There’s some meat.
Let me get this out of the way, that was really disgusting.
(groaning) I don’t think we can sellthat on Amazon though.
– [Woman] Here we are, outside Trader Joe’s.
We’re with the Wall Street Journal looking through the dumpster to see whether we can find items that we can sell on Amazon.
– [Woman] What’s this? Sunflower seeds? – Yeah it’s sealed.
– It’s sealed, there’s a bar code.
– Let’s take it.
(synth wave music) – [Reporter] AmazonCEO Jeff Bezos has said “There’s a facet of Amazonthat goes largely unnoticed.
” – There’s a piece of our business which is probably not fully appreciated which is the third partyseller part of our business.
– [Reporter] These are thesellers, other than Amazon, selling on the company’ssprawling online marketplace.
The E-commerce giant haswelcomed millions of them in a quest to deliver on its mission of vast product selection, and customer obsession.
Third party sellers havealso become a key part of the company’s growth strategy.
– Amazon Marketplace ismany times more profitable than Amazon RetailBusiness, and thus it makes so much more sense for Amazon to grow it as opposed to its own retail operations.
– [Reporter] And Amazon createssuch a uniform experience for the customer, itcan be difficult to tell who’s actually doing the selling.
With the explosive growthof third party sellers on the platform, there’s acontinuous race to the bottom.
It’s become a race among sellers to offer competitive low pricing, and win sales over otherslisting the same products.
– So the job of a selleris to try to find some way to source it cheaper than everyone else.
– [Reporter] All ofthis means your product can come from just aboutanywhere, even a garbage dumpster.
– Let’s check it out.
– The Wall Street Journal identified a number of sellers who claim they sell garbage, and secondhand products on Amazon.
– Dumpster diving!- Some even claim they sell these products as new.
– [Man] Thank you Jesus.
Thank you Jesus, whole bag full of salts.
Whole entire thing.
– Where am I finding all of this crazy stuff? Same answer, thrift stores.
– [Reporter] We couldn’tindependently verify sale of all of these goods on the site.
Amazon couldn’t confirm the storefronts of some of the dumpster diving sellers the Wall Street Journal identified.
(beeping)Most dumpster sourcing sellers refuse to go on camera, and decline to give details about their Amazonstorefronts, some citing fear of getting kicked off the platform.
So we put garbage up for sale on Amazon, though quickly bought the items ourselves so no one else could.
We dug through garbage dumpsters, gathered various items, polished them up, and listed them As New on Amazon.
But first we got a glimpse into one way sellers are able to taketheir on-the-cheap products whether from thrift stores, liquidation companies, or even garbage dumpsters, and sell them alongside the rest of Amazon’s inventory.
The key is the FulfilledBy Amazon service, or FBA.
Here’s how FBA works.
Third party sellers sign up and pay for FBA, thenthey send their products to Amazon Fulfillment Centers, warehouses, that are located all over the US.
The products are then markedas eligible for prime shipping, Amazon’s quick delivery option.
When the shopper buys an item, Amazon takes care of sendingthe shipment to the customer.
So the purchase arrives inan Amazon branded package or with an Amazon labeljust like the goods Amazon itself sells.
(doorbell ringing) Rachel Johnson Greer whopreviously managed safety systems for Amazon says “Thebranding FBA products receive “can confuse customers.
” – Anything that was insidethe fulfillment centers would get the Prime badge because it could bedelivered at that speed.
So people started equatingthe Prime badge with Amazon.
And I think at that point itbecame obscured to customers that they were buyingfrom third party sellers.
– [Reporter] FBA has been so successful for third party sellers, that now an estimated54% of sellers on Amazon send their inventory to FBA warehouses and let Amazon take care of the rest.
(light music) Heather Hooks has been anAmazon third party seller since 2009, she is not a dumpster diver, but she does source products on the cheap.
– You get better wheels onyour pallet jack than I do.
– The little ones that don’t roll.
– Together with her husband, she’s built a business through FBA over the past four or five years.
Here’s a Wet Hairbrush, that will probably go AmazonFBA or be sold Amazon Prime.
These are a peel off mask.
I’ve sold these on Amazon as well before.
And then you get some stuffthat looks like this.
(laughing) The last time I openedone of these pallets, I ended up with a useddental guard which was gross! (laughing) That’s disgusting! I find that I sell my items much faster because they’re sitting atthe Amazon Fulfillment Center and more people want to buy.
Because they’re payingfor that Prime membership.
They want that free shipping, and they want to get it in two days.
I see a clearance aisle down this way.
We would do what wascalled retail arbitrage, where you just go out and go hunting at a lot of big box stores.
Ooh, this is a good one, 50% off.
Believe it or not, you canshop the clearance aisle, buy a toy after Christmas for $5 and flip it online for $20.
