Many organizations and individuals who sell second-hand retail items online are facing dropshipping retail arbitrage issues every day.
What is arbitrage one may ask? It is the practice of listing products on an e-commerce platform that the lister doesn’t own yet. Arbitragers are essentially copying a listing from one platform and listing it on another, selling it, then purchasing the original listed item but having it directly mailed to the buyer of their copied listing. The person who copied the listing never handles the product or discloses that they are a “middle-person”.
Arbitrage, yet popular on eBay, can happen between any two online marketplaces. Resellers are able to make a profit with little to no work in order to take advantage of a price difference between their listing and the original listing. The profit is the difference between the two listings.
Some online marketplaces have declared “war” on arbitrage sellers as it weakens the customer experience and can disrupt the original sellers’ rankings and performance. In many cases, it is still considered legal but is certainly not an ethical act. In other cases, this can be considered someone else’s property to sell and therefore a cease and desist can be sent. A variety of marketplaces are also putting policies into place to address arbitrage.
Josue Mendoza, the manager of Goodwill NYNJ’s e-commerce department stated, “It can become frustrating when our team is dedicated to ensuring we have high-quality photographs for our listings coupled with strong customer satisfaction. The theft of our listings compromises our efforts and devalues our presence, directly affecting our mission’s bottom line ”.
In this scenario, we are seeing community-based non-profits such as Goodwill's, product listings become devalued on a daily basis. The product is not realizing its true potential on one platform and then is resold on other platforms. So, we asked ourselves – how do we help stop arbitrage attacks for our clients?
How can we mitigate this risk at the forefront of the listing? Watermarking the product listing images is one of the best ways to prevent arbitrage. The arbitragers will not want to list a product with images that belong to another organization or person. Also, it is very unlikely they will take the time to crop each image in order to remove the watermark. Arbitrage sellers can buy and sell millions of products per year. Time is money – and cropping millions of images will certainly take plenty of time.
Once Upright determined this would be a great method in helping our clients retain their strong customer reviews and prevent future theft of their items, we immediately worked to produce a new feature release for Upright Lister, multichannel listing and inventory management software.
The feature allows our customers to customize the watermark verbiage for photos with up to 40 characters. Administrators of accounts can set the verbiage and the software will automatically add them to each photo.
“The new watermark feature provides a ton of value to our e-commerce department so that we do not have to worry about individuals stealing our listings and capitalizing on our efforts,” Mendoza ecstatically stated when he was notified of this new feature within the Upright Lister system.
If you are not currently using Upright Lister and do not have the capability to watermark your images, we suggest the following methods to mitigate the risk:
- Utilize marketplaces that ban arbitrage
- If Listing on eBay, Report arbitrage users for intellectual property infringement under the Verified Rights Owners (VeRO) program
- List your products at a more competitive price than the arbitrage seller would be willing to list it
- Add a copyright notice to your listings
- If listing on your own website, add a DMCA badge to your website that will put a seal of protections that will deter thieves from stealing your content
- Disable hotlinking and the ability to download your images when possible
If you are interested in learning more about Lister and watermarking your images, please click here.
About Upright Lister
Upright Lister helps secondhand sellers list, manage, and sell inventory online more efficiently. E-commerce divisions are able to track inventory from donation to fulfillment, while efficiently and consistently enabling inventory to list online to multiple platforms. To-date, over 750,000 items have been sold online across multiple marketplaces.
Upright Lister Advantages
- Upright Link: photo-taking and inventory management app
- Auto-generated of titles and descriptions
- Multi-platform listing from one interface
- Real-time shipping price comparison
- API integration with data warehouse
- Advanced employee and financial reporting
- Live customer support