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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Amazon.com, Inc.    AMZN

AMAZON.COM, INC.

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Amazon com : Wish Joins Amazon in Restricting Seed Sales Amid Global Seed Mystery

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09/07/2020 | 11:46am EDT

By Jon Emont and Jesse Newman

Amazon.com Inc. is barring foreign sales of seeds into the U.S. after thousands of suspicious packets, many postmarked from China, arrived at households around the world this summer.

The move by Amazon comes as the mystery seeds led U.S. officials to raise alarms about the ease with which seed sales can occur on e-commerce sites, creating potential threats to U.S. agriculture.

Amazon informed foreign sellers that, effective Sept. 3, it would no longer allow the import of plant or seed products, according to an email viewed by The Wall Street Journal. The email said some overseas sellers would have their offers removed from Amazon the same day.

Amazon also updated its public rulebook to reflect the new policy, saying that importing seeds into the U.S., or the sale of seeds within the U.S. by non-U.S. residents, is prohibited.

On Saturday, a merchant based in East Asia who sells Chinese seeds to Amazon customers in the U.S. said that his product had been removed by Amazon.

In its email to foreign seed sellers informing them of its new policy, Amazon said the action was "part of our ongoing efforts to protect our customers and enhance the customer experience."

A spokesperson for the company said Saturday in a statement: "Moving forward, we are only permitting the sale of seeds by sellers who are based in the U.S." Sellers who don't follow the company's guidelines will be subject to action, including potential removal of their account, the spokesperson said.

E-commerce company Wish will ban the sale of seeds on its platform and remove all listings, a spokesperson told The Wall Street Journal.

"Wish has proactively taken down seed listings based on false claims and misleading information as this issue has risen to the forefront over the last few months," the spokesperson said.

San Francisco-based Wish is an online marketplace where users can order discounted goods including fashion, gadgets and kitchen items, directly from merchants in China.

The policy change comes as multiple agencies, including the U.S. Agriculture Department, U.S. Department of Homeland Security's Customs and Border Protection, U.S. Postal Service and state departments of agriculture, are investigating the mysterious seed shipments.

In recent months, thousands of people around the U.S. received in the mail seeds they didn't order. Most were postmarked from China, and the shipments were often marked as jewelry, toys or other goods. Canada and the U.K. have been among other countries experiencing the same phenomenon.

U.S. agriculture officials have said they are working with officials in China to determine who is sending the seed packages and to stop future shipments. China's Foreign Ministry said in July that mailing labels on the seed packages were forged and that China had asked the U.S. to send packages for investigation.

The USDA says it has worked with e-commerce companies for years to ensure they include information about USDA regulations on their sites and to remove sellers that illegally shipped agricultural material, including seeds. Since the mysterious mailings, however, the USDA says it has ramped up this work.

"E-commerce has presented us with a unique challenge," Osama El-Lissy, a deputy administrator for the USDA's Animal and Plant Health Inspection Service, said in an interview on Wednesday. "These sellers must meet the U.S.'s regulatory requirements."

Agriculture officials have been concerned the seeds could introduce invasive species, weeds, pests or diseases that might harm U.S. agriculture. On Wednesday, Mr. El-Lissy said the USDA had received nearly 20,000 reports from seed recipients and collected some 9,000 packages. The USDA has so far assessed more than 2,500 of those packages, he said.

Mr. El-Lissy said the USDA has identified several seeds of noxious weeds, called dodder and water spinach. The agency has also found diseases known to occur in China, called pospiviroid and spindle tuber viroid, in seeds, as well as a few pests of significance: an immature wasp and a larval seed beetle.

As it collects the seed packages, sent to people across all 50 states, the USDA has been routing them to botanists, who are examining the seeds to determine their species and whether any are on a federal list of noxious weeds, which are potentially harmful. Seeds may then be sent to a Maryland laboratory for DNA testing to determine whether they carry pathogens that can cause plant diseases.

Mr. El-Lissy said the findings to date haven't sparked significant concern, or necessitated the enactment of a federal emergency-response plan. Still, he said, the USDA is very concerned about the potential that one or more of the seed packages could contain a threat to U.S. agriculture. The agency can take steps to increase pest surveillance and prepare to respond quickly should it detect something in an agricultural region or the environment, Mr. El-Lissy said.

Authorities say the exact purpose of sending the unsolicited seed packages remains unclear but that a leading explanation is that they are part of a "brushing scam." In these scams vendors selling through online retailers like Amazon pay "brushers" to place orders for their products, shipping packages with low-value or no contents to strangers. Brushers then pose as the buyers and post fake customer reviews to boost the vendor's sales, sometimes posting the reviews to other products.

Amazon reiterated its view Saturday that seed deliveries linked to its site were genuine orders delayed due to Covid-19 and not incidents of brushing. The company has been investigating any connection the platform might have to the packages and whether brushing is involved.

In addition to being useful in brushing, seeds are also highly lucrative as a genuine e-commerce product, according to sellers based in China and elsewhere in Asia. High margins make the seed business attractive to foreign sellers, as a seed packet that costs $1.50 to buy from Chinese suppliers can retail for around $10 on Amazon, one seller said. Shipping fees are negligible on the ultralight packages.

Amazon's removal of seed offers is to take place in stages, per the Sept. 3 email to foreign seed sellers. Foreign merchants who ship their seeds directly to U.S. customers will have their offers removed immediately. Those who rely on Amazon to fulfill their orders -- and have inventory stored in Amazon warehouses -- will have their offers removed starting Sept. 30, according to the email.

Write to Jon Emont at jonathan.emont@wsj.com and Jesse Newman at jesse.newman@wsj.com

 


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Financials (USD)
Sales 2020 370 B - -
Net income 2020 16 553 M - -
Net cash 2020 55 489 M - -
P/E ratio 2020 99,4x
Yield 2020 -
Capitalization 1 608 B 1 608 B -
EV / Sales 2020 4,20x
EV / Sales 2021 3,49x
Nbr of Employees 798 000
Free-Float 81,3%
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Technical analysis trends AMAZON.COM, INC.
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Mean consensus BUY
Number of Analysts 53
Average target price 3 743,40 $
Last Close Price 3 211,01 $
Spread / Highest target 40,1%
Spread / Average Target 16,6%
Spread / Lowest Target 4,64%
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NameTitle
Jeffrey P. Bezos Chairman, President & Chief Executive Officer
Dave Clark Senior Vice President-Worldwide Operations
Brian T. Olsavsky Chief Financial Officer & Senior Vice President
Patricia Q. Stonesifer Independent Director
Thomas O. Ryder Independent Director
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