Birkenstock is Pulling out of Amazon – Will Others Follow Suit?
Earlier this month, in a letter obtained by CNBC.com, Birkenstock Americas CEO, David Kahan announced plans to halt all sales through Amazon. Additionally, third-party retailers will be restricted from selling on the site as well. The ban takes effect January 1st, 2017. This comes as a result of seemingly irreconcilable issues regarding the surge of low-priced counterfeits known to be rampant on Amazon. In a letter to Birkenstock’s retail partners, Kahan states, “The Amazon marketplace, which operates as an ‘open market,’ creates an environment where we experience unacceptable business practices which we believe jeopardize our brand. This includes postings by sellers proven to have counterfeit Birkenstock products. It also includes a constant stream of unidentifiable unauthorized sellers who show a blatant disregard for our pricing policies. Policing this activity internally and in partnership with Amazon.com has proven impossible.”
Unfortunately, Birkenstock isn’t the only brand finding themselves in a less-than-ideal position due to the sale of counterfeits on Amazon. As CNBC reports, a deluge of Chinese merchants in the last few years has caused a swell in imitation products to the detriment of brands, both big and small. Back in 2013, Amazon saw the loss of health and wellness brand, Johnson & Johnson over similar complaints.
The truth of the matter is, Birkenstock and Johnson & Johnson aren’t the first companies to protest the diminishing of their brands on Amazon through the sale of replicas and they’re more than likely not the last. In fact, illegitimate sellers are consistently usurping sales with below-the-belt tactics, like paying for reviews and taking advantage of unfortunate loopholes found within Amazon’s logistics system. This unregulated side of Amazon leaves little room for a brand’s growth as the line becomes blurred between what’s an authentic product and what’s not (in the eyes of the consumer).
Countless brands have protested the sale of low-quality versions of their products for years but Amazon doesn’t seem ready to hear their cries. This reluctance to create an even playing field for their vendors may prove unwise for the world’s largest retailer, however. In 2008, competitor e-commerce retailer eBay was ordered to pay a cool $61 million to LVMH after the fashion giant found that 90% of Louis Vuitton bags sold on the site turned out to be fake – an expensive price to pay for not listening to the sellers that make up your platform.
Facing similar issues with finding counterfeits (of your products) online? Click below for advice on how to fight it:
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