How Counterfeits on Amazon Impact Your Business and Your Brand

Amazon today:

• Amazon sales in 2017 from Amazon marketplaces worldwide – $310 Billion
• In 2018 Amazon will own 50% of all eCommerce and 5% of all retail
• 50% of units sold on Amazon come from third-party sellers
• 25% of the third-party sellers on Amazon are “global sellers”, mostly from China

Not all sellers are selling counterfeit products but there is a substantial number of counterfeits sold on Amazon. These sellers monitor new hot products and sell counterfeit versions of your product at low price, stealing the buy box and killing your sales.  In addition to losing sales, low quality counterfeits result in negative consumer reviews, further impacting your sales and reputation.

You must invest in protecting your brand.

What do counterfeits do: Counterfeiters monitor hot selling products on Amazon. They find a factory that can make counterfeit versions of your product or they buy in bulk quantities from Alibaba or AliExpress.

Here are four ways counterfeiters show up on Amazon:

1. Counterfeits add their offer to your listing. Initially they ship from China and later often ship from Amazon FBA, offering PRIME shipping.
2. If you remove them from your listing, counterfeits create a new, duplicate listing but continue to use your registered Trademark and Copyrighted materials.
3. If you can shut down the duplicate listing, counterfeits create a new listing but don’t use registered Trademark and Copyrighted materials; instead, they use “Common Law” trademarks. Common Law trademarks are not registered with the USPTO office and may be pending. Amazon refuses to honor “Common Law IP” and these listings will not be taken down.
4. They sell under their own brand and take their own photos to avoid copyright violation. But they still ship a counterfeit version of your product. The only way to combat this is to do a test buy to prove to Amazon that the product is counterfeit, which can be expensive and time consuming.

What should you do?

1. Sign up with the Amazon Transparency Program for all new products before they get in distribution. It is a sure way of preventing counterfeiters from Hijacking your listing. We have found this new program to be very effective.
2. If you have a registered Trademark for your brand, you must become part of Amazon’s Brand Registry Program. Brand Registry management often requires time-consuming, dedicated effort but can produce good results. Make sure you register all your trademarks with Amazon. In addition, register all your content (product photos, product packaging and product copy). Copyright registration is less expensive and faster than registering the Trademarks.
3. Using the Amazon Brand Registry, file Trademark violations on infringing sellers. In addition, if you have a registered copyright, you can also file a copyright violation. If you have patents (design or utility), file a violation against sellers who you believe violated your patent. If Amazon approves your violation, the seller will be removed by Amazon. In our experience, copyright violations are approved more than Trademark violations.
4. In addition, if you do not have distribution in China, you can submit information to Amazon through your Amazon Brand Registry account listing countries with sellers that may be offering counterfeit products. Amazon may block Chinese sellers from attaching to your product listing.

Conclusion

If you are a brand manufacturer, you must protect your brand. Amazon has two programs to help you achieve that, but they require expertise, experience and dedicated effort. Flatworld Group offers end-to-end implementation and management of both these program for a fixed monthly fee.

Definitions

• Product Detail Page: A product detail page is the listing page Amazon customers are directed to for each individual product sold on Amazon.
• Offer: Amazon allows multiple sellers to sell on same listing; each seller has their own offer on the listing.
• Buy Box: The Buy Box is the box on a product detail page where customers can begin the purchasing process by adding items to their shopping carts. A key feature of the Amazon website is that multiple sellers can offer the same product. Multiple sellers often share the buy box and the seller who has the buy box at any given time is determined by Amazon’s buy box algorithm which takes into account price, star rating, seller rating, among other factors.