Much has changed since Amazon.com opened its virtual doors on the World Wide Web in July 1995. Today, the world’s largest online retailer offers 500 million products sold by 2 million sellers; many of which are third-party vendors. In fact, 50 percent of units purchased last year were sold by third-party sellers.
While many third-party sellers are legitimate enterprises like major retailers and brands and small business, Amazon basically lets anyone sell nearly anything on its platform – including Chinese manufacturers. Notorious for counterfeit products, sales from Chinese-based sellers have more than doubled on Amazon’s marketplaces in recent years.
Oftentimes, consumers are unaware that their items are from unknown and unvetted sellers overseas. Unsuspecting customers may perceive a fake item as legitimate because of the Fulfillment by Amazon (FBA) endorsement. But this designation only means that the item is being packaged and shipped by Amazons fulfillment centers. Furthermore, Amazon commingles inventory – bundling together multiple third-party sellers – so that a counterfeit item could be sent to an Amazon facility by one merchant but sold by another.
Customers aren’t the only ones complaining. The company has begun to face legal pressure from brands including Apple and Birkenstock for allegedly enabling the widespread sale of counterfeits on the platform.
As a marketplace, Amazon isn’t legally responsible for keeping counterfeit items off the site; they are only required to respond to complaints and take action when fakes are brought to the company’s attention.
While Amazon has an anti-counterfeiting policy and recently announced a meager attempt to protect trademarked merchandise, critics say Amazon has not made it a priority to manage the influx of counterfeits. In fact, there’s not a single mention of the word counterfeit in their 2016 Annual Report.
“The sale of counterfeit products, including any products that have been illegally replicated, reproduced, or manufactured, is strictly prohibited.”
With a such a vast, global selling platform, it seems impossible for Amazon to police the millions of items sold by third-party sellers. But if Amazon wants to maintain any consumer trust, they need to do much more to close their counterfeit loopholes.