Amazon's Chinese Counterfeit Problem Is Getting Worse (cnbc.com)
A report on CNBC, citing sellers, says that counterfeit problem on the platform has gotten worse after it made it easier for Chinese manufacturers to sell goods to U.S. consumers. The report gives an example of a seller Jamie Whaley who started a bedding business on Amazon that reached $700,000 in annual sales within three years. Her patented product called BedBand consists of a set of shock cords, clamps and locks designed to keep fitted bed sheets in place. Whaley found quite an audience, selling up to 200 units a day for $13.99 a set. BedBand climbed into the top 200 selling products in the home and kitchen category. That was 2013. By mid-2015, the business was in a tailspin. Revenue plummeted by half and Whaley was forced to lay off eight employees. Her sheet fastener had been copied by a legion of mostly Chinese knockoffs that undercut BedBand on price and jumped the seller ranks by obtaining scores of reviews that watchdog site Fakespot.com determined were inauthentic and "harmful for real consumers." The report adds:Spend any time surveying Amazon sellers and Whaley's narrative will start sounding like the norm. In Amazon's quest to be the low-cost provider of everything on the planet, the website has morphed into the world's largest flea market -- a chaotic, somewhat lawless, bazaar with unlimited inventory. Always a problem, the counterfeiting issue has exploded this year, sellers say, following Amazon's effort to openly court Chinese manufacturers, weaving them intimately into the company's expansive logistics operation. Merchants are perpetually unsure of who or what may kill their sales on any given day and how much time they'll have to spend hunting down fakers.
Many Americans want their stuff cheap and this is a reflection of that. Personally, if I were to buy this product I would want to pay as little as possible since it's not something I really care about. Now a grill, give me a Weber.
I have family members that sell on amazon and ebay. They say they can get almost double on amazon on many items. The main reason is that people trust the sellers on amazon more than the sellers on ebay. In this case, it's the exact same seller but amazon have managed to create an environment where even used items fetch a premium. If they screw it up and people start realizing that the same hucksters are on amazon (and they are) then people will start shopping elsewhere.
That wasn't a whole lot of headroom for an American based business.
A few things I see omitted from the story however:
Did she have her product manufactured in China? If so, her own fault.
Where is the Customs in this whole mess? This sounds exactly up their alley.
Did amazon take any punitive measures against the counterfeit resellers? It seems simple enough to vet all new businesses coming online, and give a warning/ban to any that are shown selling known counterfeited items.
Counterfeits are a huge problem everywhere and it'll only get worse. The lure of money and the ease of capitalizing on someone else's idea make it a market that will never go away, even for niche products.
For some things, however, there ought to be truly severe penalties, like for the people who counterfeited brake pads for the 747's, which turned out to be made of baked sawdust and black paint. They didn't make it into a real plane as far as I know, but the consequences if they had would be staggering.
If you counterfeit a handbag, no one dies, but certain mechanical items, medications, and other "life-dependent "products should have serious penalties, decades in jail in my opinion. Counterfeit meds are problem all over the world, but especially in SE Asia where 50% or more are fake.
Just cruising through this digital world at 33 1/3 rpm...
The reviews on Amazon are for products, not sellers. Therefore, when you goto Amazon to buy something like an OEM battery for a smartphone, you are most likely going to get a "fake" battery.
Two years ago I was actually in the market for a set of "bed bands" and I deliberately chose a $3 chinese knock-off because $14 was too much. It is not an innovative idea, I thought of it on my own and went looking to see if anyone was selling something like it.
Sure, it totally sucks for that lady. But there must be a more sympathetic example than a strip of elastic with a clamp on each end.
Stop building your shit in China and maybe it won't be so easy for them to copy it. You outsource American workers? Well I'll outsource your product.
U.S. S/M
Counterfeit Meds should be life in prison.
... are far too forgiving. seller of counterfeit meds should be force fed the counterfeit product until dead, or same number of doses sold consumed, whichever occurs first.
ELOI, ELOI, LAMA SABACHTHANI!?
