In the TL;DR summation - unauthorized resellers, usually small to medium sized merchants, or even criminal gangs or dishonest individuals, will buy en masse certain high-value and/or sought after products in order to resell them for profit. Certain goods may be purchased, for example, at heavily discounted prices, and resold at regular market prices, or at inflated prices - especially if demand is high. Online smartphone sales are a popular target, however, fraudsters do not limit their targets to high-value tech products, but also services and experiences. No industry is immune, but in particular, eCommerce stores, fashion brands, event sites and the travel industry can be affected. Anyone with an online presence involving selling and payments must take this fraud risk seriously or face up to the huge financial costs.
Have you ever tried to buy a concert or festival ticket, or that must-have gadget, only to be disappointed mere seconds or minutes after they went on general sale to learn the stock is sold out? Malicious small/medium sized merchants, buyers and fraudsters will use bots setup across multiple devices to buy merchandise (smartphones, high-value goods etc.) en masse through a website checkout service, virtually giving regular consumers no chance at all to make the same purchase.
But what happens during this time, is this a victimless crime? It may appear that an affected merchant will be delighted, as in the end, their aim of garnering commerce through their sales channels has been accomplished. But companies that sell directly to customers can find their products being resold by unauthorized resellers. The original seller is not making a profit, the malicious reseller is - and at their expense. As for regular buyers, that disappointed feeling - let’s call it a negative customer experience - can result in lost future custom for eCommerce merchants. Magnified a hundredfold among disappointed customers, and the effects of these unethical trade practices can have a major financial impact an online store, and potentially create an unfavourable online brand reputation score. To be known for being unable to prevent such resellers bulk purchasing your desired goods is not a sought-after accolade. Online shoppers will use a competitor's service without having a second thought about it.