How Amazon Sellers Can Keep Things Real When They're Surrounded by Fakes and Counterfeits

Learn how to fight the Amazon fraudsters.
How Amazon Sellers Can Keep Things Real When They're Surrounded by Fakes and Counterfeits
Image credit: Jasper Rietman
Magazine Contributor
Executive Editor
9 min read

This story appears in the April 2017 issue of Entrepreneur. Subscribe »

Q: I sell reflective wearables online and do good business on Amazon. But I’m constantly seeing new competitors -- all cheap knockoffs that, suspiciously, quickly collect tons of positive reviews. What’s going on, and can I stop it?  -- Tim G.

A: “Amazon” is a good name for Jeff Bezos’ company. It’s a sprawling site characterized by relentless change, furious competition and incredible diversity. It’s also, as many sellers have discovered, a jungle.

Tim, you’re getting it on two sides here, so let’s start with the review problem. Reviews are critical for a seller. They put customers’ minds at ease, drive sales and push products up in the search rankings, but they are hard to accumulate because only a tiny percentage of buyers leave them. Which means, this being the internet, reviews must be immediately corrupted.

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And so they were! Sellers began contracting with third-party firms that would help them offer free or discounted products in exchange for unbiased reviews that would contain a disclaimer -- something like “I was provided with a free product in exchange for my honest review” -- to satisfy FTC rules regarding endorsements. Some of these “incentivized review” sites were on the up-and-up, keeping reviewer and seller at a safe remove to ensure fairness. Others were not, allowing clients to pick reviewers based on average number of stars or threatening to stop giving reviewers free stuff unless they gave everything high marks. Others still were just paying people for good reviews. In any case, a seller could amass a slew of these positive reviews in a very short period of time, climb the ranks and sell more product.

Amazon launched a series of lawsuits against companies paying people for reviews last spring, but the incentivized reviews remained. That is, until a site called ReviewMeta analyzed seven million reviews on Amazon and concluded that a whopping 30 percent were either incentivized or flat-out manipulated. (In a statement, Amazon claimed that only “a tiny percentage” were inauthentic but declined to provide a number.) Facing a consumer-confidence crisis, Amazon banned these reviews in the fall, invested in an array of “manual and automated systems” intended to weed out the offenders, and made it a requirement that all reviewers have an Amazon account and have spent at least $50 on the site.

Did it work? 

Well, meet “Bob.” I’m calling him Bob because he does $5 million in sales annually on Amazon and doesn’t want to take any chances with his account. He says enforcement has been arbitrary at best, and the ban has served to make a quasi-fraudulent practice completely fraudulent. “It’s still a huge problem,” Bob says. “They just made it more hidden.” Instead of even trying to be legit, sellers now go to Facebook groups and the like and offer straight cash for reviews. A buyer purchases a specified product through his Amazon account and reviews it favorably, without any disclaimer, and the seller pays the reviewer for the product and the review on the back end via PayPal. 

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Because the product was purchased for full price from Amazon, the review gets the “verified” badge, giving it credibility and helping it escape detection. “It looks completely legitimate to the system,” says Paul Johnson, the cofounder of Snagshout, an incentivized review site that was forced to lay off staff and convert to a daily-deals-type site after the Amazon ban. “People say it’s trackable. It’s not. It’s kind of the Wild, Wild West.” 

Amazon’s counterfeit issue is separate but related. In an effort to make it easier for Chinese vendors to sell on the site over the past few years, Amazon inadvertently opened the floodgates to counterfeit goods. It usually works like this: A seller has a legitimate product. It gets attention, people buy it and give it good reviews, and it climbs the ranks. When it becomes popular enough, counterfeiters see an opportunity and sell a bunch of cheap knockoffs at a deep discount, buoyed by a raft of reviews they paid for. Sometimes these products are merely similar -- which is legal -- but other times they are fully counterfeit and posted in the “other sellers on Amazon” section of a real product’s page, suckering buyers into thinking they’re legit. When buyers fall for it and aren’t happy with the junky counterfeit they bought, they leave angry reviews on the page of the real product, inflicting further damage on the legitimate seller.

