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Amazon loses a big customer over counterfeiting

by on22 July 2016

Birkenstock says its sandals are made for walking

Online retailer Amazon is losing one of its biggest suppliers because it has been unable to tackle counterfeiting on the site.

Birkenstock is walking away from and will forbid its suppliers to sell its goods on Amazon because it has had a gutsful of counterfeits and unauthorized selling on the online shopping site.

The memo, from Birkenstock USA CEO David Kahan said that Amazon marketplace, which operates as an 'open market,' creates an environment where we experience unacceptable business practices which jeopardises its brand.

"Policing this activity internally and in partnership with has proven impossible."

Birkenstock, founded more than 240 years ago in Germany, is one of the many brands, big and small, struggling with Amazon's growth in counterfeits. All this is because Amazon let Chinese merchants flood the site in the last couple of years.

Legitimate sellers are finding that 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.

Birkenstock saw shedloads of Chinese sellers promoting its flagship Arizona sandal for $79.99, or $20 below the retail price.
Kahan wrote that since joining the company three years ago, he has presented numerous "'out-of-the-box' ideas to Amazon management in an effort to maintain a fair and competitive environment for all."

However Amazon was not interested. Just like it was not interested in preventing online defamation “one star” campaigns against companies or products.

Kahan said the only way to get a clean sale is selling the entire catalogue to Amazon. But it's not a workable option for Kahan, who wants to maintain control over the Birkenstock brand. So he pulled the plug.

Birkenstock will be telling consumers to purchase only from authorised retailers, and that any products listed on Amazon can't be trusted. "So, buyer beware," he wrote.

Last modified on 22 July 2016
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