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In this video, Chelsea dives into the nine worst things to buy on Amazon, from potentially counterfeit skincare products to third-party sellers of Trader Joe's items.

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Sources:

https://www.moneytalksnews.com/slideshows/things-you-should-never-buy-on-amazon/

https://www.headphonesty.com/2021/06/spotify-vs-amazon-music/#Spotify_vs_Amazon_Music_Pricing__Plans

https://producerhive.com/music-marketing-tips/streaming-royalties-breakdown/&ved=2ahUKEwjj8JuMxf32AhUkUt8KHcIEABAQFnoECDsQAQ&usg=AOvVaw1v8iw5H1A2B_AwX9UbxuNl

https://www.cnet.com/tech/tech-industry/ftc-settles-its-first-case-over-fake-paid-reviews-on-amazon/

https://www.businessinsider.com/amazon-fake-reviews

https://www.amazon.com/IKEA-RAST-753-057-09-Dresser-Color/dp/B00552QBUG/ref=sr_1_5?crid=1MMZML1CT656D&keywords=ikea&qid=1647951293&sprefix=ikea%2Caps%2C71&sr=8-5
https://www.ikea.com/us/en/p/rast-3-drawer-chest-pine-10484790/

https://money.com/fake-amazon-makeup-skincare/

https://www.fakespot.com/

https://lendedu.com/blog/is-amazons-subscribe-and-save-worth-it/

https://www.forbes.com/sites/kirimasters/2019/09/05/these-four-companies-still-refuse-to-sell-on-amazon-despite-its-market-dominance/?sh=24a8201124fe

https://www.vox.com/recode/2019/11/14/20965434/nike-amazon-partnership-deal-breakup-counterfeits

https://www.cnbc.com/2022/01/28/amazon-returns-what-really-happens-to-them.html

https://cnbc.com/2020/11/17/amazon-sellers-fined-for-coronavirus-price-gouging-hand-sanitizer.html

https://www.vice.com/en/article/bj34z5/why-counterfeit-lightning-cables-kill-iphones-cheap-iphone-chargers

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Hey, guys. It's Chelsea from The Financial Diet, and this week's video is sponsored by M1. M1, a.k.a. The Finance Super App, is an all-in-one investing platform where both new and advanced investors alike can custom build the portfolio they want or use one of their pre-built diversified portfolios. You can even use an M1 community portfolio, like the M1 community pie, which focuses on groups of publicly-traded companies led by executives from marginalized communities, allowing you to invest with both your values and your financial goals in mind. M1 gives you all the tools you need to grow your wealth in one place without having to pay any commission fees, so click the link in our description to get started with M1 today and begin building your wealth for tomorrow. And today, you'll notice that I am not at home. I'm actually coming to you guys from the TFC set here at the office, because I'm a busy [BLEEP] and I sometimes have to film a bunch of videos back-to-back and I don't have time to change locations between the two of them. I'm actually very soon about to sit down with a guest we're filming with today who is a dermatologist, and I am extremely excited about that one. So it'll be worth it that I'm here. But all of that is to say I am here in a location that has more than a few products that were purchased on amazon.com. I say that in the interest of transparency given the title of the video and the subject matter, but also because I want to stress that being critical of Amazon, especially in light of all that they've been doing to try and suppress or bust the historic union that succeeded this past week in Staten Island as of this filming. You can also be someone who does need to buy certain things from Amazon or maybe who used to buy a lot of stuff off of there and is trying to wean themselves off or maybe has certain items that they can only afford or access in their location when they buy them from Amazon. Also, let's be real that, even if you buy absolutely nothing from Amazon, the chance that you would be able to totally boycott Amazon Web Services, which does make up the majority of their business, would be very unrealistic. On this channel, we critique a lot of things. But we always like to keep in mind that not everyone has the same choices or the same financial access and that, more importantly, the point of all of these things is to be getting better and to become more aware about the consumer choices that we often just totally take for granted or become sort of automated about in our lives. Many of us have taken to a default of just looking on Amazon when we look for a particular item, even when that may not be the best place to find it. These corporations are massive and effective at marketing and squeezing out competitors and making themselves unavoidable in daily life. But that doesn't mean we have to give up all hope of being a more thoughtful consumer, especially in instances when it could dovetail with our financial goals. So if you're looking for a place to start to wean yourself off of that powerful Jeff Bezos teat, here are nine things you can feel safe to say you should never buy off of Amazon.

