September 30, 2020

Soldering Point

Tech Update

Inside the get-rich-quick scheme that cost Amazon sellers thousands — and then got them banned

Photo Illustration by Nikolas Kokovlis/NurPhoto via Getty Images Amazon’s vast and complex marketplace is fertile...

Photo Illustration by Nikolas Kokovlis/NurPhoto via Getty Images

Amazon’s vast and complex marketplace is fertile ground for schemes targeting the sellers behind the e-commerce giant’s success.

Like many Amazon sellers, Chad Christensen had his ups and downs over the years trying to make a living on the giant shopping platform. But when the 58-year-old from Ogden, Utah, heard about an opportunity in 2018 to invest in a brand of bestselling laser tag toys on Amazon, he handed over $20,000 of his savings.

The entrepreneurs pitching the toy brand, called Dynasty Toys, talked up their highly ranked laser tag guns that were supposedly a hit on Amazon during the previous holiday season. Now, they were guaranteeing Amazon sellers a return on their investment, a chance to own a piece of their business, and behind-the-scenes access to their secret playbook for Amazon-selling success.

“You guys are the hero of this story,” Brett Bartlett, the creator of Dynasty Toys, told listeners on a podcast and online video broadcast during the summer of 2018.

“We’re going to change history [with] how we collaborate together,” he added.

Two years later, Christensen’s decision to invest in Dynasty Toys has been a disaster. He told Recode he’s only received $4,000 in repayment and believes it’s highly unlikely he’ll see a cent more.

And Christensen is just one of hundreds of existing and aspiring Amazon sellers who bought into the supposed opportunity, with many losing thousands of dollars along the way. Dozens have commiserated in Facebook and Slack groups in recent weeks over their lost investments, with one seller saying he contributed $200,000 to the failed enterprise.

Some of these sellers are also grappling with a consequence even worse than losing their money. In early June, Amazon suspended at least a dozen Amazon sellers linked to Dynasty Toys, including Christensen. More than two months later, Christensen and others are still banned.

“Looking back, of course, we can all see the red flags, and if any of us had been more astute at just seeing these red flags a lot earlier than we did, we would have just not done this,” Christensen said. “Brett was just so reckless and careless. It was just an utter, utter train wreck.”

Amazon is not responsible for its merchants’ investments. But the popularity and complexity of the Amazon marketplace provides fertile ground for such schemes targeting its sellers. Nearly 2 million small and mid-sized merchants like Christensen now sell products on Amazon, and they account for 60 percent of the company’s gross retail sales. They are a huge part of the platform’s retail success. But while Amazon does provide some education for new sellers, its vast and competitive platform has created an ecosystem of experts and opportunists alike promising all sorts of help to mom-and-pop sellers with dreams of e-commerce glory. Some of these offers are worth the money. But others are unhelpful — or worse, harmful for the sellers they lure in. The Dynasty Toys story is a cautionary tale of the risks posed by these self-proclaimed retail wizards.

At the same time, the story of the duped sellers also refocuses attention on some of the obstacles all sellers face on Amazon’s highly automated marketplace, which can take away their livelihoods suddenly and with little explanation. Christensen’s struggles aren’t unique. When Amazon CEO Jeff Bezos testified before a congressional antitrust committee in July, one Congress member played an audio recording of a long-time Amazon textbook seller with 14 employees, who said Amazon kicked her off the platform without warning or notice and that it devastated her business. And just this March, Recode reported on the tale of a boutique hand sanitizer seller that Amazon made, and then broke, basically overnight.

“What happened to that poor textbook seller is, well, textbook,” said Cynthia Stine, who runs the Amazon seller consultancy eGrowth Partners, which helps sellers with account reinstatements. “There is no clear way to get a problem escalated, there’s no way to get good feedback, and they really don’t care if you’re banned from the platform forever.”

Such complaints have been around for years: that Amazon makes arbitrary decisions about who it suspends and when, and that Amazon’s notice of suspensions and how to appeal them often come with vague, unhelpful explanations for sellers. Even for successful Amazon sellers, an underlying fear exists that they could lose their businesses in an instant despite what the seller community as a whole has meant to Amazon’s retail success. The Dynasty Toys situation is just one of the latest examples.

“If you do everything just right you can be successful [on Amazon], but if anything goes wrong and you get suspended, you are just generally screwed,” Christensen told Recode. “They are the judge, jury, and executioner, and there is really no oversight.”

An Amazon spokesperson said that Christensen has yet to provide the documents necessary to have his account reinstated. Christensen called that explanation “absurd.”

Still, Christensen wishes he had been more skeptical of the Dynasty Toys pitch and the men promoting it. Back in 2018, the toy brand’s founder, Bartlett, promised his would-be investors a return on investment of 8 percent to 20 percent, or more — some, like Christensen, were eventually promised a 40 percent return — and a chance to own a piece of the Dynasty Toys success through a co-op business structure. The investors would also get behind-the-scenes access to a secret playbook for dominating Amazon selling so that they too could launch their own breakout merchandise hits on Amazon.

If you’re wondering why investors like Christensen were so eager to buy in, they saw that Dynasty Toys products had previously ranked highly on Amazon bestseller lists, so it seemed like a proven brand. But for many, the real credibility in Bartlett’s pitch came from the backing of “Silent Jim” Cockrum, a self-proclaimed Amazon selling expert and coach, with a 60,000-strong Facebook following and a popular conference series and podcast, which is among the Top 100 entrepreneurship shows on Apple Podcasts.

