Amazon is a company known for constant innovation and expansion, an eCommerce and cloud computing giant that seems to be on a perpetual race against Google in terms of diversifying its operations and holdings. When Amazon started off as an online bookstore more than two decades ago, no one would have ventured to think that the company would eventually introduce the Echo smart home speaker, develop the Alexa home speaker and acquire the Whole Foods gourmet supermarket chain.
For all the innovation that Amazon has developed and continues to invest in, the company has not been able to restrain the issue of counterfeiting in its ever-expanding marketplace. A recent article by Wade Sheppard, a Forbes contributor who covers the Asian emerging markets, provides a glimpse into the world of counterfeiters who are very active on the Amazon Marketplace and how they are affecting the operations of third party sellers.
The Battle of the Amazon Knock-Offs
Writing for Forbes, Wade Sheppard told the story of Mark Lopreiato, an Army veteran and inventor of the Forearm Forklift, an ingenious system of straps that individuals can wrap around their forearms for the purpose of easily carrying heavy objects through the wonders of leverage.
The Forearm Forklift was introduced to the Amazon Marketplace a few years ago; it quickly became a top-selling item and encouraged its inventor to launch a television infomercial. By 2008, Lopreiato was enjoying sales in excess of $4 million per year, and Amazon was one of his best sales channels. A few years later, counterfeiters seized upon this product and set up shop in the Amazon Marketplace; in some cases, the products were marketed as cheaper alternatives, but in many other cases they were blatant copies that used Lopreiato’s branding and description.
Since the fake Forearm Forklifts were sold at much lower prices, many buyers gave their money to the counterfeiters, eventually causing Lopreiato to lose 30% of his annual revenue.
Confronting the Counterfeiters
Fearing further losses, Lopreaito sprung to action and began following the guidelines recommended by Amazon to deal with counterfeiters. One of the first steps was to make a test purchase of the fake product listings; Amazon requires this action for the purpose of taking action and escalating the issue to its legal department.
The test purchases made by Lopreiato helped to set the legal wheels in motion; by November 2016, the Forearm Forklift became the first product backed by Amazon’s legal team in a litigation case against marketplace sellers. As details of the case became known, business news outlets such as CNBC reported that most of the fake Forearm Forklifts came from China, a country of origin for about 25% of Amazon Marketplace sellers.
From Test Purchases to Eradicating Counterfeiters
It is interesting to note that Amazon became involved in litigation against counterfeiters after CNBC aired Lopreiato’s story; however, major brands such Birkenstock and Apple have already gone public with complaints about excessive counterfeit action on the Amazon Marketplace.
Despite this landmark litigation case by Amazon against a handful of counterfeiters, it can be easily assumed that this nefarious practice will continue on the Marketplace. For this reason, it is up to business owners to protect their products and e-commerce stores from counterfeiters. Solutions such as Brandlox offer the ability to make test purchases and track them for the purpose of identifying counterfeiters and generating cease-and-desist letters while Amazon gets involved.
In the case of the Forearm Forklift, tracking suspicious e-commerce activity is relatively easy because it involves a single product. Brandlox monitoring solutions can handle up to 2,000 products with unique Amazon Standard Identification Numbers, and this is all done in real-time. To learn more about Brandlox, contact an eCommerce security specialist today.