Can someone explain what these people are doing?

My mail carrier has been handling a lot more Amazon packages recently, due to a strategy being used by one of my neighbors. It apparently goes something like this…

We are in Oregon, where there’s no sales tax. Many Amazon shoppers buy stuff but have it shipped to “this guy” (not someone I know or have met, just someone on my mail carrier’s same route) in Oregon to apparently avoid paying sales tax. “This guy” receives all the individual packages, gathers them up, puts them on pallets and then sends them off via some other service. Somehow, they make their way to the end customers.

I can’t quite figure out how it works, but I suspect a misuse of someone’s Prime account must be involved, as the boxes are all Amazon smiley boxes, so coming from FBA.

Sales tax is usually less than 10%, so even if “this guy” only pays shipping costs once (assuming the first leg from Amazon to him is free through Prime but he still needs to pay to send the packages to their end destination?), I don’t see how this would be profitable or worthwhile. The cost to route the package through Oregon, then forward it to wherever the buyer actually is, plus “this guy’s” cut would have to be less than the sales tax the buyer is trying to avoid paying.

Is anyone familiar with this “method” (scam)?

2 Likes

Sometimes people will pay $20 in gas to avoid a $10 toll.

Literally that’s all I can think of. Unless they are for export, then you could be looking at 20-40% VAT and duty charges, but if he is shipping within North America, it sounds like a lot of wasted $$$

3 Likes

Unless they are for export

Hmm, I didn’t even consider that. But would routing them through Oregon make any difference? Aren’t import taxes and the like (something I know little about) based on the two countries involved, and not the particular state within a country that something comes from?

Maybe he’s simply a home-based freight forwarder. Is there such a thing?

1 Like

Could be sending as a “gift” but most of the time that is caught now.

He also could be an OA reboxer/prep center

AKA, Online Arbitrage sellers buy items tax free, send to him, he puts an FBA label on the item for the OA seller, and off to FBA it goes at some point

2 Likes

AKA, Online Arbitrage sellers buy items tax free, send to him, he puts an FBA label on the item for the OA seller, and off to FBA it goes at some point

But the purchases are coming to him from FBA, not the other way. Mail carrier is delivering a bunch of packages to him each day, which he’s then repalletizing and sending off somewhere else. At least that’s what the mail carrier told me, which must be what “this guy” told them.

I mean in my mind it does not make $$$ sense, but maybe these other sellers are buying on Amazon, sending to him (the “prep center”) and then he sends them back to FBA using the sellers FBA tags?

No idea. No matter what is going on here, seems like a lot of work for $0.0001

1 Like

The only way it makes any sense is if “the guy” is misusing a corporate shipping account.

Or they are just stupid and haven’t figured out they are paying dollars to save pennies.

1 Like

Maybe coupons are involved, or stolen credit cards

1 Like

Just lost a few brain cells tryna figure this one out. This is not a sustainable business.

:person_shrugging:t3:

2 Likes

Well thank goodness you learned this in time! Go SAS!

2 Likes

I could easily accept the home based international freight forwarder explanation.

And that squares with wanting to avoid sales tax.

But checking on some of the “prep centers” some foreign sellers suspended for drop shipping claim to have used, this could be related to dropshipping. There are definitely home based businesses ripping off these greedy sellers from poor countries,

2 Likes

I am not, and like others, it makes no sense at all.

However, since I live in one of the 5 states with no sales tax, I can appreciate it.

Traveling in other states, when they ask for more money then I payed for the item I bought, I always take a second look. It just don’t add up!

Though the drop ship to an offshore location makes sense. If I were to offer the service, my profits would be higher than someone from a sales tax state. For lets face it the margins are thin on that type of thing.

2 Likes

Depends on what’s in those boxes… There could be things somehow going international that this guy has a way to get it through. We made a mint selling stuff internationally through FBA export until Amazon figured out that they screwed up making things eligible that shouldn’t be.

Wasn’t all great, about 20% of the orders got caught in customs and refunded. It was an interesting ride but it’s over now sadly. Lasted about 3 months.

What I should have added to this is that all Amazon 1P “like” items are eligible even though they shouldn’t be. Just shows you how shady Amazon is. Selling shit that’s illegal in those countries knowingly.

Anything for a buck.

2 Likes

If these are high dollar items, then the sales tax savings might be more than enough to cover the onward shipping.

I’m betting he’s doing arbitrage on specific price-point items, using a Prime account and capitalizing on the (lack of) sales tax, to list these items at the same price as Amazon or only slightly lower on a different venue.

1 Like