Amazon News: Customs Schemes, Haul Shake-Up & the Veteran Seller Edge

Amazon News: Customs Schemes, Haul Shake-Up & the Veteran Seller Edge Unknown Speaker: Welcome, fellow entrepreneurs, to the Amazon Sellers School podcast, where we talk about Amazon and how you can use it to build an e-commerce empire, a side hustle and anything in between. And now your host, Todd Welch. Speaker 3: Hello, what's going on, everybody? Welcome to another episode of Amazon Seller School News Live, I should say. Got Corey, Danon, and Neil with me today, so thanks for joining, guys. I appreciate it. Thanks for having us. We've got some fun news today, some controversy as well regarding the tariffs, some news on the Amazon seller makeup and veterans possibly dominating the space. Amazon's already making changes to haul, so surprise, surprise there. And then some revenue by Chinese Amazon sellers and some more news about the tariffs and such. So good news that we're gonna be diving in today, looking like a lot of fun, maybe some controversy and some political opinions thrown in as well. So I appreciate everybody out there joining us. If you are watching, I see people streaming in on X and YouTube and Facebook, so throw your comments in there. If you have any questions or concerns or anything you want us to bring into the show, we're happy to do so. Always love engaging with you guys watching out there. So without further ado, let's go ahead and dive into the first article. Chinese suppliers offer illegal tariff workarounds to U.S. Amazon sellers. Amid soaring 145% tariffs on Chinese imports, some Chinese suppliers are urging U.S. based Amazon sellers to commit customs fraud by under declaring shipment values or using delivered duty paid to misrepresent costs. These tactics aim to reduce duty payments, but pose serious legal risks for unsuspecting sellers. Sellers are encouraged to explore alternative sourcing countries instead or verify that partners are compliant with U.S. import laws. The increased pressure is already triggering supply chain shifts and wider scrutiny of marketplace pricing practices. So not a big surprise here. I definitely expected this. I think this is common practice. The other thing that I've been hearing as well is they'll move your products to other countries and then ship it from those other countries like Vietnam or Egypt or wherever the case may be. So what do you guys think about this? Any thoughts? Speaker 1: Corey, go ahead. Speaker 4: I was going to say this is far from surprising, right, that the Chinese sellers and a lot of the suppliers tend to err on the side of just honestly illegal practices at the end of the day. So the fact that they're encouraging U.S.-based Amazon sellers to commit customs fraud is not surprising. And unfortunately, I feel like a lot of sellers are going to do this without realizing they're breaking the law until the I don't know what regulatory body would enforce this, but they're gonna get found out sooner or later. And the Chinese manufacturers are in no way, shape, or form going to be liable or going to be held accountable. And the US seller that broke the law is gonna be the one left holding the bag. So yeah, just not a surprising tactic. They'll say and do just about anything to move product. And I'm sure the bag will drop at one point or another sooner or later. Speaker 1: Yeah, I mean, this is nothing new. This has been going on for a very, very long time. It is one of the things that companies like Tariff Terminator look into, or Sellerview, is to make sure that you are actually paying the correct tariffs. A company might say, hey, yeah, this is a metal alloy when they're importing pure iron or something like that. And metal alloy has 5% and iron has 13%. I mean, this happened to me with my blankets. They had the wrong tariff code, knowingly. What to do about it? I don't know for sure, so I think it's U.S. Customs and Border Patrol is the ones that are going to be the enforcement agency, but I've heard that some factories are offering DDP, which is direct delivery. Basically, they cover customs. I can't remember what it stands for. Delivery duty paid? Speaker 3: Yep. Speaker 1: That makes so much sense. Thanks. And I'm wondering if that might not be the way to go is to negotiate that with your factories. And I don't manufacture in China, so I don't have any, my experience at this point is dated, but I always try to go for that. That's what I did on my last shipment was I negotiated DDP. But I just don't know if they do it with duty paid, if that gets you off the hook. Probably not. Speaker 3: That would be the question. I feel like you'd still have responsibility on that because you're the importer of records still on that, I believe. Speaker 4: That would be my assumption, yeah. Speaker 2: I met with one of my clients yesterday and she's never done DDP shipping before. And all of a sudden she started doing DDP shipping. And she was telling me, you know, she can't sleep at night right now because she is scared that she is going to get caught and there are going to be repercussions from this. Now, she lives outside of the US. So realistically, there is no recourse for the United States to go after her. Aside from the fact that her business would just get shut down, essentially, right. And it's like, she's been building that business for however long, all of a sudden you get caught with, you know, import fraud, and your business has just gone overnight. So I mean, there is a significant risk there as well, because You know, they're not going to just let this go on. And, you know, there's interest. I heard another interesting point where someone was talking about, oh, we're just going to, you know, if you're not using DDP, oh, we're just going to randomly decrease the value of your invoice from the factory and you'll just pay less tariff, because that's also one of the things that's kind of floating around. And someone brought up a very valid point where it's like if you have the same shipment going in every three months or whatever it is you're shipping, and all of a sudden the value of your product decreases significantly, they're not stupid. They're going to pick up on this as well. It's like there's all these different kinds of frauds being floated around. It's going to be a game of cat and mouse and who's going to be the one enforcing it and who's going to actually be getting caught. Speaker 1: That's the other one. Who's going to be the head on the pike, right? Speaker 3: They're going to hit it. They're going to make someone an example. Speaker 4: Yeah, one thing I'll add, Neil, to use your client as an example, if anybody that's doing something in their business that's causing them to not be able to sleep at night should be something that you just don't do, right? I think it's pretty black and white in many cases what's Okay, and what's not and if you're doing something that's causing you to lose sleep, then don't do it. It's pretty much what it comes down to. Speaker 3: I tend to try to lean on the side of, you know, ask forgiveness rather than permission. But when you're dealing with something like this, The repercussions, you know, like Joe, Joe Amazon there said, I know people well that enforce it get caught once it will haunt you for years on every shipment you get as well as international travel. And so that's something I don't think I would mess with. Interestingly, I've