What made this all particularly insidious is that Amazon not only commingled inventory, but actively refused to track where inventory came from.
This meant you only needed one fraudulent seller to poison the entire inventory pool and there was no way know where the bad product came from because Amazon actively avoided being able to track it.
That's the aspect of it that always felt particularly malicious to me.
Entirely why we no longer use their service and ship direct for amazon orders. Some people still try the trick but we always put a claim in and amazon after they automatically give a refund to the buyer, and Amazon pay it. So Amazon pay twice. Maybe the cost of just accepting that loss is less than having someone check the return.
Adding vendor tracking adds a layer of ERP difficulty that isn’t practical for bulk, cheap items.
You either have to have serial numbers (unique per item, not just a product identifier barcode) or you have to physically segregate inventory by vendor, which is not practical.
If the vendor doesn’t serialize the item, then Amazon has to add it on receipt. Certainly not worth it for $10-20 item.
Really? Adding a unique ID at the point of entry costs that much?
But at their scale, maybe they found a plan that works!
The headline seems to indicate that the geniuses in logistics at Amazon have figured out how to make it practical!
They don't just track quantities of SKU's like most other retailers.
If some vender is adding fraudulent items to the system based on some thresholds you set, charge the vendor to manually sort those specific products out.
Odds are they would make up the ~5 cents per item just dealing with less fraud. However, you don’t need to track every item rack the first few thousand items from a vender and you can scale back tracking as they prove themselves. At scale this could be almost arbitrarily cheap.
Maybe they have a variation of your idea where they inkjet a serial number onto a conveyor belt of incoming items or add a super-cheap chip of some kind.
They’d be better stewards of the industry, but aren’t the odds that everything they’ve done for the past decade has improved their bottom line?
This is the company whose policies have effectively forced their drivers to use plastic bottles as toilets.
Something which may or may not decrease their bottom line but definitely significantly reduces counterfeit items ending up in customers hands is going to be considered reasonable even if it’s not profit maximizing.
Buying option 1: Company X glue from store A. Buying option 2: Company X glue from store B. Buying option 3: Company X glue from store C. ...etc.
But then Amazon says, "actually, these are all the exact same bottles of glue, so we'll thrown them all into the same bin, and no matter what "store" the people buy them from, we'll just grab them out and send them to the customer.
Now even without counterfeits, this is weird. What exactly is the point of store A, B, C, etc.? Company X sends the bottles to Amazon, they get put in one big pile, you buy them on Amazon, and Amazon takes them out of that one big pile and sends them to you.
The only thing purpose of the "stores" when you co-mingle inventory seems to be:
1. Plausible deniability for counterfeits. Hey, they told us they bought it from company X, we had no way of knowing they didn't.
2. Getting money from people trying to get rich quick in the marketplace. Some people will try all sorts of cuts to boost their Amazon sales in the hope that it will pay off later.
Amazon has an interest in allowing these resellers of legitimate products to exist because it pushes down prices from the primary vendors, lowering prices for the customer. The primary vendors end up competing against themselves indirectly but they have no one to blame but themselves. This is the milieu in which counterfeit products exist.
If the producers of these products were consistently competent at managing their supply chains it would be much less of an issue because it would clear the field of resellers arbitraging the mismanagement, leaving only Company X and the counterfeiters which is a much easier problem to solve because you don’t have to worry about banning legitimate resellers. But that isn’t where we are.
Smart companies put contracts globally that have Amazon implications under a single person who can see across every deal. If they sell to someone with a restriction on Amazon resale, they will mark those goods so that they can track it if it shows up on Amazon. However, there are so many fly-by-night resellers that this is a losing proposition, so many don’t bother with those resellers anymore because enforcement yields nothing.
The vast majority of companies are naive and not very smart about any of this. People that know how to systematically set up a sales program that is profitable and resistant to arbitrage on Amazon get paid a lot of money in industry. It isn’t that hard but most companies can’t seem to figure it out.
To externalize risk away from Amazon.
I stopped buying from "fullfilled by Amazon" as the level of fraud was just insane.
So it is possible and not that expensive even as a country-wide system for goods that cost around $1 (a typical can of beer).
Maybe a unique bar code per-item that includes some private hash information that makes it unique to the producer? Sort of an electronic signature for physical goods? Then if there's a centralized database, copying the QR codes wouldn't do much good. You might be able to slip in one if it is sold before the real version. But each subsequent copy could be caught.
Is that real? I find it hard to believe that Amazon effectively accepted stock from third parties "as is" and lost track of where it came from. It's more likely that they don't tell you than they don't track.
I'm glad to see this change.
It's not that hard to then track back from an order exactly what bin or tote or shelf the item was pulled from, then look at what shipment(s) that bin's items came from to figure out what supplier it came from.
They know the counterfeit goods came in and were stowed to bin XYZ and they know that someone pulled from XYZ...
In the seller documentation they say they can track the source of commingled inventory - they achieve this by never putting them on the same physical shelf location.
Also mentioned by Amazon spokesman in e.g. this article: https://archive.is/ra6RT
> Amazon can also track the original seller of each unit
The OP article is exhibit A for how common of an issue this was.