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Grow Your Business Technology

Amazon Announces Crackdown on Knockoffs, Scammers

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Amazon just announced an initiative that it hopes will curtail the long-running issue of third parties selling counterfeit products on the platform.

Dubbed Project Zero, the free program will reportedly draw on the corporation's technological prowess to streamline its enforcement of existing anti-counterfeit policies.

"[Project Zero] empowers brands to help drive counterfeits to zero," the company said in its reveal of the program. "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."

The program is currently invite-only and restricted to U.S. brands with a government-registered trademark enrolled in the Amazon Brand Registry.

When purchasing an item on Amazon, it's easy for the average consumer to assume that the product they'll receive is the genuine article. That assumption is often affirmed when a third-party seller uses the Fulfilled by Amazon service, which handles transactions between customers and merchants. The company warehouses and ships the products, as well as handles payments, but does not claim ownership of the items being sold.

Since more than half of the products sold on Amazon are from third-party sellers, the issue of cheap knockoffs being sold at competitive prices has become one of several problems on the site.

To combat the problem on a platform where millions of transactions take place each day, Amazon said it will rely on its "machine learning expertise" to sniff out fakes. Project Zero will do that by using "automated protections [that] continuously scan our stores and proactively remove suspected counterfeits."

Since businesses enrolled in the Amazon Brand Registry program provide the company with their logos, trademarks and other data, the retailer will be able to scan the more than 5 billion daily product updates for suspicious products. In testing this process, Amazon estimates that it has managed to detect "100 times more suspected counterfeit products" than it does when brands report the problem themselves. [Read related article: 6 Amazon Seller Scams to Watch Out For]

Along with its tech-based solutions, Amazon's new initiative will give companies an "unprecedented level of responsibility" by letting them remove counterfeit products on their own.

Previously, companies that believed they'd found a seller offering fake versions of their products would have to report the item to Amazon. The retailer would then conduct its own investigation into the issue before deciding on a course of action.

Under the new program, enrolled brand holders will have the ability to remove counterfeit listings without reporting the problem to Amazon itself.

Giving major companies the power to remove small third-party sellers' listings based on the suspicion of fake goods could give rise to false removals. To combat that, Amazon said in the announcement's FAQs page that brands will be required to "maintain a high bar for accuracy" in order to stay in the program.

To ensure that accuracy in the first place, Amazon said it will provide several methods to keep companies honest, including "required training as part of Project Zero enrollment and ongoing monitoring to prevent misuse" of the program.

Further use of the self-service tool will also feed into Amazon's machine learning capabilities, the company said, honing its automated processes so that counterfeits will be caught faster.

"Project Zero gives us a great deal of confidence," said Aaron Muller, co-owner of ChomChom Roller. "It has proven to us that Amazon really cares about helping protect our brand and eliminate counterfeits." [Read related article: What Is Amazon Storefronts?]

Along with the automated process and self-service options in Project Zero, the massive e-tailer announced that it will also include a product serialization service. When this is utilized, a company's products will be scanned and given a unique serial number to authenticate that an item being sold is genuine.

The brand will put each of those codes on its products when they are manufactured. When the item is sold and shipped from Amazon's warehouses, employees will scan the serial number to ensure it's the real deal before it makes its way out the door. The company believes this aspect of the program will be the last line of defense between a customer and fake merchandise.

"Every unit we sell through Amazon has a unique, serialized barcode, and our counterfeit problem has nearly disappeared in the United States," said Phil Blizzard, CEO and founder of ThunderWorks.

While brands will not be required to take Amazon up on its product serialization measure, the company said individual serial numbers are a "powerful tool for detecting and stopping counterfeits." Brands will also have a choice as to which products have serial numbers in the first place.

While Amazon hasn't announced when the program will be more widely available, it has created a waitlist for interested companies to join.

Andrew Martins

I am a former newspaper editor who has transitioned to strictly cover the business world for business.com and Business News Daily. I am a four-time New Jersey Press Award winner and prior to joining my current team, I was the editor of six weekly newspapers that covered multiple counties in the state.