Lollipops are flying around Amazon, and it looks like we’re the suckers.
Amazon isn’t able to stop a coterie of sellers drop-shipping products from Sam’s Club to consumers — which is against Amazon’s policy — the maker of Dum-Dums told Bloomberg, adding that it likely has cost the company “millions.”
“It became a tsunami we can’t control,” Mitchell Owens, leader of e-commerce at Spangler Candy Co, which makes Dum-Dums, told the outlet.
What is drop-shipping?
Drop-shipping is a process where people can make money, often learning from tutorials online, on how to ship an item from a retailer to a consumer, using Amazon, and keeping whatever profit you can get, the outlet wrote. You’re not supposed to drop-ship on Amazon, but, as Owens argues, there are far too many people doing it for the platform to stop them.
“There’s an entire cottage industry encouraging people to start their own business selling on Amazon and drop-shipping from other retailers,” Owens told Bloomberg.
Essentially, sellers can, easily and for free, Bloomberg wrote, list a 500-count of Dum-Dum’s on Amazon, for a dollar less ($25) than Spangler’s price. When a person puts in an order, the seller goes to Sam’s Club, buys the $15 Dum-Dums, and ships it to the customer who bought it for $25, profiting $6 a…