Practical Ecommerce

The problem of fake products on Amazon

One of Amazon’s strengths is its extensive catalog and its requirement that every retailer selling an item has to list its offer on the same page. This means that when a consumer wants to buy that item, every offer from every seller is listed in one place — the consumer can then choose. Amazon helps this by sorting the offers in the order that Amazon thinks is best.

This works well for branded products, where there is no doubt that each retailer is selling the same item. The problem lies in generic products, such as mobile phone covers, battery chargers, and ice cube trays.

In fact, I have just purchased a basic refrigerator-freezer appliance that does not have an icemaker. So I needed ice trays. On Amazon there were many choices. On selecting one of the most popular options, I looked at the reviews just before my purchase. Here I noticed that although many had five stars, most of the more recent reviews were two stars and one star. The reviewers complained of brittle trays, sharp edges, and the wrong kind of plastic.

Initially I thought that maybe there was a bad batch. But I then realized that one or more of the sellers were undercutting the original retailer with identical looking trays made with cheaper materials. No doubt the original seller had produced a superior product and it had earned its place as a popular item.

Then the competitors took advantage by listing their inferior copies on this product page. The problem I had was that there was no way in identifying who was selling the good product and who was selling the inferior one. With Amazon’s product reviews, there is no way of identifying which retailer sold the product for that particular review.

Bad products, good reviews

This is a growing problem. It is a worrying problem. Inferior products being sold on the strength of good product reviews can be dangerous. Phone chargers can catch fire. Ice cube trays can contaminate the ice. Toys can contain lead paint.

So long as the item resembles the original (quality) product, then Amazon lets an unscrupulous retailer list its offer on the same page. It’s worse if the seller is using Fulfillment By Amazon, as all the products are placed together in the warehouse and the supplier of the fake product is lost in the warehouse shelf. A fake can be sent under the name of a different retailer. Indeed even Amazon itself may not know who supplied the fake if it is mixed with real items.

There is little that an honest retailer can do. On the Amazon forums there are posts of retailers complaining about this and the lack of response from Amazon. It seems that the first line support from Amazon is not helpful. The only posts on forums are from sellers who had problems getting the fakes removed. Unscrupulous retailers that succeeded presumably do not complain.

One solution to this would be to order the cheap product and test it against the original. This can be hit or miss if Amazon fulfills the products as there is no way of guaranteeing that you’ll receive a fake one. Once you have a fake, however, you can test it to demonstrate why it is significantly different from the original. You can raise an A-Z claim against the retailer and, if dangerous, contact the relevant authorities. (In the U.K., it is the Trading Standards office.) If you and others continue to do this, the A-Z claims will accumulate and the retailer will likely be banned.

But there are two problems with this. First, the retailer you bought from may be innocent — due to the problem of Fulfillment by Amazon, described above. Second, the actual culprit could simply create a new account and continue.

There is no magic bullet for this problem, although Practical Ecommerce recently interviewed the founder of a company that is trying to solve it.

Regardless, if the problem continues to grow, it will become a real issue. It may force Amazon to police its sellers much more thoroughly. Until then, genuine businesses will suffer, customers will suffer, and, indeed, Amazon will suffer.

email-news-env

Sign up for our email newsletter

  1. Jeff Delacruz March 20, 2017 Reply

    This is a huge issue for all sellers on Amazon. One quick solution would be to segment reviews to the seller who owns the buy box, removing the incentive for ‘hackers’ to take over the buy box. This issue has been going on for a while now and it’s easy to hack if you have access to cheap knock-offs. If not solved soon this could damage the integrity of amazon for both sellers and buyers.

  2. Avi March 21, 2017 Reply

    The solution is to use FNSKU for your genuine products

    • richard stubbings March 21, 2017 Reply

      Interesting idea. The problem with this is that it FNSKU is only relevant for sellers who use Fulfilled By Amazon, and will just ensure that your stock is kept separate. It eliminates the possibility of a fake being sold under your name, but does not eliminate the possibility of a fake being sold on your listing. There are many sellers who do not want to use FBA. There are many users of FBA who do not want to use the unique FNSKU labels on top of the standard UPC/EAN label on all their inventory.

  3. Lance Johnson March 22, 2017 Reply

    There are possible solutions, but they can be extensive and get costly.
    First, obtain the proper IP protection for your product (design patent for new products, copyright the product design as a sculptural work, copyright the product images, and register the trademarks for your company name as well as the product.
    Second, register your product brand name with Amazon in its product registry.
    Third, follow the Amazon procedure to close the listing to all but authorized sellers (you get to decide who is authorized by monitoring the listing).
    Fourth, file IP rights claims thru Amazon.com’s existing system against knock-off and fake listings using the IP you obtained in step 1.
    Rinse and repeat with daily monitoring.

    • richard stubbings March 22, 2017 Reply

      This only works if you are the manufacturer. Most sellers on Amazon are not the manufacturer. Also, as you say, it is costly and time consuming.

  4. Carlos Rivera March 23, 2017 Reply

    As a seller on Amazon, I can confirm about the fake products. I have tried to reason with Amazon to stop it, but not much action on their part. A shame. This needs to be stopped because it not only affects good sellers, it affect entire brands, too!

  5. ROCKY XXI July 17, 2017 Reply

    This problem is beyond the capabilities of Amazon, E-Bay and Silicon Valley.
    All three are playing catch-up to the cyber criminals of which many are affiliated with terrorist organizations and drug cartels. All of the tech industry could have prevented this problem if only they asked themselves ‘what if’ in their beginnings. The Cloud is a very convenient tool. However, does anyone really know where their data lands ?
    Perhaps the best way to combat this problem lies within the buyer. Know your product before you buy. Use the internet to check out pricing and other factors regarding the product such as spelling.
    As the saying goes, “there’s a sucker born every minute”. Up to you if you wish to be one of the #’s.
    Also, keep in mind, many fraud products help to finance terrorism and the drug cartels as many other crime families. Put pressure on your lazy do nothing representatives in the Congress and Senate. Shame them publicly if you must regarding this issue.