Amazon sellers have long battled counterfeiters within the marketplace. This is an especially important issue for private label sellers that are already part of Amazon Brand Registry.
As the marketplace facilitator, rather than direct seller for most items, they certainly have been able to avoid legal liability for these Amazon fake products, but the issue goes beyond simple legality. Amazon is always customer facing (unfortunately, not seller facing), and as such ensuring the authenticity of all products is vital.
Smaller and larger brands that do sell on Amazon often site Amazon counterfeit problems as their main concern and this program can begin to alleviate these problems. Though as with most new programs from Amazon, it does come with a cost.
Let's see what’s going on under the hood.
- What is Transparency
- What’s in it for you?
- Ancillary benefits
- What’s the catch
- How to sign up
- How long does it take
- Other considerations
- Where Transparency is headed
- Next steps
What is Transparency
It is worth noting that Amazon is calling the program simply “Transparency,” not the Amazon Transparency program.
This speaks to their long-term vision for the program, and their desire to develop the authenticating program in parallel with their e-commerce company.
They view Transparency as a way to verify everything bought online, both on Amazon and on other platforms. Forbes and other reputable news sites have covered both the issues with Amazon counterfeit products, and the exciting new program.
At its simplest, it is a unit level labeling system that manufacturers and brand owners can affix to all their products. It uses a 2D Data Matrix to assign unique codes to each individual unit. These codes are proprietary and generated by Amazon.
The barcode serves a couple of purposes. For the end consumer, the barcode is scannable on either Androids or iPhones. When one scans it with the Transparency app, a green checkmark will indicate an authentic product while a red X will indicate a counterfeit.
Additionally, brand owners and manufacturers can add other information. This means they can show unit level data such as manufacture date and other information about the product’s movement along the supply chain.
They can also add in vital facts like ingredient lists. Eventually, the hope is to have the Transparency code even lead to a brand page (something along the lines of the storefront page for Brand Registered items).
On Amazon’s end, it will allow them to scan any products that are Fulfilled by Amazon (FBA). Products that register as authentic can still be fulfilled, while products that are not are set aside.
Further verification is then required but typically the product is confiscated and destroyed at the fulfillment center, and the seller is not allowed to list. Repeat violators will be subject to harsh penalty, up to and including suspension of their selling account.
For items that are merchant fulfilled, there is a similar verification. In order to list under a product that is registered for Transparency, Amazon will verify a selection of codes based on the quantity being listed. While they may not demand the code for every product, requiring a spot check verification should eliminate hijackers and counterfeiters.
If you want to list 100 “Brand Socks,” Amazon will ask for 10-25 of the alpha-numeric codes. If you cannot provide them, you are not allowed to sell under the product listing. You can learn more about what Amazon says about Transparency program.
What’s in it for you?
This program will be a godsend for many private label sellers.
Many private labelers are in a constant battle with hijackers and counterfeiters. While Bindwise can help with hijacker notification system, it can still be arduous to get them removed and requires some legwork.
Once enrolled in transparency, this problem is eliminated before it starts. Because only verified authentic products can be sold, private label sellers will not have to deal with the grind of removing hijackers and counterfeiters from their listing.
By removing these other sellers, it means the end consumer will be only getting your real product. There are myriad horror stories of hijackers selling a low-quality product and subsequently having that product flooded with negative reviews. This program will not allow that to happen.
In addition to the brand protection, the scanned code presents a unique opportunity for brand imaging. Consumers will be able to learn more about your product and your brand, which can lead to future sales and brand loyalty.
Additionally, allowing the customer to see the progress of your product from factory to doorstep personalizes the product. This can be especially great for products that are manufactured locally in the United States or Europe. This has always been a selling point for American and European manufactured items, and this further advertises that fact.
What’s the catch
While this all sounds great, there are some negatives.
First and foremost, there is a fee of $0.01-0.05 per code. For high volume sellers, this can actually add up quickly. Luckily, it is not an all or nothing program.
This means you can start out with one or two of your top products that have been the most harassed by hijackers!
These labels will have to be printed through a special printer. This can be done through one of several recommended Amazon vendors, or by purchasing the printer yourself (which can be a large upfront investment).
Additionally, all products enrolled in Transparency must have the code affixed to every single unit.
While the program is designed to prevent counterfeit products, it is not designed to prevent general resale. A seller that has purchased your product, on ANY platform, is still allowed to resell it on Amazon. This is a sticking point for the program, and one Amazon has promised to enforce heavy-handedly.
This means it is important to be careful of Lightning Deals, Flash Sales, Giveaways, or lower priced items on your own website, eBay, or any other site. If a seller purchases your product legitimately, they will be given full latitude to sell it on your Amazon listing.
