Amazon.com's Counterfeit issue

[KnightExemplar]

https://twitter.com/billpollock/status/ ... 56/photo/1
http://www.inc.com/sonya-mann/amazon-co ... tarch.html
https://www.amazon.com/gp/customer-revi ... 4YZ1757VDL

Essentially, Amazon assigns a unique ID to each product on its platform. Depending on which programs the brand participates in, a variety of sellers can provide inventory for each SKU (stock keeping unit). For example, if you buy Huggies diapers on Amazon, you may be buying diapers that the manufacturer shipped directly to Amazon, or you may be buying diapers that a third party procured and shipped to Amazon. The problem arises when that third party sends in fake goods

Richard added, "[T]he consumer always thinks the chain is: Manufacturer » Amazon » Me. But the reality is that is pretty much never guaranteed. The only way that's guaranteed is if you find the manufacturer's listing on Amazon.com and buy via [F]ulfilled by Amazon directly from them, AND they happen to choose to opt out of commingled inventory. In every other scenario there's a chance that you get inventory that didn't come from the manufacturer."

It appears that Amazon has a growing counterfeit issue. There is a lot of discussion on what is causing this exactly, but the explanations range from:

* "Entrepreneurs" have figured out how to start a company, buy crap from Alibaba (the Chinese competitor to Amazon), and then resell things in Amazon.

* "Fulfilled By Amazon" is potentially commingling goods together. That is, if you have 3 different suppliers (lets call them Alpha, Beta, and Delta) who are selling from a single "Fulfilled by Amazon" slot, even if the consumer buys from Alpha... the specific good may come from Delta. Amazon has an opt-in program to keep stuff from commingling, but it doesn't seem to be very well known among legitimate marketplace sellers.

* A combination of these two points leads to several "Fulfilled by Amazon" marketplace people in abusing the system. Straight up counterfeit goods may be sold on Amazon: lowering the quality of the primary supplier (in this case: "No Starch Press" has gotten a lot of 1-star reviews about shoddy quality from counterfeit books), while the counterfeiters profit off of the damage to other people's reputation.

[ObsessoMom]

Thanks, KnightExemplar.

[Drumheller769]

This sort of thing does explain some of thee things I've encountered that baffle me:

First example, twice I bought a pair of sewing scissors for my wife, both times they were ripped out of the packaging, once it was rusted, the second time it was just covered in hair.

Second example, buying a brand new piece of tech (like a modem, or something else not too complicated) and it straight up doesn't work. I've had that happen to me 2-3 times, which seems high.

[elasto]

Interesting.

And it works the other way around of course: If you plump for the cheapest vendor for a product (which I invariably do), you could well be supplied by one of the higher-end vendors.

Very interesting.

[ucim]

And it works the other way around of course: If you plump for the cheapest vendor for a product (which I invariably do), you could well be supplied by one of the higher-end vendors.

In theory. But I don't see the incentive.

Jose

[Dauric]

And it works the other way around of course: If you plump for the cheapest vendor for a product (which I invariably do), you could well be supplied by one of the higher-end vendors.

In theory. But I don't see the incentive.

Jose

This.

If the odds worked out that more value in high-end items (not number of items, but the aggregate value of those items) were substituted for cheap knock-offs Amazon and their high-end vendors would be incentivised to do something about it internally as products more expensive than the sales income (net profit loss) go out the warehouse door.

As it is Amazon and their vendors can afford these screw-ups just as long as their customer base doesn't get upset enough -in aggregate- to significantly impact their sales margins. Unfortunately these two considerations combined result in a significant skew towards you getting knock-offs for full retail price, rather than brand-new name-brand products with a knockoff discount.

[KnightExemplar]

And it works the other way around of course: If you plump for the cheapest vendor for a product (which I invariably do), you could well be supplied by one of the higher-end vendors.

In theory. But I don't see the incentive.

Jose

This.

If the odds worked out that more value in high-end items (not number of items, but the aggregate value of those items) were substituted for cheap knock-offs Amazon and their high-end vendors would be incentivised to do something about it internally as products more expensive than the sales income (net profit loss) go out the warehouse door.

As it is Amazon and their vendors can afford these screw-ups just as long as their customer base doesn't get upset enough -in aggregate- to significantly impact their sales margins. Unfortunately these two considerations combined result in a significant skew towards you getting knock-offs for full retail price, rather than brand-new name-brand products with a knockoff discount.

I don't think its so much "incentive" as much as the nature of doing business on Amazon... or hell... just online in general.

