What is Transparency by Amazon

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Counterfeiting on Amazon is a huge problem for all brands selling on the marketplace. Transparency by Amazon is the answer – or at least, it’s Amazon’s answer. Counterfeiting has become increasingly prevalent on Amazon and increasingly more difficult to control. It damages good brands’ reputations and destroys customer trust on top of stealing their profits.

Amazon therefore decided to launch the Transparency program to protect its own products and labels in March of 2017. It has since been opened to Amazon’s third-party sales platform, and will help brands mitigate the severe threat to their businesses.
Counterfeiting on Amazon is a huge problem for all brands selling on the marketplace. Transparency by Amazon is the answer – or at least, it’s Amazon’s answer. Counterfeiting has become increasingly prevalent on Amazon and increasingly more difficult to control. It damages good brands’ reputations and destroys customer trust on top of stealing their profits.

Amazon therefore decided to launch the Transparency program to protect its own products and labels in March of 2017. It has since been opened to Amazon’s third-party sales platform, and will help brands mitigate the severe threat to their businesses.

About Transparency by Amazon

Transparency by Amazon is basically a product tracer that allows customers to see where the product they’re looking at comes from, as well as when and where it was manufactured and what it’s made of. Every item with the Transparency label is associated with a unique code that is scannable through the Amazon app or the Transparency app, and pulls up the above information.

Similar in nature to the Brand Registry program but separate from it, Transparency by Amazon works at the item level rather than at the brand level with logos and IPs. It’s also automated, working in tandem with other such tools to deter counterfeit sellers and solve associated issues. This is a great tool for sellers, particularly because appealing to Amazon doesn’t always result in a decisive, positive outcome – if any help can be had at all.

More than just protection for existing sellers, Transparency by Amazon also works preemptively. The tools works with automated systems that scan new seller registration information for red flags so that potential bad actors are blocked from ever entering the marketplace.

Extending Transparency

join Transparency by Amazon

Amazon enrolled new brands to Transparency slowly as it beta tested the tool. Recently, more sellers have been invited to join the program, a sign that Amazon has worked through most if not all of the kinks. Brands now get to ride on Amazon’s effort to block counterfeiting and enjoy the positive effects for sales and customer loyalty.

Amazon made no direct comment about Transparency by Amazon, but the retail giant clearly wants to make sure that more sellers get to use the tool. And we suspect it’s because they want all their customers to enjoy a better customer experience. When customers receive a cheap knock-off instead of the item they thought they were ordering, they don’t care if it was their own fault for not thoroughly checking before hitting Buy Now. To the online consumer of today, due diligence is not their responsibility but Amazon’s.

By extending Transparency by Amazon to everyone on the marketplace, Amazon’s investment in brand protection will pay off. The aim is for customers to be able to buy only genuine items and no longer face the trauma of paying top dollar for fakes and turning against sellers and Amazon itself. This way, the teams of research scientists, software engineers, program managers, and investigators they have employed to develop and run Transparency will be well worth the cost.

How Transparency Works

The system is based on issuing unique Data Matrix 2D barcodes to each product sold by registered brands. Much like having a serial number or UPC code, each product can be traced all the way back to its origins. The codes are serialized, and the marketplace knows which code belongs to which brand. Without the code – or the correct code – counterfeiters can be spotted and removed before they can do any damage.

Transparency by Amazon counterfeiters

Amazon goes a step further, warning sellers who don’t yet have codes on all their products. The risk of putting this off is too great – possible elimination of their products from Amazon. Amazon will also reject any items for sale that don’t have the code. Any shipment of enrolled products that does not have the codes will come under immediate investigation at US Fulfillment Centers. The seller will be checked, and if Amazon declares the items fake, the shipment will be rejected or the inventory destroyed.

Brands enrolled in Transparency by Amazon purchase a series of codes. The price of these codes is based on quantity, so you can get a few for 5 cents apiece or many for one cent per code if you sign up early.

Once purchased, the codes must go on every unit for sale, whether on Amazon or other sales channels. This may be seen by sellers as an annoying extra step, but Transparency by Amazon can be a plus. Customers will be able to authenticate product no matter where they purchase it.

Brands can sticker their own products, or coordinate with suppliers or labeling partners to do this for them, or to print the codes directly onto packaging. This is the preferred option since it’s more efficient and reduces additional costs.

Vendor Warning

Transparency by Amazon is not a way for vendors to cut out resellers on the marketplace. This is a violation of the program’s terms, and Amazon promises that any brand that abuses the tool will face stiff penalties.

Transparency by Amazon security

Potential Snag

Transparency by Amazon mostly relies on codes being added to product packaging. This is not nearly as secure as it could be if the Data Matrix 2D barcodes were indelibly marked on each product itself.

Counterfeiters survive by being supremely cunning. They may, for instance, get their hands on legitimate packaging with the codes printed on them and then wrap their fake items in it to pass Amazon checks. Or, they may even be able to hack the codes themselves. Counterfeiters may even be able to purchase legitimate items and copy the codes. It all depends on what kind pof resources they have at their disposal.

Brands must be careful to secure their codes and anywhere they are shared and used to minimize the risk of counterfeiters getting their hands on them. The codes’ serialization makes this more difficult to achieve, but as mentioned, counterfeiters are a savvy bunch.

Who Uses Transparency?

Second to its own brands, Amazon is rolling out Transparency mainly to third-party sellers on the marketplace. It was originally a free and optional program, but we already know that it now comes with a cost. Particularly the large initial cost is turning some smaller sellers away. If it proves effective against counterfeiters, however, Transparency by Amazon may become a requirement. In the meantime, its the bigger brands who have been taking to the program more readily.

Transparency by Amazon cost

Still, some smaller brands who already suffer significant losses due to counterfeiting see Transparency as a boon. At the very least, undercutting on price goes down, and ideally, no one can steal sales or damage the brand’s reputation with fakes. Other smaller brands see Transparency as a good investment; a way to protect the brand against possible future issues. Especially since tariff laws are changing and Amazon shows no signs of stopping, it can truly be a good business move to secure one’s brand on the marketplace.

More stringent policies on product authenticity naturally bring greater trust and less risk. Amazon has been keen for a while now on attracting more luxury brands but failing to do so, mostly for brand security reasons. Transparency by Amazon could change worries centering on brand value. All they would need then would be storefront options worthy of these coveted luxury brands.

Enrolling in Transparency by Amazon

If you want to get enrolled in the Transparency program, here’s what you need to prepare:

  1. Documentation verifying that you are the brand owner of your products.
  2. A Global Trade Item Number (GTIN) for each product you sell.
  3. Assurance that you can place your unique Transparency codes on each unit.

Final Thoughts

Transparency by Amazon looks to be a huge leap forward in the marketplace’s battle against counterfeiting. It’s proactive and preemptive as well as actionable with regard to existing violators. The key to making it work is getting more sellers to participate. The cost may be prohibitive to some sellers, hence the probability that the program may become mandatory to ensure compliance and protection for customers.

Other major retailers may not be so easy to control, however. This is the biggest challenge that Amazon faces where Transparency is concerned. Without their cooperation it will be the retail giant’s sole responsibility to educate consumers and in doing so effectively eliminate counterfeiting.

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Julia Valdez

Julia Valdez

Julia is a professional teacher and long-time lover of the art of words on paper and the stage. She has an entrepreneurial heart and spends most of her time doing marketing and management, freelance content writing, volunteer work, and sharing lots of laughs over little crazy things.

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