Think you’re buying on Amazon? It may actually be from Alibaba (BABA).
Third-party sellers contribute more than half of Amazon’s sales, many through Alibaba.
For example, Peter Koch is a 37-year-old engineer living in Serbia. He says that he is making $3,000 every month by selling the same seven baby products on Amazon (AMZN) to American customers. His secret? Chinese e-commerce giant #Alibaba (BABA). Koch began importing goods from Chinese manufacturers he connected with through Alibaba in 2014.
Products made in China tend to be particularly inexpensive for Amazon’s third-party sellers.
The Fulfillment by Amazon (FBA) service enables Koch to sell to the US. Sellers ship their products directly from Chinese factories to Amazon’s warehouses in the US. Amazon will then “pick, pack, ship, and provide customer service for these products.”
Therefore, if you’re an Amazon customer, it’s almost impossible for you to tell whether the product comes from an American seller or a factory in China. Third-party sellers use the FBA to avoid having to store their inventory and to reduce shipping time.
Amazon owns many of the products it sells to customers. So it can guarantee quality and delivery service. But as the number of third-party sellers grows, Amazon may face quality-control and counterfeit problems that have plagued Alibaba.