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Kickstarter is a place for bringing new ideas to life, but with large sums of money changing hands on the platform every day, it has become a prime target for a deceptive breed of entrepreneurs.
These entrepreneurs are conducting what I like to call “Alibaba Arbitrage,” when a knockoff of an innovative product is purchased in bulk on Chinese marketplace Alibaba then resold as their own for a markup.
Kickstarter suspends campaigns like these, such as this one reselling $15 inflatable hammocks from Alibaba for $60, but another reseller just made over $3 million selling the same product on IndieGoGo.
– Thomas Schroder, Krowdfund.com