Despite its continued, massive growth, one of the few product categories that Amazon has struggled to turn into a true cash-cow has been the luxury goods market.
The primary barrier isn’t that consumers are hesitant to purchase high-priced items online, as it may have been a few years ago. The worry is on the merchant’s side. Amazon’s unique structure of allowing wholesalers and independent third-parties to sell on the same platform has cleared the way for a deluge of counterfeit items to make its way onto the site and be sold right alongside the real product.
With thousands of sellers on Amazon in locations all over the world, this is difficult to police. Therefore, many luxury brands have chosen to steer clear of putting resources towards the marketplace, not wanting to risk a black mark on their brand name stemming from counterfeit items being sold as authentic through a major retailer.
For example, world-famous show brand, Birkenstock, stopped selling on Amazon entirely as of January, citing fake products as its primary reason.
However, Amazon has met and overcome just about every challenge it has faced in its 20-year run, and even if a particularly significant one, they’re determined to squash this issue as well.
Amazon understands its continued growth as an e-commerce retailer depends heavily upon customer confidence in the products it offers.
All this in mind, Amazon and its ever-growing Chinese competitor Alibaba, are beginning to go beyond simply removing bogus items from their stores and have begun pursuing litigation against those that sell them as legitimate.
Many believe, however, that Amazon and Alibaba are fighting a fight that can never truly be won — That these third-party sellers are so persistent and in such great number that they’ll continue to pop up and return time and time again, leaving major e-commerce retailers in a perpetual game of Whack-a-Mole.
But this fails to provide due respect to the ground these ‘moles’ are trying to infiltrate. If they address this issue anything like they have other issues past, Amazon will continue to whack — faster and faster, with larger and more powerful hammers – until the rodents think twice before raising their heads again. Or perhaps until they simply decide to play in someone else’s garden.
Image Sources: Amazon.com