728_header.jpg (23748 bytes)
 Home 
 EB Blog 
 AB Blog 
 Letters 
 Podcasts 
 Forums 
 EPIS 
 Classifieds 
 EKG 
 Ratings 
Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sun Feb 24 2013 20:52:27

Amazon Sellers Beware, Manufacturers Are Targeting You

By: Ina Steiner
Sponsored Link
Manufacturers tired of seeing counterfeit items listed online are taking action - and Amazon sellers in particular should beware. Monday's Newsflash newsletter features two articles about counterfeits on Amazon and how the fight over the problem impacts third-party merchants.

The first case deals with Warner Bros lawsuits against Amazon DVD sellers in which one high-profile seller has been caught up. The Warner Bros campaign of lawsuits, meant to target counterfeiters, highlights the growing challenge of using Amazon's FBA service, particularly the risk of using the optional commingled inventory approach. The lessons: conduct due diligence on your suppliers; be prepared to defend your inventory; and consider business insurance if you list in high risk categories.

While Amazon has been able to launch a defense against legal actions, as it is doing in the case involving Tre Milano hair straightening irons, third-party sellers often become paralyzed and seem unable to defend themselves when facing copyright lawsuits.

Kevin Harmon, at one time one of eBay's biggest media sellers, told colleagues his legal troubles are the result of a policy in which the marketplace mixed his DVDs with those of other third-party sellers in its fulfillment center. According to court documents, the trouble started on September 25, 2012, when Janice Pearson, the Manager of Anti-Piracy Strategy & operations for Warner Bros. Entertainment Inc., purchased a copy of the DVD boxed set "The Mentalist: The Complete Fourth Season" from Amazon.com from "kevhead media."

When she received the package on October 10th from Amazon's Lexington, Kentucky warehouse, Pearson alleges that the DVDs were pirated copies. In filings with the court, Pearson states, "Defendant has not been authorized by Warner Bros. to reproduce, distribute, sell or offer for sale any product."

In discussing the case online, Harmon said his inventory is commingled with other sellers' - the item the Warner rep received could have been from up to 20 different sellers or Amazon itself, he said.

Manufacturers like Warner Bros are using the courts, and so is Tre Milano. But after it lost its lawsuit* against Amazon, it is trying to use the court of public opinion to wage war on counterfeiters. (*UPDATE: Tre Milano lost its bid for a preliminary injunction. However, Tre Milano's counsel Tom Peistrup said the lawsuit is ongoing and the two companies are scheduled to square off in Superior Court on October 22, 2013.)

It's a delicate line for manufacturers thanks to the volume of transactions Amazon processes. And that's the subject of Monday's second story - how some manufacturers are taking their criticism of Amazon to the media using a website called the Consumer Fraud Center.

Keep an eye out for Monday's stories and let us know what you think!

Update: Here are the articles:

Warner Bros Brings Fresh Assault on Amazon Sellers

InStyler Fights Amazon in Court of Public Opinion

Article edited on 2/25/13 to clarify status of Tre Milano lawsuit against Amazon.



Comments (27) | Leave Comment | Permalink
Readers Comments

Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
This user has validated their user name. by: Ming the Merciless
       
Sun Feb 24 21:24:26 2013
Fulfillment by Amazero or ebafia is  losing strategy that makes lots of money for these avaricious, predatory corporations while taking unconscionably high fees money out of your pocket.

Your inventory can and will be co mingled because it saves these sociopaths preciou$ warehouse space.

Your inventory can shrink. In the brick and mortar world, shrinkage (presumably by employees) is the largest single cause. Why would these fullfillment centers be any different?

Your inventory can be damaged by mishandling.

Your inventory can be mishiped.

Your inventory can be "lost" in the mail.

In the meantime, Amazero itself is competing against you. They are acquiring a catalog of YOUR inventory.

If anyone here thinks Amazero is somehow a better place to sell than ebafia, clean the counterfeit dollar signs out of your eyes.

Both are greed motivated machines using small businesses to try to eclipse their competition and, in the end, to crush the same small businesses.
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
This user has validated their user name. by: Ming the Merciless
       
Sun Feb 24 23:45:09 2013
One additional point.

Manufacturers won't be satisfied until they've made online selling more expensive than through traditional channels.

Every six months someone figures out how to add another layer of cost for online businesses whether it's an unfair sales tax that aims to require sellers to collect and remit sales taxes to hundreds of thousands of jurisdictions in the 50 states whereas brick and mortar stores only have to collect for those states where they have a physical presence.

Evil Google slanting the playing field in favor of the big guys.

Business insurance to defend against counterfeit allegations.

"Free" shipping.

And so on.

