To say that Amazon has “a bit” of counterfeiting problems would be an understatement. Just like every other online website, the world’s largest online retailer has for years struggled with counterfeits and instances have been constantly increasing. The main reason behind this is that the shoppers are buying virtually so, items cannot be held in hand, touched or seen beyond the nine images uploaded by the seller. Because of this, it becomes very difficult for the buyer to gauge the quality of the product. Taking advantage of this, many counterfeit resellers sell fake or damaged goods at a lower price.
To put a stop on the endemic flood of counterfeit, the retail giant has debuted Project Zero on Thursday, February 28th, 2019 with an aim to eliminate the spread of counterfeit sellers.
What is Amazon Project Zero?
Amazon stated that “Project Zero combines Amazon’s advanced technology, machine learning, and innovation with the sophisticated knowledge that brands have of their own intellectual property and how best to detect counterfeits of their products.” It gives brands an automated counterfeit removal system, power to remove counterfeit items on their own without contacting Amazon and a unique product serialization system.
Automated Protection:
The automated protection process is powered by artificial intelligence. The machine learning algorithms will constantly scan the 5 billion product listings on a daily basis and proactively remove the suspected counterfeits. AI will identify the counterfeit with the help of logos, trademark symbols, and other key data related to the brand.
Dharmesh Mehta, Amazon’s vice president of Consumer and Brand Protection wrote, “We’ve been testing these automated protections with a number of brands, and on average, our automated protections proactively stop 100 times more suspected counterfeit products as compared to what we reactively remove based on reports from brands”.
Self-service Counterfeit Removal:
Previously brands had to report a counterfeit to Amazon and they would then investigate on the matter and take action. The self-service tool gives brands the unprecedented power to directly flag and delete fake listing themselves from their stores. For example, if a brand finds a reseller who is selling low-quality products on their brand name, then the brand can remove the listing directly without involving Amazon. To get back on Amazon; the reseller will have to prove to the brand that the products were bought from a legitimate supplier.
Whenever a product is removed, Amazon will feed this information in its automated protection database to prevent any potential counterfeit listings.
Product Serialization:
Product Serialization enables brands to put a unique serial code on their products during the manufacturing process. This added level of identification will stop counterfeit products even before they get sold. So whenever a product using the serialization service is ordered, Amazon will scan and verify the authenticity of the product. According to Amazon, sellers that use the serialization will get to see the best results. Brands can also decide as to which products they want to serialize.
Are all the brands eligible for Project Zero? (Available for Sellers and Vendors)
No, at present Project Zero is an invite-only program in which Amazon has just invited a few selected merchants including Thunderworks, Vera Bradley and Chom Chom. According to the retail giant, brands must maintain a high bar for accuracy in order to maintain their Project Zero privileges. But the term “high bar for accuracy” is quite ambiguous. However, the sellers who are interested in joining the program can join a waitlist to be invited to participate at some time in the future. To enroll in this anti-counterfeiting program, brands need to have a government-registered trademark and brand registry on Amazon.
Join the Project Zero waitlist here > https://brandservices.amazon.com/projectzero/waitlist
What are the expenses for the seller?
The automated scanning and self-service removal tools are free to use but the product sterilization program costs between USD$0.01 and USD$0.05 per unit, based on volume. So, if you are selling 10,000 units per month, you would be paying somewhere near $500 for product sterilization. Given the cost of risking the reputation of your brand and time spent in fighting the counterfeiting listing, this seems to be a profitable deal.
How will Project Zero help brands?
There are over 2.5 million independent merchants on Amazon who pay to list their products and even incur many additional costs like shipping, advertising and warehousing. Their struggle does not end here; they fiercely compete with one another to rank on the first page and earn coveted labels like ‘Amazon’s Choice“. But the worst part is when they have to fight the resellers and counterfeits that sell their products at low prices or try to hijack the listings.
In 2016, Apple sued a fraud company in New York for allegedly selling counterfeit versions of its products like charging cables on Amazon. Not just Apple, counterfeit has always been a burning problem for many companies, out of which many have complained publicly.
But with the introduction of this program, brands can themselves remedy this problem by removing any counterfeit resellers from their listing.
Why did Amazon launch Project Zero?
Counterfeiting had always been a weak point for Amazon. Apart from brands, there are thousands of third-party sellers who buy wholesale items from suppliers and sell their products below the brand’s minimum advertised price or sell used /damaged goods as “New” instead of selling them as “Used” or “Refurbished.” The retail giant has also been accused of collaborating with counterfeits and even faced lawsuits from brands as well as dissatisfied customers.
To stop the spread of fake listings, Amazon had revamped its Brand Registry program which lets some brands “gate” their products so other sellers cannot joint their listing. Huge brands like Apple have also entered into an agreement with Amazon which allows only authorized resellers to sell on its platform. But all these did not contribute majorly towards stopping the counterfeits. However, now it seems that the company has finally taken some solid actions and prompted the rollout of Project Zero.
But this is just one side of the coin. With Project Zero, Amazon has smartly passed down the responsibility of counterfeiting problem to the brands and even charging them for what Amazon should anyways do.
Should sellers register for Project Zero?
Probably, but it will be too early to make a decision because there is so much more to learn about the benefits, restriction, pros and cons of this initiative. Over a few months, it will be very interesting to know how are the effects of this program on the counterfeits.
The verdict:
This program will not completely eradicate the counterfeiting problems, but it will make the situation a lot harder for counterfeiters who will now have multiple hammers crashing them down every time they pop up. The counterfeit-fighting tools will be hugely embraced by brands who want to remove phony listings from their product page. Not just the brands, this new program will also greatly benefit the ecommerce behemoth because it will now be able to free itself from the work of policing its platform by outsourcing it to the brands. So it’s a win-win situation for all – the Brands, Amazon and the Shoppers.
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