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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.

10 of 205 comments (clear)

  1. And it'll only get worse by JustAnotherOldGuy · · Score: 5, Interesting

    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...
    1. Re:And it'll only get worse by ShanghaiBill · · Score: 4, Insightful

      TFA states her product is patented, in which case it really is about counterfeiting.

      She has a patent on a specific aspect of her product, not on the basic concept of an elastic sheet tightener (which have been available for many decades). TFA does NOT claim that her patent is being infringed, nor are her competitors using her brand name. This is just good old-fashioned competition, and she doesn't like it.

    2. Re:And it'll only get worse by clovis · · Score: 5, Informative

      Maybe YOU should RTFA....this is all about counterfeit products.

      Nonsense. TFA doesn't refer to a single case of "counterfeiting". p>

      It kind of looks like you're just being argumentative. That's fun, I know, but at some point you should give the rest of us a break.
      This article is not just about the bed-tightener.
      To save other people (and you) the trouble of RTFA, I'll pull out the quotes that address the gist of the matter.

      From the article:

      In May, CNBC.com reported on a Facebook group, now consisting of over 600 people, whose members have seen their designs for t-shirts, coffee mugs and iPhone cases show up on Amazon at a fraction of the price of the originals. The designers described it as a game of whack-a-mole, where fakes pop up more quickly than they're taken down.

      Birkenstock has seen dozens of stores at a time hawking its Arizona Sandal for $79.99, a full $20 below the retail price. The names of the online storefronts change all the time, one day including the monikers Silver Peak Wine Cellar and Ryan Hollifield and the next Keila*Knightley and Bking sewneg.

      "Amazon is making money hand over fist from counterfeiters, and they've done about as little as possible for as long as possible to address the issue," said Chris Johnson, an attorney at Johnson & Pham LLP, which focuses on intellectual property and brand enforcement and represents clients including Forever 21, Adobe and OtterBox. "Word is out in the counterfeit community that it's open season on Amazon."

      And this, Even Alibaba says they're doing fakes.

      Counterfeiting online is nothing new of course, particularly when it comes to commerce. Alibaba, the Chinese e-retail giant, has been dealing with it since launching in 1999.

      Some form of the word counterfeit shows up 30 times in Alibaba's latest annual report, and founder Jack Ma said in a speech last month in Hangzhou, China, that the fakes are of "better quality, better prices than the real products, the real names."

      From a sub-link:
      http://www.cnbc.com/2016/05/25...

      "They respond and take down the images, but the very same images go up within a week by another new seller," said Kristi Spencer, whose e-commerce site Golly Girls sells personalized sports-themed T-shirts, backpacks and notebooks. "Counterfeiters are selling low-quality knockoffs of other people's artwork."

  2. There's a simple answer by Pollux · · Score: 5, Informative

    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.

  3. Re:Walmart mentality by Smerta · · Score: 4, Interesting

    TFA's implication is that a white person has a right to make $700k/year, while the Chinese don't deserve to make a living because they are yellow skinned sub-humans.

    You're way out of line here, dragging skin color (not nationality, but skin color) into this.

    I think the article / story would have published even if the American was black, Native American, "brown", "yellow", etc. [I put those terms in quotes, because if I said Latino or Asian, that would be nationality, and I'm debating your choice to drag skin color into this. Personally, I think simplistic terms like white / yellow / brown to describe skin color over-simplify things, but I don't make the conventions...]

    I totally agree with you about the patent bullshit, about similar products being around forever, etc. but I don't think this is a "Chinese are sub-human animals" piece. That's way too sensitive.

    Chinese knock-offs, both legal and illegal, are widely acknowledged as being a reality. They have nothing to do with skin color.

    The lady's business was fragile, she should think she had a good run. That also has nothing to do with her skin color.

  4. Re:Walmart mentality by danomac · · Score: 4, Insightful

    You mean Weber grills, who were sued for putting Chinese parts in a made-in-USA grill?

    Don't kid yourself. I just bought a barbecue recently, and after some research discovered pretty much all bbq manufacturers use China to manufacture, even the $1k+ grilles (I looked at Jackson, Weber, and Broil King grilles.) So I said screw it, if I'm going to get one from China anyway I'm not spending $1000 on one, and found a Char-Broil one for $400.

  5. This is why I don't buy Chinese by smooth+wombat · · Score: 4, Interesting

    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
  6. Copyright vs Patents by Steve1952 · · Score: 4, Interesting

    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!

  7. Re:Walmart mentality by ShanghaiBill · · Score: 5, Insightful

    If patents did not exist, then why would they ever be illegal (outside of safety violations)?

    Counterfeiting is not about patents, it is about trademarked brands. Brands are an indicator of quality, and it is, and should be, illegal for one manufacturer to impersonate another.

    Note: TFA does not claim that either trademarks or patents are being infringed. Just that competitors are making similar products and selling them for less. But (and this is the important part) they are Chinese, so therefore we should be outraged.

  8. Re:Example Not a Problem by ledow · · Score: 4, Insightful

    Because it's a band for a fucking bed.

    That's not really a trademark, it's a generic term that's likely to be challenged as a trademark even in the territories that have (stupidly) allowed it.

    It's like complaining that if you go searching for "sticky tape" that you get things that aren't your genuine, registered trademark "StickyTape®" sticky tapes.

    If you'd called your company "Joe's Shitty Products®" and someone sniped all your "Joe's Shitty Product® Sheet Fastener's", yeah, sure you have a case. But "bed band" is a description of exactly what the product is, using two generic and common English words related to that product. That's NOT what you should be trademarking.

    If you want to protect a trademark you combine it with a company name that's pretty unique and which you own the trademarks in your territories and industry sectors for.

    But trademarking TennisBall tennis balls is a) likely to not be allowed in the first place, b) likely to be struck down for genericity at any time and c) stupid because I don't have to be specifically sniping your trademark to have a website that scores high for searches of tennis balls that aren't TennisBall tennis balls.

    BedBands is, quite honestly, one of the worst product names that I've seen. And one of the worst products that I've seen. I could make it myself, make something better, I've bought better things that do the same job, copy it in about ten minutes, and I could market it as the "best bed band product" without infringing on BedBands trademarks unfairly. Because it's a fucking band for a fucking bed.

    And, to be honest, that "sit on the corner of the sheet" shite will last two seconds until I rip it off when I roll over. Most of the bed bands that actually work do so by tying the left of the sheet to the right of the sheet under the mattress, not just the corners.

    I hope their blatant and unnecessary slashvertisement just waters down their trademarks even more.

    This rant is trademarked by me. Nobody else can have an InternetRant internet rant but me, now.