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Is Amazon's lack of oversight harming your brand?

For companies seeking to establish a foothold in an online marketplace, using Amazon to sell wares may seem like an obvious way to develop sales. As a leader in global internet sales, the company provides a platform to connect customers with small businesses using an interface that is easy to navigate. Small businesses with limited advertising budgets may initially see only advantages in vending goods on Amazon's site.

The wide range of goods marketed on the site can be problematic for vendors and customers alike, however, when counterfeiters copy trademarked goods. When this crime is perpetuated, vendors suffer in various ways: a tainted reputation, reduced sales and limited legal recourse. Customers suffer from their decision to buy the counterfeited product priced below the recommended retail price because the product is shoddy and may not meet safety regulations. In some cases, evidence of trademark infringement is so subtle that customers are not aware that they are buying fraudulent products.

In spite of publicized stories of infringement, such problems with product have not abated. Critics of Amazon's lax regulation of goods point to a statistic that could explain why the company is reticent to crack down on counterfeiters: 40 percent of items purchased come from third-party vendors. These third-party sellers pay to market their wares on Amazon. Amazon would do a disservice to its revenue stream to crack down on trademark enforcement.

Small businesses and large corporations both suffer from this lack of oversight. Recently, Apple filed suit against a company named Mobile Star LLC for selling adapters and charging cables branded with its logo. For smaller businesses, though, seeking legal recourse may prove too costly or have limited effect. As the transactions are conducted electronically, it is difficult to locate the counterfeiters and bring them to justice.

For those concerned about maintaining the integrity of their trademarked goods, experts suggest monitoring Amazon for certain indicators: poor product reviews and drop in sales. Customers purchasing fake goods will understandably post negative reviews which cause a reduction in sales. According to Sprigley Allen, head of Amazon's Program Development, a point of access for counterfeiters occurs within the product's supply chain. Companies are advised to maintain communication with their manufacturers to maintain the reputation of their brand.

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