The impact of overseas sellers on local retail platforms continues to worry small businesses, amid claims Chinese-based eBay vendors are misrepresenting themselves as local brands on the platform.
On Monday, SmartCompany spoke to fishing equipment business Blue Seas Tackle Co about its decision to leave Amazon’s Australian platform after seeing its listings drowned out by overseas sellers.
Owner Neil Adams says he has had a much better experience on eBay, but says he is concerned about the number of foreign sellers who falsely claim their products are shipping straight from Sydney.
“Vendors are putting ‘au stock’ on listing images, saying that they’re doing business from Botany Bay. But when you get to PayPal, it’s obvious they’re in China,” Adams says.
He cites a recent purchase he made on the platform of a Blackview-branded mobile phone that was tagged as “au” stock. He says the product took longer than expected to arrive, was marked as being shipped from China, instead of Sydney, and he believes it was not compliant with Australian sales regulations.
“It arrived with an American plug — it’s illegal to do that in Australia,” he says.
While Adams says he’s had a good experience using the platform, selling upwards of $1000 a month of his products on eBay, he says it’s not right that overseas sellers can disguise their locations in order to win sales from local sellers.
“It’s misrepresentation, and you have to ask — are they paying GST?” he says.
These concerns have been echoed by other SmartCompany readers, as well as sellers on eBay, who have been raising the issue in seller forums for years.
“EBay overseas sellers (China, Malaysia, Singapore, etc) are listing their products as if they are located in Chullora in Sydney, and put 3 week delivery times … eBay does nothing. False advertising!” said one SmartCompany reader yesterday in response to concerns about overseas sellers on Amazon Australia.
“How come Ebay allows China sellers to claim there stock is in Sydney Australia and then it is sent from China. This is False Advertising and not fair to Australian Sellers and Australian Buyers,” an eBay seller asked in the company’s seller forum at the start of this year.
“The thing I don’t understand is how China sellers can claim there items are in stock and even put AU stock on there main listing picture. But when you order from them the item turns up and shows China post on the package.”
Adams believes federal government agencies should be paying much closer attention.
“With some of these listings on eBay, the ATO and customs really need to have a look at them,” he says.
In a statement provided to SmartCompany, an eBay Australia spokesperson said it is a breach of policy “should a seller list its item location inaccurately”.
The retail platform says it is common for sellers to list their business location and their product as being at different sites, however.
“It is common for eBay sellers from international markets to use forward-deployed inventory pools, located in Australia, to provide optimal customer experience for our buyers,” the spokesperson said.
Anyone concerned with the genuine location of a seller on the platform is “encouraged to contact eBay’s customer service”, the company says.
“Go where your customers are”
Retail consultant John Batistich says that there are no geographical boundaries with online retail, so brands may have to make peace with the idea that there will be competitors from all over the globe trying everything they can to undercut their products.
“Retailers are becoming very clever around maybe not misleading, but trying to compete against local retailers by using local listings,” he says.
“It’s fair to say that the customer is less concerned about where a product comes from, unless it’s a product of great local provenance. They are just looking for the best solution, price, delivery, payment options.”
Whether Australian retailers are on eBay, Amazon or any other platform, the only factors they can control are being more distinct than their competitors and going directly where their customers are.
“It sounds so obvious, but what we’re learnt from everywhere from Alibaba’s online sales to Amazon is that it’s the middle ground — the undifferentiated middle ground — that are the ones who are under a lot of pressure,” he says.
While local retailers may feel like they’re up against it on these big online platforms, especially Amazon, Batistich believes there is little option but to hold on for the long haul, even if things don’t seem rosy now.
“There’s no question some retailers have been very disappointed [by Amazon], but for me, retailers have to be patient: they’re not working on all cylinders yet,” he says.
He believes that no matter what other competitors are on these platforms, shoppers are moving to this kind of buying, so your only choice is to keep taking up real estate in areas you know they will be heading to. For Amazon, this means holding off on exiting until your business sees the future rollout of the Prime platform in Australia, at least.
“The point I’d make is they’re [Amazon] just taking a position in the marketplace now, but don’t have it humming. You will see a shift this year — but I acknowledge there are disappointments [from retailers now].”