The previous post introduces Amazon Transparency Program as an effort to eliminate counterfeit products and protect the consumers. The program requires the enrolled brand to place unique barcode for each unit of products before they go onto the shelves. Each code refers to a certain brand. Then, the consumers can also verify the barcode by using a special app developed by Amazon.
Amazon Transparency Program: Who Are The Targets?
The program essentially targets brands that are dealing with massive counterfeiting problems. Many brands have been the victims of counterfeiting efforts. Examples include Hairgenic. In 2017, the company lost more than $700.000 in sales due to counterfeiting from oversea sellers. Hairgenic had requested help from Amazon, but it had no results since no program had been available to deal with problem.
After Amazon issued the transparency program, Hairgenic is now 100% free of counterfeit products. The brand has been doing efforts to reassure the customers on their legitimacy. The brand representative said that it worked: sales have increased. So have the customer satisfaction.
Amazon Transparency Program is essentially a preventive measure, which a brand can take to get rid of possible counterfeiting efforts. Owner of Beard Head, David Stankunas, said that the program works like an insurance policy. The money he spent for the program was worthy the results. He can protect his product and brand while improving customer experience.
Amazon Transparency Program: Potential Downsides
This program may sound promising, right? However, is the program risk-free. Of course, the answer is NO, since no program is foolproof. Soo-Haeng Cho, from Tepper School of Business at Carnegie Mellon University, says that the program still has some potential pitfalls. They include the following:
The technology now used by Amazon focuses mainly on the product packaging. The packages may be real, but who can guarantee the products inside? He says that program may be effective in slowing down the counterfeiting efforts. However, it will not be able to stop them at all. There is also a chance that counterfeiters mimic the product labels. However, with serial-number system, this may be difficult.
The current pricing system for Amazon Transparency Program is per label. This means that the price is based upon the quantity of products owned by a brand. Cho says that this can be a problem for small business, home industries, or startups with narrow profit margins. They cannot automatically increase the products’ price tags, since they can have additional problems with competitive advantages.
Amazon Transparency Program: The Bottom Line
The effort of protecting the brands and the consumers by means of Amazon Transparency Program is a big leap forward. It can help preventing counterfeiters from entering the supply chain. However, success of the program depends much upon cooperation of each party involved.
In addition, Amazon has to be ready for the problems, which may appear in the future. They include possible pitfalls in technology as well as financial problems. The global marketplace may need to design a pricing system for startups and small businesses if it is committed to promoting economic growth from the bottom.