If you’re a skincare brand, you’ve probably put a lot of thought into how your products smell and feel. So reading reviews on Amazon.com that say one of your creams reminded the consumer of “month-old milk” or that “it literally feels (and smells!) like rubbing your face with ham grease” is bound to be distressing.
That’s the position that Debora Pokallus, CEO of natural skincare brand Bel Essence, found herself in a few years ago when she realized that a third-party seller on Amazon had been using expired product to fill orders for Bel Essence’s Intensive Anti-Aging Treatment.
For Wei-Shin Lai, CEO of SleepPhones—headphones designed to wear while sleeping—trouble on Amazon has come in the form of inferior knockoffs.
“They basically take a generic headband, make a slit in the back, shove some earbuds inside and call them ‘sleeping headphones,’” she explains. “Then with Amazon Ads, they bid on ‘SleepPhones’ so that their cheap product shows up next to our premium product. Customers are lured to try out the cheaper product, which are often shipped from overseas with fake reviews.”
Stories like these highlight a growing problem: Copycat products are widely available on Amazon thanks to the proliferation of third-party sellers—1.2 million of which were added in 2019.
A spokesperson for Amazon emphasizes there’s a difference between knockoffs, which are regarded as generic versions of a product and are therefore acceptable; counterfeit products, which the company has developed programs to prevent; and unauthorized sellers—who, according to the spokesperson, sell legitimate products and whose presence point to a distribution issue.
Regardless of which category they fall into, though, the availability of these products on Amazon poses a real problem for brands that want to control quality, the customer experience and their reputation. And battling them can be a never-ending process.
“Sometimes I feel like it’s a full-time job just managing Amazon,” says Ira Kaganovsky Green, CEO of natural deodorant company Free Brands.
Even if a brand determines that a product is fake and succeeds in getting Amazon to take down the listing, 10 to 20 other listings pop up in the meantime, says David Barnett, CEO of consumer electronics accessories brand PopSockets.
“It’s like Whac-A-Mole,” he says. “You’re almost always losing the sale to one or another counterfeiter.”
So what’s a business to do when its product gets knocked off on Amazon? And what’s Amazon’s responsibility not just to brands but also to consumers who may not know they’re not buying the real thing? We talked to brands big and small in search of answers.
To be or not to be on Amazon
But opting out is more complicated for smaller brands.
While Amazon has not disclosed how many shoppers use the platform—other than noting its Prime membership program has surpassed 150 million users worldwide—analytics firm SimilarWeb estimates the site receives more than 2 billion monthly visits.
Access to an audience of that magnitude can be costly for a small brand to forgo.
In January, PopSockets CEO Barnett testified at a U.S. House of Representatives field hearing on the market power of online platforms and said the brand stopped selling through Amazon because of fakes and lack of what he described as a “true partnership” with the platform in dealing with the problem. Last month, however, PopSockets returned, albeit with a limited selection, in part because “we lost about $10 million last year,” he says.
Like many of the brands Adweek spoke to, PopSockets also realized that because of third-party sellers, its products will be on Amazon whether the brand itself is selling them or not. So it seems if you can’t beat ’em, you have to join ’em.
Brands can certainly implement controls over product distribution, like vetting sellers and implementing price agreements. But, says Adam Sherman, partner at the law firm Vorys, “they will never be in a position where their products aren’t on Amazon at all. If you’re not controlling your brand on Amazon, someone else will.”
Just ask insulated bottle holder BottleKeeper, which started out as a direct-to-consumer brand in 2013 but began listing on Amazon in the fall of 2015 after seeing knockoffs on the site—a phenomenon that CEO Adam Callinan says “exploded” through 2016.
Amazon’s spokesperson counters that BottleKeeper’s concerns have mostly been tied to its utility patent and that, as a retailer, Amazon is “not the appropriate entity to make such assessments, which is why we require a third party, such as a court, to let us know if such claims are valid.”
In the meantime, brands have a tough choice to make.
“If we leave Amazon, then we open the door to potentially having someone sell our products,” notes Pokallus. “So [we’re] on there basically because you don’t have a choice. … 38% of retail is on Amazon. You kind of have to be on Amazon.”
Here are the options for brands that remain.
Report the bad guys
On Amazon, listings feature a Buy Box, the yellow “add to cart” button underneath the price, says Leon Rbibo, president of online jeweler The Pearl Source. But Buy Boxes can be stolen.
Jacynda Smith, CEO of hairstyling-tool brand Tyme, says all a seller has to do is “list a product under our listing and sell it for less—that’s it.”
For Tyme, a stolen Buy Box can mean losing anywhere from 70 to 300 orders on a typical day, says Smith, which translates to approximately $13,000 to $50,000 in lost revenue daily.
“Additionally, people who purchase from the fake company when they own our Buy Box can post verified reviews back on our listing stating anything about the appearance, quality or experience with the fake product,” she says. “These reviews then count against us and cannot be removed.”
Amazon did not comment on Tyme’s review problem, but the spokesperson says the company respects intellectual property and expects its sellers to as well. She also says sellers who see inappropriate use of photos can file a report and Amazon will investigate, but adds Amazon did not find any reports from Tyme about the use of Tyme imagery in listings and ads.
Colin Darretta, founder of wellness company WellPath, says Amazon is “aware of the problems, empathetic to them and proactive in attempting to try to help us solve them.”