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Protect Before You Sell an Amazon Business: Watch Out for Counterfeiters

Posted by Nate Lind in Articles

You’ve spent months or years building up your customer demand and now you’re ready to look into how to sell an Amazon business. But have you properly safeguarded yourself against all the risks? One emerging risk for all those asking “Can I sell my Amazon business?” is whether or not you’re at risk of counterfeiters stealing your materials and products. Before getting an Amazon business valuation or transferring Amazon accounts, do your due diligence to ensure you’ve protected yourself against risks. One Seller Nearly Loses Company Due to Counterfeiters In 2017, a popular Amazon seller lost control of their listings. Her sales plunged by 80% during that year. The baby clothing brand, Wee Urban, says that because of the problems with the site, the company totally missed the holiday season and has now been working on building a brand off of the massive e-tailer and yet the company was also asked to be an early adopter of a counterfeit protection service offered by Amazon. Remember, when thinking about selling an Amazon business, it’s got to retain value to make you a profit on a sale. The chaotic and sometimes sprawling marketplace on Amazon makes it a ripe opportunity for business buyers and sellers. Although Amazon controls their own e-commerce business independently, the Amazon marketplace has millions of independent sellers around the world, listing millions of items. This has become a bigger portion of Amazon’s business and now makes up more than one half of the company’s e-commerce volume. Amazon counterfeiting has become a bigger issue. This quick growth, however, has come with its own unique set of unintended consequences and problems. Amazon has had to step in and deal with a surge in unauthorized selling and counterfeit issues. Counterfeiting Protection Service Offered too Late, Amazon Seller Says The owner of Wee Urban says that her company had been obliterated by fakers on Amazon and blames the website for being unwilling or unable to stop it. The company owner tried to remove all of her inventory last August because of imposters trying to rip off her company. In 2016, her peak Amazon revenue was $500,000 but the sales on the site dropped by 80% in 2017. The new counterfeit detection program as piloted by Amazon was designed to cut down on the very problems that that business owner had faced. The new technology focuses on a bar code that is used to verify the authenticity of the product. The early adopters were offered a free six-month period using this program, and then it would cost between one and five cents per code. It is important for anyone who is contemplating buying or selling an Amazon business to do everything possible to protect themselves against counterfeit developments. As Amazon is the popular go-to destination for individuals and small businesses, Amazon business owners will need to manage their accounts more effectively and police their listings closely. Growing a business on Amazon with the purpose of selling it in the future is an exciting proposition but it is one that must consider all risk factors and the elements that a prospective buyer might contemplate when choosing whether or not to purchase the company. Protection against counterfeit companies can help a business that has a significant amount of revenue and perceived value to safeguard their investment when it comes time to sell the company.