
A Business with No End - tysone
https://www.nytimes.com/interactive/2018/11/27/style/what-is-inside-this-internet-rabbit-hole.html
======
Bucephalus355
Part of this is money laundering. Think about how easy it is to move money
from say Romania to the United States.

Typically this would be very hard to do. If I want to withdraw $5,000 or more
in cash in the US, I have to fill out a suspicious activity report (SAR).
Transferring even under ten thousand dollars today via SWIFT can be tough
(like Venmo for the international banks).

However, what if you set up a company in the US selling 16 oz organic potting
soil for $400 a bag? You could place an order for 100x, get your over priced
potting soil shipped to Romania, but what you’ve also done is incredibly
valuable. You’ve transferred $40,000 USD across continents and essentially
outside of the central banking system via the credit card companies.

Money laundering leads to grossly inflated assets (like buying a house that’s
300k over valued because you just want to store the money in a non-cash asset
and don’t care about price). This affects us all, and should be studied more.

~~~
Joakal
Buying over priced bags would be too obvious and flagged quickly. It's better
to buy property as it's a hard-to-compare good.

~~~
skgoa
Or art, antiques etc.

~~~
acct1771
Qatar, etc, anyone?

------
function_seven
This is the kind of story where a corkboard with photos and yarn is required
to follow it. I couldn't keep up with all the interconnected players and LLCs.

The most bizarre part is Newsweek. I've known for a while that it isn't what
it once was. What I didn't know was how much it had fallen. Similar to when I
see "Polaroid" branded products, where it's obvious the name is the only thing
left of that company.

~~~
gruez
>This is the kind of story where a corkboard with photos and yarn is required
to follow it. I couldn't keep up with all the interconnected players and LLCs.

there was an article i read a while ago (maybe it was on Bloomberg, I couldn't
remember) that has a solution for this. if you clicked on the name of an
important company/person, it'd show you a short description, along with cross
references to them elsewhere in the story.

~~~
Technetium_Hat
Now I want a browser extension that adds Wikipedia-style link previews on all
pages.

------
CPLX
Can someone make a website that sells stuff to me and has good selection,
pricing, and customer service, and doesn't welcome the absolute dregs of the
internet scam community into my life?

I have literally no interest in being involved in this insanity just because I
shop on Amazon.

I can't be the only one who feels this way.

~~~
whitepoplar
Shopping on Amazon these days feels like walking through a back alley in
Shanghai trying to find a pair of authentic Nike Air Jordans.

~~~
thrower123
I am mystified as to what people are buying that they have such problems with
fakes and knock-offs on Amazon. I've had Prime for around a decade, and I can
remember exactly once where they screwed up and sent me a wrong package.

~~~
whitepoplar
Can you tell whether or not this is authentic?: [https://www.amazon.com/Apple-
Lightning-Cable-iPhone-6S/dp/B0...](https://www.amazon.com/Apple-Lightning-
Cable-iPhone-6S/dp/B07K9K7QFY)

It's the first seemingly non-third-party listing on Amazon.com for the search
term, "iPhone lightning cable." It's the 4th search result. If you hover over
the first of "Other sellers" you'll see a store which has a 67% satisfaction
rating. If you click through and read the negative reviews, almost all of them
list getting a fake product. Amazon lists the brand of the cable as "Apple."
The item description says that it comes in "non-retail packaging."

~~~
holtalanm
looks authentic to me, but if it gets the job done, do I really care if it is
authentic?

no. the answer is no.

~~~
paulrpotts
Because a cheap knockoff device that plugs into AC current could kill you.

[http://www.righto.com/2012/03/inside-cheap-phone-charger-
and...](http://www.righto.com/2012/03/inside-cheap-phone-charger-and-why-
you.html)

~~~
jaggederest
[https://www.youtube.com/watch?v=3Hdn0MuCK_0](https://www.youtube.com/watch?v=3Hdn0MuCK_0)
is another interesting example.

~~~
paulrpotts
Hooo boy, that is scary!

------
mjevans
I'd really like Amazon (and other similar sites) to improve customer service
by being more transparent and providing some modest authentication to the
goods sold.

    
    
        * Clearly state if the seller is an OEM, An OEM authorized 3rd party, or 'other'.
        * NOT co-mingle products*
        * * Unless authorized and then enumerate with which other sellers the co-mingling is authorized.
        * Allow filtering by all of the above.

~~~
mjevans
I forgot to mention one other pair of related things.

    
    
        * Clearly indicate who the OEM of the product is.
        * Clearly indicate the exact mode number(s) the product might be (including revision number).
    

That would complete actually 'advertising' a real and specific product. If
sellers lie about things then they can be hit with fraud charges and actually
punished. The lack of co-mingling or white-listed only co-mingling (and
actually tracking who's touched a given product) would allow for determining
the authenticity and reputation of sellers / returned item fraud issues.
Including items should be returnable for reasons including 'fraud, item not as
listed / shown'.