got some product in Vietnam that's ready to come over. I gave them the tariff code that I thought the product would fit the best under but also has the lowest duty rate that I could find. They're actually arguing with me trying to get me to use this other tariff code that's more costly because they're afraid that if they get inspected and they use the wrong code, they could get in trouble about it. You know, obviously I want to pay less duties, but at the same time, it's rather refreshing for them to be trying to do the right thing, right? They want to be on the up and up, not trying to skirt the system in any way. Speaker 1: Yep. Well, I don't think that that's common in China because there's no repercussions for them. Speaker 3: Right, for sure. Speaker 4: Yeah, it's like what incentive do they have to adhere to the law? None, because there's literally nothing we can do. So in a culture that unfortunately already promotes bribery and corruption as it is, to do that, to act the same way in another country where there is no repercussions, what do they have to lose? Why would they not? It's kind of what it comes down to. Speaker 1: And I know we bash China a lot. I mean, there's a lot of ammunition for that, but it's not all bad. There are companies, brands and factories that they do a very good job. They care for their customers. The bosses of those factories are like family to the people and they have gone on vacations together and stuff like that. So it's not all bad. But it's definitely not all good. And so what we're getting at here is like in the world of Amazon, we always say know your numbers, right? This is part of that. You know why your numbers are the way they are, right? So there's an underlying knowledge that you have to have here because you are fully responsible for this and it's extremely expensive to get caught breaking the law, you know? And negligence, as police like to say, is not an excuse. Speaker 3: Yeah, it's, yeah, like you said, Dana, we're talking about China, but people doing this stuff, cheating the system and things like that, that's everywhere. You know, it's human nature and stuff. The difference, I think, is that it's in China, it's more of a culture. Yeah, doing these kind of things, right, where in the United States and Europe, most of Europe, for example, the culture is more, you know, do unto your neighbor as you want them to do to you and do the right thing. Obviously, corruption, everything happens in, in the United States and Europe as well. But the culture is different compared to the culture of China. Speaker 2: It's crazy. I know for like over in China, they have these large Amazon seller conferences where all they're doing is just sharing black hat strategies, right? And these strategies, like it's massive. They're huge. And they're all on board. They're all doing the same thing. What does that do? Speaker 1: I know a few people that are part of those two. Speaker 2: Yeah, right. And it's just like, it's openly shared, like, this is how you cheat the system. This is how you can win. And it's openly shared and talked about over there. And it's, you know, it's almost celebrated, whereas over here, it's like, everyone's You know, like Todd said, it's better to ask for forgiveness than permission sometimes. And it's like, oh, I'm going to play in a little bit of a shade of grey and hope that everything is fine, where these guys are just like, they're blatant, right? And one of the things that I'll really speak to is just like that recent trend on TikTok, I'm not sure if you guys saw it, where all these Chinese manufacturers were coming out and saying, hey, I'm the factory that makes Lululemon. If you want to order leggings from me, contact us direct. We'll sell them to you for $10 instead of the $100. And they just started throwing the IP NDAs out the window. So China's, you know, this is part of the escalation is China's now starting to ignore IP. And so now there's factories, yeah, started. Now it's a lot more blatant, right? But now it's like these Chinese factories are coming out on TikTok. They're posting their emails and saying, like, contact us directly. We make these products. This is how much it actually costs. And they're doing full cost breakdowns on materials and everything that's involved. And they're like, you want this? We make this. Speaker 1: They're desperate. They're desperate. I have certainly heard more doom than I have sunshine since tariffs, since we dove into this whole area. And I have quite a few friends that in this space that have said, yeah, we just put a hold on everything. Speaker 2: I think shipments from China are down like 70%, right? Speaker 1: I don't have any statistics myself, but I believe you. I believe at least 75% of the statistics you see on the internet are true as long as they're made up on the spot, you know? Speaker 3: Yeah. Speaker 2: But the interesting thing is like, so if you think about when the tariffs were actually announced, I think it was like April 10th was the escalation. Um, you know, the 22 to 35 or 45 days from now. So we haven't even seen the price hikes yet. Right? Like everything that's on the water right now is still on the water. And, you know, I think it's between May 15th to May 30th. We'll start to see that really impact as those goods that were on the water start to actually hit and get nailed with that clearance. Right? Like I had one client who said that, um, he was one day late getting out of the port and he got hit with the $145 instead of the $83. And he's doing some, you know, he's doing a massive shipments. He's in retail as well as e-commerce and it's just like he's shipping. Not a small bit of volume. So it's like, you know, he said take the tariff divided by two and that's how much he's going to be increasing his price. Speaker 4: We had Steven Pope, my Amazon guy, who I know has been a guest on this show quite a few times. We had him as a guest on our mastermind call this past week. And that was the first topic that we covered was tariffs. And I asked him for his advice. I said, Steven, what are you recommending your clients do? What are your thoughts? And his perspective is kind of just to sit back and wait. His take is that there's no first mover advantage in moving your manufacturing to, say, Vietnam or another country because there's so much unpredictability in the market that it's almost best to just sit back and wait, right? We don't know what it's going to look like 30 days from now, 60 days from now, 90 days from now. And the infrastructure required to really manufacture in the US at a scale that could even come close to replicating that of China is going to take years to create. So he was like, sit and wait. And if it means you got to stock out on your best products, at least try to stock out slowly by raising prices over time. But it's going to hit a lot of people hard, especially people that didn't buy, say, a year's worth of inventory in advance and have those cogs locked in and that product sitting in a warehouse somewhere. Speaker 1: Yeah. Speaker 3: Yeah. My cousin makes a product that's all aluminum and he has a factory in the US that makes the product for him. But he went over to them with an order just recently and they're like, we don't know when we can get you this order because nobody wants to set a price on aluminum for them to import it. That was before Trump removed all the high tariffs