Critics say that Amazon itself is to blame for the Chinese counterfeited good problems it is experiencing recently. It was Amazon, after all, that aggressively pursued Chinese manufacturers in the first place, and gave them access to sell directly to consumers with its sprawling logistics system, according to CNBC.
Amazon’s Fulfillment by Amazon program (FBA) is advertised as a way for sellers to reduce costs and increase exposure to customers. Sellers ship inventory to Amazon FBA centers, and when an order is placed, Amazon packs and ships the merchandise to the consumer.
Merchandise that is part of Amazon’s FBA program is eligible for Amazon Prime and super saver shipping. Amazon even manages customer service and returns through this program 24 hours a day, according to its FBA advertisement. Amazon touts its FBA program as a way to reach customers around the world and grow a business locally and globally.
Sellers are excited about this program, and it offers a way for small businesses to benefit from Amazon’s scale reduction in logistics costs. The problem is that it also offers Chinese counterfeiters easier access to product information, making it easier to create fake merchandise, send it to the FBA fulfillment centers, and undercut legitimate sellers.
Often, the counterfeiters even pay for reviews, generating thousands of positive reviews in a short period of time to add an appearance of legitimacy to their online store. Usually, products are only discovered to be counterfeit once they are in the hands of the consumers.
Sellers’ online reputations are hurt when consumers think they have the real product, when it is actually a counterfeit of inferior quality. Amazon has policies that forbid business practices like this as well as fake reviews. Amazon sets out to close offending stores, but puts the onus on the legitimate seller to bring the culprits to light and report them. Sellers complain that counterfeiters are as quick to open new stores with the same products as Amazon is to close the stores they report.
Amazon not only made it easier for Chinese counterfeiters to do business through their FBA program, but also has no effective method or plan to fix the problem and police offenders. Until the company addresses the issues, legitimate sellers run the risk of losing ideas and products to Chinese knockoffs.
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