Welcome to Chinamazon. We sell fake goods.
Using such a nebulous patent to stifle competition is pretty pathetic. The whole system of 'intellectual property' law is needing abolished. I'm glad to see someone filing such a stupid patent being put out of business.
Sue Amazon. Well, get a patent on your product first, then sell it on Amazon, -then- sue Amazon for selling items that infringe on your patent. Wouldn't be the first time.
A related anecdote...Back in 2014, I received a solicited free iPad case to try that was a Griffin case knockoff. Looked exactly the same, just missing the logo, and $40 cheaper. I was interested, but curious why it was the exact same case w/o the cost. Long story short, the guy went right to Griffin's suppliers in China and paid them to make the exact same case for his company. His mistake was that he setup an office in the United States, and Griffin sued him into oblivion.
Shock cords and clips are patentable now?
That's ridiculous. There's nothing novel here, and I'd lay odds her cords and clips are made in China anyway. Intellectual property for trivial shit is the problem here.
Some people (cough Oracle) want to use the legal system to stop others from competing with them. Sounds like she is in the same mentality: if I can't compete, I'll use the government to stop you from competing.
...10% Polyester.
Middlemen used to drive up the cost, but they would also provide a quality control filter that's now missing as you can buy things directly from China and India through Amazon and eBay.
Caveat Emptor
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
Correct me if I'm wrong, but isn't the whole point of capitalism that your must innovate or die? Your product or business will face disruption to your market unless you can lower your costs and outthink or outdesign your competitors. Patents only exist as a short term monopoly so you can do more innovation.
Unfortunately, as some point big corporations turned Patents and copyright into a war chest rather than its original intention...
About 20 years ago(*) we were told that globalism would result in a higher standard of living for the US.
People pointed out that salaries would stagnate, but economists told us that this was expected and would be more than compensated by the lowered cost of goods.
So effectively you would have the same salary, but the things you need would cost much less and overall everyone would come out ahead.
And here we have an honest, everyday, working person who invented something and made a lot of money who is complaining that their product is being made cheaper in China.
Get with the program!
People are overall *much* better off being able to purchase the cheap knockoffs from China!
It's the predicted outcome. Deal with it.
(*) Starting with NAFTA, and proceeding to the US free trade agreements with China and 20 other countries, as well as the rise of H1B visas and tele-commute outsourcing.
If you don't even manufacture in China it's hard for them to get your IP. I bet she went for the cheapest person that could injection mold her idea and didn't think about what would happen once they had the designs.
I highly doubt that they would import a product made at some local shop to reverse engineer it and start making clones.
It's one of the most frustrating things about watching a kickstarter fail because they decided to go to China. When I'm developing a new tool or idea I have a much better response time with a local shop. I can swing by after going to the bank, just tell them in my own English words exactly what I want done and they'll likely be able to do it. How many kickstarters have a "Sorry about the Delay, prototype .... was delayed because apparently there's a New Year in china". What takes a Week locally usually takes 4-6 months with Chinese transit time.
She chose to make it as cheap as possible and got her initial $700k for one year as a result. She could have either charged more or cut revenue to manufacture locally and had a business that lasted 5-10+ years.
if you dont whant you stuff to have a china clone you have to file your patent with the Chinese government thats how there systems works but as most people do not take this step you get a china clone.
This article is mostly bogus; counterfeits are a real problem, but this article isn't actually about counterfeits. The seller is upset with their much cheaper competition that isn't even violating their patents, or Amazons rules.
Also, I find it funny when articles like this imply patent violations but never include the patent number. Patents are very explicit and it can be very misleading to imply a product is violating a patent when in fact they aren't. Even violating a single clause in a patent doesn't mean the patent is violated; individual clauses may not be enforceable due to prior litigation.
OK really?!
