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The problem is more complex than it seems. Amazon could easily stamp out all fake products by giving the manufacturer the power to single source a given brand.
by yholio 8y ago
The problem is more complex than it seems. Amazon could easily stamp out all fake products by giving the manufacturer the power to single source a given brand. Unfortunately, that would also give that manufacturer full pricing power across Amazon, and that's a very bad thing for Amazon. The manufacturer could practice price discrimination in certain lower income markets while at the same time, being sure that discounted inventory does not end up on Amazon. No such limitation would exists for other sites, putting Amazon at a serious competitive disadvantage.
So Amazon wants the distributors of a certain brand to compete with themselves and push the prices down. But that opens the door for fakes on the site.
Nothing I said above should justify co-mingling inventory from different producers when a risk exists that fakes will be introduced in this manner, that's squarely Amazon's fault in their pursuit for faster delivery times. That practice leaves consumers without any ability to avoid fakes, destroying trust in the Amazon brand itself.
I think the solution is a system of financial bonds, where the seller would pledge a significant sum to be accepted in the co-mingling bunch and benefit from fast delivery etc. A single fake product traced back to it would result in loosing the pledge.
- yayana 8y agoI like your analysis, but I find the pledge problematic. Vendors work against each other and would consider frauds like hiring people to buy a real product and return a fake.
- eslaught 8y agoI see your point, but isn't that a problem for any enforcement scheme? Unless Amazon is going to invest the energy of their own employees into determining what is fake and what isn't, the best you can do is rely on the signal you get from customers when they return items (legitimately or not).
- paulddraper 8y ago> invest the energy of their own employees into determining what is fake and what isn't That is how most stores operate.
- eslaught 8y agoMost stores don't sell products for third parties. And no third party sellers means a drastically reduced inventory. I don't like the fakes any more than the next person, but I think the problems are genuinely more difficult than the various armchair experts on HN seem to give credit for.
- paulddraper 8y agoMost stores do sell products for third parties, marking up the a price and passing it onto the customer. That is in fact the entire business of most stores.
- DenisM 8y agoYou can take signal from customers and then manually investigate suspect batches, before dishing out the fine.
- go_away_nsa 8y agoThe solution is the federal government seizing every one of Amazon's warehouses for knowingly trafficking counterfeit goods across state lines. But that won't happen because Bezos has wisely entrenched himself in Washington DC and Amazon is thus protected from laws that would shut down smaller competitors
- ethagknight 8y agoSingle sourcing products has not been a problem for Walmart.
- yholio 8y agoThat's an interesting example. While undoubtedly large, Walmart is still a brick and mortar shop, it's part of the short tail world. Walmart can press producers for significant discounts by simply affording them some of it's limited shelf space. Amazon is "the everything store", the exponent of long tail online retail. If Amazon would employ the same tactics as Walmart, it would be quickly be out-competed by other online stores with a larger selection of products.