How Big Is Amazon's Counterfeit Problem
Amazon.com Inc. (NASDAQ: AMZN) has had counterfeit problems for years. Its marketplaces allow America’s largest e-commerce company to sell tens of millions of its own products and those from other retailers. More and more of those retailers complain that some merchandise sold on Amazon are fakes.
Amazon was hit by a powerful new accusation from the American Apparel & Footwear Association (AAFA), which represents over 1,000 manufacturers, retailers and owners of major brands sold at retail. The association claims its members employ almost 4 million workers and combined have over $384 billion in U.S. sales.
The AAFA reports that the major problem is U.S. goods sold in Germany, Canada and the United Kingdom. Its complaint was filed with the Office of the United States Trade Representative and stated some countries make the sales of counterfeits relatively easy. In the filing the AAFA said:
The submission was part of USTR’s 2018 Special 301 Out-of-Cycle Review of Notorious Markets, which identifies foreign physical and online marketplaces that reportedly engage in and facilitate substantial copyright piracy and trademark counterfeiting.
This is by no means the first complaint about the Amazon marketplaces issue. An organization called The Counterfeit Report identifies fake goods sold at Amazon, eBay and China’s Alibaba. It keeps a scorecard of where these fakes are sold. eBay is first at 61% and Amazon second at 13%. The Counterfeit Report recently accused Amazon of including fake goods in its “Amazon’s Choice,” which is essentially a product endorsement.
Counterfeits sold at Amazon, eBay and Alibaba include knock-offs of products like Tide, Gillette, Nike and Rolex.
Amazon does have an anti-counterfeiting program. If it identifies products that are counterfeit, it “may result in loss of selling privileges, funds being withheld, and destruction of inventory in our possession.” According to the AAFA, that is not nearly enough, so buyers have to beware.