And then we kinda shifted to liquidation.
You are seeing it for the first time.
I started buying big pallets.
Now you’re going fromspending two or $3 an item down to like 50 cents or $1 an item.
What happens is all ofthose big box stores, they end up with excess inventory.
It goes into a pallet to a liquidator.
And then they in turn eithersell it by the pallet, or even, back by the truckload.
When unboxing a palletor a liquidation case, I go through and I find what’sgonna go to Amazon first.
Because that’s the big monsterof customer acquisition.
Something like this wouldprobably go on Amazon because it’s in a good condition and the package has not been opened.
I’m gonna make sure the seal’s not broken on the bottle on the inside.
And you can clearly see everything is still totallysealed and packaged.
Fulfillment By Amazon hashelped me scale the business.
I list under the already created listing, and then I put a label onit that says it’s mine.
It goes to my store.
And then I ship it intothe Amazon warehouse.
They handle all the shipping.
They handle all the customer returns.
And so the back end ofselling any item I have is just to completely taken away.
– Sealed video games are great.
Even if it’s something youdon’t think is worth anything.
Just scan it if it’s sealed because– – [Reporter] Many sellers agree.
The FBA designation gives their listings more legitimacy andleads to greater profits.
– So as you could see, there is definitely money within dumpster diving.
– [Reporter] To testdumpster divers’ claims that almost anything could be retrieved from the garbage andsold on Amazon via FBA– – [Man] This is the newest haul.
– The Wall Street Journal(synth wave music) went on a few dumpster dives, and collected dozens of products from a variety of retail store dumpsters, including Trader Joe’s.
After a little sprucing up, three were put up forsale on an FBA storefront created by the Journal.
We listed our items As New, and intentionally priced them higher than other sellers to discouragecustomers from buying them.
A reporter from the Journalsuccessfully purchased the goods as soon as they were listed to ensure a customer didn’t end up with items from the garbage.
Both the stencil set and the paper shipped in Amazon packaging, not the packaging in whichthe Journal sent them.
The lemon curd however, came back in the same box that the Journal packaged it in, still in the same bubble wrap and tape.
The only thing Amazonappeared to have done was to put its own shipping label on top of the Journal’s.
A Trader Joe’s spokeswoman said “The grocer doesn’t approve of the sale “of any of its products on Amazon.
” Trader Joe’s says “It’s store policy “to discard a product onlyif it is unfit for sale.
” Following the Wall StreetJournal’s reporting, Amazon updated its policies, and now prohibits sellingitems from the trash.
An Amazon spokeswomansaid “The company requires “all products offered on the site “to comply with applicable laws, “regulations, and Amazon’s own policies.
” Adding that “The company expects sellers “to act honestly and fairly “in accordance with theirseller code of conduct.
” She said that “Workers atAmazon’s Fulfillment Centers “have the authority toflag unacceptable products, “meaning broken and expired items, “and prevent them frombeing sent to customers.
” Since leaving Amazon, Rachel Greer began advising third party sellers on the site.
She says some sellers don’t understand the precautions and safety concerns associated with sourcing inventory.
– One of the things thathas been a challenge is convincing a small business owner that safety and compliance is important, if Amazon’s not looking.
There is absolutely nothing stopping you from dumpster diving for food.
There’s nothing stopping youfrom doing the same thing with toys that get tossedout, nothing at all.
– I have heard and watched some people do some dumpster diving.
That’s not my scene.
(laughing) But I don’t know, somepeople think liquidation is a little bit like that as well.
Anything you’ve sent into Amazon, is super important thatit’s gonna be pristine.
I love to have my handsdirectly on each item because then I know for sure it’s in the quality andit’s in the condition that I really, really love.
(synth wave music) – [Reporter] Jeff Bezoscredits Amazon’s success as a company to its philosophyof customer obsession.
– If there’s one thing amazon.
com is about it’s obsessive attentionto the customer experience.
Obsessive focus on the customer.
At the very top of thelist is customer obsession.
The number one thing thathas made us successful by far, is obsessive compulsivefocus on the customer.
– [Reporter] But dothe third party sellers that now make up morethan half of its sales share in this commitment? – Most sellers are trying tobenefit from Amazon’s size.
Amazon is known to be consumer obsessed.
Sellers don’t have to be.
– [Reezy] (mumbling) do South Beach livin’ you buyin’ food on Amazon.
(laughing) – That is a Amazon shipmentgetting ready to go we got some stuff, right, electronics.
(rustling) – [Woman] What about these olives? – [Woman] That looks goodenough to sell on Amazon.
Mints? – [Woman] I think it’s sellable.
– [Reporter] Before publishing this video, Amazon removed Wall StreetJournal’s storefront.