As a customer of trading sites, I have often been critical in the past of some practices, like the use of expensive couriers even for small things with no option to choose regular post. For rural addresses this can often make the shipping charge twice or more the cost of the item.

I sometimes also get the other side of the story, though. My sister is a small trader entirely dependent on her Amazon income.  (She specialises in NASCAR memorabilia if anyone is interested.) Recently she told me about a new threat to the survival of herself and others like her.

Merchandising depends on trends. For example, the market for Starwars figurines is closely tied to the release of the films. There is a narrow window when demand surges. Traders need to ensure they have stock to meet these surges, but most cannot afford to sit on huge inventories so timing is essential.

With NASCAR, demand surges may be tied to the racing season, or individual races, or favoured drivers who do well, or many other things. Traders like my sister need to anticipate these and order stock in advance.

What is now happening is that overseas operators, mainly Chinese though other nationalities are also getting in on the act, are sourcing extremely cheap counterfeit copies of such merchandise and dumping that for prices below the cost price of genuine traders. My sister gave me the example of flags. These cost her $5 and they sell for $10. They actually are made in the USA and the quality is good. But the counterfeits are being retailed for $3! They are thin and flimsy and quickly disintegrate. People buy them thinking they are getting a bargain, then take out their anger on legitimate traders when the quality fails. The whole industry suffers as a result.

This practice is actually threatening my sister’s livelihood and no-one really knows what to do about it. The counterfeit traders also follow market trends and order their goods when they anticipate that there is going to be a surge in demand. They then dump huge quantities of the inferior merchandise, undercutting the legitimate traders. Then they move on to the next big item. My sister didn’t go into detail about that, but I assume they keep changing their identities and opening new trader accounts. Amazon is trying to combat this, but it is difficult.  

Counterfeiting has long been a problem, but this mass dumping of counterfeit items to meet temporary demand surges seems to be something new and apparently it is a serious threat. I mention this because I have just been made aware of it and it reminds me that there are two sides to every story. I wouldn’t want to be an Internet trader. It looks like a pretty tough life.