Amazon Problems: Counterfeit Products

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azbirky0In my previous installment of Amazon Problems, I talked about fake Amazon product reviews. This time, I talk about fake products themselves. Thanks to lax Amazon policies, buyers now have to worry about whether their products are genuine or counterfeits.

Amazon is now more of an open marketplace and less a “store” like Best Buy or Wal-Mart. Nearly 40% of Amazon’s total sales now come from two million third-party sellers. When you buy something, the website might still look like Amazon but the behind-the-scenes process could be very different. You basically have one of three options:

  • Ships from and sold by Amazon.com. The real “Amazon store”. Amazon buys the products wholesale directly from the manufacturer, keeps them in Amazon warehouses, and then Amazon ships it you.
  • Fulfilled by Amazon (FBA). This means a third-party bought the product from somewhere, claims that it is authentic, and then ships it over into an Amazon warehouse. You buy it, and Amazon ships it. This allows the merchant to make their products eligible for Free Super Saver Shipping and Amazon Prime.
  • Ships and sold by Third-Party. The sellers have to follow certain rules, but you are mostly dealing directly with a third-party seller with their own warehouse and order fulfillment. This is like eBay or traditional flea markets.

Because Amazon essentially allows anyone to ship them something and say “These are the real thing!”, that opportunity itself can encourage counterfeiting. In July 2016, Birkenstock announced that due to counterfeits and Amazon’s lack of response, they will no longer supply products to Amazon as of January 1st, 2017. In addition, they will no longer authorize third-party merchants to sell on the site.

According to another CNBC article, other brands with questionable authenticity include Michael Kors and Canada Goose. Amazon even commingles inventory from various third-party sellers, so you end up with no idea where your product really came from:

To unsuspecting consumers, fake products can appear legitimate because of the Fulfillment by Amazon program, which lets manufacturers send their goods to Amazon’s fulfillment centers and hand over a bigger commission, gaining the stamp of approval that comes with an FBA tag.

Furthermore, Amazon’s commingled inventory option bundles together products from different sellers, meaning that a counterfeit jacket could be sent to an Amazon facility by one merchant and actually sold by another.

I can only hope that Amazon’s own inventory is still kept separate from the Fulfilled By Amazon (FBA) inventory.

Per The Counterfeit Report, here are some other brand name items with reports of counterfeit copies online:

  • Converse Chuck Taylor All Star shoes
  • The North Face Denali jackets
  • Gillette Fusion Razor Blades
  • Giorgio Armani: Acqua Di Gio fragrance
  • Bose headphones
  • Otterbox smartphone cases
  • Duracell batteries

It’s really hard to tell between fake and real products. Last year, a detailed teardown of a $199 Beats headphone that revealed only $17 of cheap parts went viral. That pair of headphones turned out to be fake. But wait, they did a another teardown of authentic Beats headphones and found them to be still very similar, with $20 of cheap parts. It really says something these hardware experts didn’t even recognize a fake after tearing it apart (the boxes and internal materials are also excellent copies).

This counterfeit problem should be a huge concern for Amazon. Every time I look at a brand name product like Bose headphones, Nespresso coffee pods, or Ray Ban sunglasses, I have to pause and weigh the chances that I’ll get a fake product. Is the price too good to be true? Why is this other price so much lower? If another big merchant comes along with a good user interface and reliable product sourcing, then I would definitely consider shopping there instead. (You hear that, Jet.com + Wal-Mart?)

What can you do? One option is to only buy things marked “Ships from and sold by Amazon.com.” This may mean you have to voluntarily pay more for the same product – so painful! – but it may be worth a few extra bucks for the peace of mind. I would also consider third-party sellers if they are the original manufacturers of the product. For example, you could buy ExOfficio boxer briefs directly from the ExOfficio seller account (although sold by Amazon is cheaper right now).

Amazon’s return policies could still be considered “customer-friendly”, but only if you are an alert and active customer. It is your responsibility to examine your product for any inconsistencies. If you spend the time to contact them and complain, by most accounts Amazon will refund your money if under FBA, or at least pressure the 3rd-party merchant to refund your money. This isn’t good enough; I hope that Amazon becomes less reactionary and be more pro-active about this problem.