on most of the countries except for China. Then post that, he went back to them. He's like, okay, so now are we good? You're able to get the aluminum? They're like, no, not really because there's no aluminum to be had because all the big companies bought it all. Now we can't get any aluminum to manufacture. The supply chain is going to be totally messed up for a while while this works out. I think until you start hearing some major announcements for agreements, like final agreements with countries, things are just going to be all over the place because people are afraid to set prices. They're afraid to start production possibly in fear of what could happen. Yeah, which is one of the worst things in a market for a market to deal with is uncertainty. Speaker 1: Yeah. Well, a lot of people, let's take the stock market. What happens when people freak out about stocks? Nothing good. Speaker 3: No. Crash down quickly. Speaker 1: Yeah. Speaker 2: Same thing about, yeah. Same thing about trying to start up a factory in the United States. Like I, you know, that client that I was talking about that was importing for Walmart, they were saying that, you know, why would we start up a factory in the United States when these policies change by the hour? And it's like, we're really not interested. Like we have the capital to do it and we can shift our manufacturing, but it's like this could be gone in 60, 90 days, like you said. So it's like, why would we invest all of this expenditure in this when, you know, we can just wait? Right. And I think that's the, you know, and, you know, going a little farther into the item, meeting with a client who was talking about launching a product, you know, last week. And I said, you know what? I don't know if right now is necessarily the best time to be doing it. Let's just take a wait and see approach for a week or two and let's see what happens. We don't know what's going to happen with buyer sentiment. We don't know what's going to happen with all these tariff wars and everything like that and how everyone is going to be impacted. Let's just Take a minute. And, you know, Amazon's not going anywhere. This tariff war will get resolved, although I did have an interesting, you know, I've been doing lots of meetings lately. I did have an interesting meeting on Thursday night. I met with one of my clients. He's on the other side of the Great Firewall. So he's based in Shanghai and he's a Chinese aggregator. And I was talking with him about it. And he was telling me, he's like, you know, like, the result of this is going to be a lot of a lot of Chinese factories are going to be pulling out of the United States. He said, that's going to be step number one. And he said, step number two is there's going to be that cheating that we're talking about right now. And then he said that there's just going to be, you know, they're in a good position where they stock six months of inventory at once. So they're going to ride it out. And they're thinking that, you know, from his side, he said that China is like, we're not thinking of budging. He said, we'll go back to eating rice, rice and lentils, like we won't take vacations. We don't care. We'll just log in and we'll ride it out and we'll figure it out somewhere else. They were saying China's, is it 15% of exports go to the United States or something like that? And then I think their second biggest client is actually themselves, because I think it's like China's selling to Beijing or Hong Kong or something like that. And I think that that's just a way of them fudging the numbers. And I think all of that is actually going into the United States. So I do think it's a bigger number. I do think it's a bigger number than what's actually reported. Speaker 1: So he has firsthand experience with breaking the rules. Speaker 2: Oh, yeah. Yeah. And so it's like they'll find a way. They'll find a way. Right. And China has all these satellite factories all over the place. They've been working towards this for a long time as well. They are in Vietnam. They are in Malaysia. All these factories are opening everywhere else because they know that the United States likes to throw these I don't want to say embargoes, but tariffs, and trying to make things harder for their long-term plan. Speaker 1: It's legal. These tariffs aren't an embargo, but yeah, they are. Speaker 2: We're getting to the point where trade's stopping, right? Speaker 1: Yeah, exactly. I mean, it's not illegal to trade. Speaker 3: Hey, Amazon sellers. Tired of losing money on storage and shipping fees? Well, Amazon Storage Pros is here to take the headache out of logistics. We manage everything from inventory and creating efficient shipping plans to working with 3PLs and Amazon's AWD so that you can focus on growing your business. Start with a free storage cost audit and discover exactly where you're overspending and how to fix it. Don't let logistics eat into your profits. Visit AmazonStoragePros.com. That's AmazonStoragePros.com to get your free storage cost audit and start saving today. And now back to the show. Speaker 4: It just doesn't make sense. It doesn't make business sense. Speaker 1: Yeah, it's not sustainable. Thank you. Speaker 4: One point that Stephen Pope made on our call earlier this week, he said that this Q4 and this Christmas in particular is going to be very interesting with a lot of people stocking out, a lot of brands and pricing going through the roof. A lot of opportunities for sure for certain people but then a lot of missed opportunities for others. So it will be interesting to see how Q4 shakes out specifically. Speaker 1: I think there's huge opportunity. In this absolutely like my my what my my main product is made in california so i have nothing to worry about any ingredients are not imported from china. You know i'm i've been a i've condones manufacturing america as much as possible. With my private label I tried I tried like hell to find a manufacturer in in America And I could not find anybody that had the equipment to make what I needed So I abandoned the brand I abandoned it Yeah, I'm in a similar position sorry go ahead Dan oh with the fishing poles or fishing equipment I. Speaker 3: No, just not with the polls. Those are, I haven't made in Vietnam, but a lot of the, most of the best selling products that I sell for other people are made in the US. Speaker 1: Oh, awesome. Speaker 3: So, I'm in a relatively good position. Now, some of the parts that they use in manufacturing may come from China. Speaker 1: Yep. Speaker 3: But, you know, the good thing about all this, regardless of what ends up happening between China and the US, It's going to push a lot of those Chinese factories to open up factories in other countries. I know Egypt and Vietnam and Mexico and other places. To me is a good thing because now those factories are under the laws of those other countries. They're going to have a little more oversight and scrutiny. Obviously, it depends on the country how well you can buy off the local officials and such, right? But, you know, it adds another layer of things and it diversifies the supply chain. Speaker 1: Yeah. Speaker 3: In case something was to happen down the line between the US and China. So in the long run, I think it's going to be beneficial in the short term, which we're talking like the next three to six months. It's probably going to be a roller coaster. As things get