Cockrum does not appear as an owner of Dynasty Toys in public records, but he aggressively pitched the idea alongside Bartlett.

“I am not about to put my reputation on the line for something that’s going to go south and have hundreds of people say, ‘Oh, those people are scammers,’” Cockrum said on the podcast promoting the idea alongside Bartlett in 2018. The worst-case scenario, Cockrum promised listeners, was getting their full money back early the following year.

The duo pitched a vision of communal success built on viral marketing videos and an expected holiday shopping bonanza leading up to Christmas in 2018. All they needed was money — millions of dollars of it, they said — to buy enough inventory to meet the huge demand they predicted. And that’s where their followers would come in.

Another Dynasty Toys investor and Amazon seller, who requested anonymity on advice from their lawyer, told Recode that they were first attracted to the opportunity because of Cockrum’s involvement. “We trusted Jim because he seemed like a very faith-based man,” the seller said. This Amazon seller had also found some of Cockrum’s Amazon courses helpful in the past, and told Recode that they still want to believe that Cockrum did not intentionally mislead his followers.

Bartlett and Cockrum gave their would-be investors various ways to participate. Some investors like Christensen gave the Dynasty Toys team money to help them buy inventory to sell on Amazon, with the belief that everyone would share in the profits after that holiday season. Other investors simply bought inventory from Dynasty Toys at a wholesale price, and then were on their own to sell it through their own Amazon accounts during the 2018 holiday season.

Then, in 2019, Bartlett introduced a third option for sellers like Christensen who didn’t receive a profit from the holiday season: Sell other products that Bartlett and Cockrum dubbed “proven,” let Dynasty Toys handle the logistics to get those products into Amazon warehouses, and earn profits on those sales without having to go out of pocket any further.

This also didn’t go well for Christensen. “Our group literally got the worst-selling products,” Christensen said. “It was atrocious.”

Eventually, Christensen gave up on seeing a penny more. Now, the best he can hope for is getting his seller account reinstated, which Amazon suspended on June 2. The problem is that he and other sellers once allowed Bartlett to link his account with theirs. So when Amazon suspended Bartlett amid a bevy of complaints about face masks he started selling during the pandemic after pivoting away from Dynasty Toys, the company suspended seller accounts like Christensen’s that were linked with Bartlett’s, too.

“Honest to God, I don’t care about the investment part of it,” the seller who asked to remain anonymous told Recode in early August. “I just want my business back.”

This seller feared losing their home and figured they’d have to go back to selling on eBay to try to cobble together some income. A day after Recode’s first conversation with the seller, Amazon reinstated their account and called the original suspension an “error.” But the experience left the seller afraid to invest too heavily into selling on Amazon out of fear that their account could be suspended once again. Christensen’s account and others remain suspended.

A lawyer for Bartlett declined to comment. Cockrum did not respond to messages nor a phone call seeking comment.

When asked about Bartlett’s account and the suspension of seller accounts connected to his, an Amazon spokesperson said: “Sellers are incredibly important to Amazon and our customers. As part of our ongoing efforts to protect customers and sellers, we identified a bad actor and took action to protect our store by closing the accounts the bad actor was attempting to use.”

“If a seller believes we made a mistake, we encourage them to contact us,” the spokesperson added.

Since Dynasty Toys has failed, Cockrum has attempted to distance himself from Bartlett in recent weeks, telling sellers in private conversations that he was also let down by his former protégé.

“I’ve said all along that I didn’t make money from Dynasty,” Cockrum said in response to critics on a Facebook post in early August. “Dynasty didn’t pay me. I didn’t take investor/note holder funds.”

Despite this distancing, Cockrum and Bartlett have a tangled history with each other. Cockrum referred to Bartlett as his “partner” while pitching the investment program in 2018, and, as recently as late April, he was touting Bartlett’s face mask business while using the pronoun “we.”

“Are you based in the [US]?” Cockrum tweeted to his 7,000 Twitter followers on April 24. “Have access to a sewing machine? We are HIRING! Spread the word- we are supplying face masks to several US based companies and military branches! Inquire at FamilyFaceMask.com.”

That website no longer exists, but the problems for the Amazon sellers caught up in the Dynasty Toys fiasco still do. Stine, who runs the Amazon seller consultancy, said the inconsistency and inaccuracy of the feedback Amazon offers its sellers is unacceptable, and it has been for years.

On the occasions that sellers even get a response from an Amazon seller support representative, the feedback is typically scripted or vague and rarely explains the specifics of a suspension unless you happen to get an especially helpful rep on the phone, she said. It’s not totally surprising then that some Amazon sellers have been willing to pay bribes to Amazon employees for access to inside information, or to try to get their accounts reinstated.

“Everything with Amazon is like an interpretive dance or Kabuki,” Stine told Recode. “We know what we know [about suspensions] by observation but wouldn’t it be easier if they just told us?”

“I tell sellers all the time, ‘Amazon doesn’t care about you,’” Stine added. “It’s hard for them to believe, but it’s true.”

Christensen, the suspended seller who invested $20,000 into Dynasty Toys, added: “I wish Bezos would just wake up and realize the system is just flat-out broken. It needs to be completely overhauled.”


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