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Amazon's Jeff Bezos Called Out On Counterfeit Products Problem (cnet.com) 169

Posted by BeauHD from the marco-polo dept.
An anonymous reader quotes a report from CNET: Here's the scenario. A small company designs and creates a product and puts it up on Amazon. Things go well. People really like it. They post hundreds of positive reviews. Sales build -- and keep building. Everything is going great. And then, boom, things go south in a hurry. Another company has created a counterfeit version of the product and is selling it under the same name only it's selling it for less, stealing all the sales. That's exactly what happened to Portland-based Elevation Lab, its founder Casey Hopkins said, accusing Amazon of being "complicit with counterfeiting" in a blog post.

The Anchor, Elevation's popular under-desk headphone mount, has been getting flooded with counterfeits, Hopkins said, noting the situation certainly isn't unique to his company. "The current counterfeit seller, Suiningdonghanjiaju Co Ltd (yeah they sound legit), has been on there for the past 5 days and taken all the sales," Hopkins wrote. Adding further insult to injury, he said Elevation has paid Amazon a "boatload of money" to advertise the product that it has "built, invested in, and shipped." Amazon has now purged the Suiningdonghanjiaju listing, which is noted in our cart as "no longer available from the selected seller." It instead defaults to Elevation's own stock. Hopkins told CNET that counterfeiters have been purged at least five times in recent weeks only to return a week later under a different seller name "to hijack the listing." He said it takes Amazon 5 days to remove the seller. "If you have a registered brand in the Brand Registry and don't sell the product wholesale, there could be one box to check for that," Hopkins wrote. "And anyone else would have to get approval or high vetting to sell the product, especially if they are sending large quantities to FBA [Fulfillment by Amazon]. I imagine there are some algorithmic solutions that could catch most of it too. And it wouldn't hurt to increase the size of the Brand Registry team so they can do their work faster." Hopkins took a final poke at Amazon CEO Jeff Bezos, saying: "If you're reading this, come on, this is Day 2 activity."
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Amazon's Jeff Bezos Called Out On Counterfeit Products Problem More

Amazon's Jeff Bezos Called Out On Counterfeit Products Problem

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  • This has plagued Amazon for the longest time, and what makes it worse is when the counterfeits get sent to Amazon's warehouse for shipping. People trust items that go under "Prime" and don't realize they may be marketplace items. I've gotten several fake batteries and other items, and while Amazon has refunded me, I know not everyone is so discerning.

    • Re: (Score:2)

      by arth1 ( 260657 )

      It affects search so much that I don't go there if I can help it. Otherwise I have to wade through pages of counterfeits and knockoffs and "related products" before I find the actual product I explicitly searched for.

      It's not like adding "genuine" to the search helps either - that just tends to exclude the real product, while generating hits for "genuine cable for [insert brand}". (It's a genuine cable, as opposed to a painted rope, I take it.)

      • They need to add standard search options, like -genuine would remove all products with genuine in the listing.

    • Yeah, the batteries are really starting to piss me off, and I would say they are by far the biggest issue. The batteries have destroyed about $1,200 worth of electronics and badly damaged a $1,000 desk for me in the past two years.

      I am happy to get the random Chinese bike lights (my bicycle looks like a Christmas tree), because they get stolen constantly, but I do buy a proper main light retail from a trusted store.

      But now if it is anything expensive (or really cheap) I think twice about buying from Amazon

      • Since amazon often merges all the reviews for a given UPC, the reviews saying a product is fake will also tar a vendor not selling fakes. The feedback for vendors is ineffective since they come and go.

        What amazon should do is anytime someone leaves a review they should ask if this review about the vendor, the product or both. Then list the vendor in the Review.

        • Can't even do that, because with Amazon Fulfillment, you don't actually know whose product you received-- just who claimed the order.

    • In the world of electronics at least the trust is already gone for me; at this point I wouldn't buy electronics from Amazon and more than I would from eBay.

