Amazon did not comment on the case of Frank or other express sellers, but the company said in a statement that it often requests “invoices, purchase orders or other evidence of delivery” if it has doubts about a seller and has an appeal process. Investors who believe the execution decisions were wrong.
One of Frank’s suppliers, according to documents he provided to CNBC, is KZ International, a giant wholesale and distribution company owned by Kenzo Sobrie, a successful entrepreneur who has been described as “Amazon’s youngest millionaire. “
When Frank contacted Amazon about his suspension, an account fitness representative told him that KZ had been placed on an internal list of “at-risk suppliers. “Amazon declined to say such a list exists.
In December, KZ’s warehouse in Huntington Beach, California, was raided by the California Highway Patrol, which seized pallets of Dyson vacuum cleaners, TP-Link routers, Ninja mixers and Breville coffee makers. A few weeks later, law enforcement conducted a similar search of the warehouse of one of KZ’s customers.
KZ sued two of its suppliers in March, alleging they had provided the company with stolen goods. CHP eventually recovered nearly $4 million worth of goods it decided were “stolen cargo,” according to KZ’s complaint. Separately, Amazon said it shared data and intelligence with CHP in the investigation dubbed “Operation Overloaded. “
Frank is still not sure if his suspension is similar to that of KZ products. Their store has been offline for about 4 months. Four other investors suffered a similar fate around the same time, according to data provided to CNBC. All said they had never been informed of the sale of stolen goods their years on Amazon and had no idea which of their products had been reported or which suppliers might be responsible.
Millions of distributors around the world now make up Amazon’s third-party marketplace. Some opt for personal branding, promoting family items, clothing or workout equipment under an independent brand. Others prefer to act as retailers, repromoting lots or thousands of other products from well-known brands.
Regardless, this is a relentless, low-margin venture that is usually about paying Amazon’s higher fees for storing and shipping products, as well as for visitors and advertising. stolen or counterfeit products, and suddenly be shut down.
While Amazon offers a flexible program called Account Health Insurance, which aims to protect merchants from abstract suspension, Amazon’s distributor’s central site states that accounts can be deactivated without delay “if we have engaged in fraudulent, deceptive, illegal, or otherwise engaging in activity. “destructive activity. “
Amazon uses the generation to track products from the moment they enter a fulfillment cinput, to detect fraud and counterfeits. When identifying potential problems, the company refers products to investigators and refers cases to law enforcement. organization called ORC Engagement Team, composed of law enforcement professionals.
Amazon’s recent competitive moves coincide with calls from lawmakers and government agencies to remove goods stolen after an organized store robbery, which allegedly led to more pieces stolen from e-commerce platforms. The new law requires online marketplaces to determine the identity of high-volume distributors to prevent fraud.
Suspensions on Amazon are notoriously difficult to overcome. The merchants told CNBC they had the opportunity to appeal their suspension through a doomsday-style video interview with an Amazon representative, where they can argue in favor of restitution. But it’s a long shot.
The interview lasts about forty-five minutes and dealers must provide copies of their driver’s license, tax identity number, invoices and bank statements, among other documents. Amazon intends to notify distributors if they have legal maintenance within five business days. But some investors say they’re still waiting for a reaction weeks after his interview date.
“You start from the point of view of guilt until it turns out otherwise, and then if you can find out it’s a mistake, it’s possible to reinstate it,” said Chris McCabe, a former Amazon worker who has spent more than nine years. years helping suspended sellers. Get back to normal. “These other people can’t present evidence because the parts are stolen or the suppliers don’t cooperate and give them proof. “
Amazon distributors intend to verify suppliers before hiring them. However, it can be tricky to know where products come from, as it’s not unusual for resold pieces to be sourced and sold through various parts before they’re sourced through a merchant and indexed in Amazon.
In addition to offering Amazon receipts and documents, distributors say there’s not much they can do about the situation. Meanwhile, their accounts remain blocked, forcing some to lay off their workers or even declare bankruptcy.
