How to Fight Counterfeit Practices on Amazon
Amazon launched its Transparency program in 2017 to prevent Amazon sellers from listing counterfeit products. The intention is to protect businesses against counterfeit practices and ensure authentic products on the platform. Because of this program, knock-offs or fake products are removed from Amazon as quickly as possible.
Unfortunately, counterfeiting has been a big problem on Amazon. With advances in manufacturing technology, it has become increasingly easy for unscrupulous Amazon sellers to make and sell cheap copies of high-performing products.
With the virtual sea of products available on Amazon, these counterfeiters always seem to be one step ahead of Amazon’s counterfeit defense team. Many sellers in Amazon’s online community have placed substantial pressure on the eCommerce company to continue improving its efforts.
These sellers eventually persuaded Amazon to create the Transparency program. The result is a more secure platform for everyone. Check out this article to learn more about Seller Insurance on Amazon.
The program is an integral part of your strategy as a seller to prevent loss. Luckily, signing up for the Transparency program is an easy process. Read on to learn more.
Amazon Transparency Enrollment Process
To begin your enrollment in the Amazon Transparency program, all you have to do is fill out a simple contact form. Amazon sellers can enroll as many or as few products as they’d like. Once enrolled in Amazon Transparency Program, you have direct access to the Amazon Transparency customer service team through the “Contact Us” form.
The customer service team is an excellent resource if you have any questions, need clarification about the program, or require technical support. Automation is the ultimate goal of the program so that once set up, you can be primarily hands-off. But there are some requirements you’ll need to meet to make it practical for your brand.
Amazon Transparency Program Requirements for Sellers
There are a set of requirements that Amazon brands must meet to participate. There are also requirements for the products themselves. Make sure to review the list of requirements to see if you are eligible to join the Amazon Transparency Program. Brands have to:
- Be previously registered with the Amazon Product Registry.
- Be approved to participate in the Transparency Program (obviously), and
- Meet quality control requirements as outlined by Amazon.
Individual products have to meet an additional set of expectations as well to qualify for Transparency Program protection. These are as follows:
- Sellers must trademark each product with a principal register
- Each product must have UPC or Global Item Trade Numbers (GTIN), and
- Either meet packaging standards under the program or apply stickers to existing packaging that allow for proper tracking
This process can be lengthy and cost-prohibitive for sellers who already use UPC coding to track their products. But if you’re serious enough to apply for the Transparency program, you’ve most likely already done this.
Regardless of the cost and time consumption of joining the Amazon Transparency program, it’s an essential step if you want to protect your products from counterfeiters and maintain your brand’s unique status in your niche.
What Are the Benefits of the Amazon Transparency Program?
There are both primary and ancillary benefits to joining Amazon’s Transparency Program. Some of these have to do with concrete business factors, while others are more qualitative and less obvious.
First, let’s take a look at the benefits for the growth and stability of your Amazon business:
- Safeguarding against counterfeiters across platforms, both digital and physical
- Development and protection of your brand’s integrity and reputation, and
- Being in alignment with other influential brands inside and outside of your niche
Safeguarding Against Counterfeiters
There’s a misconception that safeguarding against counterfeiters only applies to Amazon when using the Transparency Program. The unique barcodes and serial numbers used in the Transparency Program can also be applied and carried over to any other platform where you sell your products. This includes online stores you’ve built, eBay, Walmart, and other retailers with a substantial online presence.
The Transparency Program is most effective when applied to higher-risk products. High-risk includes products with a high sales velocity – such as viral or trending items. Other high-risk products include those that are easy to recreate, such as makeup. Electronics, watches, and toys are also easy to knock off for experienced counterfeiters.
And, if they’re smart – which sadly, many are – they’ll place their counterfeited product ads opposite of where your authentic products are selling successfully. If your product is blowing up online, they’ll take the knock-off version and sell it at physical marketplaces, too. Every so often, counterfeiters will even be brave enough to try to compete directly on your product listings and other platforms.
This is why the Amazon Transparency Program is such a powerful tool. Because Amazon puts a high price on customer satisfaction, it’s also in their best interest to fight fake products listings. And again, it’s great they have not made the program proprietary to prevent it from applying to other platforms where you sell. This protection also applies to physical retail locations.
