Many brand owners would be shocked to know how easily their products can be counterfeited. Throughout the world, there are factories that brazenly specialize in knocking off popular brands for retailers who want to capitalize on the ease of selling fakes at discounted prices.
While Amazon works hard to prevent eCommerce counterfeiting, there are still lots of counterfeits on Amazon and that is very often where the initial research to find attractive targets begins. Here is a typical way it plays out:
- Unethical retailers use third-party tools such as JungleScout to find popular branded products on Amazon.
- Targeted products are purchased and sent along with research to factories (usually overseas) that are happy to ignore trademarks and patents. Typically, the counterfeits are produced with only modest attention to detail and little effort to replicate quality.
- When the retailer receives the counterfeits, he/she lists them for sale on the same Amazon product page as the original, usually at a lower price.
The flat earth economy makes it very easy for counterfeiting retailers to connect with production facilities around the world that will create knockoffs for them, but the good news is that counterfeiting is being taken seriously both by governments around the world and shopping platforms like Amazon. Overall, the future is bright but we have a long way to go.
It is no big surprise that counterfeiting is a huge problem for brands in three major ways:
- Brand owners lose sales to retailers selling inferior knockoffs at lower prices.
- The inferiority of the counterfeit product weakens the brand by lowering customer satisfaction.
- The price competition introduced by the lower-priced counterfeits puts pressure on distributor and retailer distributorships who cannot compete.
It is fairly easy to get eCommerce counterfeiting shut down on platforms like Amazon simply by reporting it when you find it. On the flip side, there are always new counterfeiters ready to step in when others are shut down. As a result, policing counterfeiting is a never-ending job. On another note, you can read about Trademark and Copyright Violations here.