Daily Insights

Clean Up, Clean Up

By: Griffin Carlborg | Mar 07, 2019

The largest online retailer in the world sells fake products.

Sellers can easily post products to the Amazon Marketplace, which makes the prevalence of counterfeit products inevitable. In Q2 2018, Gartner L2 analyzed product reviews for nearly 1,000 third-party listings on Amazon and found that 40% had reviews making counterfeit claims.

In response, Amazon recently announced Project Zero, a program that allows brands to tag and remove counterfeit listings of their products. The program also seeks to automate counterfeit product identification by using logos, trademarks, and other product data in over five billion daily product scans and will also issue unique codes to include on products during manufacturing so Amazon can authenticate every sale for these products.

Despite the prevalence of counterfeit products from third-party sellers, first-party vendors can benefit from alliances with these sellers to clean up their inventory on Amazon. Gartner L2’s Amazon Winner’s Circle 2019 report analyzes how a strategic relationship between Johnson & Johnson and Pharmapacks accelerated brand performance.

Pharmapacks outperforms Johnson & Johnson first-party listings for buy box ownership and Sponsored Product placements. On average, the third-party seller competes with fewer sellers for the buy box and earns Sponsored Product placement higher on the page. The partnership allows Johnson & Johnson to maintain control over a great share of third-party listings.

As Amazon prioritizes counterfeit clean up through programs like Project Zero, and first-party vendors strategically align with third-party sellers to control distribution, the number of fake products will decline, improving the reputability of Amazon’s ever-growing assortment. The current state of counterfeit clean-up indicates that Amazon is building a system in which vendors play an integral role in policing the marketplace through which they sell.