No one but the fraudsters themselves can be happy about sales of counterfeit products on Amazon. Manufacturers, brand owners, and legitimate retailers have been frustrated by fake products. Ripoffs often seem to show up immediately after a hot product launch and sell for much lower prices. Customers may leap for the knockoffs, but often rue the ‘great buys’ when they discover they paid money for low-quality goods. The brand suffers and the manufacturers, legit retailers, customers, and Amazon all suffer as well.
According to Randy Hendrix, who has sold his TRX Training System on Amazon since 2008, fake copies of his product started appearing on Amazon in 2013. His company reported every instance they found to Amazon but more fake resellers kept showing up. “We realized this was an epidemic,” said Hetrick. Although TRX enjoys annual sales of $50 million, Hetrick estimates the fakes rake in about twice that amount each year, Bloomberg reported.
Now Amazon is making a major effort to stop the sale of phonies by not letting companies sell them on its platform. U.S. and European Amazon teams are going to reach out to brands owners to register their products with Amazon. The teams will include companies that have never sold on Amazon themselves, in some cases companies that have resisted precisely because of the presence of phonies. Once a product is in the registry, any merchant who lists the product for sale must prove to Amazon that they have a legal right to sell it online.
During 2017 Amazon will focus on large companies and top brand names, hoping to build the registry fast and get the approval process working efficiently. The payoff will be huge for companies that have seen lost sales on Amazon and for companies that have stayed away because of concerns about fake products. Brands will be protected, consumers will get what they pay for, and Amazon, of course, will simultaneously boost its reputation with merchants and increase revenues.
“Amazon has zero tolerance for the sale of counterfeit items on our site,” Amazon said in a statement.
“The depressing thing about it is, brands that invest the most to innovate and create new products are the ones that lose the most because they are the ones the counterfeiters target,” said Hetrick, who is pleased with Amazon’s plan, according to Bloomberg. “You end up becoming the sales and marketing arm” for the counterfeiters.
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