In an effort to prevent counterfeit products from making it to consumers, Amazon has cordoned off a section of its marketplace to establish a luxury Beauty and Personal Care catalog. The invite-only catalog allows brands to differentiate their wares from the bevy of indie and low-to-mid range brands on Amazon.
Product display pages in the catalog have additional features that aim to elevate the customer experience, such as more detailed descriptions and store locators. Brands featured in the exclusive category are also able to establish more control over their assortment. For example, La Roche Posay, Obagi Medicals, Oribe Hair Care, and Stila had over 90% of their assortment listed as being sold directly via Amazon, allowing them to effectively manage distribution.
Amazon’s counterfeiting issues are widespread. A third of products sold by third-party vendors owning the buy box (i.e. not sold directly by Amazon) contain at least one review claiming product inauthenticity, according to Gartner L2’s Amazon Third Party Distribution Strategies Playbook. These reviews skew towards high-end merchandise: nearly 10% of reviews for products that cost between $100 and $150 contain terms alluding to product counterfeiting, while this holds true for only 3% of cheaper item reviews.
But the new features, coupled with tighter distribution control, seem to have boosted consumer trust. Reviews flagging an item as counterfeit dropped from 10% to 3% for brands listed under the exclusive marketplace, on par with the mid-range (and lower) category selection elsewhere on Amazon. By replicating this approach in other categories, especially fashion, Amazon could attract high-end brands and placate negative consumer sentiment stemming from counterfeiting.