“It’s been devastating for us,” said Ricky Sala, co-owner of the Oregon Prep Center, which launches and operates Amazon businesses for other companies. “We’re terrified of buying wholesale products for consumers right now because I don’t know what’s stolen, what’s not stolen, or what Amazon is going to say that’s stolen, even if it’s not stolen. “
Several of the accounts Sala oversees have been suspended in recent months, costing his company some clients. One of the main tactics given to suspended providers across the country to meet others and exchange stories is through concentrated groups. They met through forums, social media, and mutual connections. In June, while sharing important points of their suspensions, several discovered that they had purchased products from the same suppliers.
The Los Angeles area, home to two of the nation’s busiest advertising ports, has a hotbed of evidently organized retail criminal activity, according to data provided by the suspended vendors.
Several suppliers told CNBC that the stock-sourcing procedure replaced the Covid pandemic. Due to travel restrictions, they were unable to meet potential suppliers at industry exhibitions or in their warehouses, so they connected via social media such as Instagram and Facebook, where they resorted to virtual stock tours.
Suppliers would trap distributors into subscribing to their Telegram channel, where they would promote the products they have in stock and how much they cost. The channels have names like “Amazon Wholesale,” “Wholesale,” and “Amazon Offers. “
Sala, 28, said many of the vendors he knows who use Telegram’s messaging service are of varying ages and would rather send notes to their giant teams than send bulk emails.
“They need to be completely on their phone,” Sala said.
Vendors are encouraged to act temporarily, as teams can have thousands of members and donations are temporarily accepted.
A CNBC review of more than a dozen such Telegram teams showed that consumer electronics and small kitchen appliances were among the most popular products. Vendors told CNBC they order products worth thousands of dollars through those equipment.
While travel has reopened as the pandemic has subsided, much of the procedure has remained virtual. Sellers who sought to make a stopover at a supplier’s warehouse to check stock may find themselves unable to obtain hot products because the competition would rip them off. just so you don’t wait.
To manage costs, distributors do not depend on merchandise. Instead, they rely on suppliers to ship products to Amazon’s warehouses, where the online store handles sorting, packaging and parts for delivery through a program known as Fulfillment via Amazon, or FBA.
A Miami salesman said in an interview that at the time last year, he started working with a handful of new suppliers he discovered on Instagram, hoping to expand into the popular appliance category.
The merchant, who requested anonymity, paid more than half a million dollars for popsicles from deep fryers, food processors and coffee makers, according to invoices and bank statements reviewed through CNBC.
The documents showed that several of the suppliers claimed to have purchased the parts from brands or liquidators. The Miami merchant said suppliers are offering the products at “regular wholesale” prices.
On March 17, Amazon suspended his account for allegedly selling stolen items. In correspondence between the distributor and Amazon, the company declined to say who was infringing.
He contacted the FBI, hoping the police could help him. Officials opened a report but said there wasn’t much they could do without knowing what products had been stolen.
A New York-based merchant said that on May 6, Amazon froze a $17,000 worth of “inappropriate inventory,” which an account representative said meant stolen goods. Amazon sent a list of dozens of products that had violated its policies.
“We took this action because your account provides parts that are wrong and possibly would have been used to interact in deceptive or illegal activities that harm our customers, other sales partners, and our store,” according to a copy of the notice. which was noticed through CNBC.
The distributor tracked the products and provided as many invoices as you can imagine to Amazon as part of its June 1 phone interview. It was never suspended, but stocks remain frozen more than a month later.
Several merchants said they contacted the attorney general’s office in Washington, D. C. state. of Amazon, to raise awareness about what was happening. The attorney general’s office contacted the company in June about the suspensions, sources told CNBC.
Amazon contacted the Washington state attorney general’s office about organized crime in retail, but did not provide details. The attorney general’s office did not respond to CNBC’s requests for comment.
By tracing the chain of origin of suspended sellers, safe trends began to emerge.
At least 3 suppliers purchased computer monitors, fryers and other products from Ngo Wholesale Distributors, also known as Ngo Trading Co. , which has addresses in Santa Fe Springs, Los Angeles County and Garden Grove, just south of Orange County.
Tien Ngo, the company’s owner, told CNBC in an interview that he bought products from other suppliers in Southern California, adding a company called Stride Trading, founded out of Los Angeles.