How to Sign Up
First, you need to be Brand Registered. This has been covered elsewhere but requires some paperwork and a registered Trademark.
Beyond that, you will just need to verify brand ownership again with Amazon, a GTIN number (most often a UPC), and a commitment and ability to apply a Transparency code to every single one of your products.
Currently, early adopters of Transparency will get free access for three months. This means no per code fees. This will allow sellers to experiment with using Transparency without too much cost.
When you make the jump, Amazon will assign a Transparency onboarding specialist. This person will help work and speak with you one-on-one to get you going, but here are some things you can expect.
You will fill out an enrollment sheet with each of the products you are enrolling, and the number of units you will be starting with.
After deciding how they will be printed, you will be ready to affix them to each product you produce going forward.
Lastly, you and your onboard specialist will decide how long before the enrollment becomes official. This can be anywhere from 30-90 days. This is to allow you and other sellers of the product to sell out of any previous product they had in stock.
Other sellers will be notified of the product’s enrollment, which serves as their chance to be sure they are getting authentic products and to move on from their previous inventory.
You will then discuss with your specialist what information you would like to appear when the customer scans the code. This is still in Beta testing, so there is limited access to this aspect of the program. In the coming months, this will be fully fleshed out, so either way, it will be good to have a plan of action in place for what information you’d like the customer to see when scanning your product.
How long does it take
Compared to many of Amazon’s opt-in programs, Transparency is incredibly simple. If you have all the requisite paperwork, a salesperson and specialist will setup your onboarding meeting, and you can join within a week.
Then, you simply begin registering products, and after you wait through the grace period (30-90 days), you are active in Transparency.
Most sellers enrolled have spoken to the ease with which registration happened, and the unusually helpful nature of Amazon throughout the whole process. The newness of the program, and Amazon’s aggression in registering brands, actually works out in the seller’s favor, making the entire process easy (for once!).
While this program can seem complicated, it is actually rather easy. Basically, it uniquely identifies each unit of a product and allows the customer, and Amazon, to verify it as authentic.
For this to work properly, you will need to pay careful attention to your own supply chain.
These 2D barcodes are based on a 26 digit alpha-numeric code. When you register and purchase codes, they will be sent to you in an excel file. You will work with a printer to print them for affixing directly. Alternately, some brands choose to work with their factories directly to have these QR codes printed directly on the product or packaging.
In the long run, printing right on the package may make sense as it prevents the manual labeling step. This can also be problematic. These codes are what verifies and authenticates your products. If they fall into the wrong hands, you will be ripe for counterfeiting yet again. For instance, if your factory shares those codes with another seller, all your work will have been for nothing. This is why many early adopters have chosen to label themselves, with only trusted members of the company team having access to the codes.
It is also worth noting that Amazon has been enforcing their expectation of every unit being labeled in a draconian manner. They have promised to suspend accounts for anyone found to be circumventing this system by only labeling items that get sold on Amazon. You must be truly prepared to label your units for sale on every platform if you enroll in this program.
Where Transparency is headed
As hinted at earlier, the name alone of the program provides some clues as to the future of this program. By creating this brand authenticating program, separate in name and business structure from Amazon itself, Transparency is positioning itself to be a major player in all of online retail.
The issues with counterfeit goods on Amazon and hijacking of products are not unique to Amazon. It is rampant on eBay, Craigslist, and anywhere else things are sold. The Transparency program hopes to become universal. If large brands begin to get involved, the hope is that Transparency labels become the norm. If this ends up happening, being an early adopter will allow you to know the ins and outs of the program before it becomes commonplace, and could position you to take full advantage of all its benefits before many of your competitors.
If you are a brand owner, especially one that sells on FBA, you should register for this program as soon as possible. While you get enrolled, you can use Bindwise to help monitor your listings in the meantime and increase your Amazon brand protection. It seems to be growing and building momentum and may be required in the coming months and years anyway. The protection from hijackers more than offsets the nominal per unit fee, and you can start with only one or two products to avoid overcommitting.
It’s recommended that you start with a handful of good sellers that have battled hijackers in the past. If these go well, you can eventually move on to your full product line. Early on, it’s recommended you use their printing providers while you evaluate the fit. Again, if it goes well you can invest in the specialized printer, and begin printing and affixing your labels yourself (or having them applied somewhere in your supply chain).
Will Transparency Help my Brand?
This is a decision only you can make. While hijackers are a common problem on Amazon, it’s not an issue for every brand owner. It is clear that Transparency will help to combat hijackers and make sure customers are only getting authentic versions of your branded products.
Joining new products can be time-consuming and stressful, but can also be worth it. As the ability to redirect Transparency users to your preferred information grows, Transparency will begin to help you grow your brand. Given the low downside, and potential windfall, getting started with Transparency is a good idea for brand owners, despite the work!