    • Even worse are the overpriced items. When I can walk into a store and get the Item for 70% less, there is a problem. The whole point of online shopping was that it was suppose to be cheaper. So not only do I pay more but I have to wait for the item. My how times have changed.

  • Maybe if your product wasn't a 12 cent piece of plastic that you sell for $12 you wouldn't have such a hard time with counterfeits. What does your product do that the counterfeit product does not? It's a stupid plastic hook with a piece of double-sided tape on it. If I see one for $3 and one for $12 then I doubt I am going to give your company my money just so you can afford to show me even more stupid ads to inflate the price of your plastic crap.

    • Re: (Score:2)

      by Luthair ( 847766 )

      A lot of time the cost of the product is in R&D and creating a market by making people aware that it exists. If your competitor just makes an exact clone their only cost is tooling and manufacturing which will be considerably less than yours.

      You're basically saying it would be fine for a chinese company to clone an iphone and use Apples software.

      • A lot of time the cost of the product is in R&D and creating a market by making people aware that it exists. If your competitor just makes an exact clone their only cost is tooling and manufacturing which will be considerably less than yours.

        You're basically saying it would be fine for a chinese company to clone an iphone and use Apples software.

        The Apple analogy is a poor one. That's pretty much what Chinese and Korean companies have been doing: replicating the hardware design and styling the software to look like what Apple produces. Have you SEEN the Apple Watch clones? The difference is Apple is the big dog, and has the clout to take them to the mat in court.

    • Re: (Score:2)

      by arth1 ( 260657 )

      What you pay for is likely a patent.

      (Which in my opinion should never have been granted; with under-table purse hooks being around for a century, the man on the Clapham omnibus would see it as obvious that large ones can also be used to hang headphones from.)

    • For a second there, I thought you were talking about Apple!

    • Re: (Score:2)

      by GuB-42 ( 2483988 )

      The problem is that the copy has the same name as the original, it even has the nerve of calling itself "the original" in the Amazon listing.

      I have no problem in people making cheaper versions of popular products, but they have to stand by their own merit.

      Also, if you look closely, on the left product, presumably the copy, the double-sided tape is thinner and doesn't fit properly, the molding marks are more noticeable too. It means that they didn't even bother paying the whole 12 cents required to get to th

    • Maybe if your product wasn't a 12 cent piece of plastic that you sell for $12 you wouldn't have such a hard time with counterfeits. What does your product do that the counterfeit product does not? It's a stupid plastic hook with a piece of double-sided tape on it.

      So, it's a Command hook? You can get that for less than $12 and it won't damage most things you stick it to.

  • Amazon Can Also *Be* The Problem (Score:4, Interesting)

    by ytene ( 4376651 ) on Sunday March 04, 2018 @10:38AM (#56205343)
    A few years ago I bought a camera tripod from a small specialist British company... It gets lots of regular (ab)use and is doing brilliantly. About a year after I bought it, I happened to see what looked like a mirror copy, only smaller, being sold on Amazon's web site.

    With no more knowledge of the original company than having purchased one of their products direct, I picked up the phone and gave the company a call. Because it was a small British company at the time, the person who answered the phone turned out to be one of the owners... and we got talking. It turns out that he'd taken a phone call from Amazon one day, with the Amazon person saying something to the effect of,

    "We've got a solid demand for your product, people asking us for something exactly like your current model range and enough to provide about £100,000 of orders. We're going to buy your product in bulk and sell it, and here are the terms you're going to agree to..." [ I'm exaggerating to make the point].

    The small British company decided that they did not want to sell through Amazon, but, believe it or not, ensuring that this happened ended up taking a court case which - despite the win - cost this company a *vast* amount of time and money. In response, Amazon went out and started to purchase rip-off clones from a Chinese manufacturing supplier... Amazon are still selling the rip-off model on their site... This sort of scenario is going to be applicable in every case, of course.

