(rustling) - Ugh.
There's some meat.
Let me get this out of the way,
that was really disgusting. (groaning)
I don't think we can sell that on Amazon though.
- [Woman] Here we are, outside Trader Joe's.
We're with the Wall Street Journal
looking through the dumpster
to see whether we can find items
that we can sell on Amazon.
- [Woman] What's this?
Sunflower seeds?
- Yeah it's sealed. - It's sealed,
there's a bar code. - Let's take it.
(synth wave music)
- [Reporter] Amazon CEO Jeff Bezos has said
"There's a facet of Amazon that goes largely unnoticed."
- There's a piece of our business
which is probably not fully appreciated
which is the third party seller part of our business.
- [Reporter] These are the sellers, other than Amazon,
selling on the company's sprawling online marketplace.
The E-commerce giant has welcomed millions of them
in a quest to deliver on its mission
of vast product selection, and customer obsession.
Third party sellers have also become a key part
of the company's growth strategy.
- Amazon Marketplace is many times more profitable
than Amazon Retail Business, and thus it makes
so much more sense for Amazon to grow it
as opposed to its own retail operations.
- [Reporter] And Amazon creates such a uniform experience
for the customer, it can be difficult to tell
who's actually doing the selling.
With the explosive growth of third party sellers
on the platform, there's a continuous race to the bottom.
It's become a race among sellers
to offer competitive low pricing,
and win sales over others listing the same products.
- So the job of a seller is to try to find some way
to source it cheaper than everyone else.
- [Reporter] All of this means your product
can come from just about anywhere, even a garbage dumpster.
- Let's check it out. - The Wall Street Journal
identified a number of sellers
who claim they sell garbage,
and secondhand products on Amazon.
- Dumpster diving! - Some even claim
they sell these products as new.
- [Man] Thank you Jesus.
Thank you Jesus, whole bag full of salts.
Whole entire thing. - Where am I finding
all of this crazy stuff?
Same answer, thrift stores.
- [Reporter] We couldn't independently verify sale
of all of these goods on the site.
Amazon couldn't confirm the storefronts
of some of the dumpster diving sellers
the Wall Street Journal identified.
(beeping) Most dumpster sourcing sellers
refuse to go on camera, and decline to give details
about their Amazon storefronts, some citing fear
of getting kicked off the platform.
So we put garbage up for sale on Amazon,
though quickly bought the items ourselves
so no one else could.
We dug through garbage dumpsters,
gathered various items, polished them up,
and listed them As New on Amazon.
But first we got a glimpse into one way
sellers are able to take their on-the-cheap products
whether from thrift stores, liquidation companies,
or even garbage dumpsters, and sell them
alongside the rest of Amazon's inventory.
The key is the Fulfilled By Amazon service, or FBA.
Here's how FBA works.
Third party sellers sign up
and pay for FBA, then they send their products
to Amazon Fulfillment Centers, warehouses,
that are located all over the US.
The products are then marked as eligible for prime shipping,
Amazon's quick delivery option.
When the shopper buys an item,
Amazon takes care of sending the shipment to the customer.
So the purchase arrives in an Amazon branded package
or with an Amazon label just like the goods
Amazon itself sells. (doorbell ringing)
Rachel Johnson Greer who previously managed safety systems
for Amazon says "The branding FBA products receive
"can confuse customers."
- Anything that was inside the fulfillment centers
would get the Prime badge
because it could be delivered at that speed.
So people started equating the Prime badge with Amazon.
And I think at that point it became obscured to customers
that they were buying from third party sellers.
- [Reporter] FBA has been so successful
for third party sellers,
that now an estimated 54% of sellers on Amazon
send their inventory to FBA warehouses
and let Amazon take care of the rest.
(light music)
Heather Hooks has been an Amazon third party seller
since 2009, she is not a dumpster diver,
but she does source products on the cheap.
- You get better wheels on your pallet jack than I do.
- The little ones that don't roll.
- Yeah. - Together with her husband,
she's built a business through FBA
over the past four or five years.
Here's a Wet Hairbrush,
that will probably go Amazon FBA or be sold Amazon Prime.
These are a peel off mask.
I've sold these on Amazon as well before.
And then you get some stuff that looks like this. (laughing)
The last time I opened one of these pallets,
I ended up with a used dental guard which was gross!
(laughing) That's disgusting!
I find that I sell my items much faster
because they're sitting at the Amazon Fulfillment Center
and more people want to buy.
Because they're paying for that Prime membership.
They want that free shipping,
and they want to get it in two days.
I see a clearance aisle down this way.
We would do what was called retail arbitrage,
where you just go out and go hunting
at a lot of big box stores.
Ooh, this is a good one, 50% off.
Believe it or not, you can shop the clearance aisle,
buy a toy after Christmas for $5
and flip it online for $20.
