Birkenstock, a well respected and notable footwear brand, have made the decision to terminate their operations on Amazon U.S. While the organization has had a degree of success on the e-commerce website, it has been troubled by the increase in counterfeits available on the website and unauthorized third parties selling their products.
An innovative and unique brand, Birkenstock no longer supply products to Amazon or even authorize third party partners to sell their products through the e-commerce giant. Manufacturers have long complained about the lack of controls put in place by Amazon to protect their products and Birkenstock have been the first big name brand to end operations with them.
Why did Birkenstock leave Amazon?
CNBC quoted Birkenstock CEO David Kahan: "The Amazon marketplace, which operates as an 'open market,' creates an environment where we experience unacceptable business practices which we believe jeopardize our brand." Mr. Kahan further commented that attempts to control this practice have proved ineffective: Birkenstock have already worked alongside Amazon to try and improve monitoring for fakes.
The problems lie in unauthorized third party producers buying the real product cheaply from leaks in the supply chain and selling them for below market value, or just as cheap Chinese copycats. Many manufacturers have noted the holes in Amazon's logistics such as at fulfillment centers, where Amazon mixes products from distributors and so it's easy for counterfeits to get into a genuine supply chain.
Birkenstock are much more interested in their brand reputation than quarterly sales. This is partly due to the the brand experiencing a rebirth in high fashion after being featured in many fashion magazines such as Cosmopolitan in recent years. They appear to be playing a long game and positioning the brand at the higher end of the market.
What can you do in this situation?
At Red Points we work tirelessly to reduce counterfeit products on Amazon and other sites. The influx of counterfeits in recent years cannot be understated, so our team works to ever expand its expertise and to constanly improve the scope of our technology to deal with the ballooning problem. Will Birkenstock be the first of many dominoes to fall?
Does your brand suffer from counterfeiting online? Check with our free audit tool here.