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Comments

  1. They are aggressively shutting down counterfeiters, even at the expense of their massive third party seller network. They have made it easy for any brand to register their product and restrict what sellers are allowed to list their products on Amazon. They have a list of their own of suspected counterfeited brands in which Amazon is restricting who can sell those brands. Now sellers need to provide at least three recent wholesale invoices with substantial quantity order, have good seller metrics and pay I ungating fees (avg $1k+ on each brand) to apply for approval. That fee is to help the cost of their counterfeit investigation operation. Most counterfeiting is coming from the merchant fulfilled sellers, but some does come from FBA sellers. AZ is applying these rules as strictly all sellers alike. AZ is a victim in these scandals too. The recent proliferation of counterfeiting has scaled up to a rate too difficult to police it all. They will no longer accept retail receipts to substantiate authenticity, which includes Walmart. Many products Walmart sells are knock offs. I am an FBA seller and these changes hurt our business. We get blocked from selling products we have been routinely selling legitimately and the current stock at Amazon doesn’t get grandfathered so there are substantial losses. Amazon’s mission is to always put the customer experience first, regardless of the fact that third party sellers are a profit center for them (they don’t make profit from their own sales). I’ve never seen a company more protective of their customers than AZ. They are a huge growing company so communication is lacking. I don’t doubt they weren’t amply communicating their efforts to Birkenstock, but that doesn’t mean they weren’t working behind the scenes.

    • well, it does sound like AMZ’s unofficial official response 🙂

    • Amazon has become as cheap as it can get! I have stopped buying things from them.
      This post above is some amazon employee, forced to work long hours and made to write things praising them!

      They deliver via private persons, having no integrity and standards, these carriers steal packages and mark them as delivered.
      I was shocked to see a dirty truck pull up on my property, a nonchalantly dressed man steps out and delivers a package, grabs few others packages delivered earlier and goes away!

  2. I became aware of the counterfeiting for health supplements several months ago. I usually bought name brand company products that I trusted, but realized I couldn’t trust the products on Amazon (and now you’re telling us even things sold and shipped by Amazon might be commingled) to be real. So I went to my favorite companies and asked where I could reliably buy their products. Now I buy all my supplements from that source. A big disappointment, because Amazon used to be my one stop shop. No longer. Thanks for getting this info out there. Amazon better wake up and smell the coffee.

    • They have made it easy now for your brand to register themselves so now they can control the sellers on Amazon. The brand owner/manufacturer would have have to approve any seller other than themselves. This way they know that only the sellers and distributors they directly sold the product to can be on the listing.

      • this is simply not true. The real problem is a security one, this website has been hacked by Chinese criminals who can freely open as many accounts as they want. Simply removing the counterfeiters doesn’t work anymore. They work by taking American third party sellers listings as bait, if they can stay open more than 14 days they then get paid by amz for their sells while there shipping will take 4 to 6 weeks, and of course very little orders they took will be shipped.

    • When it comes to health supplements, there are many fakes on amazon. I’ve learned to stick to brands I know and trust.

  3. Joshua Katt says:

    Even Amazon plays these games too. I bought disposable Gillette Good News razors directly from them. Packaging and item was completely different that advertised and they suck compared to what I buy at CVS.

  4. Even products shipped and sold by Amazon can be knockoff, too. I’m surprised Ray-Ban sunglasses wasn’t on the list because they are a lot of fakes out there.

  5. Yes there are certainly problems with the Amazon marketplace. Just about anyone can sell anything on the marketplace and its not really feasible for Amazon to guarantee everyting sold by the 3rd parties. On teh other hand the problem with counterfeits is not unique to Amazon and you can get them in ebay, misc. internet vendors and retail stores.

  6. Joe Higashi says:

    Is wasn’t able to find any way to seach for “fulfilled by Amazon” or “sold by Amazon” which made it very tricky to even collect super-saver shipping, let alone worry about counterfeits.

    Amazon should be very concerned about this, as it has largely strangled ebay. After being burned a couple of times on ebay I’ve given on it for anything I don’t expect to be crap.

  7. I paid $13 more for a ship and sold by amazon product earlier this summer because I didn’t want to take the risk.

    Also another product where I’ve read reviews with reports of counterfeits on amazon is micro SD cards.
    What some don’t realize is that fulfilled by amazon doesn’t mean genuine. In terms of comingling, I’ve read of it happening but people have returned these items to amazon and exchanged and what they’ve gotten in exchange seems genuine.

  8. Oh btw, I hope you continue with these series on amazon. So far you’ve written about issues I’m aware, I’m wondering what else is next?
    Has anyone else noticed that pbs programs that were included with prime video no longer are? you have to pay extra for them now?

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