Under mounting pressure, Amazon launched a crackdown last year, and sellers and buyers can now report instances of counterfeiting, but whether anything can really stanch the sheer volume of knockoffs remains to be seen. “Let’s say they suspend an account,” says Ming Ooi, chief strategy officer of Fakespot and Trustwerty, which help buyers and sellers detect bogus products and reviews on Amazon. “The next day, that same company that got shut down is just going to open a new email, open a new account and in a couple of days they will be back online again, selling the same product.”

This is all a way of saying, Tim, that as a small seller, there is no silver bullet available to you. But before you throw away your reflective wearables and take a nighttime walk in traffic, the experts I spoke to do have some good suggestions.

Register your brand with Amazon, and, if you can, get your product patented, here and abroad. The latter will cost money, and it’ll take time, but it will help you make your case to Amazon when a dispute arises and you file what they call a takedown notice. Amazon says it independently investigates every claim, but sellers I spoke to cited spotty enforcement and suggested gathering and presenting evidence yourself to strengthen your case.

Be relentless in reporting bogus reviews. Fakespot and Trustwerty launched a service in January that can take any product listing and examine it for signs of fraudulence. The engine, which runs on artificial intelligence, will not only look at every review for the item, seeking incriminating signs like unusually high ratings and clusters of reviews posted in a short period of time, but will also analyze every review each reviewer has ever written for signs they might be on the take. A report costs $10, and company CSO Ooi says sellers have already started using it as evidence when appealing to Amazon to take down a listing or delete bogus reviews.

Be cunning. Anytime Bob sees a knockoff selling on one of his pages, he places an order for the product, writing “Attention: Test buy for trademark infringement” on the address line. Sometimes that’s enough to get the seller to pull the listing. If they do send the product, Bob takes a picture of the box, the product, the likely stolen art being used to sell it, etc., and sends it to Amazon hoping it’ll kick the seller off. If that still doesn’t work, Bob will keep ordering the product. The seller will either spook and flee, or keep canceling orders, which will drive up their cancellation rate and get their accounts shut down.

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Try to get “gated.” Bob estimates he generates $1.2 million a year for Amazon, but his efforts to get gated -- meaning no one else can sell his product without his consent -- have failed. Amazon will gate a brand under its Amazon Exclusives program but charges 5 percent per sale for it, and that’s a lot for someone doing big volume. So Bob is considering hiring an “Amazon lawyer” to help him get gated. The lawyer, Bob expects, will cost $5,000 to $6,000. “The thing is,” he says, laughing, “she doesn’t do anything special. She just has one contact there who replies to emails.” But this is valuable, because Bob says he has trouble getting anyone over there to reply to his emails.

Finally, recognize that buyers aren’t necessarily aware that these issues even exist. Many mistakenly place the same trust in Amazon that they place in, say, Best Buy, thinking the product will always be as advertised. Sellers can also use Fakespot and Trustwerty to get their products certified as legitimate and advertise that on their listings via a downloadable badge. And they can make a simple tweak on their own: Jamie Whaley, the inventor of BedBands, a widely bootlegged product that holds bedsheets in place, suggests putting as much information as possible in the title field of your product to alert the consumer that fakes are all around and that yours is the real thing. Her product used to be listed as “BedBands.” It is now listed as “BedBand not made in China. 100% USA worker assembled. Bedsheet holder, gripper, suspender and strap. Smooth any sheets on any bed. Sleep better. Patented.” 

Don Draper it ain’t. But she says it helped. And she needs all the help she can get. A week after we spoke, Whaley emailed me. She had mentioned previously that some of the bogus reviews on her bootleg competitors’ products had been removed. “Well,” she wrote, “Amazon has reposted all those reviews. I am not sure why.” In other words, Tim: Good luck.

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