figured out. And Neil, you mentioned about companies not wanting to open up factories in the US. I think you're correct on that unless you're a big company that can afford to roboticize or automate most of the factory. What is it? NVIDIA, I believe, is opening a giant factory in Texas. Majority of that's going to be run by robots and AI with people in there fixing the robots and AI, and that's about it. Big companies will be able to do it easy. I think small companies that are just opening up little factories in their shops and things like that, they've got maybe a CNC machine or an injection molding machine and stuff like that. They're going to do really well. But for people who are already manufacturing overseas or have their main operations overseas and aren't in either of those camps, They're going to probably hurry up and wait to see what actually happens. Speaker 1: Let's not forget that eight years ago, we went through the same thing. That was when Mexico was like all the rage. A bunch of us went down to Mexico. Amy Weiss put together the Mexico Manufacturing Convention in conglomeration with the Mexican Trade Association. I can't remember what they're called. And then it was like a up and a down where people realized the logistics just aren't there. But if we could get these factories, I know that China started opening factories in Mexico. But I would love to be able to manufacture all my stuff in Mexico. You can drive there. Speaker 4: Right. Speaker 3: Yeah, for sure. Yeah. And a lot of that's probably going to end up happening. Right now, Trump is kind of hammering on Mexico and China over the illegal immigration and drug trade that's coming through those borders. That'll iron out and work itself out. You could end up seeing a lot of factories in Mexico. But the problem is that they have to build up the infrastructure and the customer service, I guess I should say, like China has, because that's one thing that China is amazing at. And the thing about Amazon is they can pretty much just handle everything for you. In the US, it's much harder. Speaker 1: Yeah. These other factories, they don't handle all aspects of your product necessarily. They're fifth generation woodworkers that all they do is this thing. They can't box it for you, pack it, negative space, fill, all that stuff. But the factories that adapt to that and then get themselves known, they're going to do a good job. They're going to do well. Speaker 3: Or the sellers who are able to figure that out and make it happen, right? Like you said, Corey, there's going to be a lot of winners and losers. And this is an amazing opportunity for entrepreneurs who are willing to jump in and figure it out. Like, is it Aaron Cordova, I believe, is the owner of Zulai Kitchen. I've been seeing some of his posts and, you know, he is Mostly like very positive about the tariffs, you know, which you would think would be surprising because they manufacture a lot of stuff in China, but he's really coming at it from a perspective of, you know, if he's the one who can figure this out and get through all this stuff. On the other side is a lot of opportunity to be had for those who make it through. Speaker 1: Yeah. Also, Brandon Young just posted a video about tariffs and how you should be charged on them. I didn't get a chance to read it all, to watch the whole thing because one of my daughters broke into my office and then I had to, who knows what I had to clean up. But he was going over the fact that you're not supposed to pay the tariff based on what the factory charges you but based on what the factory paid for that item. So if they're buying a zipper over here for $0.30 but they're charging you $0.70, you don't pay tariffs on the $0.70, it's the $0.30. Any details about this, but he is one of a select group of people in the industry who I firmly trust to deliver real and actionable and valuable data. So if anyone's not following Brandon, I'd go look at what he posted recently because I think it's going to be very helpful. Speaker 2: That's who we're recommending as well from the agency. I'm not sure if he's a nine-figure seller, but from what I heard, he does 95% of his business in China. And if anyone's going to get hammered on that, it's going to be him. And I know he did put on a webinar. Speaker 1: That's right. Speaker 3: Yes, you did. Speaker 2: And so, you know, I don't know where it's living right now, but for those of you who are tuned in, check out, we're recommending them, Brandon Young webinar on importing and tariffs and how you can minimize the damage from this. Speaker 1: Yeah, I think it's inner circle. Speaker 2: It is the, or Seller Systems, it's Seller Systems. Speaker 4: Yeah, I think it's just Sellersystems.com. Speaker 1: Okay, so it's through Seller Systems, yeah. Speaker 3: Yeah, he puts out good content for sure. He's definitely somebody I would recommend following. We do too, Todd. What's that? Speaker 2: We do too, we do too. Speaker 3: Yeah, well, yes, lots of people. You guys all put out good content for sure. Speaker 1: That's right, everybody. Follow us, we're geniuses too. Speaker 2: I meant Amazon Seller News, Amazon Seller News. Speaker 3: Absolutely. Speaker 1: You heard it here first. Speaker 3: All right, next story here. So we're going to kind of stick in with the tariff deal a little bit here. So Amazon shifts strategy on Haul as tariffs threaten ultra cheap imports. Amazon is reworking its Temu-style haul store by adding brand name items shipped from U.S. warehouses, moving away from its original promise of ultra-cheap, unbranded Chinese products. This shift comes as new U.S. tariffs and the end of the de minimis rule will soon add duties to low-cost imports under $800, impacting haul's core model. For Amazon sellers, the move signals growing pressure on ultra low-cost imports and an opportunity to compete more fairly as Amazon pivots to US-based fulfillment. Sellers should watch this shift closely, especially as it may influence consumer expectations around price, delivery speed, and sourcing. Daymond, what do you think? Speaker 1: This to me sounds like Amazon's going, oh crap, and they're eliminating all their cheap inventory. That's what I read this as. Speaker 3: It kind of sounds, my first thought is like, okay, so they're going to make, they're turning Haul into Amazon.com, I guess. Speaker 4: It's like, what's going to be the difference if they're adding brand name products? What's going to be the difference between Haul and just regular Amazon.com? Is it just going to be brand name products under a certain price point? In which case, I mean, it's still most likely going to be imported goods. So what is the differentiator? Speaker 1: Well, these are non-brand names, like no brand names, right? Speaker 4: I thought that, Todd, in the article you said that- They're adding in brand names. Speaker 2: They are adding in brand names. Speaker 3: Yeah, they had a few down here. Let me see if I can- But like those- I think Levi's was mentioned. They're including those products now as well. Speaker 1: Okay. I was going to say, what, they're adding branded products like those Apple iPhones that we were seeing all over Amazon Haul? Speaker 4: Were they actually, were there iPhones on Haul? Speaker 1: No, they were just using the Apple logo. Oh, like it was clearly an iPhone when they were selling a case, you know, and there was just, yeah. Yeah. Speaker 