Number one is products from Trader Joe's, Costco, or other big-box grocery stores. These stores are all direct competitors of Amazon, so they are not going to sell their products on Amazon directly. Which means that, when you see Trader Joe's Cowboy Caviar or Costco Kirkland brand peanut butter on Amazon, these are being sold through a third party and not the companies themselves, meaning that there's no guarantee that they have undergone the same quality inspections you'd expect at those stores. They could even be expired or totally counterfeit. They're also often way overpriced compared to what you would buy them for in the actual store because of going through a third party and the fact that typically, if someone is looking to buy these items on Amazon, they can't easily access them at the normal store. For example, the cult favorite Trader Joe's tea tree shampoo, which sells for about $4 in the store, is listed for over $13 on Amazon Prime. Free shipping is not going to cancel out that difference, honey. Representatives from both companies have stated that they don't authorize this reselling and cannot stand behind the quality or the safety of any of their products being sold on third-party sites like Amazon. Now, I'm not here to be a Grinch. If there is one specific item that you can't access and you miss and you think about daily and you really want to get it and Amazon is absolutely the only way you can, OK. Do you. But making any kind of regular habit about buying these items off of Amazon is a one-way ticket to overpaying for what are potentially even counterfeit goods.

Number two is music streaming from Amazon Music. Both Spotify and Amazon Music premium memberships are $9.99 a month for unlimited streaming, unless you're a Prime member, in which case Amazon Music is only $7.99 per month, saving you approximately $24 a year. However, unless you have a household full of Alexas and Echoes and other Amazon products, Amazon Music might not be optimized for or even compatible with all of your technology. Like Spotify and other music-streaming platforms, Amazon does offer an ad-enabled free membership program. But unlike Spotify, the free Amazon Music membership does not grant access to their full content library. So make sure that you check all of the specifics before signing up for the Amazon Music program just because it happens to be $2 cheaper. Now, I should caveat here that Amazon does actually pay a very, very, very infinitesimally slightly higher amount to their musicians and that is something to consider. However, the difference, in my opinion, is not substantial enough to make the switch to Amazon Music, which will in many ways back you into a further corner of needing more Amazon products and programs.

Number three is any product that has tons of sketchy reviews. Reviews are one of the most important tools that we use to assess whether or not to buy an item on Amazon. And honestly, God bless the people who leave really detailed product reviews, especially with little photos. Like sometimes, you get little heartwarming stories. It'll be like a 60-year-old married man who's like, I use this waffle iron every Sunday to make my beautiful wife waffles and she loves them, with a picture of a waffle that has like raspberries arranged in a heart on it. I live for those. Those people are the backbone of America. But of course, those reviews are extremely hard to effectively regulate and, therefore, highly susceptible to fraud. The first FTC settlement placed a fine of $12.8 million against the diet pill brand Cure Encapsulations for paying a third-party company to post fabricated reviews, but it would be suspended once they paid $50,000 to the FTC and fulfilled their other tax obligations. Essentially, a slap on the wrist. So we'll link you to a resource for spotting fake reviews on Amazon, but here are just a few quick tips. Look at the percentage of 1 to 5 star reviews. If 70% of the reviews are four or five stars and 30% are one stars, that is unusual. Check if the reviews are vague. If the reviews are extremely positive or negative but don't specifically mention what makes them good or bad, like love it, great, or horrible, the review might be fake. If the review mentions a competing product, that's also a red flag. For example, if a user says not to spend your money on a product but to check out another brand, that is definitely suspicious. And lastly, take into account the popularity of the product. If a fairly unknown or less popular product has thousands of reviews, it's worth giving those reviews a closer inspection.

Number four is IKEA brand household items and furniture. Similar to the Trader Joe's situation, IKEA famously does not sell its products directly on Amazon, meaning anything that you buy that is IKEA branded on the website is going to come from a third party and, therefore, be subject to all of those same concerns we raised in our first point. Because, yes, this means that their products listed on Amazon are almost always more expensive, sometimes egregiously so. The point of IKEA is that it is supposed to be reasonably priced and accessible. So why would you want to spend more than twice what an item actually cost just to get the convenience of Amazon Prime? Listen, Jeff Bezos might make horrible decisions in his personal life, but that does not mean the man is stupid. He understands the powerful psychological tool that is unlimited free shipping and, in many cases, two-day delivery. That one little difference will, for many of us, override many other factors that would make buying somewhere else way more reasonable and financially sound. Don't give in to his bullbull[BLEEP]..

Number five is beauty or skincare products. Now, I should be clear that, while there may be some exceptions to the rule, especially depending on where you live and what other distributors you might have access to, much of what is important about testing a new beauty or skin care item is to be able to sample it, which you usually will be able to do if you go to places like Sephora, NARS, Mac, et cetera. Additionally, there is a huge issue with counterfeit beauty products on Amazon. While Amazon strictly prohibits the sale of counterfeit items, over 42% of items purchased during a 2018 government investigation of third-party vendors on sites like Amazon and Walmart were fakes. Every single cosmetic item purchased in the investigation was believed to have been a counterfeit, including an Urban Decay eyeshadow primer that was a near-exact replica of the actual product. So definitely compare prices before buying any makeup or skin care item on Amazon. Look out for fake reviews, and look at the product's own website to see if they list Amazon as an authorized retailer. You can also install the browser plug-in Fakespot which scans product pages to find fake reviews and counterfeits. When it comes to makeup and skin care products, there are almost always better places to buy it with better customer service and loyalty programs than Amazon has, plus the sample factor which will allow you to safely test things and the knowledge that you are not going to be buying a counterfeit product.