    By now, Amazon will know that some of the products they are selling infringe on original product designs from other companies, but in some cases there may be more to the story than Amazon simply being an innocent victim.
    • or is that competition? If Amazon infringed on a novel patent I could see it being a genuine rip off. But baring that, well, it's a camera tripod. Maybe even a really nice one, but still a camera tripod.

      Now that said, I do think we ought to start thinking (and doing something) about the scenario where Amazon eats the world. Once everyone else is out of business it won't end well for us working stiffs.

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      What is the actual infringement here though?

      Is there some patented tech that makes the tripod work better than others, which was copied? Or did they put a fake logo on it, which is subject to trademark protection?

      Because if it's just an aesthetic design then there probably isn't that much they can do to stop other people making similar ones. The copies aren't fake unless the misrepresent themselves as being the original. And personally I actually like that people make cheaper but 90% as good versions of pop

      • Re: (Score:2)

        by tlhIngan ( 30335 )

        What is the actual infringement here though?

        Is there some patented tech that makes the tripod work better than others, which was copied? Or did they put a fake logo on it, which is subject to trademark protection?

        Because if it's just an aesthetic design then there probably isn't that much they can do to stop other people making similar ones. The copies aren't fake unless the misrepresent themselves as being the original. And personally I actually like that people make cheaper but 90% as good versions of pop

    • Sounds like normal capitalism at work here. Was there a trademark issue? Was there a patent violated? The thing is what most people call counterfeit and infringing is nothing of the sort. There's nothing stopping me creating something that looks like something else and selling it at half the price providing there's no trademarks or patents being infringed on. That is why big companies are so strict on their IP and part of the reason why they attempt to impose some level of DRM.

      If your small British company

      • Re: (Score:2)

        by ytene ( 4376651 )
        There was an issue, but for the life of me I could not recall whether it was trademark or patent. Rather than make a false statement, I decided not to go to that level of detail.

        I do appreciate that you ask about an extremely relevant point, but I don't want to dilute the validity of my statement with factual error.

        Hope you understand.

        • No worries :-)

          In this particular case in the article there actually is a fraud case as the product is a proper direct rip-off with the same logo, name, and the listing even says "the original" in the title.

          Though anyone selling a cheap gadget these days if they didn't think of registering a trademark at the start... well you live with the poor business decisions you make.

    • Re: (Score:2)

      by h8sg8s ( 559966 )

      Bezos couldn't care less. There's absolutely no penalties for getting caught and trademark/patent protection in these kinds of product categories is nonexistent due to the cost of prosecuting them.

    • We're going to buy your product in bulk and sell it, and here are the terms you're going to agree to..." [ I'm exaggerating to make the point].

      In Amazon parlance, this is known as "taking inventory".

  • Amazon is being gamed by all (Score:3)

    by 140Mandak262Jamuna ( 970587 ) on Sunday March 04, 2018 @10:53AM (#56205405) Journal
    There are companies that set up a storefront, collect orders and forward the order to another company, pure arbitrage play. The seller is busy making and selling product. This arbitrage guy comes in lists the same product at multiple price points and advertisement and marketing scenarios.

    Chinese counterfeit products are known all over the world and people are wary of them. America is so insulated and well protected in the past by good law enforcement from fake products and infringements. So in some sense most American consumers are naive, unfamiliar to such scammers. Amazon is the big enabler and the race to the bottom will be very fast. Soon most Americans will learn not to be so trustful of the vendors.

    • Re: (Score:2)

      by Luthair ( 847766 )
      I feel like in general a lot of consumers don't really understand when they aren't buying from Amazon and this is losing goodwill for their brand (evidenced by product ratings). Unfortunately Walmart, Best Buy, etc. have all copied Amazon's model (well ebay really) so there may be no one left offering decent competition.