2: This seems like, um, I think about like Marshalls, like the chain Marshalls. It's like you go in there and you know you're getting some branded stuff, some non-brand name stuff, but you know you're getting cheaper prices, right? And it's like, okay, I don't really care about the brand name. Just give me a good deal. And this seems like a very big swing and a miss from Amazon right now because they're It's absolutely no difference now if you're bringing in branded products. And the under $20 section is now over $20. It's just like the dollar store. To me, this is a swing and a miss. I wouldn't be surprised if Amazon wraps this up sooner than later and just kind of focuses back on... Speaker 3: What's the difference then between Amazon Haul and Amazon Outlet deals? It's basically they should just merge the two, I guess, and just make it all one big thing and make it like a TJ Maxx style store where you've got the name brands plus the cheap We've got a lot of products and things like that that you can pick from, but I don't know. It just seems like a conflict of interest on Amazon's part. Speaker 4: So does anybody, and I guess semi off topic, but not really. I mean, what is Tamo and Shine been doing since these tariffs went into effect? Like they're obviously continuing operations, What's the latest with them since this has already been announced? Speaker 2: I just saw an article that said that they are going to be raising their prices. Speaker 4: Okay. I mean, I figured they had to be, but it was just a matter of how much and how much money are they going to lose if they don't. Speaker 2: Yeah. Speaker 3: Yeah. Speaker 2: Because I think I saw that their prices were from $2 to $30. Wow. For some of them and then for another one, I think it was like $5 up to $200. I think. Speaker 4: Oh my gosh. Speaker 2: So they're like, those are, those are their standard prices. Right. So like they'll be raising their prices for the, but imagine buying a t-shirt for $2. Right. Like, you know, exactly. And just kind of going back to like that TJ Maxx style, it's like, you're getting those, some of those brand names end up in those stores because they are a swing and a miss from the real brand. Right. Like, The size is funny. They thought they had a really nice style and no one took and it's a swing and a miss there. I think with Sheen and Timu, they are definitely going to be feeling this. Their low cost, the loophole just got closed. Speaker 1: Well, they're trying to attract us. As sellers to go onto their platform. And I think that's the best potential that they have. Who was it? Was it? Was it T? I think it was Timu that was that had quite a large booth at Prosper. I actually didn't go visit them, but I should have. But I think it makes sense for them to go, hey, why don't you sell on our platform? We'll give you highly competitive rates. Why not? A little side thing, walking by the booth reminded me of being at the trade show in China. Speaker 2: Canton Fair. Speaker 1: Thank you. The Canton Fair. Although this was a much nicer booth, but it was filled with, I'm not even joking, like 25 Chinese people. Nobody talking to any other sellers, just all speaking amongst themselves. So strangely uninviting, which is why I just kept walking past it. Like no one said, Hey, how's it going? Or anything like that. So that's a swing and a miss for them to invite people. And I saw very few sellers walk in there, but it does make sense. And it's going to make sense for us as sellers to Why not? They have traffic. They got a platform. It doesn't cost me as much. It's another opportunity. I'm always a big supporter of diversifying off of Amazon because Amazon will eat your lunch on accident or on purpose. Speaker 3: Yeah, for sure. Speaker 4: Yeah, and especially if it's just a way to diversify. You don't necessarily need to go all in on those platforms, but why not? Speaker 1: Yeah, unless your sales go gangbusters. Speaker 4: Right. I was going to say, why not cross list and test it out? Like you said, it's kind of a way to hedge your risk. Speaker 2: If you got in early on Wayfair and you're just on the platform already approved and it's just like Wayfair is a great place to be a seller, right? You get nice high margins and people know that you're getting quality products from there and you don't deal with the headaches that you deal with on Amazon. So if you can get in early, And, and get a spot there where they're, you know, maybe they have a little bit of a looser onboarding. It could be a great opportunity, right? Like you never know. Speaker 4: Yeah. Speaker 1: She and Timu go ahead and reach out to us and we'll build the affiliate links. Okay, cool. Speaker 4: Thanks. Yeah. Speaker 3: Yeah. Yeah. So this is one of the other articles that were, was in the newsletter today. So just read this real quick. Temu's ultra low pricing model is under threat as the U.S. ends the de minimis loophole and imposes steep tariffs on Chinese imports, forcing the company to either raise prices or absorb unsustainable costs. Experts say Temu may reroute goods through lower tariff countries or invest in U.S. warehousing, but both options come with strategic and financial challenges. So yeah, opening U.S. warehouses and or like we talked about earlier, rerouting the products through other countries, both of which are gonna increase the price of the products that are on there. Speaker 4: Right, no doubt about that. There's no avoiding that at this point. The prices are gonna go up. It's just a matter of how much are they gonna go up. Speaker 3: Yep, yep, definitely. The question will be, you know, the products that are coming from China are going to go up. And how will that compare to products that are manufactured outside of China, you know, because you're not all products on Amazon are going to go up, probably all the prices on Tim are going to go up, but not all of them on on Amazon, you know, like the ones I sell, mostly are made in the US. So unless they're getting a lot of their raw materials from China, those prices won't necessarily change a lot. So that could make those products a lot more competitive. Speaker 1: I believe that prices holistically will increase. Look at what we're paying for food today. We don't have a food crisis now like we apparently did before. Don't ask me to go into that because I don't know any details but apparently some of the pigs flew away and the chickens killed themselves off because one of them got the flu so they killed 90 million chickens a day or something like that. Now, eggs are the price of Same way this gold, you know, yeah, but um, but that all happened after right like we had a swine flu that that the birds got and the birds whatever but I think that the prices are gonna go up. Anyhow, I believe that sellers will feel that this is an opportunity to attract a couple more points on their profit margin. And why not? Because people are going to pay for it. Certain things will take, bless you. Oh, you've already been blessed once today, Corey. Speaker 4: I appreciate that. Speaker 1: But I think that the prices are just generally going to go up because people are just accepting the fact that that's what's happening. Speaker 2: And it's simply why not, right? Like you have the ability to do it and you just take it. In Canada, the government did a thing where it was a GST holiday. So they just knocked off the GST for two