The way the program works is that you will receive a barcode paired with each of your products that protects them against counterfeiting in the physical retail world, not just in the “virtual” retail world. Hijackers cannot sell your products if they don’t have the transparency code that proves they are the rightful owner.
Development and Protection of Brand Integrity and Reputation
It may seem like a little thing on the surface, but that transparency barcode on your packaging says something powerful: the person selling this product is serious about their business, and you’ll be messing with them at your own risk. Beyond the risk prevention, the Amazon Transparency barcode tells potential customers that you sell authentic products. One of the primary reasons people hesitate to buy a product – and continue to sit on the fence – is that they’re uncertain about the legitimacy of a product or the brand selling it. With transparency codes in your corner, those doubts lessen. It’s standard practice for the world’s largest brands to have unique UPCs and descriptions for every product they sell, regardless of platform. When you have these codes, you’re considered a reputable brand.
When your brand is considered reputable, plenty of “social capital” is also added to your brand name. You will be able to build brand awareness at a much faster rate than you would have otherwise because buyers will not have to question whether you are legitimate. It’s especially true due to the many, many brands on Amazon that come and go. These brands are constructed out of a metaphorical house of cards. The primary drive of these brands is to make as much money as possible, as fast as possible. Integrity is not a huge concern.
You don’t want people to see your brand as transitory. Using the Amazon Transparency Program virtually eliminates the possibility of this happening. Your brand’s integrity and reputation should be built on a solid foundation and have longevity. Therefore you must be seen as having the integrity to develop and maintain a solid reputation in the niche. All it takes is a few bad reviews from frustrated customers or someone to think your product is fake. After receiving negative reviews, the damage could be irreparable to your brand.
Alignment With Other Powerful Brands Inside and Outside Your Niche
Amazon’s Transparency program is now available in some of the largest countries in the world. primarily those that collectively have massive buying power and citizens with an expendable income. Some of the world’s largest brands (including Nike, Samsung, Seiko, and Black and Decker) use Amazon Transparency UPC coding on all of their products. It sounds simple, but if they’re using transparency, why in the world wouldn’t you?
Powerful companies such as these are willing to take the time to build UPC coding and protections to ensure their products are seen as legitimate. As a result, it’s almost impossible for counterfeiters to make money ripping them off. Not all benefits of joining Amazon Transparency are obvious; some ancillary benefits are just as powerful.
Ancillary Benefits
The transparency UPC coding on your products isn’t just for counterfeit protection. When a potential customer scans the UPC, they’re given additional information about the product that solidifies your brand legitimacy.
When customers can see the UPC and related information as they read your product description, they’re much more likely to make a purchase than to leave the page and compare your product to something similar.
The Transparency Program information also allows a customer to see their package’s progress as it makes its way from the factory floor to their doorstep. This tracking information builds trust even further.
When you continually build confidence in your brand in this way, you’ll also build loyalty. And repeat customers tend to be your most loyal customers.
This ancillary benefit is especially powerful if your brand is in the US or Europe. This is because there is plenty of protection afforded consumers through the legal and economic systems.
If you’ve been following our blog for a while, you know we cover both the positives and the negatives about a given topic. This article is no different.
As with any strategy you employ to increase brand trust and awareness on Amazon, there is a cost. Getting established with the Amazon Transparency program with your brand is not without its drawbacks.
Drawbacks of Amazon’s Transparency Program
- Requiring extra steps in the shipping process
- An additional cost to participate
- Online tracking is tied to your specific Internet Protocol (IP) address
- The need to use transparency UPC levels everywhere you sell your products
Depending on whether you’re working as an FBM or you’re working through 3PLs as an FBA seller, there can be some additional logistics in your shipping process when using transparency labels. First, you’ll need to ensure that each product has a title. While applying “traditional” labels was easy enough to automate because you could replicate UPCs, you can’t do this with transparency labels, so it could get a little tricky.
Transparency labels are not cheap. Each label will cost you somewhere between $.01 and $.05 depending on the volume of orders on which you’re working. There are some associated printing costs here that can add up quickly. Because each label’s UPC is unique, the printer you traditionally work with may price this label run differently from a label run where all UPCs are the same.
