Knock Off Products are a Common Challenge
One of the most frustrating experiences is when someone else takes credit for your work. On Amazon, this manifests as another company creating a copycat, knock off, or downright counterfeit or your product. To make matters worse, they often do so while undercutting your pricing (check out this blog post to learn how to defend against competitor price erosion).
It’s a serious problem, so serious in fact that the department of Homeland Security (DHS) published a 54-page report in January 2020 titled, “Combating Trafficking in Counterfeit and Pirated Goods.”
The Department of Homeland Security Counterfeit Report
According to the report, international trade of counterfeit goods rose 154% from $200 billion to $509 billion between 2005 and 2016.
The DHS’s report came after years of counterfeit products flourishing through ecommerce. In recent years, counterfeiters have sold contaminated food, cosmetics, and prescription drugs, sub-standard brake pads, airbags, helmets, and climbing gear, and faulty electronics that have caused injury, death, and fires, many of which received media attention.
DHS also reported seizures of infringing goods at the U.S. border rose from 3,244 to 33,810 per year, and that “global employment losses due to counterfeit goods were between 2 million and 2.6 million jobs in 2013, with job displacement expected to double by 2022.”
Amazon Created the Perfect Place for Counterfeits & Knock Off Products
DHS’s report found that Amazon has played a major role in enabling the counterfeit problem. Amazon offers few barriers to entry for new sellers, and shoppers have great difficulty identifying counterfeits without being able to inspect products in-person. The Organization for Economic Cooperation and Development wrote, “Ecommerce platforms represent ideal storefronts for counterfeits and provide powerful platform[s] for counterfeiters and pirates to engage large numbers of potential consumers.”
These problems plague other online marketplaces as well, but Amazon’s ungated marketplace and dominance in U.S. ecommerce puts it squarely in the spotlight.
Amazon Takes Action Against Counterfeits
Amazon has made notable progress in their anti-counterfeit efforts. On June 24, 2020, Amazon announced a new Counterfeit Crimes Unit whose mission is to “investigate crimes and bring legal action against counterfeiters.” On May 9, 2021, Amazon published its first Brand Protection Report, which reviewed the Counterfeit Crimes Unit’s efforts along with other Amazon programs.
The report notes that Amazon’s verification progress prevented over 6 million attempts by “bad actors” to create selling accounts, as well as 10 billion suspected bad listings before they were published. Amazon also detected and seized over 2 million counterfeit products from within its fulfillment centers.
In combination with these efforts, Kaspien has also observed a sharp increase in Amazon requests for safety test documentation from brands. While these requests can be inconvenient for brands and sometimes call for certifications that are not legally required for the given product type, they do make it harder for unauthorized sellers to persist on the marketplace.
Amazon Doesn’t Stop Knock Off Products
You’ll notice that Amazon’s efforts are focused overwhelmingly on stopping counterfeit sellers. That’s because counterfeit goods are illegal and can harm consumers. Amazon has no interest in stopping sellers who carry copycat or knock off products. To stop knock off products, brands must act on their own.
So, How Do You Stop Knock Off Products?
The burden of stopping copycat and knock off products rests upon the brand. Proactive measures are always preferable, including filing for trademarks and copyrights. Without legally securing your intellectual property, you’ll have a much harder time removing copycat products.
Intellectual Property Checklist
- Secure your trademark with United States Patent and Trademark Office (if you plan to sell on Amazon.com). This process can take 6 months, so the earlier you begin, the better.
- Amazon released a program called Amazon IP Accelerator to assist brands in the process and ensure the steps taken align with Amazon compliance.
- Once you have a trademark, enroll in Amazon Brand Registry. This will provide access to additional tools for marketing and brand protection on Amazon.
- Secure UPC codes (synonymous with barcodes and international EAN) for every unique product in your catalog. This includes product variations, like size or color. GS1 is a reputable organization that can support the process and ensure your UPCs will be accepted by Amazon and other retailers.
- Certain products require testing and material information in order to be approved for resale on Amazon.
- For example, Toy and Baby categories require safety testing and a Children’s Product Certificate (CPC), while Automotive may require Injury, Testing, and Regulation paperwork. Review your category’s requirements thoroughly before listing on Amazon.
- Amazon has hazmat requirements as well as category restrictions that must be passed in order to even list your product on the platform. Make sure to have Material Data Safety Sheets on hand to submit to Amazon. Amazon is proactive in helping brands identify whether their products qualify as hazmat. Please review the Dangerous Goods Identification Guide for further information.
What if You Don’t Have IP Yet?
If you’re struggling with knock off products and you don’t have your intellectual property secured yet, you have to get scrappy. Highlight every important way in which your product differentiates from the knock off. Factors to consider include:
- Price
- Quality
- Warranties and guarantees
- Product features
- Product safety
Your job is to convince shoppers that your product provides more value for the price than the knock off. You should speak to each of the above items in your copy, and make sure that images and videos highlight those differentiating factors as well. You can also add A+ Content to make your product listing appear more professional, building shoppers confidence.
You can also leverage Amazon advertising and social media marketing to bring in traffic to your listings instead of the copycat. Sponsored Product Ads have the highest conversion rate on Amazon, while Sponsored Display Ads are useful for targeting specific ASINs to erode competitors’ market share. You can even target your own ASINs to protect your digital shelf space.
Get More Tips for Brand Protection in our Free eBook
We’re just scratching the surface. Our eBook focuses on blocking counterfeits from polluting your inventory, as well as reclaiming control from unauthorized sellers. We also break down what actions brands can and cannot legally take against gray market sellers, as misusing a reporting tool can actually land you in hot water.
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