Until Amazon's best-selling manufacturer loses to a generic manufacturer in one year and goes bankrupt with a loss of over 900 million yen
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Mr. David, who sold the best-selling 'massage gun' product on Amazon for two years from 2019 to 2021, went bankrupt in November 2022 due to interference from generic manufacturers such as 'fake copyright infringement'. However, it is reported that the loss amounted to 7 million dollars (about 940 million yen).
7 Million Dollar Amazon Bankrupt. Our Amazon journey started in January… | by David | Nov, 2022 | Medium
https://medium.com/@david073/7-million-dollar-amazon-bankrupt-cf977fb085f5
``Massage guns'' became a hot item in January 2018 when sports technology manufacturer
Inspired by HyperVolt, David and his colleagues received a patent for their unique massage gun design in February 2019. The product was launched in July 2019. The product has been well received since the beginning, and has been a bestseller for two years, from October 2019 to October 2021. There were a total of 31,000 reviews, with an average rating of 4.8. In this way, Company B newly entered the massage gun market, which had become a ``quite competitive market'' with the top 15 sellers having an average of 15,000 reviews.
In December 2021, David and others received a false 'copyright complaint' and the product's ASIN was suspended, and it took three weeks for it to be reinstated, so it missed out on the bestseller list. Company B was ranked instead. According to David's research, Company B's Amazon bestseller ranking score was over 20,000 in the 'Health' and 'Home' categories, an impossible number. The method involved listing products with a dummy seller account and offering 95% off on Facebook groups, resulting in 5,000 to 6,000 transactions in a week. Although the dummy account did not ship the massage gun, Company B successfully obtained the best seller badge and enabled FBA (Fulfillment by Amazon) on the main account. By repeating this method, Company B's products began to appear for all relevant keywords on Amazon. Meanwhile, David's products were tagged as 'adult' and had their ASINs suspended again, and it took a week to get them back, during which time they continued to lose their index.
Eventually, as sales stabilized, Company B changed its brand name. By listing more products and offering a reward of $40 (approximately 5,300 yen) for 5-star reviews, we acquired nearly 2,000 reviews in two months. We will continue to dominate the massage gun market. Starting in April 2022, David reported company B's policy violations, such as purchasing reviews, to Amazon, but nothing happened. So, in August 2022, he contacted his account manager, and an investigation was finally started, but this time Mr. David started receiving threatening emails directly from Company B, and received 15 policy violation warnings every day. I have now received 20 items. Amazon apparently did not take any action on this matter and closed the case.
In the end, David and his team were suspended 16 times in 2021 and 80 times in 2022, resulting in a loss of $7 million (approximately 940 million yen) in inventory storage fees and advertising costs. It is said that they liquidated everything and went bankrupt on November 1, 2022.
In response to David's report, the social news site Hacker News said, ' Don't fight Chinese sellers on Amazon. If they come to your category, give up. They are 99.99% non-Chinese sellers. ``I understand Amazon's system much better than anyone else. '' ``That's why I don't buy from Amazon anymore, and I buy Chinese products at a cheaper price on Aliexpress.When I find something interesting on Amazon, I look to see if they have their own online store.'' ' Amazon has only 4.5 stars or more, and it's full of fake products and trash ,' were the comments that seemed to be giving up on decent shopping on Amazon.
Also, since HyperIce was the market pioneer in the first place , he said, ``I can't cry because they did what we (HyperIce) did.'' ``You're right, David is also part of the cesspool, and his company is B. ' They probably don't even realize that they are a parasite just like the company, ' some harsh comments said. In addition, some people commented, ``Even so, it's a useful article that the average Amazon user doesn't know about.''
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