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Amazon Finally Admitted To Investors That It Has a Counterfeit Problem (qz.com)
Amazon has for the first time acknowledged sales of counterfeits and pirated items as a risk in its annual earnings report to investors and the U.S. SEC. "Some third-party sellers have been using the reach of Amazon's marketplace as an opportunity to sell counterfeit and pirated items," reports Quartz. "The pressure on the company has been growing as brands such as Birkenstock and Mercedes Benz have lambasted it for not being able to control the problem." From the report: Under the section of "risk factors" to the business, Amazon says it "could be liable" for the activities of its sellers, and explains: "Under our seller programs, we may be unable to prevent sellers from collecting payments, fraudulently or otherwise, when buyers never receive the products they ordered or when the products received are materially different from the sellers' descriptions. We also may be unable to prevent sellers in our stores or through other stores from selling unlawful, counterfeit, pirated, or stolen goods, selling goods in an unlawful or unethical manner, violating the proprietary rights of others, or otherwise violating our policies. Under our A2Z Guarantee, we reimburse buyers for payments up to certain limits in these situations, and as our third-party seller sales grow, the cost of this program will increase and could negatively affect our operating results. In addition, to the extent any of this occurs, it could harm our business or damage our reputation and we could face civil or criminal liability for unlawful activities by our sellers."
Simple solution, Amazon: stop comingling the damn inventory from 3rd party sellers. True, you won't be able to prevent
from selling counterfeit items, but you'll be able to trace back who sold it, and when sellers know they can be identified, they won't be as willing to risk it
Without openly admitting it, those admissions are also referring to money laundering of some affiliates and how Amazon profits handsomely by taking its cut off the top, no questions asked. Nope, there's nothing at all odd about a seller who prices common health & beauty aids and other common items three orders of magnitude greater than their MSRPs....
It's already worse than you think. Amazon mingles inventories, so you can pay the premium to order a legit product from a legitimate seller and still get a cheap chinese knockoff.
A bullet may have your name on it but splash damage is addressed "To whom it may concern."
Amazon has bigger problems that counterfeit goods alone. By letting in every fly-by-night manufacturer and seller from China, they've created a situation where certain items simply can't be purchased on Amazon anymore.
Case in point: try buying a good replacement battery for a laptop computer, i.e. one that won't die in a few months. You'll find the same crappy junk batteries being sold under a dozen different names, all at cut-rate prices. The quality sellers have fled Amazon. You have to go to another web site to buy a decent battery (albeit at a higher price, but at least a battery you can trust).
Or try buying an RC toy car for your kids, or a water toy, or any one of hundreds of different electronic items. The only choices you have are bad, bad, and bad.
To make it worse, the fly-by-night sellers have learned how to corrupt the Amazon review system. You'll see some item with hundreds of favorable reviews, then realize that only the last dozen of them actually apply to the item for sale. The other reviews will be talking about a completely different item. Somehow the sellers have figured out how to transfer a set of reviews to a different product.
On top of that, Amazon defends the bogus sellers. I recently got a Facebook message from a Chinese seller offering to reimburse me if I bought a super soaker toy and gave the toy a favorable review. I promptly located the item and seller on Amazon and left a scathing review, which Amazon promptly rejected. Fake paid reviews are clearly perfectly acceptable to Amazon, but reporting them is not.
Trust is Amazon's greatest asset. If people stop trusting what they buy from them, Amazon is opening the doors wide open to the competition.