Comment by specular

This is really interesting -- I had the exact same reaction as the majority of the responses to this comment.

Ignoring the tax issue for a moment, I would expect the arbitrage to fluctuate with shipping costs and currency valuations, which is really interesting.

But unfortunately, it's really difficult to ignore the tax issue. In particular, China and the United States are sticklers for this, and getting caught smuggling a high priced item (I forget the threshold) won't be viewed as innocent arbitrage by customs.

This model would work equally well for drugs and human trafficking, so I would assume that most governments will/should have a problem with this form of tariff evasion.

Note: I'm not trying to imply that the founders have anything but the best intentions here. I'm simply pointing out that the very existence of a viable distribution network such as this might be of concern for authorities.