And then we kinda shifted to liquidation.
You are seeing it for the first time.
I started buying big pallets.
Now you're going from spending two or $3 an item
down to like 50 cents or $1 an item.
What happens is all of those big box stores,
they end up with excess inventory.
It goes into a pallet to a liquidator.
And then they in turn either sell it by the pallet,
or even, back by the truckload.
When unboxing a pallet or a liquidation case,
I go through and I find what's gonna go to Amazon first.
Because that's the big monster of customer acquisition.
Something like this would probably go on Amazon
because it's in a good condition
and the package has not been opened.
I'm gonna make sure the seal's not broken
on the bottle on the inside.
And you can clearly see
everything is still totally sealed and packaged.
Fulfillment By Amazon has helped me scale the business.
I list under the already created listing,
and then I put a label on it that says it's mine.
It goes to my store.
And then I ship it into the Amazon warehouse.
They handle all the shipping.
They handle all the customer returns.
And so the back end of selling any item I have
is just to completely taken away.
- Sealed video games are great.
Even if it's something you don't think is worth anything.
Just scan it if it's sealed because--
- [Reporter] Many sellers agree.
The FBA designation gives their listings
more legitimacy and leads to greater profits.
- So as you could see, there is definitely money
within dumpster diving.
- [Reporter] To test dumpster divers' claims
that almost anything could be retrieved
from the garbage and sold on Amazon via FBA--
- [Man] This is the newest haul.
- The Wall Street Journal (synth wave music)
went on a few dumpster dives,
and collected dozens of products
from a variety of retail store dumpsters,
including Trader Joe's.
After a little sprucing up,
three were put up for sale on an FBA storefront
created by the Journal.
We listed our items As New,
and intentionally priced them higher
than other sellers to discourage customers from buying them.
A reporter from the Journal successfully purchased the goods
as soon as they were listed
to ensure a customer didn't end up
with items from the garbage.
Both the stencil set and the paper
shipped in Amazon packaging,
not the packaging in which the Journal sent them.
The lemon curd however, came back in the same box
that the Journal packaged it in,
still in the same bubble wrap and tape.
The only thing Amazon appeared to have done
was to put its own shipping label
on top of the Journal's.
A Trader Joe's spokeswoman said
"The grocer doesn't approve of the sale
"of any of its products on Amazon."
Trader Joe's says "It's store policy
"to discard a product only if it is unfit for sale."
Following the Wall Street Journal's reporting,
Amazon updated its policies,
and now prohibits selling items from the trash.
An Amazon spokeswoman said "The company requires
"all products offered on the site
"to comply with applicable laws,
"regulations, and Amazon's own policies."
Adding that "The company expects sellers
"to act honestly and fairly
"in accordance with their seller code of conduct."
She said that "Workers at Amazon's Fulfillment Centers
"have the authority to flag unacceptable products,
"meaning broken and expired items,
"and prevent them from being sent to customers."
Since leaving Amazon, Rachel Greer began advising
third party sellers on the site.
She says some sellers don't understand
the precautions and safety concerns
associated with sourcing inventory.
- One of the things that has been a challenge
is convincing a small business owner
that safety and compliance is important,
if Amazon's not looking.
There is absolutely nothing stopping you
from dumpster diving for food.
There's nothing stopping you from doing the same thing
with toys that get tossed out, nothing at all.
- I have heard and watched some people
do some dumpster diving.
That's not my scene. (laughing)
But I don't know, some people think liquidation
is a little bit like that as well.
Anything you've sent into Amazon,
is super important that it's gonna be pristine.
I love to have my hands directly on each item
because then I know for sure
it's in the quality and it's in the condition
that I really, really love. (synth wave music)
- [Reporter] Jeff Bezos credits Amazon's success
as a company to its philosophy of customer obsession.
- If there's one thing amazon.com is about
it's obsessive attention to the customer experience.
Obsessive focus on the customer.
At the very top of the list is customer obsession.
The number one thing that has made us successful
by far, is obsessive compulsive focus on the customer.
- [Reporter] But do the third party sellers
that now make up more than half of its sales
share in this commitment?
- Most sellers are trying to benefit from Amazon's size.
Amazon is known to be consumer obsessed.
Sellers don't have to be.
- [Reezy] (mumbling) do South Beach livin'
you buyin' food on Amazon. (laughing)
- That is a Amazon shipment getting ready to go
we got some stuff, right, electronics.
(rustling)
- [Woman] What about these olives?
- [Woman] That looks good enough to sell on Amazon.
Mints?
- [Woman] I think it's sellable.
- [Reporter] Before publishing this video,
Amazon removed Wall Street Journal's storefront.
Amazon said "The storefront offered products
"that were sourced in a manner
"that violated Amazon's high bar
"for customer trust and safety."