Gawd, how I loathe these people.
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
by: MADandCracked This user has validated their user name.
       Web Site
Mon Feb 25 00:09:41 2013
Any time that you allow someone else to do your work for you, you run the risk of problems. The guy should have shipped out his own products instead of allowing Amazon to handle them. Storing and shipping out products is part of selling. I would never let anyone else handle that part of the job for me. It is as important and the correct pictures, titles and descriptions are in your listings.

@Ming ... Give me a break! Amazon employees are not sitting there going "Ohhh what can I take today?" ... seriously ... I worked at one of Amazon's fulfillment centers verifying inventory. Yes, there were damaged items and/or stolen items, but that was rare. Items will usually collect dust before they get damaged.

I don't know why people in this world (like you) have become so negative and un-trusting. Most people are NOT that way. If you have been victimized so many times that you can no longer put your trust in people, then maybe you need to find new friends.
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
This user has validated their user name. by: Philip Cohen
       Web Site
Mon Feb 25 00:30:28 2013
I’m inclined to agree, FBA is probably asking for trouble; and just like PreyPal, users of FBA are little more than parasitic middlemen ... Having said that, the Consumer Fraud Center apparently thinks that eBay is more scrupulous than Amazon and that eBay is doing the right thing by them … seriously, how naïve can you be … I think this is simply another case where the biggest and strongest corporate bully will likely win … after all these sellers are relatively small in the scheme of things … maybe the DOJ too could get involved and offer these “felons” a discounted sentence of, say, 30 years each …

eBay / PayPal / Donahoe: Dead Men Walking ... http://bit.ly/11F2eas
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
This user has validated their user name. by: Philip Cohen
       Web Site
Mon Feb 25 00:45:19 2013
And, on the matter of eBay’s latest “Auction Promotion for Invited Sellers Only”, regardless of whether you are invited or not, such invitations for listing fee-free auctions smacks of utter desperation—for, why else would eBay offer anyone anything for free? … Don’t kid yourselves people the “house of cards” is starting to shake …

eBay / PayPal / Donahoe: Dead Men Walking ... http://bit.ly/11F2eas
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
by: teddychan This user has validated their user name.
       Web Site
Mon Feb 25 00:57:27 2013
It is a simple fact that eBay does have systems in place to report bogus items, and that eBay buyers are never confused about whether they are buying from a third party or not. Amazon Marketplace is flooded with bogus items simply because its system is easily manipulated by fraudsters and because they have no reporting system like eBay. Furthermore, less savvy Amazon buyers are sometimes confused about who the seller is especially with FBA items which are shipped in Amazon packaging. Amazon needs to be exposed for being their #1 marketplace for fraud. They surpassed eBay for that "honor" a long time ago.
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
This user has validated their user name. by: Philip Cohen
       Web Site
Mon Feb 25 01:50:47 2013
@ teddychan,

“It is a simple fact that eBay does have systems in place to report bogus items,” Hmmmm …

“Amazon needs to be exposed for being their #1 marketplace for fraud. They surpassed eBay for that "honor" a long time ago.”

Seriously? Then I suppose it depends on what type of fraud we are talking about; at least Amazon does not run auctions on which it blatantly aids and abets shill bidding fraudsters to cheat their trusting buyers as, it can be demonstrated, does eBay …

eBay / PayPal / Donahoe: Dead Men Walking ... http://bit.ly/11F2eas
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
by: Steevo This user has validated their user name.
       
Mon Feb 25 02:17:51 2013
I've seen the problem on Amazon, electronics product based pages with a whole bunch of sellers listing items.  

Some say they are original OEM, some are ''compatible'', some are ''OEM Equivalent''.  Some are silent on what they are selling.

That is just ridiculous, that you should buy an OEM item and get a chinese knockoff. I called Amazon about the problem, but I didn't have much confidence the person I talked to understood what the problem was.  ''All those widgets are the same''.  Ridiculous.

Now it turns out Amazon themselves don't even try to distinguish between different sellers stuff in the warehouse and this poor guy is getting sued over it.  Copyrighted materials, too!

And he didn't respond to the lawsuit!

The guy is kind of a dope, huh? I'd have countersued Amazon right away, they shipped the fake product, right?  It should be their problem.  
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
This user has validated their user name. by: Rexford
       
Mon Feb 25 08:27:13 2013
Manufactures are greedy.  They don't want anyone selling their products whom they can't control.

Manufacturers seem to be ignoring the laws that allow a consumer to sell an item once he/she has purchased it.
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
by: FREDDY This user has validated their user name.
       