~~~
ikeboy
Not as described is an option when returning and if you get too many of those
Amazon will suspend

~~~
mjevans
You'll note the description of my proposed return reason includes the photos
as part of the description (not sure if that's currently implied) as well as
requiring actual product manufacturer and model numbers.

~~~
ikeboy
The brand name is required on listings and there's a model number field

~~~
mjevans
Not /the/ brand name, /a/ brand name.

I'm saying the actual manufacturer should be required, as in, whichever
factory made the parts, not the fly by night name so many rebranded products
have.

~~~
ikeboy
What if, like many products, it's made in multiple factories?

~~~
mjevans
Ultimately I'm asking for transparency to the consumer, including tractability
to actual component manufacturers. Warehousing doesn't count, but combining a
number of small things together in to one big thing does.

There are a couple different approaches, and no reason you'd need to stick
with only one. Consumer transparency is the only true requirement (Be
SPECIFIC, Never Lie or lie by omission, also only allow things like "non-ecc"
in ways that exclude the text from normal searches).

For example:

Iphone Model (specific year model/type), By Apple, Built in Apple Approved
factories (external link).

Example licensed cosmetic product "brand name" Shampoo, Brand, Co-mingled
(sold by X), Manufactured in one or more of (exhaustive list)

Example licensed cosmetic product "brand name" Shampoo, Brand, Sold by Y (no
shared inventory), Manufactured in (short list of pharmaceutical labs in a few
US states).

Real Cane Sugar Cola, SodaCola Brand, Bottled in List X (short list of
pharmaceutical labs in a few US states, only specific manufacturers could be
picked as well, shipping time would vary).

~~~
ikeboy
Half these things are trade secrets for any number of major brands. Coke is
not going to tell you the supplier for each and every ingredient in a bottle.

------
abalone
So how did the fraud work? I seriously tried to read the whole thing. I had to
click through to the indictment[1] to read that they improperly used funds
from lenders that were supposedly for Newsweek's servers. But how exactly did
the weird Amazon listings and bookstores play into it? I wish this was written
more concisely instead of stretched out like a television series.

[1] [https://www.manhattanda.org/da-vance-announces-indictment-
of...](https://www.manhattanda.org/da-vance-announces-indictment-of-newsweek-
and-christian-media-chiefs-in-long-running-10-million-fraud-probe/)

~~~
mattzito
My interpretation, possibly missing something, is that these e-commerce sites
are a long tail play. They have lots of peoples time committed to work on
this, so why not build a network of random Shopify sites that sell stuff you
can get elsewhere for cheaper? Most stuff won’t sell, but the things that will
return a disproportionate return relative to the effort.

------
jmccaf
I wonder if the weird storefronts like Stevens Books, Leez Dept. Store are to
sell returned merchandise (that was drop-shipped)

------
chenster
So the story is really about discovering an elaborated money laundry operation
using shell company and online fake store.

~~~
grrowl
It feels to me like selling dropshipped items for twice the price online, then
re-selling the returns in random retail stores domestically would be part of
this.

I wonder how they can afford rent, but as long as they can pay salaries then
the laundering cycle becomes complete

------
Sushi-san
This story is so surreal: how is it ethical for a Christian organization like
this to have such a large network of fraud?

~~~
dbt00
Trick question: They're not meaningfully christian, they just claim the mantle
like a shield.

This reminds of nothing more than Rev. Moon's wacky Unification Church, which
eventually founded the Washington Times and bought the UPI wire service to
appear legitimate (and, at least in the case of the Washington Times, curry
favor with conservative politicians).

~~~
arduanika
No true Scotsman...