Amazon has reached a critical mass: people trust reviews and trust Amazon. If you want to sell goods online, you go to Amazon. Its incredibly difficult to open up a webstore and compete against them. Most people go to Amazon to check for reviews on particular products... even when shopping in a mall or another "real world" retailer.

[Bane Harper]

Nice share @KnightExemplar will be wathful from on

[elasto]

If the odds worked out that more value in high-end items (not number of items, but the aggregate value of those items) were substituted for cheap knock-offs Amazon and their high-end vendors would be incentivised to do something about it internally as products more expensive than the sales income (net profit loss) go out the warehouse door.

Surely if Alpha registers a sale, they will be forced to restock the common pool, even if Delta actually initially supplied the item sold.

Delta will neither make any income nor suffer any financial loss when an item they supplied is sold in Alpha's name.

At least, that's the only way that makes any sense to me..?

To have Delta receive the money at the price point set by Alpha makes no sense... Alpha could troll and set the price point at 1c for a $1000 item, never supply any stock at all and bankrupt all communal suppliers..!

[wumpus]

And it works the other way around of course: If you plump for the cheapest vendor for a product (which I invariably do), you could well be supplied by one of the higher-end vendors.

In theory. But I don't see the incentive.

Jose

This.

If the odds worked out that more value in high-end items (not number of items, but the aggregate value of those items) were substituted for cheap knock-offs Amazon and their high-end vendors would be incentivised to do something about it internally as products more expensive than the sales income (net profit loss) go out the warehouse door.

As it is Amazon and their vendors can afford these screw-ups just as long as their customer base doesn't get upset enough -in aggregate- to significantly impact their sales margins. Unfortunately these two considerations combined result in a significant skew towards you getting knock-offs for full retail price, rather than brand-new name-brand products with a knockoff discount.

I don't think its so much "incentive" as much as the nature of doing business on Amazon... or hell... just online in general.

Amazon has reached a critical mass: people trust reviews and trust Amazon. If you want to sell goods online, you go to Amazon. Its incredibly difficult to open up a webstore and compete against them. Most people go to Amazon to check for reviews on particular products... even when shopping in a mall or another "real world" retailer.

Of course, this only works for "poorly done counterfeit goods". If the goods were already made offshore, and the counterfeiters had the original drawings and did a similar level of quality in "building to print" that the original off-shoring company did, the customer (and presumably Amazon) wouldn't have an issue. The presumed official maker of the actual counterfeit goods certainly still has a problem.

A cow-orker returned from Korea with some NFL jackets priced well under anything the NFL could possibly license. The NFL website included 5 "sure fire ways" to tell you had an official NFL jacket (extra expensive stitching and graphics that appeared completely unnecessary). It was all there. It comes down to are you buying "cheap knock offs" or simply "unlicensed built to print" jobs. It can't be that hard/expensive to get the original drawings from the official off-shorer (you are dealing with people sufficiently desperate that they have to put out nets if/when they jump out of the building). So it all comes down to if the counterfeiter is willing to create "correctly built" goods or not. Judging from plenty of moaning from people tasked get the official manufacturer to follow the official quality procedure, I can see this as a difficult task (but remember that the same culture tends cut corners on the "official goods" nearly as often as the "counterfeit" goods. I wouldn't be terribly surprised if there was a significant (although small) chance of the "counterfeit" goods being more true to the original drawings than the "official" ones.

[mosc]

This is old news. Certain products have a lot of this, others it's not an issue. If you're buying Oral-B toothbrush heads, god help you. If you're buying from the manufacturer's listing or from Amazon directly, this is often not an issue. Read the reviews.

The biggest problem I have with amazon is the way they lump listers together into a single product page. If I'm shopping for Oral-B toothbrush heads I need to be able to distinguish the seller.

[KnightExemplar]

This is old news. Certain products have a lot of this, others it's not an issue. If you're buying Oral-B toothbrush heads, god help you. If you're buying from the manufacturer's listing or from Amazon directly, this is often not an issue. Read the reviews.

The biggest problem I have with amazon is the way they lump listers together into a single product page. If I'm shopping for Oral-B toothbrush heads I need to be able to distinguish the seller.

Some of it is old news.

The "new news" to me was commingling of suppliers into a single pool. You cannot distinguish between sellers at Amazon. Anything that is "fulfilled by Amazon" comes from the same pool. (In the typical case. There seem to be rare exceptions)

The important tidbit is that Amazon's default behavior is commingling of goods across suppliers. In effect, all the listers are lumped together because all of their goods have been lumped together. Which is why Amazon has a growing counterfeit issue.