Number six is "Subscribe and Save" products. Subscribe and Save as a service that Amazon offers for anything from shampoo to toothpaste to cotton balls where Prime members can sign up to subscribe to get an item delivered regularly, e.g. every month, in exchange for a small discount, typically up to 15%. But this isn't necessarily a good deal. Because for one thing, the price of a product may jump between one month and the next without you noticing. That is intentional. And even with the Subscribe and Save discount, you're not necessarily getting the best price out there. LendEDU compared 38 identical products at Costco and Amazon and found that Amazon's products were 56.48% more expensive. These products ranged from the Apple iPad to the Splenda sweetener. And the biggest price differences were found in food and beverage products. For instance, a Butterball fresh hen turkey was $0.99 per pound at Costco and that same turkey was $3.70 per pound on Amazon. It might be convenient, but it in many cases directly opposes the intended purpose to save more money through automation and regular buying. There are many items in our life which we will need at fairly frequent intervals, but it can be a huge money saver to set a small reminder for yourself to manually load those items into your cart once a month or once every other month so that you can ensure that the automated feature on your end isn't just an excuse to price gouge you on the end of the retailer.

Number seven is clothing and shoes. Now, it should be stated here that many, many clothing brands do not sell directly on Amazon. So for a lot of this shopping, it is going to have the same issues we covered in other points. But in addition to the clothing possibly being counterfeit or way more expensive than they would be on the actual retailer's website, even when a brand does sell directly, one of the most important things is to be able to try on clothing. For example, if you buy directly from a retailer's website, you will usually be able to return or exchange that item directly in store. The same rule does not universally apply for Amazon purchases. And Amazon does know that psychologically many of us don't actually take the time to return things that we bought online, even with their little lockers in Whole Foods. And even if you do return, Amazon is notorious for how many of its returns end up in landfills anyway. And Amazon third-party sellers told CNBC that they end up throwing away about a third of returned items. Additionally, apparel is one of the most rampant places on Amazon for all kinds of fraudulent reviews and fraudulent item images. It's become a meme at this point. But for many people, buying clothes on Amazon will mean receiving an item that is meaningfully different than the item that was advertised and often much lower in quality. Now, this, of course, also goes for retailers like Sheehan and boohoo and Fashion Nova, but you could probably guess that my advice is don't buy that [BLEEP] either.

Number eight is COVID supplies. So you probably remember the COVID supply price gouging crisis in 2020, which was a problem with retailers everywhere, not just with Amazon. "Between February and March of 2020, third-party merchants, Mobile Rush, EMC Group, and Northwest-Lux sold more than 1,000 units of hand sanitizer on Amazon's marketplace at prices that grossly exceeded the price at which the same or similar products were readily obtainable elsewhere," the New York Attorney General's office said. "For example, Northwest-Lux charged Amazon shoppers $79.99 to $129.99 for two-liter bottles of Purell, which are typically priced between $20.87 to $35." And Amazon has claimed to suspend thousands of retailers guilty of price gouging. But when third-party resellers raising the price on what an item would normally cost on everything from Trader Joe's cookies to Purell to a pair of Timberlands, it's really not credible to think that the practice is all that frowned upon. Similarly, and you may already guess what the next problem is with it, but counterfeits are rampant. The regulation over mask labeling, for example, has not been nearly sufficient enough to prevent millions of fake N95s and KN95s being sold through Amazon over the past two years.

Lastly. Number nine is knockoff phone and computer chargers. This is a short and sweet point. Knockoff chargers on Amazon for your various devices can often be cheaper, but they can also often harm your device. It is not worth having to replace an entire laptop or iPad because you didn't want to pay for a legitimate charger. $79 to replace your Apple brand power adapter is still way less than dropping $1,200 on a new laptop because you accidentally fried your old one. This is something that actually happened to my colleague here at TFD, Holly, who wrote this script, in fact, and I think felt personally triggered by this one. But we'll link you guys in the description to an entire story about how these cheaply-made and often incompatible chargers are ruining devices left, right, and center. At the end of the day, Amazon is basically unavoidable in most of our lives to some extent. But we can be a lot more discerning about how we use it, starting with these items. And if you're looking to do something actually smart with your money, we recommend you check out M1 at the link in our description. As always, guys, thank you for watching. And don't forget to hit the Subscribe button and to come back every Monday, Tuesday, and Thursday for new and awesome videos. See you.