Amazon might be consciously neglecting the fight against counterfeits traded on its platform, in order to avoid losing out on its own business opportunities – this accusation is currently raised in US media. The e-commerce giant is focusing on attracting an enormous number of third-party sellers, also from China, to its Marketplace platform. Allegedly, Amazon accepts that this also entails that counterfeits and other banned products are offered on the platform. “Counterfeiting is a problem considered a necessary evil when you’re going to be selling at this volume”, told Chris McCabe, a former Amazon investigator, the Washington Post.
After Amazon had stepped up its actions against counterfeiting starting in 2016, complaints had dropped – but the selection of goods offered on the platform had grown less strongly too, states a former Amazon executive, who wishes to remain anonymous, in the Washington Post. Subsequently, in early 2018, Amazon began to add third-party sellers on a massive scale – regardless of whether they were authorized to sell the respective products. According to the former manager, Amazon does not want to track down counterfeits but to increase its selection of goods as much as possible.
Allowing all these third-party sellers has opened Pandora’s box, says Juozas Kaziukėnas, Chief Executive of Marketplace Pulse, an e-commerce research firm. Sellers can easily sign up and list products that are checked by Amazon only via an algorithm. Amazon also offers third-party vendors to have their products delivered from its own warehouses. This also means that counterfeit items may even end up in Amazon’s warehouses and might be handled by the company’s employees.
About one third of Amazon’s sales are now generated by third-party sellers, as shown in Amazon’s 2018 Annual Report; Marketplace Pulse estimates that 2.5 million independent third-party sellers are now trading via Amazon. The online retailer keeps around 15 percent cut of third-party sales, regardless of whether the products sold are originals or potential counterfeits.
Amazon, on the other hand, stresses its strong commitment to fight counterfeiting, which it says exceeds its legal obligations. Potential fraud cases are investigated by employees and algorithms monitor the more than five billion changes to the listed products every day. For every case reported, there are over one hundred cases that Amazon proactively removes. Amazon spokesperson Cecilia Fan also stresses that the online retailer does not reduce its anti-counterfeiting efforts: “We continuously improve our protections and would never loosen them,” Fan said.
According to Fan, in 99.9% of cases, customers land on pages that had not received notice of potential counterfeit infringement. Comparing this figure with an estimated 17.6 billion page views in October, there are still about 17.6 million page views in October alone that led to offers for suspicious goods, according to the Washington Post.
For brands, the trade in counterfeits via Amazon often remains an issue. The US sports goods manufacturer Nike, for example, has just announced that it would no longer sell any products via Amazon – the German shoe manufacturer Birkenstock had already withdrawn from Amazon previously and accused the US firm of being an “accomplice” in the trade in counterfeits.
The Swiss garden shears manufacturer Felco also suffers from counterfeits, which are sold via Amazon, among others. Currently, the family-owned business is even offering to replace counterfeit products via a campaign web page. “Counterfeit tools continue to be sold on Amazon,” explains Stephan Kopietzki, Chief Commercial Officer. “Some customers have returned counterfeits only to receive a replacement counterfeit product from Amazon – that just doesn’t live up to our customer expectations.”