The reality is more complicated than you are assuming. A shockingly large number of vendors grossly mismanage their supply chains such that Company X can actually be legitimately undercut by reseller Company A on Amazon even though Company X produces the product! The mechanics of it are convoluted but legit, and there is a huge ecosystem of companies that arbitrage the legions of producers that are bad at managing their global supply chains.

Amazon has an interest in allowing these resellers of legitimate products to exist because it pushes down prices from the primary vendors, lowering prices for the customer. The primary vendors end up competing against themselves indirectly but they have no one to blame but themselves. This is the milieu in which counterfeit products exist.

If the producers of these products were consistently competent at managing their supply chains it would be much less of an issue because it would clear the field of resellers arbitraging the mismanagement, leaving only Company X and the counterfeiters which is a much easier problem to solve because you don’t have to worry about banning legitimate resellers. But that isn’t where we are.

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rocqua 12 hours ago | parent [-]

Is the arbitrage you are describing just "buy in another country and ship more cheaply"?

	▲	jandrewrogers 11 hours ago \| parent \| next [-]
		That’s one way but far from the only one. Producers like to do things like make random deals through their myriad divisions to offload inventory to a random reseller very cheaply that ultimately finds its way onto Amazon at a price that undercuts cost of the original producer’s contract on Amazon. The cost of sales are not the same on Amazon even if you are selling the same product, so they can legit undercut you. You also have different divisions of the same company around the world all selling on Amazon under different contracts competing with each other (which Amazon tacitly encourages AFAICT). Smart companies put contracts globally that have Amazon implications under a single person who can see across every deal. If they sell to someone with a restriction on Amazon resale, they will mark those goods so that they can track it if it shows up on Amazon. However, there are so many fly-by-night resellers that this is a losing proposition, so many don’t bother with those resellers anymore because enforcement yields nothing. The vast majority of companies are naive and not very smart about any of this. People that know how to systematically set up a sales program that is profitable and resistant to arbitrage on Amazon get paid a lot of money in industry. It isn’t that hard but most companies can’t seem to figure it out.
	▲	mcherm 11 hours ago \| parent \| prev [-]
		That's one approach. There is also "buy it at a discount, resell it without much markup" and "buy it earlier, store it until prices rise", and plenty of other ways to perform this arbitrage.