Next time you’re buying a product on Amazon, be sure to pay close attention to the small, small print just below where it says: “In Stock.”
Now, look a little closer:
Because different third-party sellers can sell the same product, Amazon allows customers to buy products from multiple sources through the same product listing.
When you click on the “Buy” button on a product sold by multiple sellers, Amazon automatically chooses the seller who lists the product at the lowest price. This often provokes Amazon’s third-party sellers to wage a war with each other over the “Add to Cart” button.
The system through which Amazon sellers list products also makes it possible for counterfeiters to essentially hijack an established product’s listing, and sell their lower-quality, ripped-off versions to unsuspecting buyers. That’s what happened with this particular product, an under-desk headphone mount called the Anchor. Only one company, Elevation Labs based Portland, Oregon, makes it, and that company does not sell its product wholesale (except to Apple).
“Suiningdonghanjiaju Co Ltd” does not make the Anchor. Elevation Labs was the first company to list a headphone mount with an adhesive attachment, and the company’s founder, Casey Hopkins, told BuzzFeed News they do not sell the product to other sellers.
How, then, did Suiningdonghanjiaju Co Ltd get a hold of Elevation Lab’s headphone mounts to sell on Amazon? They didn’t.
Through a loophole on Amazon’s seller marketplace, Suiningdonghanjiaju Co Ltd was able to overtake Elevation Lab’s own listing.
It did this by manufacturing a counterfeit version of the headphone mount and uploading the counterfeit to the Amazon marketplace using the same SKU number (a unique string of numbers attached to every unit of a particular product). Then, by listing the counterfeit at a slightly lower price, its rip-off completely took over Elevation Lab’s product listing for the Anchor.
“They photocopied our packaging, which you can tell because it has less contrast. They tooled up, made a bad molding, added a bad adhesive — but to Amazon it’s all the same thing,” said Hopkins, who wrote a blog post on Thursday titled “Amazon Is Complicit With Counterfeits.”
“Amazon’s not policing for counterfeits or anything. They’re still making money from counterfeit products, and counterfeiters can hide behind anonymity. I don’t even blame the counterfeiters, because Amazon makes it super easy for them,” Hopkins told BuzzFeed News.
Amazon didn’t specifically comment on how a counterfeit product took over Elevation Labs’ legitimate product listing, but in an emailed statement, an Amazon spokesperson wrote, “We remove suspected counterfeit items as soon as we become aware of them. 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.”
Customers can contact customer support for a full refund of their order, if a product doesn’t arrive or isn’t as advertised, the spokesperson said.
Elevation Lab’s Anchor headphone mount is a very popular product on Amazon. Hopkins told BuzzFeed News his company spent “tens of thousands” of dollars on advertising on Amazon, and the mount currently sits at number five in the headphone accessories category for best-sellers, so it’s not surprising that other manufacturers would attempt to copy Anchor’s relatively simple design through reverse engineering. But Hopkins says what happened to his product is another thing entirely: “That’s one thing, to have a lot of copycats. It’s another thing getting a counterfeit taking over our listing. We don’t get any sales anymore, and it’s a big product for us. It’s a high-volume product.”
Elevation Labs pays Amazon to list the Anchor first in search queries, where it appears as a sponsored result. By hijacking the Anchor’s listing, counterfeiters are piggybacking on that investment.
Hopkins also said he suspects Suiningdonghanjiaju Co Ltd is using software that automatically adjusts the counterfeit’s price. When Hopkins tried to lower his Anchor’s price, Suiningdonghanjiaju Co Ltd would instantly lower their product’s cost by one cent.
According to Hopkins, this seller essentially commandeered the Anchor product listing for five days, but counterfeiters have been using the same method for over a month, with new sellers popping up every few weeks. “We’ve probably lost $100,000 to $50,000 in the last week alone, plus the long-term effects, for negative reviews of our product if they get a counterfeit version,” Hopkins said.
At first, the scheme wasn’t immediately obvious to the Elevation Labs team. “We didn’t even notice it until we looked at sales data. We saw a high amount of sales of these every day, and it went to zero. We were like, ‘what’s going on?,’” Hopkins said.
The team reached out to Amazon repeatedly — four times over the course of the month. “We’ve gotten very canned responses. Sometimes they take a day, sometimes a week, and they still might not take down the seller [for another couple of days]. They don’t even give a reason,” said Hopkins. At the time of this article’s publication, Amazon had removed the counterfeit seller from the listing, five days after it first popped up. (While the counterfeit Anchor product is no longer available, the counterfeit’s seller profile appears to be active.)
But simply removing a counterfeiter won't prevent bad actors from taking over the Anchor’s listing again — or other listings — in the future.
Hopkins said Amazon could easily implement a safeguard to prevent this kind of fraud. The company already prevents third-party sellers from listing products under its own Amazon Basics brand. He suggested that if Amazon gave sellers an option to indicate when their branded content is not sold wholesale, then it would be straightforward to block anyone trying to sell counterfeits of these products.
Through the Fulfillment by Amazon program, or FBA, sellers can send all of their inventory to Amazon’s warehouses, where Amazon takes care of the storing, packing, and shipping of each order. It’s incredibly easy for anyone to sign up for an Amazon seller account and begin selling products, and especially counterfeit products, through FBA.
Amazon’s marketplace, which gives sellers access to its millions of customers with credit cards in hand, is a double-edged sword for many sellers: “We do a ton of business on Amazon. It’s a gift and a curse. It’s a massive platform, and you have to be there — it’s where you’re going to get a ton of volume in sales,” Hopkins said.
He continued, “I have Amazon Prime, and I’m a big Amazon fan, but there’s this messed up side of Amazon, on the seller side, that’s, like, insane.”