These types of bed fasteners/sheet holders have been around since forever. I had my own set that I bought in the early 90's and I'm sure they have been around in some form before that. Hell, people have been wearing their components since they have been dressing in nice socks, trousers and long shirts (you can use shirt stays that attach to socks to accomplish the same feat)
This lady wants to be coddled into being a millionaire? Wake up, it's 2016. You can't just facsimile an old idea and strike it rich without someone taking a piece.
I will go out of my way not to buy a product made in China. About the only thing I can't buy are sunglasses and winter gloves, and that includes those overpriced Marmot gloves. Even companies such as North Face have their products made in China then charge outrageous prices because, you know, they're specially made for the adventurer in you.
Stop buying Chinese-made products and their industries will dry up. Stop having products made in China and they don't have the exact specs of your product. It's really a very simple solution but like everything else it makes too much sense so will never be done.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
Hey Americans, welcome to capitalism! Your politicians, backed by large companies and army, are pushing it globally down everyone's throat for 50 years now, at least. Now it is coming back home. Prepare soon to find out that there is guy in China or India capable of doing anything you can do for 1/3 money you need only to keep food on the table and pay bills. And forget about Sanders, capitalism will crush any Sanders standing in his way.
839*929
The free market will sort it out.
As cheap manufacturing countries start directly competing against their customers, the cost of using those countries for manufacturing will increase tremendously. At some point, knowing that you are likely to be competing against your own product (but cheaper and possibly built with slightly substandard parts) will make it more cost effective to build your product locally. It's kind of surprising that the governments of these countries aren't bending over backwards to try and prevent these counterfeiting/knockoff operations because it seems like the economic impacts for those countries could be devastating.
It is a bit ironic that if you assert that someone has violated your copyright (e.g. used one of your images or some of your text), then under the DMCA (Digital Millenium Copyright Act), you can contact Amazon and they are obligated to take the listing down right away.
But if you assert that someone has violated your patent, the process is much harder. So young man, remember that (cue disco ball): it's more fun to play with the DMCA!
Amazon's real problem is third party sellers. The products are questionable the shipping is a disappointment and decreased customer satisfaction will tarnish Amazon's image.
Right now, Amazon is cashing in on the increased product list and the added revenue, but in the long term their image suffers.
I "recently" purchased a 10GE NIC from Amazon. I didn't realize that it was a third party seller until I found out, at checkout, that it wasn't Prime eligible. So, instead of getting it in two days, it said it would take a week. Fine.
Two days later, it says it's shipped and due in 7-10 days. More than one month later it finally just showed up, from JAPAN! I'm also not convinced that it is a genuine Intel card.
Satisfaction with Amazon is pretty poor on this one. They can claim that it wasn't their fault, but I purchased the product form Amazon and it wasn't a good transaction. I've still got angst over my purchase and I'm not eager to repeat the experience. This has a cumulative effect that Amazon better figure out real quick. I can get this kind of treatment from Best Buy.
>> Her sheet fastener had been copied by a legion of mostly Chinese knockoffs that undercut BedBand on price
Yeah. Thats how it goes today. You have to innovate to undercut the copycats. Don't innovate and you will slowly vanish. That's trus for multibillion-corps as well as for small fishes.
DELA WITH IT.
aaaaaaa
Bracers for sheets are not an invention, and certainly not patentable - unless the stuff kept your grand-dads pants up since before the first world war is worth a patent?
All those moments will be lost in time, like tears in rain.
I ignore all the good reviews and only read the bad reviews on Amazon. The problem with that though, is the one item I had to give a bad review myself was "redacted" a few days later by I assume was the seller.
This article is mixing three issues, all of which should concern any online retailer.
The first is counterfeit or fake goods - a customer buys a product, but instead gets an item that doesn't match what they ordered. This is clearly fraud, and makes it difficult to trust online purchases. This doesn't seemed to have happened here. Most customers must have known they were buying the product from someone else, not the "original".
The second is that the signal to noise ratio drops very low because a lot of vendors flood the marketplace (perhaps automatically) with products that are supposed to grab the top spot (due to low price, for example). The product might not even exist - say I print a t-shirt when someone makes an order, but I can digitally generate a million t-shirt slogans and create a million different t-shirts to show up on search. This isn't fraud - I know exactly what I'm getting, but the marketplace experience as a whole is terrible.