    • Re: (Score:2)

      by shess ( 31691 )

      There are companies that set up a storefront, collect orders and forward the order to another company, pure arbitrage play. The seller is busy making and selling product. This arbitrage guy comes in lists the same product at multiple price points and advertisement and marketing scenarios.

      Chinese counterfeit products are known all over the world and people are wary of them. America is so insulated and well protected in the past by good law enforcement from fake products and infringements. So in some sense most American consumers are naive, unfamiliar to such scammers. Amazon is the big enabler and the race to the bottom will be very fast. Soon most Americans will learn not to be so trustful of the vendors.

      Amazon is selling products which are listed as made by the original manufacturer and shipped and sold by Amazon.com, with a picture of the original product, but what you receive looks materially different from the picture, and is either counterfeit or the brand trying to destroy themselves. They sure do have arbitrageurs shipping me knockoff crap from China, and I do intentionally order from them when I don't want to wait a month for something to get to me via packet post. But that case is a far cry from

    • Re: (Score:2)

      by h8sg8s ( 559966 )

      Amazon isn't the victim - it's complicit in the creation, production and selling of fakes. I used to think Walmart was the top scam product vendor but Amazon has taken the lead.

  • Comment removed based on user account deletion

    • Selling a hook is not the problem. Using someone else's brand name to do it...is.

      • Selling a brand name at an inflated price when the customer wants a hook is the problem.

        • You mean, like Apple products? Apple sells a brand name at an inflated price, when the customer just wants a good cell phone or computer that works.

          I agree, inflating prices is an issue. But it doesn't give others the right to lie and pretend that their product is the same brand, when it isn't.

  • Its amazing how someone can write an article that long and not even cover Amazon's lawsuit [forbes.com] a few months ago.
  • IF they were smart, they have registered their trademark. When a counterfeit item pops up, not only use a DMCA on the offending listing, sue Amazon for willful misuse of a registered trademark. Trademarks carry the force of patents - it's a Government granted monopoly on a logo and/or branding element. Use it. A few hits at Amazon and they'll quickly pay attention to anyone trying to use your trademark.
  • You "invented and heavily invested" in a hook and are now whining that a Chinese company is making said hooks at a tenth of the price.

    I could have designed that thing in under 5 minutes in SolidWorks and had it printed up in about an hour and a half.

    Companies like this need to fuck off and die.

    • You can go to any home improvement store and buy a METAL coat hook and a couple of screws. They probably come in packs of 3 or 4, so you can mount some for your friends.

  • "If you have a registered brand in the Brand Registry and don't sell the product wholesale, there could be one box to check for that," Hopkins wrote. "And anyone else would have to get approval or high vetting to sell the product

    I've seen exactly this happen. Amazon restricts some brands or even whole categories until you provide paperwork showing you've either bought it from a reputable supplier or have written permission from the brand owner.

  • i seen it myself, i would find a good product, but not be able to afford it, a few weeks to a couple months later i search amazon for the product and its gone but there are knockoffs that look the same under a new seller with a new account, i even bought clothes and the product delivered to my door was not the same as advertised, amazon is doing the same dirty bait & switch crap ebay has been famous for in the past, somebody needs to do a class action lawsuit on Jeff Bezos and amazon, they need to be in

    • amazon marketplace sellers are doing the same dirty bait & switch crap ebay sellers have been famous for in the past

      There, fixed that for you. Mind you, Amazon allows it, which is just as bad; but let's not pretend that Amazon is the one selling the counterfeit goods and those poor marketplace sellers are the victims here.

  • Bezos doesn't care about you, your business, your health, welfare, or anything except getting your money off you and into his pocket. He doesn't care if you are a thief, a slaver, or a drug-dealer. He doesn't care if the money comes from legal, illegal, or ethically-dubious sources. He doesn't care if you made it by selling people, animals, burning the rainforest, or conning old women out of their life savings. The only thing that matters is that it comes to Amazon.

    Bezos is a sociopath, pure and simple.

    Don'

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