Historically, Amazon has offered little help to brands battling counterfeiters and IPR violations on its platform, but times are changing. As a result of counterfeit products weakening shoppers’ confidence in Amazon and IPR violations driving several major brands off the ecommerce platform, Amazon has been forced to take a stand on the issue.
In recent years, Amazon has launched several initiatives designed to help brands defend against counterfeiters, IPR infringements, and unauthorized sellers. Keep reading to learn what they are, how to enroll, and how much you should rely on them.
Protect Your Brand with Amazon’s Tools
Enroll in Brand Registry
Amazon introduced Brand Registry to help brands defend against IPR violations. It enables brands and their Registered Agents to accelerate listing updates, create enhanced brand content and brand stores, and provides access to Amazon’s infringement reporting tool.
You can use Kaspien’s guide to enroll in Brand Registry.
Request Brand Gating
Brand Gating is an invite-only Amazon service that prevents sellers from listing specific ASINs unless they provide an authorization letter. Brand Gating is especially useful for brands who have encountered many violations. To increase your likelihood of being invited into the program, always report violations through Amazon.com and become Brand Registered.
Enroll in Transparency
Transparency is a program created by Amazon that can be used anywhere your products are sold. Products enrolled in the Transparency program are labeled with unique QR codes provided by Amazon (for a fee). When an Amazon warehouse receives product enrolled in Transparency, they scan the QR codes to verify the product is from your approved manufacturer. If it is not, they remove and destroy the product as counterfeit.
But it’s not limited to just Amazon warehouses. Shoppers can also download the Transparency app and scan the QR codes while at brick and mortar locations. For example, if your product is enrolled in Transparency and it’s sold at Walmart, shoppers can still scan the code on the packaging to verify that it’s authentic. Each QR code is unique, preventing counterfeiters from mass producing them to sneak through the system.
Beyond just protecting against counterfeits, Transparency also offers great marketing and safety options. When shoppers use the app to scan the code, the app can also show them ingredients, manufacture date, and additional ideas for use that may not be on the package itself or in the listing.
Join the Project Zero Waitlist
Project Zero is Amazon’s effort to snuff out counterfeiters by enabling brands to remove counterfeit listings themselves. This method bypasses the Amazon case system. Currently, the program is invite-only, and only a handful of brands are utilizing it. However, brands interested in Project Zero can join the waitlist, and Amazon will notify them when they are eligible to enroll.
Don’t Commingle Inventory That’s Struggling with Counterfeit Issues
If you have a product that is struggling with counterfeit issues, don’t allow the inventory to commingle. Although not commingling inventory can increase fulfillment costs, it gives you the ability to clean up your listing. By keeping each seller’s inventory separate, you can conduct test buys to try to identify which seller(s) have counterfeit product in their inventory. Once you’ve identified the problematic seller, you can work with Amazon to remove them from your listing.
Learn to Identify & Report Fakes
In addition to Amazon’s programs, you can keep an eye out yourself for counterfeiters. In listings that suffer greatly from counterfeiters, you can also add warnings to shoppers in a bullet on how to avoid ordering from a counterfeiter, although such a warning could also deter potential customers. Make the decision on a case by case basis, and if you do add a warning to the bullets, mark the date so you can monitor how it impacts your sales.
To identify a potential suspect, look for the following:
Is the price too good to be true?
An exceptionally low price suggests a rogue seller who is either breaking MAP to win the Buy Box and/or someone selling low-quality counterfeits.
Is the seller marked as “New”?
This can indicate an opportunist who has snuck into a listing to sell through product they acquired through retail arbitrage or counterfeit goods.
Does the seller name sound legitimate? How many seller reviews do they have, and what is their seller rating?
The more reviews and higher the seller rating, the more likely they are to be a legitimate seller. If the seller has few or many negative reviews, it’s good cause for concern.
Is the order Fulfilled by Amazon?
FBA orders are screened by Amazon warehouses. While this does not prevent counterfeit products from shipping to customers, it helps. If a seller offers FBA, it’s a good sign.