months on products. And instantly every single retailer just raised their prices and the GST holiday ended and the prices never came back up. It was just like a way for them to be able to sneakily do it. So like we didn't, we were supposed to get a slight discount, but we didn't actually get one. And this could very well be the exact same thing. Speaker 1: Yeah, totally. Speaker 3: Yeah, yeah, for sure. So then the question will be, will the income of, you know, Americans go up? More than the increase in the price of the products. Speaker 1: Well, if we get rid of income tax, uh, yep, it will. Speaker 3: Yes. That'll be the big thing. If he can do that, then yeah, you'll, you'll come out a major winner in all of this, but that's definitely a question mark yet. Speaker 1: Yeah. What better way to stimulate the market than to let people keep more of their money? Speaker 4: So Joe has a good point here, and he knows his stuff, right? I know Joe personally, he has experience with a lot of this stuff. So he said the rerouting of products still doesn't legally remove the tariff issue. The tariff is typically based on the product's origin, so you would still be falsely declaring, which would be painful if caught. And again, that's something that I bet a lot of people just don't know, and they're not gonna realize until they do get caught. So they might even think that they're not breaking the law, that they're not doing anything wrong, and then they come to find out they are. Speaker 2: Yep. Speaker 3: Yeah. Got to be careful for sure when you're doing that kind of stuff. I wanted to bring in one question that we have back here. It's not related to the news, but I want to answer it for the guy. So Ahmed had the question, Amazon randomly gated products and they require 300 units to ungate. Does it mean OA model is dead? Give me suggestions. What can I do? Interestingly, I just had that happen to me yesterday. I was looking at a couple of products that I'm like, oh, maybe I should get these from my distributor and sell them. And so I went over and they were gated. And when they went to ask for the invoice, one of them wanted 100 units and the other wanted 300 units. So Amazon is definitely jacking up that minimum quantity that they need on an invoice. Everything used to be 10, right? Or they would just magically ungate you with nothing. But yeah, they've been moving that up quite a lot to make it It's harder, I think, for people to cheat the system. Ahmed, the only thing you really have, the course of action, is to get that invoice for the number of units that you need and get ungated. There's definitely a risk there because they could refuse your invoice. You're going to want to make sure you're buying directly from the brand or buying from a legitimate, a truly legitimate distributor. But that's really your only recourse unless you know of anything else, Corey. Speaker 1: Before you answer that, let's give them a little bit of history here. So, sorry to interrupt you, but I think it's important that people know why we've gotten to this point and it's because there was a ton of inventory that fell off trucks, tons, just millions and millions of units of inventory that fell off trucks and they were getting sold all over the place and tons of fraud and counterfeit products and stuff like that. So, Amazon's been implementing these First of all, they actually put together a full-blown coordination effort with government entities to go and seize property and stuff like that. And then they also have been making it so that if you want to sell a product that you can't just bundle it with something else and call it a new ASIN, right? So it has to be something that's from the factory. And so Amazon's, and this is what, this is what it's like dealing with Amazon. It's, I've got 15 years of watching these things go in and they do, they make these incremental changes trying to solve a problem. And in some ways it kills a market or makes it worse or, or fixes it. Right? And so you need to expect, especially if you're an RAOA whatever, any type of arbitrage that, that, It's been changing this way for quite some time and you can expect it to continue to change because Amazon has gotten a lot of heat specifically from these types of sellers. So I just wanted to give that history before Corey gave more context. Sorry, buddy. Speaker 4: No, you're good. And I think it makes sense to put that caveat out there, right? Because really the reason Amazon is tightening up a lot of these requirements is because they're getting pressure from the government to police counterfeiting, police review manipulation, and quite honestly, just police sellers who have no idea what the hell they're doing, who don't know the difference between a counterfeit product and a legitimate product. And so he asked, well, is arbitrage dead? No, I don't think arbitrage is dead. I think far from it. The process of on gating is going to require you to have a legitimate wholesale source because there's very few websites that are going to sell you 300 units of a product without canceling your order or sell you 300 units of a product and issue you a single invoice because a lot of times. 300 units is going to come from multiple different warehouses. So you're going to have an order confirmation for 20 units and then 37 units and then 20 here. So I don't think arbitrage is ever going to go away. Amazon knows that they need arbitrage sellers to fill the supply for a lot of products out there that either are hard to get wholesale or that just wouldn't be sold otherwise. They're just going to continue to increase the barrier to entry for newer sellers, which is a good thing for established sellers like us, but it's also a good thing for newer sellers who are serious, who treat it like a business. I remember when you and I recorded our podcast episode for my podcast, that's one of the things that we harped on for a good portion of that episode. Amazon sellers just aren't professional. The vast majority are not professional and Amazon realizes that those sellers are a liability and so they're tightening these screws to make sure that those unprofessional sellers don't get in or if they get in, they get weeded out quickly via a section three or a video verification interview or all of the methods that we've seen recently and that large legitimate sellers continue to operate relatively unimpeded. Speaker 3: Yep, yeah, for sure. Yeah, that's a, I was coming at that more from a wholesale perspective, I guess he's talking about OA. So you're 100% correct. You're not going to be able to get 300 units most of the time from, you know, Walmart or some other place. In a situation like that, you might have to try to find a distributor that you can get it from and then go down the OA model with it from there. Speaker 1: It makes strategic sense to diversify from arbitrage over to a wholesale model. Speaker 3: If you can get it cheaper, you can't always get it cheaper from a distributor than you can from Walmart or something. Sometimes they sell it cheaper than most people can buy it wholesale. Speaker 1: That's true. But if you take the hit on one invoice and you get approved, We're selling that product. Well, then you can continue your OA model, right? Because then you don't have to continue to prove that you've been approved. Well, in an ideal world with Amazon, which doesn't exist, but happens