Here’s How Amazon Is Doing When it Comes to Policing Counterfeits on its Site

Has Amazon made any progress on the counterfeiting problem that continues to plague one of the world’s most influential retailers?

According to Gartner L2’s Amazon Intelligence: Third-Party Distribution Strategies Playbook report, one third of the product listings operated by a third-party featured, at minimum, one review that mentioned trigger words like “fake” and counterfeit. For the report, Gartner L2 surveyed 158 brands in the categories of fashion, beauty, health and personal care and headphones.

Though that “one-third” might seem alarming, the research and brand intelligence firm said they represent just 5 percent of all reviews on the e-commerce website, indicating that Amazon actively takes down listings that consumers have flagged as being inauthentic.

There’s one easy way for a brand to limit the possibility of having its reputation dinged by less-than-reputable vendors. The brands with the most product sold through third parties are the ones most vulnerable to having knockoffs passed off as the real thing, the research firm noted.

“Third-party vendors represent a shortcut for brands to scale up presence on the platform, but sometimes this comes at the expense of customer experience,” Gartner L2 associate director Oweise Khazi wrote in a blog post about the report.

Makeup and skincare, in particular, seems to be a particularly at-risk category; 75 percent of the Amazon Standard Identification Numbers for brands like e.l.f. cosmetics, L’Oreal and Olay contained consumer reviews claiming the product was not authentic.

The findings confirm Chico’s FAS decision earlier this year to begin selling merchandise through Amazon.

Senior vice president of business development George Z. Nahra said Chico’s took the plunge largely because, with a formal Amazon partnership, the retailer would be better equipped to manage its brand on the platform and control its intellectual property.

“If there are counterfeiters selling [our] products on Amazon, it’s easier working with Amazon to get them to remove them versus not,” Zahra said at a retail conference.

However, he cautioned that Amazon’s counterfeiting assistance tends to be reactive rather than proactive. The moral of the story, it seems, is that it’s better to have Amazon on your side than not to.

Editor’s Note: This story was reported by FN’s sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.

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