The third is gaming the review system. I tend to read the content of the reviews carefully (I don't trust the rating system as much) to gain information, rather than checking the ratings. In this case, it seems as if the "inferior" product had a lot of fake reviews. If true buyers were returning the product in large numbers, however, Amazon might even pull the product.
I do agree that it isn't the merchant's job to track down fraud/fakers (which this particular example is not); Amazon should be careful that they don't become the next ebay or craigslist.
I was recently looking for a cheap oscilloscope kit and eventually came across a comment on Amazon that led to this website. http://www.jyetech.com/Products/LcdScope/e138.php
I guess this would be one way to try and combat the counterfeiters; call them out.
When "Made In China" became ubiquitous, I wondered about the trade-off between cheaper goods and Americans losing their jobs. I didn't give it great thought, but figured that the cheaper goods would balance out those people having to look for work elsewhere or having to retrain for a new career.
Now that I'm older (and probably wiser), I realize that there are only so many cheap, wide-screen TVs one can buy. We have to eat many times a day. We use much energy daily to participate in a modern world. We pay taxes and mortgages. None of this "stuff" involves cheaper goos from China. I think this needs to change. Are import taxes the answer?
Jeff Bezos is not a good manager, IMO.
So I bought a beautiful, expensive mountain bike made in USA a few years ago. Now that bike broke and that model is not made by the manufacurer, I can't find key replacement parts (maybe they exist but are rare) and today models are made in China. You Americans are shooting yourselves in the foot, don't blame the Chinese.
Amazon, and unfortunately NewEgg, are both cutting their own throat in this regard. They forget that one of the services a store provides is selection. In both directions. Variety of available wares and culling of worthless duplicates. Amazon and NewEgg are absolutely buried under thousands of copies of the exact same product using literally the exact same photograph but somehow with unique listings that differ by one or two or zero cents. All of which have bullshit tags and bullshit categories.
This is not valuable to me. This is absolutely stupid for me, as a customer. It wastes my time, totally pollutes search results, and annoys the shit out of me. Enough that I will choose another store, even a brick and mortar store, just because the signal to noise ratio has become so horrendous I literally can't find what I'm looking for.
NewEgg are you listening? I know Amazon is not. But NewEgg, I expected better. NewEgg had useful, reliable, helpful category- and specification-based search for more than a decade, long before Amazon's half-assed attempt. Now it's been overrun by asshole third-worlders hawking $2 useless plastic shit I don't want, don't need, and REALLY don't want to see when I'm searching for a goddamned video card. A vinyl sticker designed for a Macbook cover is not a video card! Curate your collections! It matters!
</rant>
Would not worry that much about Chinese sellers, instead Amazon really needs to sort out their Marketplace and remove all the scammers which pop up recently. It seems to be the New Thing for scammers to put up notebooks/DSLR and other higher price items at prices which go from "very good price" to "omg what a deal", and when someone is dumb enough to fall for such an offer, the scammer tries to handle payment outside Amazon (only to then disappear with the money and the buyer has no Amazon payment protection). If you do not agree to pay outside of Amazon, the item you want to buy suddenly is not available anymore, of course. Sometimes these scammers even use hacked seller accounts. These scam offers ruin any search for items at a normal price because of course only these fake super low prices are shown in the search results. Look e.g. here, this camera normally goes for 3500+ Euro new, see all the "used-very good" results at less than half the price (totally unrealistic prices for this high end DSLR) and the "write to us xxxx@yyyy.de": https://www.amazon.de/gp/offer...
Just in case Amazon actually manages to remove some of the fake offers, here is what it looks like right now: http://i.imgur.com/sG86jsG.png
I hate ebay, in part because of the constant begging for positive feedback.