Mon Feb 25 09:28:56 2013
Anyone who goes with FBA is bound to come up on the short end. Besides high fees etc.. you have this commingled problem. The rules to use FBA , proper packing, certain size bar codes etc. etc.  Storage fees. They look at it and you get a fee. The pro is cheaper shipping rates. That is it.  It is very easy for fake items to go through Amazon. Now with some categories lower fees only thru FBA will just encourage more and more fake items. Have read and heard to many horror stories for the small seller to even get close to FBA. One hand it helps with fees and exposure - but your lost item, damaged, return wrong item etc will hurt (IMO) more in the long run. Amazon - like ebay -fees are the main reason they are in business.  China knock offs just add more and more fees.  AS previously mentioned, I am sick of seeing the equivalent, compatible, replaces etc etc. It has to be original oem or have total separate listing stating it is a knock off. Plenty of people are willing to buy knock offs. Amazon has the capabilities on the site - to clean up toooooo many duplicates, and list knock off in different categories. However, like ebay - bottom line is important. Amazon has been spending money on new centers etc. while ebay has been building up off shore accounts. Amazon needs a better pay off for stock holders or they will loose value. Therefore - welcome china and your knock offs.
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
by: Moonwishes This user has validated their user name.
       Web Site
Mon Feb 25 09:36:56 2013
I've never quite figured out how FBA worked with their inventory managaement at their fulfilment center. I prefer to keep hands on with my items. My mind thought simpler problems than what these folks are having and that was: the warehouse workers wouldn't be careful enough with my inventory and would damage it, I sell sewing patterns and about every 9 years they start repeating the pattern number, so I can (and have) at times up to 3-4 different styles of sewing patterns with the same number. Can I really expect the FBA workers to bother double checking to be sure they are picking the correct item? Not at all. But the thought of commingling inventory explains how they 'keep track' of some inventory and I sure wouldn't want that.

"Amazon needs to be exposed for being their #1 marketplace for fraud. They surpassed eBay for that "honor" a long time ago." Sorry but at this point I can't agree with that. Ebay just about gave me an ulcers and ran me out of business with all their rules and regs. When I went back to Amazon last year, many of the same rules were in place as I remembered them from almost 10 years ago. I don't feel like I am being taken to the cleaners, but then I'm not in a race to the bottom with my prices either. I think it is how we perceive what Amazon is doing in conjunction with how we run our businesses as well. I've never seen yet a FBA price that wasn't in the basement. FBA is just another form of 'penny sellers' (which I don't see routinely anymore --not saying they aren't there) that is covered up with the 'free shipping' etc. so that those that want to sell for a 'liveable' wage seem to have way too high prices. When I have time after a sale, I go back to see where my item was placed within the price ranges. Generally I was higher than FBA and many others yet I still got the sale.  
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
by: pace306 This user has validated their user name.
       
Mon Feb 25 10:54:15 2013
It is a simple fact that eBay does have systems in place to report bogus items,” .. YEH BUT NOTHING EVER HAPPENS! EVER!

Ive reported HUNDREDS of fake items, and eBay just gives you the line that they will look into it and NOTHING happens. Why? FVFs!

Its the same reason lets certain sellers have HUNDREDS of negatives every month, month in and month out - FVFs.

eBay only moves when a big seller complains or when the clowns in VERO get woken up from thier naps/Kardashian reruns and are FORCED to do some actual "work".

Ive seen Amazon pull listings and items - and while its far from perfect they are ON IT most times.

Im not bragging about Amazon - just telling you my experiences and how Ive seen them TRY.
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
by: Steevo This user has validated their user name.
       
Mon Feb 25 10:59:33 2013
Allegedly Kevin Harmon sent legitimate non forged DVDs to Amazon for the FBA system.  

Amazon then switched Harmon's original non forged DVDs for another anonymous seller's fake ones.  

When the Warner Bros anti piracy manager ordered from Harmon the order was fulfilled not with Harmon's original DVD set but with a fake one.  

Harmon was sued last September but he didn't respond to the lawsuit.  Warner Bros is completely justified in suing, the DVDs they received from Amazon and Harmon were fake, according to them.  

What Harmon needs to do right now is show up in court on March 4th and ask the judge to continue the case so he can hire counsel.  That will probably be granted.

Then he must do some discovery to determine what products he sent Amazon and what products are in the Amazon warehouse right now, and whether they are legit or fakes. If Amazon even knows the origin of the items in their warehouse.  If they don't know where every item came from that is his defense.  

He must bring Amazon into the case since they were the ones who shipped the product to Warner Bros and that's why he is sued.

It might cost him $30,000 or $40,000, but Amazon might have to defend it if they were culpable. If they don't know where each item in their warehouse came from I don't see how they can defend at all.

If they actually commingle fake and legit items and ship them out randomly they caused the problem and they are going to have to address that fact.