occasionally. Yeah. Speaker 3: I mean, you've got a moat right around you. If you do get ungated, most people, other people out there are going to look at that and be like, okay, next product. They're going to move on. A lot of people want to get it. You've got a golden opportunity. Speaker 1: Yeah, a lot of people like to whine about what Amazon is doing to them, right? And I was one of those people too, but if you just put on your big kid pants and be like, all right, I got punched in the face by Amazon today. What am I going to do to hit back? You're always going to get slapped around by Amazon. Always. Speaker 3: Yeah, and that's part of being entrepreneurs, figuring those things out. That's what separates the successful ones from the unsuccessful and those who, you know, go back and get a nine to five job or whatever. Because these kind of things are going to happen, whether you're doing selling on Amazon, or whether you've got a retail store or whatever, there's always something. That's going on a new local zoning regulation or who knows what, right? It could be anything that's always coming up and that's what makes an entrepreneur is figuring those things out. Speaker 1: Amazon implements something where you have to get it tested at some sort of science facility that costs $40,000 to get the testing done. And you have to use Amazon's. OK, I'll give you a perfect example of this. Amazon literally said you have to use this facility to test and it has to be through Amazon. And the testing was double the price. I checked it. Double the price to go through Amazon than it was to go direct to the same one. But you had to go through Amazon. Speaker 3: Of course. Speaker 4: I mean, a monopoly, that's what happens when you have a monopoly. It is what it is. And it's one of those things where they're too big to fail. They're too intertwined with the government. We could get into conspiracy stuff all day. We won't go down that rabbit hole. What I didn't realize is how entrenched AWS was with the military. I'm not going to quote an incorrect statistic, but a large percentage of AWS revenue is with the U.S. government or the U.S. military. So there's just massive conflict of interest, massive incentive for the government to look the other way in certain cases. So I don't really see the monopolistic tendencies slowing down anytime soon and certainly never stopping, at least as long as Amazon is as entrenched with the government as they are. Speaker 1: I mean, the whole world runs that way. Speaker 4: Yeah, totally. You're right. You're not wrong at all. Speaker 3: When I'm talking to people from other countries that come from countries with a lot of corruption and stuff like that, I usually tell them, we do the same thing here in the United States. We just hide it better. Speaker 4: That's so well said. Speaker 1: Or it's official. Speaker 4: Yeah, or it's a law. Exactly. Speaker 1: Yeah, I've been in a couple of countries, helped business, a medical facility launched into the Bahamas once. And the only way, the only way to be able to build this hospital was to grease some palms. That was it. Speaker 4: It had to be done. Speaker 3: Yep. Yeah. And that's the case in most countries of the world. That's just the way things operate, unfortunately. Speaker 1: Look, the bullshittery that us Amazon sellers put up with is just a miniature version of as you go up the chain of large business and then governments and then government contracts and stuff like that. So if you get good at it at this level, just orders of magnitude after that. Speaker 3: Yeah, absolutely. Speaker 2: That's just like Apple achieving the exemption status, right? It's the order of magnitude. Speaker 1: That's right. Speaker 3: Yeah, for sure. Speaker 4: Well, Todd, the other, yeah, I was about to say, I was like, the article that you have here about the veteran sellers, I really want to get into, because I have a strong opinion on kind of this topic, and I think you guys will agree, but it's something that I feel like there's a lot of negative sentiment towards as far as is there opportunity for newcomers? Speaker 3: Let me read through it real quick and then we can dive into it. Veteran sellers still rule Amazon, but there's room for newcomers. Over 60% of the top 10,000 Amazon.com sellers registered before 2019, proving that experience and endurance are key in today's market. Despite daily new registrations, most elite seller spots remain locked in by veterans who've weathered rising fees, ad costs, and global disruptions. Still, nearly 10% of top sellers joined in the past two years, showing that strategic newcomers can break through. For Amazon sellers, the message is clear. Longevity matters, but adaptation and smart execution still open doors to growth. Speaker 4: It's funny to me that that is the headline when we're talking about selling on Amazon, when that is literally just how business works in general. It's like, hey, you do the same thing for multiple years and you're good at it and you operate efficiently. Yeah, you're going to be one of the top businesses. And if you quit after six months, yeah, you're going to fail. I love how we, and Dana and I, this is something you and I talked about too, right? Quite a bit on our episode is that For some reason, Amazon sellers and just people who operate in this space, they think they're operating in a bubble that doesn't have the same rules as regular business. They think that they can get away with being unprofessional or they think that they can drive the Lambo within four months. I don't know why the sentiment in this business is the way it is, probably because of all the people advertising on Instagram the way they advertise. But in general, it's just you use You run a good business, you outlast everybody else and you win. It's pretty much that simple. Speaker 1: Yeah. I really think that we should attract sellers by doing a baloney YouTube ad where, I've been wanting to do this for years, like leaning up against a Lambo outside of a nice house. Unknown Speaker: Like, do you want to have what I have? Well, blah, blah, blah. Speaker 1: And then someone comes out the front door and like, I told you to get the hell off my property. And then we run back to like our Toyota. or something like that. Speaker 4: They had an Amazon course and they ran a video ad campaign, just like you were saying, where it was multiple different scenarios, but the start of the ad, the guy's like, all right, here I am in my Lambo, and then he gets out of the car, he's like, just kidding, it's my piece of shit Toyota Camry, and then he jumps into the pitch, right? But he had that same opening on, here's my Lambo, here's my house, just kidding, it's a trailer, right? And they crushed it. Apparently they sold so many courses, And from what I heard the course was put together by VA. It wasn't a very good course, but I missed out. Speaker 1: Yeah So, okay, there's something else I want to add to this I think that there will always be opportunity for new sellers always. Yeah, but Like this ain't the Wild West so much as it was it's still fairly wild right things can go bonkers easily, but You know, 15 years ago, all you had to have was a good photo and you made sales. And 10 years ago, all you had to do was bribe 70 people with your product for free and you made sales. And five years ago, all you had to do was do a great ads campaign and you made sales, you