Amazon offers a wealth of opportunities for brands to expand their reach and sell their products globally. With 1.6 million Amazon packages delivered daily in the U.S. alone, it is no mystery why brands utilize this marketplace to earn revenue.
However, with this opportunity comes the unfortunate reality — fraudsters also see dollar signs. In 2020 alone, Amazon reported that they seized and destroyed more than 2 million products sent to their fulfillment centers that were detected as counterfeit.
While Amazon has initiatives to protect brands that utilize its marketplace, realistically, it cannot stop all fraudulent activity. For this reason, brands need to enact their own protective measures.
Common Brand Risks
First, to understand what protections to put into place, it is important for brands to understand what the most common risks are when selling on Amazon.
1. Resellers Using a Listing
By design, Amazon is the ultimate owner of product listings. This means that other sellers can potentially hijack a brand’s listing. One method for doing so involves another seller using a brand’s Buy Box to resell their product.
In this case, the reseller is selling a legitimate product and is within their rights. For brands that notice this occurring, it can be helpful to understand where resellers are gaining access to products. If the resellers can undercut pricing, likely, they are somehow buying the products at a deep discount. Cutting off the source can mitigate the issue.
2. Counterfeiters Using a Listing
Similar to the above scenario, in some cases, illegitimate sellers will use a brand’s Buy Box to sell a counterfeit version of the product. The only way to determine whether or not a reseller is selling a legitimate or counterfeit product is to purchase one.
If the product is counterfeit, the next step is to file a complaint with Amazon. If this does not resolve the issue, it is time to speak with a lawyer.
3. Trademark & Patent Infringement
Another issue that can affect brands is a trademark or patent infringement. In the case of a trademark infringement, another seller will steal a brand’s logo or name. Patent infringement involves stealing the utility or design of a product.
In any of these above cases, it is imperative for a brand to have registered its trademark and secured its patents. Otherwise, it is difficult to prove a crime has been committed.
4. Fake Reviews
One more way a brand can be affected negatively by Amazon is when a competitor pays for a flood of fake reviews. These can either be one-star or five-star reviews. A flood of one-star reviews has an obvious repercussion — a brand’s reputation is damaged. A flood of five-star reviews is a newer phenomenon and is done in the hopes of triggering Amazon’s internal auditing system. Essentially, a seedy player hopes to trick Amazon into thinking a brand is purchasing fake five-star reviews, shutting down their listing.
Brand Protection Strategies
Understanding a brand’s potential pitfalls on Amazon is just the start. Brands can use the four following tips for building robust protection.
1. Use the IP Accelerator
First, brands should register their intellectual property (IP) by enrolling in the Amazon IP Accelerator.
2. Register on the Amazon Brand Registry
Once enrolled in the Amazon IP Accelerator, brands should go on to register with the Amazon Brand Registry. This registry provides automated protections that aim to stop bad listings before they are published and makes it easy to report violations.
3. Opt for an Amazon FNSKU, not UPC
Next, any products listed on Amazon should utilize an Amazon barcode, called an FNSKU, rather than a UPC. This will identify a brand as the legitimate seller of a specific product.
4. Brand Your Packaging and Products
To help make it harder for counterfeit products to enter the market, brands should invest in clearly branded packaging and products. Adding logos and specialized insignias can help prevent counterfeits.
5. Use Built-In Protection with Amazon Marketplace Management
Brands that sign up to use Phelps United Amazon Marketplace Management tools will receive built-in brand protection tools. Through our platform, brands can receive real-time notifications and alerts of any potential concerns. Not only that, but our legal partners will find and remove any unauthorized resellers of a brand’s products. To learn more, contact our team at Phelps United and find out how we can help protect your brand.
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