CNBC reports that Birkenstock has decided to stop selling its products on Amazon and won't authorize third-party sellers to do so. The reason: counterfeiters and unauthorized sellers who have been peddling products under the Birkenstock label on the site.
"The Amazon marketplace, which operates as an 'open market,' creates an environment where we experience unacceptable business practices which we believe jeopardize our brand," Birkenstock USA CEO David Kahan wrote to company partners. "Policing this activity internally and in partnership with Amazon.com has proven impossible."
According to the story, "Earlier this month, CNBC.com reported on the scores of legitimate sellers that are hurting because fraudsters are knocking off their products and utilizing tactics such as paying for reviews, jumping into their listings and taking advantage of loopholes in Amazon's logistics system. For example, Amazon commingles inventory from distributors at its fulfillment centers, so authentic products and fakes can get mixed together. The story included reference to Birkenstock, which has seen legions of Chinese sellers promoting its flagship Arizona sandal for $79.99, or $20 below the retail price."
Amazon has not commented on the move.
The story goes on: "The dependence that so many businesses have on Amazon is a major reason why the company hasn't suffered financially from the counterfeit surge. Amazon's global network of warehouses and data centers, coupled with a highly sophisticated and efficient delivery system, have produced consistent sales growth and drawn the love of Wall Street. The stock is up 52 percent in the past year and is trading near $743.
"Perhaps Birkenstock will present a case study in how to succeed without the world's largest online marketplace. Then again, even Kahan knows that just because he's leaving Amazon doesn't mean his shoes, or something resembling them, won't be readily available."
"The Amazon marketplace, which operates as an 'open market,' creates an environment where we experience unacceptable business practices which we believe jeopardize our brand," Birkenstock USA CEO David Kahan wrote to company partners. "Policing this activity internally and in partnership with Amazon.com has proven impossible."
According to the story, "Earlier this month, CNBC.com reported on the scores of legitimate sellers that are hurting because fraudsters are knocking off their products and utilizing tactics such as paying for reviews, jumping into their listings and taking advantage of loopholes in Amazon's logistics system. For example, Amazon commingles inventory from distributors at its fulfillment centers, so authentic products and fakes can get mixed together. The story included reference to Birkenstock, which has seen legions of Chinese sellers promoting its flagship Arizona sandal for $79.99, or $20 below the retail price."
Amazon has not commented on the move.
The story goes on: "The dependence that so many businesses have on Amazon is a major reason why the company hasn't suffered financially from the counterfeit surge. Amazon's global network of warehouses and data centers, coupled with a highly sophisticated and efficient delivery system, have produced consistent sales growth and drawn the love of Wall Street. The stock is up 52 percent in the past year and is trading near $743.
"Perhaps Birkenstock will present a case study in how to succeed without the world's largest online marketplace. Then again, even Kahan knows that just because he's leaving Amazon doesn't mean his shoes, or something resembling them, won't be readily available."
- KC's View:
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It seems to me that companies like Amazon have a core responsibility to do everything possible and necessary to insure that counterfeit and illicit products are not being sold on their sites. No excuses. It may require new investments and policies, but in doing so, they protect not just their sellers, but their customers.
And that's a bottom line responsibility.
