There’s a Lot of “Banned, Unsafe, Mislabeled” Stuff on Amazon That’s Imported From China

The Wall Street Journal has published a lengthy look at Amazon’s years-long effort to bring products directly from Chinese factories to me and you, the American consumer. How has this effort turned out?

Well, the title of the article is “Amazon’s Heavy Recruitment of Chinese Sellers Puts Consumers at Risk.” So … maybe good for The House That Jeff Built, but kinda bad for consumers!

This is another example of the Journal giving Amazon the business recently. Only a few weeks ago it reported that the company stubbornly lists for sale lots of clothing produced in Bangladeshi factories that even competitors like Walmart shun because of chronic violations of basic safety standards. And in August, the Journal detailed how little oversight the company has over the products sold on its platform, which results in “thousands of banned, unsafe or mislabeled products” floating around on there. The paper itself found more than 10,000 such items on the site between June and August.

And now comes today’s story. The paper reports that out of nearly 2,000 sellers of problematic items (whose addresses could be determined), more than half were based in China.

That’s the result of Amazon’s effort to “cut out the middleman” between Chinese manufacturers and America’s online shoppers.

That was the sales pitch an Amazon representative made this year at a trade event in Hong Kong … but it’s not an accurate description of what the company has been selling to the Chinese manufacturers it’s recruiting. The Journal cites another Amazonian who was much more on the nose in 2017 when she told a conference audience of Chinese business people: “We help factories directly open accounts on Amazon and sell to U.S. consumers directly. This is our value.”

These pitches appear to have been effective. Amazon doesn’t require its sellers to list where they’re located (or share that information), but the Journal cites an outside analysis of the 10,000 most-reviewed Amazon sellers that found approximately 38% of them are now located in China … a percentage that has increased steadily since Amazon began recruiting Chinese sellers in 2013.

That’s significant. Although Amazon’s business interests now include cloud computing and producing TV shows in which Jim from The Office plays a CIA super-agent, its cut for getting cheap stuff into our hands is still a core Amazon business concern. Third-party sellers – the kind that Amazon recruits from China and over whose products it provides the bare minimum of oversight – make up more than half of Amazon’s physical gross merchandise sales, which totaled $277 billion in 2018!

The Journal interviewed this lawyer – a lawyer representing a guy whose house burned down after (not kidding) the hoverboard he bought on Amazon unexpectedly caught fire. He explained why all of this anonymous third-party selling is a problem:

Cross-border e-commerce has made it harder to police unsafe products entering the U.S., he said. “When you had the traditional importer and customs and brokers—and all those procedures are followed—you provide a couple of layers of protection that you don’t when you’re talking about an internet market.”

So: The evidence suggests (after a big recruiting effort by Amazon) Chinese sellers make up a huge chunk of all the physical stuff sold on Amazon dot com; those sellers can be linked to nearly half of the fraudulent, banned or unsafe stuff sold on Amazon; and Amazon’s lax oversight allows them to remain faceless and unaccountable.   

So … How is Amazon able to pull this off legally? By arguing, of course, that it’s just the middleman!

Amazon’s legal defense in safety disputes over third-party sales is that it is not the seller and so can’t be responsible under state statutes that let consumers sue retailers. Amazon also says that, as a provider of an online forum, it is protected by the law—Section 230 of the Communications Decency Act of 1996—that shields internet platforms from liability for what others post there.

And does Amazon know a lot of junk is getting sold on its platform? Yes, the Journal writes:

In its annual Securities and Exchange Commission filing this year, Amazon disclosed for the first time that counterfeits and fraudulent products are a risk factor. It said Amazon may be “unable to prevent sellers in our stores or through other stores from selling unlawful, counterfeit, pirated, or stolen goods,” among other issues.

This is all so crazy. Amazon founder Jeff Bezos has urged another billionaire plutocrat, Michael Bloomberg, to run for president. If you, meanwhile, would like to know if what you’re buying was correctly labeled as “Made in USA,” you should probably avoid buying stuff on his website. You should also sign a petition to the Federal Trade Commission, urging it to increase its enforcement of labeling and its Made In USA standards.  


Reposted from AAM

Posted In: Allied Approaches, From Alliance for American Manufacturing