I would be arguing that Amazon is completely responsible for switching the items and for shipping fake ones and they would have to defend that, and if they can't do it they will have to pay for Harmon's and their defense.  
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
by: comet This user has validated their user name.
       
Mon Feb 25 12:15:30 2013
If this was the  REAL WORLD wouldn't Amazon be seen as some sort of vast money laundering machine?

Isn't this what the Mob did for oh about a thousand years?

Take dirty profits and wash them thru a system to "remove" the taint?  This is just EXACTLY what some (not all) Amazon FBA sales are accomplishing.  And if this hurts a REAL seller of "clean" items--well too bad so sad.  

Now STEEVO--I agree with your points.  But--I suspect MOST of us do NOT have $30 to $40k to gamble on the outcome of an Amazon defended or Warner Bros prosecuted--however this turns out---case.  The guy prob is not willing or maybe even able to put up his house.  cars,  business--what might be left of it--and any other personal assets to defend AMAZON.  

Their promise as I understand it is--Send us your Merch and WE the great and benevolent Amz will inspect  reject detect define and decline to do ANYTHING when we are found to have "commingled" fake and real items and will stand by when "Our" seller is trashed.  

While we stand by and twiddle our thumbs this guy is hung out to dry.  Amazon SHOULD step up and defend THEIR CONTRACTED SELLER.  Instead Amazon is acting much like some religions we have seen lately---let the courts decide and then Amazon gets to stand by hands piously clasped and say:::::

Wasn't ME I didn't DO it.  
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
by: Steevo This user has validated their user name.
       
Mon Feb 25 12:50:32 2013
Comet,

I don't have that amount of money either, but if you have never been sued (I have) you might not know that it's possible that Warner Bros might get a judgment next week for $100,000. Or maybe $5 million!  

He didn't defend the suit.  They have nowhere to go.  

What happens if the sheriff comes to his place of business with a judgment to collect and takes all his money, his stock, property, cleans out his til and his bank accounts?  That's next!

Not defending a lawsuit, that's just stupid.  

I meant it, I would just sue Amazon and claim they did it, which is his allegation anyway.  

Then Amazon would have to defend, and might have to defend him depending on what comes out in discovery. Discovery might show that he is completely innocent and it was some other seller's goods that Amazon shipped out. He'll be off the hook.

By ignoring a lawsuit you get the whole liability pinned on you. I am not nearly rich enough to do that.  
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
by: Steevo This user has validated their user name.
       
Mon Feb 25 12:52:12 2013
In fact, I suspect Amazon is darned surprised they didn't get sued over this.  They expected it.  Their lawyers are amazed that it's going like it is.  
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
This user has validated their user name. by: Rexford
       
Mon Feb 25 13:25:23 2013
Steevo, going up against the deep pockets and political influence of both Amazon and Warner Bros?

Would anyone stand a chance?
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
This user has validated their user name. by: Rexford
       
Mon Feb 25 13:27:38 2013
"We reached out to the organization and learned it is backed by manufacturers."

And there you have it.  No bias there.  LOL
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
by: Steevo This user has validated their user name.
       
Mon Feb 25 14:44:57 2013
Rexford, when you are sued there are two things you can do.  

Nothing, in which case they will get a default judgment against you and you will surely lose money, and lots of it, or respond and bring in Amazon and hope they will defend, or that discovery will show you didn't do it.

I think doing nothing is a bad idea. I realize it's costly, but when you are sued you don't have any good options.

What approach would you use?  I can't think of any better options that would be available.  
Perminate Link for Amazon Sellers Beware, Manufacturers Are Targeting You   Amazon Sellers Beware, Manufacturers Are Targeting You
by: Steevo This user has validated their user name.
       
Mon Feb 25 14:49:30 2013
It seems this lawfirm wants to defend this case. Perhaps Kevin Harmon should give them a call, and right away.  If Amazon caused the problem they can pay, and this might be a contingent fee case.

http://pietzlawfirm.com/warner-bros-home-entertainment-inc/>
Click to view more comments
1 2  [Next Page]


Login is required to post comments.
To sign in to leave a comment using your AB Verify User Name, fill in the form below. If you have not yet signed up for AB Verify, or if you'd like more information, go to the Registration Page
.

Login for AB Verify
Be sure and use your email address and password to log in.

 
Email:
Password:
 
 Forgot Your Password?
 Even though you are signed in with the AuctionBytes Blog, you will have to sign in to the EcommerceBytes blog. But you can sign in with your existing AB Verify info.
buyersmarket2aaa2.JPG (7729 bytes)
 EB Blog Recent Posts 
 AB Blog Recent Posts 
 EB Blog Recent Comments 


Subscribe in a reader



Archives



Powered by Perl Web Blog
© 2005/2017 Ranson's Scripts