Amazon's Jeff Bezos called out on counterfeit products problem

Here's the scenario. A small company designs and creates a product and puts it up on Amazon. Things go well. People really like it. They post hundreds of positive reviews. Sales build -- and keep building. Everything is going great. And then, boom, things go south in a hurry. Another company has created a counterfeit version of the product and is selling it under the same name only it's selling it for less, stealing all the sales.

That's exactly what happened to Portland-based Elevation Lab, its founder Casey Hopkins said, accusing Amazon of being "complicit with counterfeiting" in a blog post. (We saw it highlighted on John Gruber's Daring Fireball.) 

The Anchor, Elevation's popular under-desk headphone mount, has been getting flooded with counterfeits, Hopkins said, noting the situation certainly isn't unique to his company.   

"The current counterfeit seller, Suiningdonghanjiaju Co Ltd (yeah they sound legit), has been on there for the past 5 days and taken all the sales," Hopkins wrote. Adding further insult to injury, he said Elevation has paid Amazon a "boatload of money" to advertise the product that it has "built, invested in, and shipped."

According to Hopkins, the product Suiningdonghanjiaju is selling is a poor facsimile:

They literally reverse engineered it, made steel compression molds, made the logo wrong, used fake 3M adhesive that's very thin and was diecut smaller than the top (measure once, cut twice), they use a lower durometer silicone so it flexes more, its has huge mold parting lines, and the packaging is literally photocopied then reprinted (you can tell by the lack of image contrast). And they had to apply a big sticker to cover our SKU with theirs. But to the untrained eye, it would pass. Can't wait for the negative reviews to come...

Amazon has now purged the Suiningdonghanjiaju listing, which is noted in our cart as "no longer available from the selected seller." It instead defaults to Elevation's own stock.

Hopkins told CNET that counterfeiters have been purged at least five times in recent weeks only to return a week later under a different seller name "to hijack the listing." He said it takes Amazon 5 days to remove the seller.

"It's like whack-a-mole," Hopkins told CNET.

Since Elevation doesn't sell its products wholesale (except to Apple), he said it should be obvious to Amazon that any third-party seller with significant quantities is selling counterfeits. "Amazon's policies let sellers hide behind the anonymity of the platform and they know there will be zero recourse," he added.

Amazon has previously recognized it has a counterfeiter problem and has taken steps to quash it. It has sued counterfeit sellers and recently created a Brand Registry for companies to list their logos and intellectual property.

Last year, Peter Faricy, vice president of Amazon Marketplace, told Reuters that the registry would let Amazon remove listings and potentially cancel seller accounts if counterfeit products were spotted.

Hopkins said Amazon could do something very simple to fight counterfeiters, but it isn't.

"If you have a registered brand in the Brand Registry and don't sell the product wholesale, there could be one box to check for that," Hopkins wrote. "And anyone else would have to get approval or high vetting to sell the product, especially if they are sending large quantities to FBA [Fulfillment by Amazon]. I imagine there are some algorithmic solutions that could catch most of it too. And it wouldn't hurt to increase the size of the Brand Registry team so they can do their work faster."

Hopkins wanted it to be known he loves Amazon as a customer and is even a shareholder, but he warned folks to take a minute to look at the seller before buying anything on Amazon and then took a final poke at its CEO Jeff Bezos.

"If you're reading this, come on," he jabbed, "this is Day 2 activity."

In a letter to shareholders last year Bezos wrote: "Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1."

An Amazon spokesperson responded to CNET's inquiries about the incident with the following statement:

Our customers trust that when they make a purchase through Amazon's website—either directly from Amazon or from one of its millions of third-party sellers—they will receive authentic products manufactured by the true manufacturer of those products. We strictly prohibit the sale of counterfeit products and invest heavily – both funds and company energy – to ensure our policy against the sale of such products is followed.

We work closely with vendors, sellers and rights owners to strengthen protections for their brands on Amazon. Any rights owner can register with Amazon's Brand Registry service to manage and protect their brand and intellectual property rights on Amazon.

In addition, we encourage rights owners who have a product authenticity concern to notify us, and we investigate any such claims thoroughly. We remove suspected counterfeit items as soon as we become aware of them, and we remove bad actors from selling on Amazon. We have successfully taken legal action against a number of bad actors and will continue to pursue legal action and work with law enforcement.

In order to detect bad actors and potentially counterfeit products, we employ dedicated teams of software engineers, research scientists, program managers, and investigators to operate and continually refine our anti-counterfeiting program. When a business registers to sell products through Amazon's Marketplace, Amazon's systems scan information for signals that the business might be a bad actor, and Amazon blocks most of those bad actors during registration before they can offer any products for sale.

Amazon makes significant investments in innovative machine learning and automated systems in order to anticipate and stay ahead of bad actors. On an ongoing basis, Amazon's systems also automatically and continuously scan numerous data points related to sellers, products, brands, and offers to detect activity that indicates products offered might be counterfeit.

Customers are always protected by our A-to-Z guarantee, whether they make a purchase from Amazon or a third-party seller. If ever the product doesn't arrive or isn't as advertised, customers can contact our customer support for a full refund of their order. We take this fight against bad actors very seriously and will not rest.

Update 4:13PM EST: Added statements from Hopkins and Amazon.

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