When San Francisco resident Catherine Lelong recently received a delivery from Sam’s Club, she was confused: She didn’t remember having placed an order with the membership club.
She was right. Lelong hadn’t placed an order from Sam’s Club, but she eventually realized that the bottle of detergent inside the box was something she had recently ordered on Amazon.com. How did that happen? An online merchant had bought the detergent on Samsclub.com for one price, and sold it to her through Amazon.com for several dollars more. This Amazon seller then had the detergent shipped directly from Sam’s Club to Lelong’s home.
Lelong had been a victim of retail arbitrage — the practice of buying a product at one price from one retailer and reselling it on another shopping website for a profit. It isn’t new, but it has become more popular as big shopping destinations like Amazon onboard more individual sellers, and software tools pop up to automate the activity. And it can be disappointing for loyal Amazon customers who trust that Amazon usually has the best price, or something close to it.
"I feel a bit cheated, which I don’t love," Lelong, who places several Amazon orders a week, told Recode in an interview. "Now that I know, I have my eyes more open."
An Amazon spokesman pointed me to a policy for Amazon sellers that prohibits "purchasing products from another online retailer and having that retailer ship directly to customers." Those sellers who fail to comply with this rule can have their selling privileges suspended or revoked, it said. He declined to comment further.
The Amazon seller Lelong bought from, called "Order Me," claimed ignorance in a message to Recode.
"We utilize the services of more than 20 warehouses throughout the country and they decide from where the item will ship. In case an item is back ordered at time of shipment, we place order with our vendors. We have no idea which manufacturer they used to ship the item."
Another San Francisco resident, Ariel Bryant, had the same reaction as Lelong when a delivery recently showed up in a Walmart box. Bryant, a longtime friend of mine who first alerted me to the activity, said she takes responsibility for not comparing prices before hitting the Buy button on Amazon. She ended up paying double the price of Walmart for a pack of paper towels. (The seller, "Mott Gifts," did not respond to a request for comment sent through Amazon’s messaging service.)
But Bryant said she had previously trusted that Amazon’s prices were always competitive, so she wasn’t as diligent in price-checking as she otherwise might have been. Some of that trust has now been eroded.
"I was going back through a lot of my orders and saw they came from Amazon sellers, and now I wonder if they were doing the same thing," she said.
What Bryant is describing is the part of Amazon’s business that isn’t always clear to shoppers: Not everything sold on Amazon is coming from Amazon itself. In fact, 47 percent of the items sold on Amazon today are being sold by someone other than Amazon, and that percentage has been increasing each and every quarter.
This growth has mostly been a good thing for Amazon, because it allows Amazon to expand its product selection in important categories like apparel without taking on the risk of owning all that inventory itself. The company also takes a cut of sales anytime one of these sellers sells an item on its site.
Still, a sale that comes at the expense of customer trust is not a sale you would imagine Amazon wants. And neither do its customers.
"I noticed in the last few months," Lelong said, "that Amazon is kind of becoming a bit like an eBay."
This article originally appeared on Recode.net.