It would appear that Amazon are clamping down on arbitrage traders, although perhaps not as hard as you might expect. We’ve had a couple of reports in the past week that Amazon have downgraded accounts on Amazon.com from business accounts to personal accounts.
The big difference (which really matters in arbitrage as you’re only trading on price) is that Amazon Business offers price discounts just for businesses on millions of products across Amazon. This means that if you can snag a business account you’ll get better prices than you’d see on a personal account giving more opportunity to sell at a higher margin on another marketplace – often on eBay.
It would appear that Amazon don’t appreciate arbitrage and have downgraded accounts saying “We have determined your usage of Amazon Business does not fit with the services we provide. Your business account has been converted to an Amazon personal account”.
On the one hand you have to feel sorry for the arbitrage community who have spotted a loophole and exploited it – whether or not you like the practice of arbitrage, those using arbitrage to make a living are legitimately running a business. However from Amazon’s perspective they’re offing discounts on products and asking their third party merchants to offer additional service under the expectation that the business purchasing is the end customer, not simply someone who will take their products and turn them for a quick buck.
The only thing that surprises me is that Amazon don’t appear to be closing accounts – they’re merely downgrading them to personal accounts and removing the business benefits. It’s almost like they’re turning a blind eye to arbitrage so long as they don’t also have to fund arbitrage with lower pricing.