Can Amazon Weed Out the Fakes?

By Denise Garcia

  • Small businesses made more than $1B on Amazon Prime Day
  • Amazon has more than 1 million small and medium-size biz on the platform

Small businesses are raking in tons of cash on Amazon (AMZN  -0.65%), but counterfeit products are cutting into many of these entrepreneur’s profits. Could business owners make even more more money if Amazon were to eliminate this issue?

Why This Matters: Amazon is home to more than a million small and medium-sized businesses, that just on this past Prime Day raked in more than $1 billion dollars.

However, successful companies are stricken with counterfeiters who duplicate top-selling products. They sell them at a cheaper price, all in hopes to reap similar financial benefits. Not only does this create issues for consumers looking for good quality buys, but for business owners as well. For the original hosts, this could mean a tarnished reputation and notably smaller income.

African Americans could be at a greater disadvantage than their counterparts. While they are considered the fastest-growing group of entrepreneurs, black Americans are still a relatively small percentage of business owners.

According to Small Business Trends, African-Americans made up 9.4% of small business owners in 2012. This group also saw smaller product sales. The report noted the average American business owner saw average revenues of $1.2 million in 2012, for black Americans that figure was $72,000.

Situational Awareness: Amazon says that it’s doing everything in its power to weed out the fakes. “Forceful action against both reviewers and sellers by suppressing reviews that violate our guidelines and suspend, ban or pursue legal action against these bad actors,” a spokesperson told The Wall Street Journal. In addition, some merchants have noted that although the tech-giant manages to remove bad actors, it’s relatively easy for them to be back up and running in no time.

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