What else does the manufacturer make? Do they offer a full product line?
This is another case where more is better.
Are the customer reviews verified and what is the average rating?
Amazon was once rife with fake customer reviews. While measures have been put in place to prevent them, the problem still persists. You can use tools like Review Meta to assess how reliable customer reviews are in a given listing.
A legitimate seller might have concerns for one of the above, but if they have multiple, your customers should do more digging or look into purchasing from another seller. As the brand owner, if you have good reason to suspect an illegitimate seller, you can report them to Amazon.
It’s a Mistake to Rely on Amazon Alone
While Amazon’s efforts in recent months and years are appreciated, they are nevertheless only a piece of the puzzle. Amazon’s tools are largely limited to protecting brands only on their platform, and three of the above tools are limited to a select few because they are still under development.
To effectively protect your brand against online threats, your defense strategy must extend beyond Amazon.
Protect Your Brand Beyond Amazon
Trademarks, Patents, Copyright, & Trade Secrets
Don’t forget the basics. Anytime that you create a proprietary product, follow through with due diligence to protect it. If you don’t have legal rights to a product, you can’t protect it. Amazon requires that you have formal registration for trademarks, patents, and copyrights if you want to enforce your right to them on its platform.
If you sell in foreign marketplaces or if there is a possibility that you could expand into foreign marketplaces, you should also take the time to file your IP in those countries.
Differentiate Your Packaging
In addition to providing branding opportunities, your packaging can also help protect you against counterfeiters. If your packaging is unique, customers will be put on alert if they receive a box that doesn’t match the picture.
Best practice is to make it hard for someone to copy your packaging; don’t put an unbranded item in a plain envelope or box. Differentiated packaging doesn’t have to be expensive, it just needs to be unique. Even a branded sticker can.
You can also track lot codes, serial numbers, or use stickers color-coded for specific retailers to help you track who you sold inventory to and where that inventory ends up. If you can track the inventory’s journey, you can more easily identify where the counterfeit product is entering the supply chain.
Actively Monitor Your Brand, Sellers, and Distributors
Taking a cavalier or passive approach to who you partner with leaves you vulnerable for exploitation. To protect your brand, you should carefully select who you allow to sell and distribute your product. We recommend two services for monitoring your channels and enforcing your pricing policies.
Perispect is Kaspien’s proprietary price monitoring and brand watch software. It enables brand owners to monitor sellers and their prices across marketplaces, empowering them to enforce their pricing policy. Perispect is a powerful tool for cleaning away rogue sellers and maintaining your brand integrity. Read more about its offerings in our Perispect blog post.
While you can find tools to help clean and maintain your channel, you can’t outsource your strategy. You decide who you work with, so only work with partners you can trust.
Define Your Rights in Distributor & Seller Agreements
When you decide to work with a retailer or distributor, the contract will often give them full legal rights to resell or distribute to anybody they choose. Before signing agreements or even upon renegotiation, look at clauses that better align with your brand strategy, such as protections for who goods can be sold to, where goods can be sold online, if they can they be sold internationally, etc.
If you sign an agreement that does not specify restrictions on where and who can sell your product, you lose your legal footing and control over who and where your product is sold.
Several of our partners have learned this lesson the hard way. With Kaspien’s help, they were able to regain control of their Amazon channels, but the process is both long and time intensive. In many cases, entering the situation with a proactive strategy can prevent serious issues from developing.
File with US Customs
Register your trademark with US Customs to defend your brand against imported counterfeits. Customs and Border Protection are tasked with preventing counterfeits from entering the US. If you file and alert them that you feel your brand is being targeted by international counterfeiters, they monitor for products coming into the US using your IP. If they find some, they’ll inspect it to see if the products are legitimate or counterfeit.
Protecting your brand requires a holistic approach. Amazon’s tools are useful for its marketplace, but you need a proactive defense strategy that protects your brand across the board, online and offline.
Kaspien has a dedicated compliance team. If you want expert assistance in navigating ecommerce IPR, contact us to schedule a call.