The sale of counterfeit products on the e-tailer is a frequently discussed issue. Approximately 33% of product listings by third-party vendors have at least one review containing terms such as “fake” or “counterfeit,” according to Gartner L2’s Amazon Intelligence: Third-Party Distribution Strategies Playbook report, which evaluates 158 brands across fashion, beauty, personal care, and headphones.

These “counterfeit” reviews, however, make up only 5% of total reviews, indicating that Amazon does take measures to prevent the distribution of counterfeit goods in its tracks.

Distribution

That being said, categories with large third-party presence have a higher chance of damaged or counterfeit goods falling through the cracks and ending up for sale on Amazon’s marketplace. A case in point is makeup, which reveals the highest share of third-party listings. Top brands like Olay, e.l.f cosmetics, and L’Oréal have a review citing inauthenticity on approximately 75% of ASINs, according to Gartner L2’s report.

Third-party unit sales on Amazon have held steady at 50% of total unit sales since 2016, outlining the need for brands to understand the impact third-party distribution has on their business. Third-party vendors represent a shortcut for brands to scale up presence on the platform, but sometimes this comes at the expense of customer experience. 

Critical reviews—particularly those claiming a product is counterfeit—can have a negative impact on a brand’s reputation. The fact that consumers are leaving such reviews publicly on Amazon means that brands need to be diligent in monitoring the marketplace for counterfeit goods sold by unauthorized sellers if they want to prevent the problem from escalating.

Daily Insights in Your Inbox