Amazon’s marketplace has turned into the wild west, with the good guys facing off against the bad guys in one of those gunfight scenes where they see who can draw their gun the fastest. In those classic western showdowns, they take ten paces away from each other, then spin and shoot. Typically, the good guy wins and the town is saved.
The difference with Amazon is that the bad guys are fighting dirty. They’re the shitty outlaws who shoot the good guy in the back after just two paces. And even if the good guy manages to survive that shot, there are ten more bad guys waiting in the wings to take him out.
The Bad Guys Have the Advantage
Legit sellers see Amazon as a place to start an honest business or create a long-term brand. But this influx of new, shady sellers see it simply as a platform to be exploited.
And here’s the crazy thing. It’s working. Nearly half of the folks making over $1 million in sales on the U.S. marketplace are in China. Obviously there’s nothing wrong with someone from China selling their products on Amazon. But the vast majority of counterfeiters and scammers have come out of China since Amazon expanded operations there in 2013.
And they have a couple of advantages. Many Chinese sellers are already connected with Chinese factories that can manufacture whatever they need quickly and inexpensively. And Amazon has made the process of selling their products to Americans a cake walk with their “cross-border e-commerce parks,” which offer help with branding, accounting, logistics and navigating the Amazon platform.
How Amazon Scammers Take Down Legit Sellers
So how does some random fraudster compete with all the legit sellers on Amazon to take down the competition and make millions in the process? Here’s how they do it, step by step:
1. Find a category that has no dominant brand
In many categories, shoppers have no real brand loyalty. As long as there are positive reviews, they don’t care who makes the product. For example, one of the top sellers in the massage category is Opove, a Chinese company making over $1 million in sales per month. And there are multiple other little-known brands making six figures per month in that same category.
2. Come up with a brand name that makes no sense
The United States Patent and Trademark Office (USPTO) won’t let anyone trademark a generic term like “gloves”. But they’re happy to trademark made up words like “Xerox”.
Search for any random product on Amazon and you’ll see tons of sellers with nonsensical brand names like TRENDOUX, FRETREE, HONYAR or MAJCF. (Apparently Chinese sellers like to yell their brand names at you.) It’s much easier to get a trademark when you throw together a bunch of random letters because no one can say your name is too similar to theirs.
3. Grab some stock product photos
Any 9-year-old can download a generic photo of a spatula, then Photoshop a brand name onto it. These “specimen photos” can then be provided to the USPTO as part of the trademark process.
And they don’t even have to look decent. The people reviewing them are overworked, bureaucratic pencil pushers, not digital forensic scientists.
4. Apply for a trademark with the USPTO via a U.S.-licensed attorney
You used to be able to simply fill out a form and send in your “specimen photos” to get a trademark. But due to the huge increase in fraudulent applications over the last few years, the USPTO now requires you to apply through an attorney. It may cost a little more to do that, but what does that matter when you’ll soon be clearing six figures per month?
5. Use that trademark to get into Amazon’s Brand Registry program
Amazon created the Brand Registry program to combat counterfeits and trademark infringement. But all that’s needed to join the program is a registered trademark. Actually, you can join Amazon’s Brand Registry before obtaining a trademark by applying through a law firm that’s a participant in Amazon’s IP Accelerator Program.
Joining the Brand Registry program not only makes you look more legit in Amazon’s eyes, it also provides access to the Early Reviewer Program. That’s where you can get those crucial first reviews on your new products.
6. Start up the black hat tactics
The most successful products on Amazon have two things in common: lots of positive reviews and high search placement.
Anyone can get a bunch of fake positive reviews by buying them from folks in certain Facebook groups, subreddits and other online forums. To get verified reviews, shady sellers look up the names and addresses of a few people, create Amazon accounts in their names, order their own products, then leave glowing reviews. The cost of giving away those few products is just a cost of doing business. And it’s worth it once these tactics start kicking in (at least until they get caught).
To boost a product in Amazon’s search, there are two options: get more clicks so the algorithm moves it up or take out the top sellers so there’s less competition. Lots of scammers use click-farming to boost their search results. Then they do things like filing false reports against their competitors or paying for a bunch of negative reviews against them.
Finally, they milk that product for all it’s worth. If they get caught and Amazon suspends or bans their account, they just start the whole thing up again under another name.
American sellers who have invested tons of time and effort into getting brand recognition would never risk getting suspended or banned. But when you’re selling under numerous interchangeable trademarks, you don’t care.
It sounds bad, but there are still ways to take advantage of Amazon without getting scammed. But it’s important to be aware of these tactics so you can fight back if they happen to you.
About the Author
Gennifer is the Marketing Manager at ByteStand, where she lives and breathes customer service education while sipping coffee in her pajamas.
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