Counterfeit or Unsafe Product on Amazon: Unauthorized Seller Tactics
Amazon Unauthorized Sellers: Their Low Priced Products Could Cost You Your Safety
Who hasn’t used Amazon for something? It is likely most people have and the giant marketplace is only getting bigger with offering Amazon branded goods claimed as the equivalent of name brands, and its huge base of third-party resellers offering just about anything under the sun. But, consumers should be cautious and informed of the battle of brand names against the rampant rise of Amazon unauthorized sellers, how it can adversely affect consumers, and how illegal sellers can be spotted.
Name Brand Owners and Unauthorized Sellers
Owners of popular brands have a decision to (1) sell goods exclusively, (2) sell through authorized third-party sellers they contract with, and/or (3) sell through online marketplaces like Amazon that make it easiest for consumers to shop at a one-stop type place with more consumer friendly shipping options. Each option poses some issues for a brand and making an informed business decision on which options to proceed with should not be made lightly. As consumers come to expect certain levels of quality and service from a particular brand, the use of third party sellers and online marketplaces require some trust that the product offerings will maintain the integrity of the brand.
Sales through online marketplaces usually require licensing of the brand owner’s product images for use by the online platform. For example, Amazon requires that a seller creating a product detail page grant a “royalty-free, non-exclusive, worldwide right and license” to Amazon to use and to sublicense to its affiliates. Therefore, the decision for brand owners to sell on Amazon means their copyrighted product details page can be used by third parties selling the same product, often without the brand owner’s permission as Amazon unauthorized sellers. Such use can cause consumers to mistakenly believe they are buying product from the brand owner when they are not, likely without the original product warranty, and possibly in a condition that isn’t what would be expected from a purchase from the brand owner.
Unfortunately for brand owners and consumers alike, once an Amazon product page is created, even if a brand owner decides to pull out from future sales on the platform, third parties – Amazon unauthorized sellers – can and do still use those pages to sell product which may or may not be authentic. For example, Nike, Birkenstock, and Ikea are some companies that have decided against sales of their product on Amazon.com. However, you can find their products for sale on the platform if you search. These Amazon unauthorized sellers appear to be legiitmate sellers because of their use of the company product pages. Brand owners have an ongoing battle in trying to stop unauthorized sellers with what appears to be insufficient help from the online platforms as well as from inadequate laws and regulations for such illegal online seller activities.
It is easy to see that when brand owners can’t control their own product for quality or monitor unauthorized sales for proper handling, they not only lose money, but brand reputation when consumers believe they received sub-par authentic product. But, there is also harm that can reach consumers as well.
How Can Amazon’s Unauthorized Sellers Harm Consumers?
It may seem it should be obvious to a mom and pop online seller whether it has been given permission to sell a product, but many smaller sellers vetting the online sales business may not realize their fault until they get a cease and desist letter from a brand owner’s intellectual property enforcement legal team. These small unauthorized sellers may create consumer harm due to mistake and will likely stop such illegal actions once they understand their actions can and do cause harm. However, of more concern are the organized online retail crime outfits that have a better ability to trick consumers into believing they are purchasing legitimate product, and purposely create consumer confusion about what a product truly is.
The harm from Amazon’s unauthorized sellers is mostly seen when products aren’t what consumers expect. It could be due to poor quality, not receiving the actual name brand expected, or even receipt of an authentic product but without the original product warranty. Worse yet, harm can come when product is improperly handled, such as supplements and medications requiring storage under specific temperatures and conditions that could change the effectiveness and possibly even render them dangerous for use. Additionally, consumers could receive product that is counterfeit and can physcially harm, such as cheaply-made toys dangerous to children, defectively-made products, or beauty products and consumables that could trigger allergic reactions from undisclosed ingredients. Unfortunately, the online marketplaces as they currently work, make it easy for illegal, unauthorized sellers to pop up and use tactics to prey on unsuspecting consumers. Therefore, much like brand owners, consumers would be safest to take an active role in identifying online marketplace unauthorized sellers and avoiding purchases from them.
How to Identify Unauthorized Sellers on Amazon and Other Online Marketplaces
Sellers typically look to brand name sellers, star ratings, and detailed reviews for determining whether a particular product will suit their needs. However, as mentioned previously, a third-party seller, even an unauthorized seller could use a brand owners own details page for sale of product, so that alone should not be a determining factor for consumers. While product reviews are often used by consumers to gauge whether a product will be acceptable for their needs, it is important to know that online retail criminals have methods of generating thousands of fake reviews. Therefore, looking at the number and ultimate score rating of reviewers isn’t enough. The following are quick tips to use to help determine whether a seller is authorized or not.
First, do a quick Internet search about the brand for purchase to check if they sell on the particular online marketplace. Most larger brand owners will have literature online about whether they authorize such sales or not, to help consumers avoid unauthorized and/or counterfeit product. This is the easiest step.
Second, look into the actual seller of the product. If buying a certain brand, but the seller is not the owner, check that store’s length of time on the marketplace and what their reviews say. A seller with a lot of inventory, but little sales history and reviews could potentially be a fly-by-night operation you would want to avoid. On the other hand, if the seller has been online for a short period of time, but has a lot of reviews, it could be a sign of fraudulent reviews. Typically, only a small percentage of buyers actually leave reviews, so to have hundreds or thousands of reviews would mean the seller has been selling that product for many years.
Finally, read the reviews. While no one wants to read tons of reviews, reviews can often be filtered for verified purchasers only to mimimize the reviews that should matter. That said, a focus on the most recent verified purchase reviews is important. The reason for this is that seasoned product infringers know how to convert review posts from one product to another. Ever read reviews that don’t match what the product is? Most likely, those reviews were for another product and were sneakily consolidated into the current product’s reviews to gain number of ratings and/or for a better overall star rating. By focusing on the most recent, verified purchase reviews, one can more easily see whether the current product sales are what consumers expected to receive. Another thing to note in reading reviews is the language used in the posts. If they seem scripted they probably are, so beware.
Recently, industry organizations, large brand owners, manufacturers, and enforcement agencies have banded together in the Buy Safe America initiative for implementation of more adequate laws to help address consumer safety by requiring online marketplaces to add protocols and regulations for the protection of consumers as well as for finding a proper manner of holding marketplaces accountable for not taking adequate action to protect consumers.
Key Takeaways About How Unauthorized Sellers Cause Harm
As one of the largest online marketplaces, Amazon’ unauthorized sellers pose a risk to the economy, brand owners, and consumers because they:
hurt profits of name brand companies as well as tarnish brand reputation with bad product;
consumers can get damaged, counterfeit, or even stolen products without the expected warranty or consumer protections;
consumers could be buying off-market or gray market product that was never meant to reach such consumers;
pricing comparisons for seemingly same product that aren’t actually the same can misguide consumers and drive sales away from legitimate products; and
consumer safety is at risk with product that can be out of date, contain undisclosed ingredients, and could cause health risk.
See our post Importance of Intellectual Property Rights: Increasing Market Share Through Stopping Knockoffs and Infringements for a comprehensive discussion of implementing effective IP-enforcement programs.
For more insights on Anti-Counterfeiting, see our Anti-Counterfeiting & Enforcement Overview and Retail Industry Legal Solutions pages.
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