Online protection via the Transparency program is tied to your IP address. Amazon can protect you from anyone visiting your listings tied to that IP. Still, if counterfeiters try to sell your products outside of your listing, you’ll have to raise those concerns individually.
Amazon does require that you attach transparency UPCs to all of your products, even those sold outside of Amazon, as we covered previously. However, there are some potential privacy concerns here, especially as it relates to your customer data. Therefore, it’s worth taking the time to see what type of data Amazon collects on your customers across “boundaries” to determine whether any lines are crossed that would keep you from wanting to be a part of the program.
There’s been some confusion along the way about how Amazon’s Transparency program differs from the highly-publicized Project Zero that promised to eliminate counterfeiters from the platform.
Let’s take a closer look at how they’re different.
How Amazon’s Transparency Program Differs From Project Zero
The first thing to understand is that with both Amazon Transparency and Amazon Project Zero neither program is 100% foolproof. There will never be absolute certainty that either program can prevent your customers from purchasing a counterfeit or fake product. But both programs do an amazing job of making it highly unlikely.
The functions of the two programs, how you enroll in the programs, and cost are the primary differentiating factors.
For example, more power is placed in the hands of the seller with Amazon Project Zero. Sellers have the authority and ability to remove counterfeit sellers from their listings directly. But this power comes at a cost and with more stringent enrollment requirements.
To be eligible for Project Zero, you need to be enrolled with the Amazon Brand Registry and have a legally registered brand trademark. These requirements are true of the Amazon Transparency Program as well. Learn more about Amazon Project Zero in this article.
Project Zero-enrolled sellers also must maintain a clean record. You cannot for instance receive any reports of potential infringements of products copyright. Project Zero members have to be approved at a 90% rate in order to stay eligible for the program.
Another differentiating factor is price. Enrolling in Project Zero is 100% free. Automated self-service protections and counterfeit removal tools are free of use. The only time Project Zero enrollees have to spend any money is when serializing their products for tracking within the program. These fees are per unit.
Sticking with Project Zero still makes sense for some Amazon sellers. Particularly those who would prefer to have a greater level of manual control over keeping counterfeiters at bay.
Where Is the Amazon Transparency Program Headed?
There have been rumors that Amazon might be willing to share the Transparency Program technology with some of their major competitors (think Walmart, eBay, etc.) to make the program cohesive across the eCommerce landscape. While this seems ideal, putting it into practice would be a whole different ball game.
Amazon has also reached out to major retailers to offer the same. Still, understandably, there has been resistance given that Amazon is their primary competition and reason number one. In addition, the traditional brick-and-mortar ecosystem has changed so much in the last two decades, plus since Jeff Bezos started the company in 1994.
Like any other program Amazon rolls out, the final version that’s most effective rarely looks like the public first sees. However, because of the power Transparency can have once it reaches a final form where all of its processes are efficient and more sellers and retailers are ready to come on board, Amazon’s certain to put the time and resources into the program in an attempt to crush counterfeiters on the platform and beyond.
Next Steps to Consider
When you’re first getting started as an Amazon seller, aligning with a program like Transparency may not immediately be important. However, you need to focus on plenty of things as you’re establishing a brand, including cost control, marketing, brand development, content strategy, social media strategy, and so on.
The need to have a tool to fight counterfeiters is greater when all of these things are established and working in concert to bring you sales velocity and a consistent cash flow. When you start to sell consistently is the point when counterfeiters begin to pay attention.
This isn’t to say they won’t be opportunistic if you happen to strike a pot of gold and have a product get viral. But, still, chances are they’ll be much more interested when they see you have this type of success consistently, especially if you have a large social media presence that’s supported by a well-thought-out and well-executed social media strategy.
However, if you’re an experienced seller and don’t have the protection transparency UPCs provide in your corner, there’s no reason not to leap. If you’re experienced, you’re still at it and have the cash flow necessary to spend for the codes and any other packaging considerations that come along with the territory.
Conclusion
Counterfeiters are not looking to sell on Amazon as equal competitors. Instead, they want to take advantage of your thoughtful, hard work by stealing your intellectual property and derailing your potential success as an Amazon seller.
Enrolling in the Transparency program is a great way to prevent their attempts to make a quick buck at your expense. Joining the program will help your customers trust you, and Amazon as an eCommerce marketplace in general.
