Online retailers let product resellers pocket difference

People are making some pretty good money buying things on Amazon and selling them for more on eBay without ever touching the product. It's called "drop shipping."

Planet Money did a wonderful podcast called "Cat Scam" to explore this topic. Their lead example is the Ripple Rug, an activity mat for cats made by SnugglyCat. People bought the rug for $40 from Amazon Marketplace and resold it for $60, using Amazon Prime's free shipping service. They never had to touch the product or do much work. But when customers saw the Amazon box, they looked it up and found out they'd overpaid for the rug. So they'd return it to Amazon.

In two months, there were 200 returns. Bad news for SnugglyCat, the toy maker. It had to pay Amazon fees for every purchase, shipment, return and restocking, and sometimes it had to destroy the used mats. In two months, they lost $10,000. The eBay sellers kept the $20 profit on each rug.

Is this legal? Turns out it is.

Why didn't the customers send the product back to the eBay seller for the full amount they paid? The boxes came from Amazon, so the buyers returned the boxes to Amazon and lost the $20 difference.

SnugglyCat eventually solved the problem by giving up Amazon Prime. The company's sales dropped by 58 percent, but the founders said it was worth it to ship stuff themselves.

Here's another example of drop shipping: An American couple working in Iraq were so enamored of online shopping, they bought everything online, even a dog, which came all the way from Oklahoma. Next they signed up to become drop shippers with a company called DS Domination, which offers software to help users manage things. The "DS" stands for Drop Ship.

The couple's first purchase was an Angry Birds Star Wars toy they bought for 30 cents and sold for $9, which they did about 30 times on the first day. After a few months, they quit their jobs and moved to Houston. They told Planet Money they make more than a million dollars a year in sales. Hard to believe.

There are dozens of other methods, some of which we found at Quora.com, the question-and-answer site. Do a search on the phrase: "What is the Best Drop-Shipping Software?" Is there a limit? Could you drop ship a car?

Incidentally, Planet Money, our favorite podcast, now does videos, too, at npr.org/planetmoneyshorts. Watching one on the Tooth Fairy, we discovered that parents now leave an average of $4.13. Gosh, Joy only got a quarter.

AUTOMATIC SPEEDUP

Be skeptical of any program that offers to "clean" the Windows registry, since registries don't get dirty. But you can buy a program to speed up Windows.

We're looking at you, Ashampoo WinOptimizer. We chose it over Iolo System Mechanic, which won PC magazine's Editor's Choice Award. Ashampoo came in second, but its WinOptimizer costs $40 one time. Iolo's cost $25 per year.

Many of Ashampoo's 38 modules speed up your computer by getting rid of junk. But they also add to your privacy, by preventing you from being tracked or your files from being sent out to nosy third-party applications. WinOptimizer also gets rid of duplicate files, including movies, music and photos.

ONLINE SERVICES

Just for the fun of it, we tried Hello Fresh, a meal kit delivery service. We received a giant box with ingredients and instructions for three meals.

It was so much fun, but we felt bad that there was so much packaging waste. Even two tablespoons of sour cream came in its own sturdy package. This had to be a disaster for the environment, we thought. But a new report says that's not so.

According to a study by the University of Michigan, reported by the blog Engadget, the carbon dioxide emissions tied to the average grocery store meal were about 4.4 pounds higher than those produced by meal-kit services. That's because meal kits cut down on wasted food. The amount of energy going into the food we eat is a lot tougher on the environment than a few extra boxes.

The grocery store also wastes a lot by stocking too much food and throwing out unsold stuff. According to Dumpsters.com, grocery stores throw away 43 billion pounds of wasted food each year.

SCAN YOUR PHOTOS

One of these days, we're going to free up space in our apartment by having all our photos scanned.

Several years ago, we sent a box of photos to ScanMyPhotos. They not only scanned them, they improved them. Which was good, because some were pretty faded.

The problem is, we didn't save any physical storage space because we kept the originals they sent back to us. Parting with those is the tough part.

However, it's much better to have the digital version. The print versions sat unseen in boxes for years. As soon as we had them digitized, Joy began making her relatives' day by emailing them every so often. Her nephew's new bride was especially happy to see what her husband looked like back in the day. The cost seemed trivial.

Since sending out that box, ScanMyPhotos has a new offer: 1 cent per photo scanned. One customer sent in 9,100 photos. It cost him only $131.60. The catch: The photos are "social media quality," 150 dots per inch. That's fine by us. It's good enough for email.

Bob and Joy Schwabach can be reached by email at bobschwab@gmail.com and joydee@oncomp.com.

Business on 05/18/2019

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