know. And now today, Well, what is it, right? It's just getting more. You have to be more efficient. Depending on who you are and what you want to do, you have to have more money to start and there's a much steeper learning curve. But the way that the path is paved, you just have to filter through the garbage to get there. YouTube University is fantastic, but algorithmically speaking, you're going to go through 90% crap To find out what you need to know. And so that's why people like Corey and Todd have these seller schools. You're gaining knowledge from experience, right? And then that's why companies like PPC Ninja exist because they know what they're doing because they've got a decade of ads data that's built into their AI and their management. You know what the saying is? It's not who you are, it's who you know. And that's never been no less true now because you just need to be on the right lines of the right people and find who you can trust. And that's fairly easy to do in this because you've got people that just throw up whatever data comes from others and then you've got people that I provide you data with solutions behind them. It's the solution backed helpful people that I think have the greatest amount of truth in this industry because they're not just out there putting out alarming information, right? I can do that. Easy. I can say, oh my God, Amazon made a change. Everyone go jump off a bridge because that's what I'm doing, right? Or I can say, oh my God, Amazon made a change. This is what I've done to solve it. This has been my journey along the way. Ben Leonard. You guys know Ben Leonard? You will soon. Speaker 3: I think so. Speaker 1: He's actually something of a... He's a first original mover and shaker in our industry. He's from England, if I'm not mistaken. He sold the very first brand out of the UK to Thrasio and has now just reacquired it and is doing a whole crazy documentary of reacquiring this brand that was ruined by Thrasio and getting it back up to where it was. Speaker 4: I love that concept. That's awesome. Speaker 2: Sounds like Barstool Sports. Speaker 1: Yeah. Speaker 4: Yeah. Speaker 1: So that's, that's going to be Ben. Ben is one of the people like he's no fluff, you know, he's going to tell you how it is and that's who you need to go look, look to for information. And he's literally just starting this journey. We, he, he and I had a conversation about it a couple of weeks ago. Um, I would watch him. I will be watching him and I'm going to, I plan on partnering with him on this and helping him out from my aspect with the review removal. But you know, There's always going to be opportunity. It's just how you enter it is changed and you can't take a course from five years ago and expect to get the same results. Speaker 2: The stakes are a lot higher now, right? The barrier to entry is higher. You can't afford to make those mistakes on your initial launch. It's all about time in the game, like Corey said, and in order to get that time in the game, you can't screw up. On step number one, two, three, four or five, right? Like you have to be dialed in kind of right from the beginning, especially because we, you know, we kind of talked about it earlier. We are in late stage Amazon, right? Where it's like, you have to move optimally through the Amazon system in order for them to really give you love. And if you're like, the number one mistakes I see from new sellers is Under two little inventory, two little startup capital, right? And it's just like, they don't understand the numbers required to actually start this up. And so when you're looking at starting a, you know, a regular business, say you want to start a bar, you know, how much are you looking at? You're looking at 200,000 just to, you know, leasing materials, rentals, all that kind of stuff. Like that's the same thing. It's just the overhead on e-comm is smaller, but you still need that good seed money. And that's where, you know, Amazon Seller School, Corey, like we all try to share as much information to make it so everyone can succeed. Because I, you know, one of the things that Stephen Pope always says, it's us against Amazon, right? Like at the end of the day, it's us against Chinese and it's us against Amazon. Speaker 3: Very well said by all you guys. I don't have really much to add to that, but there's always going to be opportunity, but Amazon's maturing, getting harder. You have to be more professional about it and make sure you're crossing all your T's and dotting all your I's, so to speak. Speaker 1: Maybe it's Senya asked if we can share our X accounts. I'll let you guys do that, but I don't really use X. I'm on LinkedIn. And as a matter of fact, LinkedIn is where you want to go. The agencies that provide valuable Amazon data, the influencers and thought leaders that provide valuable data, they're pretty much all on Amazon. That's not to say they're not on X, but I mean, they're all on LinkedIn for sure. Speaker 3: LinkedIn is great. There's a lot of good information on X as well. Speaker 1: Yeah. Speaker 3: And Corey, you do fantastic on X, but you get a lot more variety, I find, and a lot more depth on LinkedIn for the most part. Speaker 4: Yeah, and something that I've noticed too, as far as the Amazon community, or I can really speak more specifically to the wholesale slash arbitrage community, on X, the wholesale arbitrage community has all but died completely. Like I hate to say it, but when I started on X beginning of 2023, there was probably one to 200 regular faces on the timeline of all experience levels, people that were brand new documenting their journey up to people who had been doing it for years. And you look at the X timeline these days, and there's like me and Miles. So yeah, it's I mean, the community on X has gotten quite a bit quieter. And then LinkedIn, I think, has much more quality information, much more sophisticated people, people that have been at it for a long time, agencies, private label sellers, software as a service company owners, right? So you're gonna get a much higher quality of data on LinkedIn. That's absolutely a fact. Speaker 3: Yeah, for sure. All right. Speaker 1: Best comment ever. OMG, you guys are so amazing. Speaker 4: Are you commenting on your own stream, Daymond? Speaker 3: There you go. Look at that. Who's this Adventure with Daymond guy? He's got the same name as you, Daymond. Speaker 1: This is weird. Totally weird. Speaker 3: All right, guys. We're over the top of the hour. This has been fantastic. I appreciate everybody out there watching and all the questions and such that we've had. Always fun joining you guys and getting you the news. So every Friday we do this 1 p.m. Eastern and I am very positive we'll have all these guys back at some point in the future. So appreciate it you guys and have an awesome one. Speaker 4: See you guys. Unknown Speaker: This has been another episode of the Amazon Seller School podcast. Thanks for listening, fellow Amazon seller. And always remember, success is yours if you take it. Speaker 3: Hey, if you made it this far in the show, I really hope you enjoyed it and I'd like to ask you a favor. Could you head on over to Apple or Spotify or wherever you're listening to this and leave us a review? It would be greatly appreciated and would help us continue to grow the show and offer more episodes for you. Thank you. God bless and have an awesome day.