Now I'm getting it from Amazon's sellers. Every purchase that's not from Amazon itself results in emails asking me to leave positive feedback, reminders that if I haven't left feedback I still can. I got tired of that pretty quickly on ebay. "A+++++++++" seller ... gack. Maybe I'm old fashioned, but doing exactly what I paid you to do is actually "C" level work.
There's also the "used book scam" which has hit me twice. Find a relatively inexpensive copy of a rare book. Order said copy. Copy ships. Copy never arrives. "So sorry, it must have gotten lost in the mail." Next day the same seller has a copy available at 3X or even 10X the price you paid.
It appears that they get "seller's remorse" and pretend to ship you a book (with no tracking, of course) and then miraculously find another copy they can sell closer to the prevailing rate. Several sellers seem to have a lot of feedback that implies this is what's happening.
The third scam I've seen is the "I don't really have the book, but I'll have someone else ship you a copy" ... Order from seller "A", book arrives from seller "B". They offer a book at a slightly higher price and better quality than the other seller.
Quit whining, the logic of Capitalism is inescapable. Read the "Wealth of Nations".
because Americans think they can patent any stupidly obvious little thing, method, or gizmo. The world is telling you that you can't, so stop calling competing products "counterfeit" or "knock-off". Neither Europe, Africa, Russia, nor Asia have these made-up problems, only the U.S has them, because they argue that "we made all the things", and that consequently the whole world is stealing from them. It is idiocy at best.
Little secret guys, you want something made, someone in China wants to make it for you. They'll do it for cheap and if it's a hunk of technology, they'll do it with the same parts they made the original from. But why stop with knockoff routers and my little pony love dolls? Anything you can imagine and get on to paper, some dude in China will make for you, using only the finest tears from the finest ruined hopes and dreams of tiny little Chinese children. Does that guy in China care that your specification calls for an orphan heart? No. No he doesn't. And he can get them dirt cheap! And if you want some quality engineering, he'll outsource it to Korea! One of the Koreas for sure! So why let the big corporations have all the fun? Why wait for some corporation to make that awesome thing you've been kicking around in your head for the last couple years? Find a manufacturer in China and go into business for yourself! Just don't be surprised when they start ripping off your designs once you start making money. Because China don't give a shit about US trademarks.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Something's not quite right here. I've been using this sort of product since 2010, when I purchased a set at Walmart for under $10. I know for a fact that it was earlier than May 2010, because I distinctly remember a conversation I had with a co-worker about them; I left that job in May 2010, and the co-worker passed away shortly thereafter.
While patent-infringing cheap merchandise may be a problem on Amazon, the particular item highlighted in this article seems to be a little misleading.
I agree about Amazon's shitty search functionality.
Not only is it frustrating as fuck to have such little control over the results, but I am literally dumbfounded that the largest online retailer has such a shitty search.
I guess its a testament to network effects that simply being popular is enough to let them get away with such a suck-ass user interface.
Especially in regards to car parts. Many of these Chinese manufacturers ship the same item with and without branding. Example: a snorkel for a Toyota 4x4. If it says SAFARI on the side and has been shipped from China to Australia, then to the US, it's $400. If it says nothing and ships from China to you, It's $125. Likewise, eBay is a great source for low-cost radiators, AC condensers, etc. Same low-grade junk the parts stores are selling at twice the price.
It's the free market at work. You can sell your product for whatever you like, but your price point must be competitive with a Chinese knock-off.
Is that so bad?
It's a perfect time for being wasted.
A perfect time to watch the stars.
- Burden Brothers, "Beautiful Night"
Amazon has developed into a website for scammers. Try buying a set of earbuds if you want to see endless fake reviews. Worse yet, just about every product has review after review written by people who were given the product for free or for a discount, "but it did not affect my honest opinion in any way" (cough, cough). Between the fake products and the fake reviews it's amazing the FTC hasn't crushed the company with fines and bad PR. Truly out of control and disgusting for a large company that so many people trust. This is really such a ripe target for a full-blown investigative report.
