Even if your Amazon strategy includes staying off the platform altogether, you may find your products (or a version of them) circulating on the marketplace. Brands need to pay attention to what Amazon is doing now more than ever, especially when it comes to consumers. Check out this article on the current counterfeit issue Amazon is facing.
The article below was originally Published on Fast Company, by Elizabeth Segran
A team of 1,000 major brands are fighting back against Amazon counterfeits
A trade group that represents Adidas, Gap, and Target accused Amazon of creating a black market of counterfeit goods.
Click Here for Original Article
If you type “Gucci Bag” into Amazon’s search bar, you can see a selection of handbags that look an awful lot like what you might find at a Gucci store, but at $40 or less. Some are adorned with bees and beetles, which Gucci is famous for. One features Gucci’s interlocked double G logo. Of course, if you take a closer look, you’ll realize they’re fakes. One bag has misspelled the name: Gugci. And the bags are made of plastic, rather than leather.
Counterfeiting is so rampant on the site that it can be hard to tell what is real and what is fake. If you’re looking for a more modestly priced bag, for instance, like one by Kate Spade, you can’t tell whether an $80 cross-body tote is the real deal or a knockoff.
When I reached out to Amazon, a spokesperson said, “Amazon strictly prohibits the sale of counterfeit products. We invest heavily in prevention and take proactive steps to drive counterfeits in our stores to zero. In 2018 alone, we invested over $400 million in personnel and tools built on machine learning and data science to protect our customers from fraud and abuse in our stores.” The spokesperson added that the company stopped a million suspected bad actors from opening Amazon selling accounts and blocked more than 3 billion suspected bad listings.
But these measures may not be enough, at least according to many brands whose products have been counterfeited and posted on Amazon. And from a quick search of the Amazon website, it’s easy to see why.
A fashion industry trade group called the American Apparel & Footwear Association (AAFA), which represents 1,000 brands, including Gap, Adidas, and Target, has recommended that five Amazon sites be added to the U.S. government’s annual list of Notorious Markets. This list lays out all the online and physical markets outside the United States where large-scale copyright infringement takes place. This could lead to trade sanctions for countries with weak copyright protection enforcement. The five sites included Amazon’s U.K., Canadian, German, French, and Indian websites.
In a letter to the U.S. Trade Representative (the agency in the government responsible for developing and recommending U.S. trade policy), the AAFA said, “Anyone can become a seller with too much ease, and it is often misleading and difficult to interpret who the seller is. Members emphasize that from a consumer standpoint, it is hard to decipher from whom the purchase is being made. Amazon needs to go further, by demonstrating the commitment to the resources and leadership necessary to make its brand protection programs scalable, transparent, and most importantly, effective.”
It’s unclear whether the U.S. government will put these websites on the Notorious Markets list. If it does, it may use trade sanctions or other legal means to induce Amazon to take stricter measures to curb counterfeiting. Last year, the AAFA recommended that the U.K., Canada, and German sites be added, but the government ultimately decided not to include them in the final list.
Amazon’s listings are ultimately controlled by Amazon itself, rather than sellers. If a third-party brand, like Gucci, identifies a fake product, they can only take it down by reporting it to Amazon and waiting for Amazon to take action. And an in-depth Yahoo Finance investigation found that Amazon tends to be reactive, rather than proactive, toward counterfeiting issues. It relies heavily on algorithms and machine learning to flag issues. This “leaves it vulnerable to bad actors, who can game the system,” according to Yahoo Finance’s Krystal Hu.
(The Amazon spokesperson said that Hu’s characterization is not entirely accurate, since the brands themselves have tools like Project Zero, which allows them to identify suspicious, counterfeit listings and remove them. The spokesperson also said that on average, Amazon’s automated protections proactively stop 100 times more suspected counterfeit products compared to what Amazon removes based on reports from brands.)
But there are many ways to rip off design. With this letter, the AAFA was specifically reacting to third-party sellers on Amazon’s platform that are creating replicas of other brands’ products, sometimes even using their brand names. However, Amazon itself has become notorious for allegedly copying brands that are top sellers on the site. In 2016, Bloomberg reported that Amazon manufactured and sold an aluminum laptop stand in 2015 through its AmazonBasics line that looked very similar to one created by Rain Design, which had been popular on Amazon for a decade before. However, while Rain’s stand was $42, Amazon’s was $20. AmazonBasics now sells thousands of products, from coffee makers to colored kitchen knives to dinnerware sets that seem inspired by other sellers on the site. Amazon is even creating fashion items inspired by popular brands that don’t even sell products on the Amazon platform. Most recently, I reported that they created a wool shoe that looks suspiciously close to Allbirds’ Wool Runner.
Part of Amazon’s business is to be a marketplace for other brands, and yet within the fashion industry, the platform seems to be alienating companies at every turn. It’s not a good look.