Case Study: Nike™ and Birkenstock™ Fight Counterfeiting on Amazon

Counterfeiting and brand forgery are certainly not a new phenomenon. The rise of eCommerce sales in the early 2000s created a surge of counterfeiting, and fraud is now more prevalent than ever thanks to the online shopping boom generated by the COVID-19 pandemic. 

We can’t fault consumers for taking advantage of the convenience of online shopping, but with a 10,000% increase in counterfeit goods over the last two decades, it’s nearly impossible for shoppers to avoid counterfeit goods. In fact, it’s estimated that about 80% of consumers have handled fake or falsified goods. To put it another way, that’s about 10% of all goods sold!

Because the online marketplace is only growing, brands have been coming up with creative ways to avoid forgery—some of which are successful, and others that fail to meet expectations. 

Take Nike™ for example.

In 2017, Nike signed a wholesale agreement with Amazon that was intended to create a lucrative, mutually beneficial partnership. The agreement gave Amazon access to profits generated by genuine Nike product sold directly through the manufacturer. In exchange, Amazon was asked to impose stricter guidelines for Nike resellers and crack down on counterfeit Nike goods throughout the platform. 

But by 2019, only two years later, Nike decided to remove its products from Amazon for good. 

Why? 

Well, the partnership with Amazon didn’t live up to Nike’s expectations. Counterfeit items continued to be sold on the site. To add insult to injury, listings for counterfeit goods were even showing in search results above genuine Nike products!

It’s a problem that affects more than just Amazon. The overwhelming amount of product flooding online retailers—especially resellers like Amazon—makes it nearly impossible to identify each counterfeit listing, much less stop them.

And Nike’s not the only one!

In a similar move, Birkenstock™ pulled its products from Amazon in 2017. In 2016, the CEO of Birkenstock™ USA, David Kahan, shared an official letter stating that the nearly 250-year-old brand, which has recently seen an increase in popularity, believed that “unacceptable business practices” jeopardized its brand.

This decision came after a partnership with Amazon made no impact on the surge of counterfeit products on the site. In some cases, Birkenstock sandals were being sold at a price point $20 below MSRP—meaning Birkenstock couldn’t compete with counterfeits of its own products!

So, how do you protect your brand against counterfeiting? 

There are more risks of brand forgery than lost profit. Not only could you lose your hard-earned sales, but counterfeit goods can also make consumer trust in your brand and online marketplaces plunge. 

On average, 52% of consumers lose trust in a brand after purchasing a fake item.

Big, household-name brands like Nike and Birkenstock can survive without partnering with online retailing marketplaces because they're so well known. But for smaller businesses, start-ups and brands that don't have the same level of visibility as Nike and Birkenstock, it's not so easy. To ensure that only genuine products are reaching your partners and customers—whether sold through online retailers like Amazon or otherwise—we recommend using Brand Protection Labels! 

With a variety of human-visible and micro-features, these secure labels make it easy for you and your clients to know when a product is fake. 

How Brand Protection Labels work:

1. A variety of styles and features can be mixed and matched to create a one-of-a-kind security label that’s impossible for fraudsters to duplicate. 

These Anti-counterfeit Labels can be checked for your unique features at each step of the shipment process—from departure to arrival. Using tools like a loupe (small magnifying glass), micro-features can be revealed to authenticate your product. If the micro-features aren’t there—or if any of the unique features you’ve chosen don’t show—you’ll be able to tell that it’s a forgery. 

2. More than just complex printed features, some security labels show physical evidence of tampering. 

Tamper-evident Labels make tampering impossible to hide. Whether the label self-destructs and leaves adhesive material behind when criminals attempt to peel it off, or if it leaves behind a printed message like “VOID” when peeled, you’ll always be able to tell if a product is genuine.

3. Visibility over the entire fulfillment process alerts you to deviations from a shipment’s designated path. 

Sometimes genuine product gets diverted during shipment. Called grey market diversion, these products are genuine, but sold through unofficial channels. To mitigate this diversion, Traceability Labels authenticate your shipment at every stop. Arrival and departure scans can be tracked digitally, so you can see whether your shipment makes any unofficial stops and where they diverted from the path.

4. Brand Protection Labels are a bit like a birthday cake—the more layers you have, the more delicious it is! (Or, in this case, the more secure it is from fraud.) 

There's no one solution that protects you from counterfeiting. The best secure labeling strategy is more like a bunch of Brand Protection features working together to form a solid shield against forgery. The combined features of Anti-counterfeit, Tamper-evident and Traceability Labels work together to create a unique blend that protects your sweet, sweet success!

About GBS

With more than 50 years of print experience, GBS is poised to help brands like yours secure their products from counterfeiting.

Our in-house label printing capabilities and strong network of business partners allow for endless brand protection possibilities. With the latest in print technology at our fingertips, we work with you to create highly-advanced, custom-designed Brand Protection Label Solutions to fit your exact needs.

Sources:

Levy, Ari. “Birkenstock Quits Amazon in US after Counterfeit Surge.” CNBC, CNBC, 20 July 2016, https://www.cnbc.com/2016/07/20/birkenstock-quits-amazon-in-us-after-counterfeit-surge.html.

Thomas, Lauren. “Nike Won't Sell Directly to Amazon Anymore.” CNBC, CNBC, 13 Nov. 2019, https://www.cnbc.com/2019/11/13/nike-wont-sell-directly-to-amazon-anymore.html.

Zimmerman, Ben. “Council Post: Why Nike Cut Ties with Amazon and What It Means for Other Retailers.” Forbes, Forbes Magazine, 22 Jan. 2020, https://www.forbes.com/sites/forbesbusinesscouncil/2020/01/22/why-nike-cut-ties-with-amazon-and-what-it-means-for-other-retailers/?sh=e7071b364ff6.