[notafraudster]

It doesn't follow that if they can pay you $20, they can pay everyone $20. They have an expected uptake, and they have a model for how the reviews translate to more sales. I agree that it's likely that at least some of this marketing is priced into the price and there's some inflation, but I suspect the overall uptake of stuff like this is <20% and it generates non-zero additional sales, so I would guess the margin is more like $2-4 or so.

[csnover]

Once you start looking at the actual numbers it becomes pretty clear that most of these arbitrage sellers could give every customer $20 and still make money.

For example, the top search result for “webcam” on Amazon.com right now usually sells for $35[0]. Its wholesale price on Alibaba for 5k units is $3.84[1] + $2.04 shipping per unit. Plug those numbers into Amazon’s FBA profitability calculator[2] and you’ll find that the seller only needs to sell 67 units per month to break even, after giving every buyer $20, because the seller’s net margin at this volume is nearly 60%.

[0] https://camelcamelcamel.com/product/B087NN41JH

[1] https://www.alibaba.com/product-detail/China-Factory-Wholesa...

[2] https://sellercentral.amazon.com/hz/fba/profitabilitycalcula...