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Comment by cookiecaper | Hacker News Reader

I don't think Amazon is going to make a lot of noise about this, because users who are unaware of this issue (which are still the vast majority) would then start to worry. They've sent out some light PR around it in business-oriented press outlets like Forbes.

Ask any FBA seller, especially those who do product arbitrage, and they'll tell you that Amazon is getting very aggressive with account suspensions and requiring a lot of documentation that the seller's original supplier is either the brand owner themselves or an authorized distributor.

I know a guy who did arbitrage with imports (authentic products, but "not authorized" because they were factory overruns). He made some good money for 2-3 months, but almost all of his products got removed for lack of verifiable paper trail and he ended up in a pretty bad spot.

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>authentic products, but "not authorized" because they were factory overruns

These are counterfeit products. When you contract with a factory to make 10K units with your brand on them, they aren't allowed to use your brand to sell any number of "overruns" past that.

I'm not familiar with the legal definition of "counterfeit" so you may be correct. I'm using the common definition of counterfeit, meaning a falsified imitation product that is usually low-quality and always produced by a third party who has "reverse-engineered" the target product.

To most people, "counterfeit" does not mean literally the same product, produced by literally the same people, even if the company who commissioned the build didn't want some of those units to be released onto the market.

Personally, I dislike the suggestion that an identical product is "counterfeit" merely because the company that commissioned the product is seeking to constrain supply and keep their price point artificially high.

The contracts between the manufacturer and the client are unknown to buyers. If the contract is being breached, the client would probably be wise to seek to enforce the agreement.

I understand there are potential trademark implications (but afaik they're not necessarily cut and dry, IANAL), but IMO this doesn't classify something as a counterfeit product, at least as far as general usage is concerned. I make no comment on the legal classification/terminology.

The legal situation is fairly straightforward. If you have a trademark, it means that anyone who who uses places it on goods for sale without your consent is counterfeiting.

>To most people, "counterfeit" does not mean literally the same product, produced by literally the same people, even if the company who commissioned the build didn't want some of those units to be released onto the market.

And gone through the same quality control process, and subject to the same defect rejection standards? A huge part of why consumers trust the trademark is that it puts the reputation of the marking company on the line with the product - the manufacturer is saying that they stand behind the product and have ensured that it's to standard. Following the same process with the same tools and using the same people doesn't have that, and it's fraud to represent that it does.

>Personally, I dislike the suggestion that an identical product is "counterfeit" merely because the company that commissioned the product is seeking to constrain supply and keep their price point artificially high.

Being able to claim the benefits of your brand by controlling the supply is incredibly important to functioning market economies. If you make a widget with a novel feature that customers like, you can capitalize on it adding your trade mark and commanding a price premium. This pays for things like creating novel features, or adding to build quality, or going through more stringent defect rejection, or whatnot.

Consumers want and are willing to pay for these features. If the manufacturer can get undercut by a marginal-cost-only supplier that doesn't have to amortize the development of these features, then we end up not creating the high quality products that consumers want.

As a fellow layman I disagree with your anecdotal definition. I definitely consider this excess production to be counterfeit.

It's counterfeit branding but it's not counterfeit production. It's worth distinguishing the two, at least in terms of consumer harm.

I would disagree. It is counterfeit production. The entire notion of factory overruns being of the "same quality" as the original brand is very dubious to me. When the ODM ordered X instances of a part, the factory delivered X instances to them. There's no reason for them to create X instances for the order and an additional Y instances for themselves. Factory overruns, therefore, are instances that the original brand rejected because they were out of spec in some way. Now, that might be fine - the rejection might have been due to a quality issue, such as the silkscreened logo not being in the correct spot. Or, it might not be fine - the rejection might have been due to the chip not living up to its specified clock speed or memory capacity. The problem is, as a consumer, I have no way of knowing whether the "factory overrun" I'm buying is of the first sort or the second sort. That's why I'd consider it counterfeiting.

I upvoted you because I think you have a reasonable position even if not everyone agrees with it. Disagreement is not a sufficient reason for downvoting.

And when I file a warranty claim on this overrun product and the manufacturer sees that the serial is not on file and refuses to fulfil it what then?

If access to a warranty is what qualifies something as counterfeit, then almost everything we buy is counterfeit!

To be eligible for warranty claims, one frequently must register the product in advance and provide proof that it was purchased from an authorized retailer. There are a variety of other conditions that disqualify products for warranty coverage, so much so that it's practically always a crap shoot whether a given manufacturer will process the warranty claim or reject it with a flimsy justification.

Second-hand purchases are also generally not respected for warranty claims, but we don't consider everything sold used counterfeit.

If you anticipate utilizing warranty coverage, you have to cross all the is and dot all the ts. That's a class of consumer that isn't just going to buy from a third-party seller on Amazon without making sure that they're authorized and legitimate.

I'll also take this opportunity to note that this entire tangent arose out of a parenthetical statement where I indicated that I know someone who was selling what I consider to be non-counterfeit items from factory overruns. Nitpicks over the definition are not really related to the claim I was originally making. The anecdote remains valuable in its original context, which is that Amazon is policing FBA sellers more and more aggressively. Didn't mean to trigger a long subthread about the precise definition of "counterfeit" and whether or not a product has to be eligible for warranty to be authentic. ;)

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