The dominance of Amazon and its marketplace is clear. What’s not so clear are the counterfeit items that are also sold there. Rob Dunkel is the founder of 3PM Marketplace Solutions, a company that uses sophisticated data analysis to identify counterfeit and trademark violators on Amazon and other leading marketplaces.
Practical Ecommerce: How can you tell if a listing on a marketplace is counterfeit?
Rob Dunkel: We collect a complete data set that allows us to build models to identify fraudulent activity. We’re looking at things like what the history is for these third party sellers; have they sold products that had a high counterfeit rate; and what do we see on a product review. These types of things can be concerns of counterfeits. We’ll also look at is who is selling that product around a given time and we’ll analyze that seller to find out if it has any seller feedback that could help.
PEC: How big is the counterfeiting problem on Amazon?
Dunkel: We do not comment or make any type of counterfeit estimations. But what I can say is that Amazon captured over 40 percent of online product sales in 2016. So therefore all brands and manufacturers need to understand who is listing their products on that marketplace.
PEC: Could you give us an example or two of the work that you’ve uncovered at Amazon or other marketplaces?
Dunkel: We had a baby teether manufacturer approach us. They were concerned that they were receiving some negative product reviews. The manufacturer purchased some product off Amazon and it came back as a counterfeit.
They had been doing kind of a whack-a-mole type of approach. We hear a lot of companies doing that, where you just buy a product, it’s a counterfeit, you report it to seller, and it may get suspended or removed.
We were able to work with this manufacturer and remove all these fraudulent listings. When we did that it reduced the number of actual third party sellers listing the product.
PEC: Say a brand retains your company and you find a counterfeit product on Amazon. What happens then?
Dunkel: As an example, we have a well-known apparel manufacturer. We did a 30-minute training on our platform with this company. The next day they reported over a thousand trademark violations.
Our platform will report those violations on behalf of the brand to the marketplace operator. Then we’ll track to make sure that those listings are removed from that marketplace.
PEC: What does Amazon typically do? Does Amazon’s personnel act on it?
Dunkel: Amazon’s been very responsive to our reports. I think one reason why is that the data that we’re providing is accurate and we understand the process and Amazon doesn’t want fraudulent listings.
PEC: Amazon is famous for its automated processes. Do you actually talk to a person or is it an automated submission?
Dunkel: Once we submit it, it’s not something that we’re involved in. When we submit something that is, say, a trademark violation, we’ll actually take a screenshot and we’ll preserve any evidence or anything that needs to be used at a future date.
PEC: In your experience, does that typically stop a trademark violator or a counterfeiter?
Dunkel: If there is a seller out there that continues to create problems, Amazon will suspend or remove that seller in my experience.
If a seller is infringing on our client’s brand, understand that these infringements that we’re reporting aren’t our clients authorized listings. These are people who are trying to avoid the Amazon’s detection or prevention of these problems.
PEC: Are you aware of those individuals ever being prosecuted?
Dunkel: I know that different marketplaces have taken actions against third party sellers. I think there are some brands who have taken action against third party sellers.
PEC: Why doesn’t Amazon do what your company is doing in terms of policing its own platform?
Dunkel: This is something that I dedicated the last four plus years trying to solve. The people on our team are some of the top people in the industry. I don’t think this is something that Amazon does. Amazon’s not trying to avoid it. It’s a very complex problem.
Think about how many thousands and thousands of brands sell on marketplaces and then trying to figure out which belongs to what trademark. It’s very difficult.
PEC: Tell us about 3PM Marketplace Solutions. When did you launch the company? Where are you located?
Dunkel: We’re located in Chicago. When I launched the company in 2013, it was because I bought a counterfeit headset off of Amazon. I did some research and I saw the people who were trying to solve this problem were more legal-oriented, not technology oriented.
PEC: How much does it cost? What’s the minimum monthly fee?
Dunkel: We have certain clients who pay $1,000 a month and then we have others who pay significantly more. It just depends upon the number of marketplaces. We have many different types of products that are geared for not only the brand protection, but other ecommerce applications.
We have clients with more than 100,000 different listings. But what they really care about is which ones have the most volume or the most growth last month. And then of those, which sellers had the most growth. If we see a seller who’s just launched and now all of a sudden he’s got 20,000 feedbacks for 1,000 products, it’s a little suspicious.
PEC: Anything else?
Dunkel: Quite often data can tell the story of what’s occurring in terms of counterfeit and trademark violators. Marketplaces are huge. Sometimes it’s challenging for brands or manufacturers to identify or report different violations. We try to make things as efficient as possible.