Any group has to own its bad eggs as well as its good.

~~~
smcl
As an aside, these "debate team" shortcuts (no true scotsman, etc) might have
worked really well in school but they're trite and extremely unpersuasive in
real life.

------
mprev
I know it's a little off-topic but I wish they'd let the content speak for
itself. Are the Geocities-style background and animated GIFs really necessary?
I feel they add to the cognitive load rather than adding to the story.

------
bhouston
I think there are three potential explanations: (1) money laundering fronts
(2) someone sold this idea to all the participants that they may get rich
doing this but all the businesses are essentially failing, but the religious
keep donating somehow to keep ti slightly afloat. (3) the long tail works --
but I strongly suspect it doesn't, this is to shittily put together.

------
flas9sd
"The web" delivers on its name, not a hypertext of explanations, but a cobweb
of obscurity.

Writing of the author has been featured here before, also in line with her
interests in obscure business schemes, about gratis watches and dropshipping
that for me personally went into modern themes of brands and identity:"Museum
of Capitalism - There's No Such Thing as a Free Watch".

------
dbt00
TL;DR: A giant, weird pile of money laundering and fraud.

------
cribbles
I really enjoyed the author's 2017 piece, "There's No Such Thing as a Free
Watch"[1] (linked in article, also discussed in [2]). This one, not so much,
and I feel compelled to explore _why_ I feel this article doesn't work as
well.

First, here's my attempt at a synopsis of the article. I only read it once,
and admittedly found it hard to follow, so I'm sure a few details are off.

\- There are a bunch of fake-seeming storefronts on Amazon selling various
products in unrelated categories at high markup. The business model seems to
be basically massively automated Alibaba drop-shipping. Rather than providing
a material or marketing value-add, the sellers are banking on buyers not doing
any comparison shopping.

\- A lot of these storefronts are connected with a shady Christian university
chancellor who had profiteered off of content farming via a journalism company
called IBTimes, a business that acquired Newsweek in 2013 and ran WaPo-style
tactics to ramp up the clickbait.

\- Separately of that, the chancellor has covertly supported the
entrepreneurial ventures of his university's graduates. This usually takes the
form of either 1) acquiring fledgling existing businesses, ramping up the
prices, setting up Shopify online storefronts and profiteering off
unscrupulous consumers, 2) creating brick-and-mortar storefronts that sell a
mix of marked-up retail goods and returned items from these Amazon
storefronts, or 3) some mix of 1 and 2.

\- It's not clear how approach #2 makes money, since some of these brick-and-
mortar storefronts are in extremely high-rent areas, e.g. Manhattan and San
Francisco.

\- Also, many of the businesses connected to this organization are currently
under investigation for commercial fraud.

So why doesn't this article "work?" Well, to extract the above synopsis, we
have to wade through:

1\. A non-linear narrative about the author's acquaintance getting some goods
from one of these storefronts returned to their parents' house. This has no
connection to the rest of the piece. Seems like it was just a mistake.

2\. A labyrinth, Pepe Silvia-style thumbtack-and-yarn exposition on a bunch of
overly precise yet insignificant investigation details (storefront names,
suppliers, warehouses, products) and recurring literary devices to match (e.g.
"warehouse foo sells unrelated items x, y, and z")

3\. An anecdote about buying some lipstick from one of these places, then
returning it.

4\. Some anecdotes about visiting some of the storefronts and observing that
they're kind of weird and empty.

5\. Some excerpts from email transaction with some of the "players" involved
in this whole scheme, which don't amount to much - PR fluff basically, which
could have been made up. We don't know.

6\. Lots, and lots, and lots of exposition about the "journey" to figuring all
this stuff out - I reverse image searched this pic, which lead me to this
business page, which was connected to this trademark, etc. etc. (none of which
exceeds the standard Google-fu any reader of this piece is probably capable of
doing themselves, or needs to read about at length)

7\. Half-baked, Baudrillardian navel-gazing divergences about how weird and
dreamy and postmodern all this is.

I felt myself a little ripped off by the time I got to the bottom of the
article and learned that, in fact, we have _no idea_ what the answer is to
some of the core questions prompted by this piece. How do these ritsy
storefronts make money? If they don't, are they just laundering money? If so,
for what illegal activities? Is it connected to the IBTimes fraud? Whom
exactly are they defrauding? What exactly is the relationship of the
university to the IBTimes and these stores? And so on, and so on.

I feel like if the author had simply made a PDF providing a simple, linear
narrative - similar to her watch story - it wouldn't have mattered that these
questions went unanswered. The mechanics of the drop-shipping operation are
sufficiently compelling. But the platform (a newspaper) and the piece's
pretense (long-form, old school investigative journalism) demand unwieldy
narrative inflation that isn't really merited by the meat of the story, and
that ultimately makes it feel that much less satisfying.

[1]
[http://www.jennyodell.com/museumofcapitalism_freewatch.pdf](http://www.jennyodell.com/museumofcapitalism_freewatch.pdf)

[2]
[https://news.ycombinator.com/item?id=15154934](https://news.ycombinator.com/item?id=15154934)

