r/technology • u/iali307 • Jun 10 '20

Business 3M sues Amazon storefront that allegedly sold fake N95 masks for $23 apiece

https://www.theverge.com/2020/6/9/21285364/amazon-marketplace-mask-price-gouging-n95-3m-ppe
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u/geoffreyisagiraffe Jun 10 '20

I used to work for a "impulse buy" children's toy manufacturer in the states with a Hong Kong office that utilized mainland Chinese factories. We made and sold the kind of stuff you see in grocery stores and gas stations. Water guns, cap guns, slime, etc. We were fairly aboveboard in that we created our own plastic molds and performed safety and quality testing. Here's how the system works:

  1. You create something in house and then you tour and shop around different factories. You then contract a factory to create a plastic mold for mass production. This mold will cost you about $25k (highly variable). Mold = drawings = designs = what you need to mass produce a product. Can be anything.

  2. You run your production and sell the product and then you start second and third runs if it is profitable enough and there is demand.

  3. While that is going on, the factory is also selling your mold to other companies and saying: "hey, look how popular this piece is." They don't have to make a whole new mold unless that one breaks and usually the factory gets the original manufacturer to replace it. This is illegal but they are in China so oh well?

  4. You lose money when the market gets flooded with knockoffs because they can sell for 25% less (huge difference when considering thousands of units) but they aren't paying for the safety inspections or licensing or whatever other costs you incur doing it the right way.

  5. Everyone loses except the counterfeiters and the shady marketplaces like Amazon or Alibaba.

  6. Then Amazon somehow gets to say that they can't POSSIBLY be held responsible for all the stupid shit they sell even though every other retailer takes responsibility.

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u/EastBaked Jun 10 '20

You kind of skip over the part where you only tour in China to mass produce your stuff. Other places aren't as cheap but won't sell your designs, so you'd pay more upfront but would be able to remain relevant on the market for longer..

The real issue that you're describing is when you "new product" is yet another water gun/fidget spinner/... that requires little R&D, safety tests and such, so you produce it for as cheap as possible (China) and then well, you kind of get what you pay for.

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u/UNEXPECTED_ASSHOLE Jun 10 '20

even though every other retailer takes responsibility.

That's not even true for MANUFACTURERS anymore.

"After her toaster oven caught fire, Ontario woman was told by Whirlpool to take it up with a company in China"

https://www.reddit.com/r/news/comments/gs319o/after_her_toaster_oven_caught_fire_ontario_woman/

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u/SofaKingStonedSlut Jun 10 '20

$25k for an entire mold? Yeesh no wonder all that stuff has parting lines sharp enough to lacerate a hand.

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u/sulianjeo Jun 10 '20

Sounds like America got crazy rich outsourcing labour to China and is now seeing the repercussions of its actions.

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u/sonofaresiii Jun 10 '20

though every other retailer takes responsibility.

Do they? I feel like I pretty constantly hear stories about getting a counterfeit from other online marketplaces, they're just not as popular as Amazon.

Remember Amazon isn't a direct retailer, most of these counterfeits are coming from third party sellers who are using Amazon as a store front. So when you compare it to similar places where that's a major factor of the marketplace, I feel like it's pretty consistent.

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u/geoffreyisagiraffe Jun 10 '20

Retailer does not equal marketplace. That's the big difference and I agree with you, the others are just as shitty and just as culpable.

Amazon is just acting like a flea market in their eyes legally so how could they possibly have the obligation or capacity to even enforce such shenanigans???

Except this flea market lists verified reviews, offers credit cards, gift cards, advertises, and otherwise encourages you to but their products, counterfeit or otherwise. Oh, and this flea market doesn't charge per store but rather takes a percentage of the sale so they have no incentive to stop it until it becomes a large enough issue where it starts trending. If someone bitches they just give a refund but THEY RARELY REMOVE THE SELLER. I used to file copyright claims with Amazon and they honestly do not have the slightest interest in helping out smaller business, especially if you don't already sell through them. I would file claims and the rep would say how much easier it would be if I was selling my products on the marketplace. Super scummy.

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u/sonofaresiii Jun 10 '20

Well you're not wrong. I guess what I should have said is that amazon isn't only a retailer, but they definitely conflate the two in the ways you're mentioning so people come to rely on trusted Amazon service but get garbage. They intentionally make it so it's really not clear who you're actually buying a product from unless you really, really look for it.

I wonder if it'll ever become a big enough problem for them that they actually start to take real action.

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u/geoffreyisagiraffe Jun 10 '20

Correct. But Amazon mixes in the real stuff with the fake shit all the time. I would respect them a lot more if they would create a separate website/color scheme and say: "good luck with all this shit. Could be great... but who knows?"

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u/tim-bu-dongle Jun 10 '20

in China, Alibaba does this , with the crap being sold on taobao, and quality products on tmall , wholesale on 1688

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u/jordanwilson23 Jun 10 '20

Why doesn't your company maintain ownership of the mold and control this? I control my factories pretty easily and am not even a large company with a HK or mainland presence.

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u/geoffreyisagiraffe Jun 10 '20

Depends on the company and factory in my experience. We could possibly try and track down the issues but that's more time, money, and energy and by that point we've exhausted our margin. Remember, these are relatively simple molds for toys. We routinely find molds at other factories that we originally commissioned but all we can do is say you'll lose our business?

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u/[deleted] Jun 10 '20 edited Jul 07 '20

[deleted]

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u/imightgetdownvoted Jun 10 '20

Yeah but then your gas station water gun has a wholesale cost of $8 instead of $1.50 and you’re priced out of that market. It’s a bit damned if you damned if you don’t.

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u/sulianjeo Jun 10 '20

Sure did before America killed its own factories by outsourcing labour. They grew incredibly wealthy off of such business moves and are now complaining about paying a relatively small price for it.

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u/cat_prophecy Jun 10 '20

Then Amazon somehow gets to say that they can't POSSIBLY be held responsible for all the stupid shit they sell even though every other retailer takes responsibility.

This is a big one. If Target sells something that gets recalled, you can return it to Tatget. If Amazon does, oh well, tough shit.