The Rise of Counterfeits

Online marketplaces are rampant with counterfeit products. The scale of the problem was not fully understood until a 2018 test run by the U.S. Government Accountability Office found that about two of every five brand name products purchased online through 3rd party retailers were counterfeits.

Counterfeit sales have boomed along with the rise of e-commerce and the internet. In the brick-and-mortar days, it was significantly more difficult to get a counterfeit item on the shelf and in front of buyers in a legitimate environment. Now, however, counterfeit products are mixed seamlessly with legitimate products and sometimes elevated above them because of algorithms that prioritize cheaper prices. These fake products are so convincing that over 25% of consumers have unwillingly and unknowingly purchased counterfeit goods online.

Some e-commerce platforms, like eBay, have introduced their own programs to combat the rise of counterfeit items on the market while others, like Amazon, have taken a less proactive approach. The most common products to be copied are footwear, clothing, and leather goods, but they are by no means the only categories impacted.

For resellers or those in the second hand retail space, it is critical to ensure that these counterfeit items are not put back into circulation. For those selling on marketplaces like eBay, the consequences for selling a fake product can range from lowering seller ratings to hiding/demoting all listings from search results to account suspension.

Ultimately, the best way to avoid accidentally listing fraudulent items is to authenticate them.

Authentication Services

There are a number of methods and services for ensuring product authenticity. Many platforms like The RealReal and Lolipuff hire and train experts to personally examine each item and “guarantee” the authenticity of it. While these methods can be helpful as initial cues, in person inspection is not foolproof, and it can be very costly to source and train someone to identify fakes solely by physical examination.

Thankfully, AI and machine-learning powered alternatives exist. With almost instantaneous results, our number one choice is Entrupy. With Entrupy, customers can utilize a scientifically-proven authentication solution that is backed by a financial guarantee - ensuring complete procurement protection and trust with their customers. Entrupy offers authentication of the top 15 designer luxury handbags and has recently introduced authentication for sneakers.

For second-hand retailers using Upright Lister to manage their e-commerce listings, our recent partnership with Entrupy allows them to add certificates of authenticity (COA) directly to the listing. These certificates help build trust with consumers and generate higher revenue.

Check out this video for a quick tutorial on how to add Entrupy COAs to listings via Upright Lister!

Authenticate First offers a much wider selection of brands in categories like footwear, jewelry, and handbags making it the authentication service of choice for any brands not supported by Entrupy. Unlike Entrupy, Authenticate First works with highly specialized experts from around the world to verify authenticity. As such, the timeline for receiving results is a little longer averaging between 24-48 hours. Upright Labs is currently working on an integration with Authenticate First that would allow users of Upright Lister to automatically add COAs to product listings.

When to Authenticate

In the fashion industry, the popularity and availability of a particular brand will dictate a product’s value. What may have sold for $100+ five years ago may only sell for $20 today. Given that the cost to authenticate any one item ranges from $10-$20 it’s important to focus on authenticating the brands that have the potential to drive significant revenue.

The first step in deciding whether or not to authenticate is to do a visual check for clear signs of fraud. At Upright Labs, we created a counterfeit guide for our clients with general and brand-specific clues for authenticity. Authentication should only be used for extremely high value brands like Louis Vuitton and Hermes but can be skipped or ignored for lower-value brands like Coach or Michael Kors.

Conclusion

With such high levels of counterfeit products in circulation, second-hand retailers and resellers must take precautions to ensure that their customers are getting original products. Using services like Entrupy and Authenticate First is the best way to ensure high customer satisfaction and the best possible price. Using these services is now even more seamless for Upright Lister customers thanks to platform integrations.

---

Upright Labs expertise and operational insights have allowed us to optimize and implement over a million square feet of e-commerce operations via Upright Services and process over 100 million dollars in gross revenue with Upright Lister. During COVID-19 specifically, we’ve assisted over 20 retailers in scaling their e-commerce departments while navigating the increasing consumer demand to shop online. We welcome you to experience the value by partnering with Upright Labs, a customer-focused and transformative software and service provider. If you’re interested in boosting your e-commerce business, schedule a free 30 minute consultation with our team of experts.