“They said they weren’t stolen goods, but I never looked at their chain of origin,” Ngo said of his conversations with suppliers. “I didn’t need to jeopardize the existing relationship. “
Stride has been listed as a supplier to other suspended distributors who have spoken to CNBC. Because Amazon doesn’t provide important details about suppliers, CNBC wouldn’t be able to do so if your call was continuously received by coincidence. Stride did not respond to multiple requests for comment.
One vendor said an NGO worker told him the suspensions were due to the recent crackdown on CHP. The worker sent the merchant a link to a report on CHP’s “Operation Overload,” in which agents arrested more than 40 suspects in May and recovered about $50 million. in stolen goods, as well as 20 stolen shipping trailers, several firearms and thirteen gold bars.
“There is a strong possibility that stolen serial numbers/ASINs or the like will be entered into each and every source line,” the worker wrote. ASINs refer to the 10-digit code used to search for products on Amazon’s website.
Court cases filed through KZ, the Huntington Beach wholesaler and distributor, provide the clearest picture of what happened before the suspensions.
In late March, KZ sued TV Wholesale Outlet, owned by Los Angeles resident Armen Babayan, alleging it had sold the corporate value of $3. 8 million of property “illegally obtained. “KZ said it learned the goods were stolen as a result of the CHP raids. in your facilities. Now, not only can KZ not sell the products, but it also incurs “over $376,000 in shipping and garage costs, moving costs, and reserved stock fees,” he said.
In addition, KZ said it “has since been the subject of claims from third parties whose windows were closed or frozen through Amazon due to ‘stolen cargo. ‘”
Babayan filed a motion to dismiss on June 14 and questioned KZ’s allegations.
KZ filed a separate complaint in May alleging that another supplier in the Los Angeles area, Juniper Holdings, sold the company more than a million dollars in stolen property. The complaint.
KZ learned that some products had been stolen months before the raid, according to the complaint, after a visitor obtained a letter from TP-Link warning him that routers he had purchased from KZ had been stolen. Juniper told KZ it could regresar. la merchandise, according to the complaint.
Babayan responded to a request for comment. Juniper CEO Cameron Webb denied the allegations in KZ’s lawsuit.
CNBC contacted Sobrie, the owner of KZ, several times by phone and text message to numbers we found him in California, Florida and New Jersey. Answered.
The owner of the Huntington Beach assets they raided through police declined to comment but said searches had taken a stand and said the Sobrie company was no longer a tenant.
Kevin Cole, Sobrie’s attorney, answered questions about his client’s business activities or his appointments with Amazon, writing in an email that “the allegations in our lawsuits speak for themselves. “
Sobrie is well known in Amazon reseller circles. He has been noted for his good fortune in product wholesale and can be seen in Instagram posts posing in luxury cars and sharing ecommerce business tips.
Sobrie now runs a new wholesale company in New Jersey, KN Trading LLC, according to business documents in the state. His Telegram channel, which has over 1100 followers, vibrates with new offers almost daily. A recent video posted on his Instagram page shows a warehouse filled with boxes of produce and workers loading packages onto UPS trucks. The caption reads: “Ready to spice up your Amazon business?KN Trading is the spouse you need!”
Meanwhile, suspended distributors desperately seek answers while burning money. They’ll almost certainly miss Prime Day, Amazon’s annual event, scheduled for next week, and can only hope they can prepare in time to be in a position for the holidays, the time of year when many stores are nonetheless turning a profit.
In the organization’s chat, they consult with each other almost daily, exchanging recommendations for their phone interviews, as a way to increase their chances of recovering their accounts.
One of them wrote in a recent message: “I pray that we will all have news very soon and that this is a story that has ended well. “
WATCH: Amazon Stock Falls After FTC Antitrust Case
Do you have a confidential news tip? We hear from you.
Sign up for loose newsletters and get more CNBC in your inbox
Receive this in your inbox and more information about our services.
© 2023 CNBC LLC. All rights reserved. A department of NBCUniversal
Data is a real-time snapshot * Data is behind by at least 15 minutes. Global trade and monetary news, inventory quotes and market insight and analysis.
Data also by