I'm usually a big believer in patent protection and truth in labeling. In this case; I actually went to buy the product called a "Bed Band". When I saw how they were made I concluded whomever set the MSRP was smoking something. I went over to the sewing notions corner of Walmart and spent about $6.00 on the materials to make about a dozen bed bands. The first set went on the mattress in the RV so the sheets would not work off when bouncing down the road then used the leftover material for making more as a "kid's project" making something for mommy that is useful. All you need is elastic strips and the slide clasps from a garter belt and you have the gadget to hold a sheet onto the mattress.
You can't patent a concept. You patent a design complete with materials specification. You can't sell a "Bed Band" made exactly the same as the patent holder but a concept so self evident will allow for at least three points of design difference without breaking a mental sweat.
Remember the "Rubik's Cube"? The designer didn't patent the mechanism for the block hinges; he patented the whole toy. Well, the patent on the whole toy included the specification of the colors on the faces. Hmmm, the cheap knock offs were out within six months of the fad taking off with only different color stickers from the original.
Compare the patented original: https://bed-band-store-llc.myshopify.com/
Then compare with the competition, none of which is close enough to even hint at a patent violation.
https://www.amazon.com/dp/B00TGPU3FC/ref=pd_lpo_sbs_dp_ss_2?pf_rd_p=1944687502&pf_rd_s=lpo-top-stripe-1&pf_rd_t=201&pf_rd_i=B003M5XSDG&pf_rd_m=ATVPDKIKX0DER&pf_rd_r=69AD7FHRNYZTAPHBZWQK
http://www.shopko.com/catalog/product.jsp?productId=95768&utm_source=CI&utm_medium=PLA&utm_term=17537929&utm_campaign=Home&cm_mmc=Google-_-PLA-_-Home-_-17537929&term={term}&productid={productid}&source={source}&medium={medium}&gclid=Cj0KEQjw5Ie8BRCJ9fHlr_bH24cBEiQAkoDQcY3VfK6exRTpr6WK2qiKBTIFvKLkePzRtyeaVF3O-LsaAsuj8P8HAQ#
NRRPT/RCT
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One reason the Chinese manufacturers can sell much cheaper than North American companies on Amazon is because they pay very little for shipping in China. And due to the postal agreements, the US/Canadian post offices deliver on this side of the ocean for free. It would help if they had to pay the same amount for shipping as North American's. i.e. China has to pay for mail delivered over here. Often, smaller Chinese products on Amazon sell & ship for less than the US post office charges for postage,
Can't speak to the other systems (so this doesn't really invalidate your larger point), but I have to dispel the common misconception that the Amiga was anything but profitable to the end of its days. Commodore went under due to losses from the PC clone business, and Amiga production shut down when suppliers stopped delivering parts. Near the end, Amigas shipped with dealer-installed hard-drives (paid for in cash) since HD makers were among the first to get stiffed with delinquent invoices. I would posit that, under better management, the Amiga platform could have survived and have a market position similar to the Mac today.
There is a reason Amigans are so bitter about how that went down.
I bought a HDD from Amazon.de, cost around 150 Euros, but it is a fake one.
https://www.amazon.de/dp/B0152T3NFM/ref=cm_cr_ryp_prd_ttl_sol_0
It is a German seller instead of Chinese seller, so it is a widespread problem. Amazon should take care of such problem.
I will try to sue them.
search for blue strawberries :)
Sure, if someone unrelated makes a pair of shoes and passes them off as genuine Nike shoes, that's counterfeiting, but if we let the U.S. get its way, then eventually nobody will be allowed to make shoes, cardboard boxes, harddrives, sunglasses, or whatever, because the U.S. will scream and froth and call it counterfeit and patent violation etc.
Many of these Asian manufacturers are a bit bold at the moment, but what they're effectively doing is combating the REAL problem: the U.S. fight to own every idea and product, and force the world to pay up for simply existing. The usual U.S. chant of "we made everything, and all the money is ours".
My support is on Asia, their fight will eventually make the world better in this regard.
Made in the USA does't mean what it used to mean.