AS 52: Amazon Fights Counterfeits, 100,000+ Products counterfeited in Yimu

07 Sep 2016

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Today’s podcast, episode 52, Amazon Marketplace counterfeit problems, 100,000+ Products counter fitted in Yimu.

It’s been a pretty busy week with Amazon, and I didn’t want to cover this topic until I had at least a few confirmations come in as it is really big news.

Amazon finally decides to enforce protections on brands from third party sellers. At first, it was a few brands like Lego and Nike.

“We want customers to be able to shop with confidence on Amazon. We consider several factors when determining qualifications and criteria to sell certain products. For certain products and categories, Amazon requires additional performance checks, other qualification requirements, and fees.”

There was this MASSIVE, tug of war between brand owners and Amazon. Brand owners always angry about Retail arbitrage sellers selling their “brand” at a discount, from liquidates. Then you have the counterfeiters, who them too, saturate the price, as they are selling premium products at a discount. With lack of control for big brands, what was any one to do. Some major brands, throwing up their hands in disgust , abruptly left the platform, creating news worthy headlines, and Amazon quiet.

Perhaps this is a result of the 16+ years since opening the marketplace, and a pivot from what they thought could work, into caving into the brands wishes.

But now, that list grows, with all brands protected by Amazon brand registry. I’m actually surprised the relationship between Amazon brand registry and preventing other sellers from coming on wasn’t enforced in the past.

Retail arbitrage sellers started getting this message:

For anyone trying to sell branded items now, they

  • Submit required documents:
       3 different purchase invoices for Lego products from a manufacturer or distributor
         1 letter from lego authorizing you to sell their products
    • Review and agree to the selling conditions
    • Upon approval of your application, you agree to pay a non-refundable fee of $1000 USD.


As I mentioned in the past, Amazon enabling China to easily jump in on the game, creating many fears amongst sellers on Amazon, questioning what would happen as this transition continued to happen.

Will counter fitting be a thing of a past.

You can bet it won’t be. Counterfeiting is such a huge trade in China, that apparently is a good thing. There was an extensive documentary on it, posted in the show notes, depicting the reason why counterfeiting is so prevalent in China.

For one the manufacturers that counterfeit in China, see it as building the economy of China, for what is rightfully theirs. It is silently thought that the Chinese people have been wronged for the past century, and for the first time, this is their way of making a big come back.

In the city of Yimu, aka “Capital of Small Commodities”, but better known as the Counterfeit Capital of the World there are over 100,000 different products are sold there, and up to 90 percent of these are fake. There are literally cops standing by watching illegal goods being sold…it is tradition…and it is the building of their economy.

The counter fitting industry employs millions of people in China, and stretches across their entire nation. The worst part of it is, almost every corporation and brand has thought of, or already does produce their goods there, Apple, Microsoft, Guchi, the list goes on.

The damage equates to over 20 billion dollars year worldwide.

We’ve sacrificed our Intellectual property for cheaper goods, and quicker money, knowing that in the long run this trade will bite us back.

With Amazon fending off the quick counterfeiter, counterfeiters will seek other ways to distribute their goods. When there is a will there is a way.

So how do you challenge counter fitters. What is the true game plan moving forward? Counterfeiting will always happen.

I personally can see myself starting my own manufacturing center in the U.S,  in fact it is the plan. Just as Tesla can made their cars here, one day I will be manufacturing products that meet consumers needs leveraging automation. I had a guest – Tracy Hazzard come on the show discussing 3D printers, and how it will change manufacturing. I think that is the way forward. The only way.




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