Counterfeiting is a Rapidly Growing Problem.
Every day, thousands of counterfeit goods are sold online. Selling counterfeit goods has increased over 10,000% in the last two decades.*1 These imposters can wreak havoc on brands, resulting in lost integrity and revenue, and in some cases pose risks to consumers. American businesses lose approximately $200 billion in revenue annually due to counterfeits*2 damaging company profits and undermining consumer trust.
This impact can be felt across sectors, most notably: apparel, accessories, over-the-counter drugs, children’s entertainment, and electronics. To combat this problem, Amazon launched, Transparency, a new, item-level tracing service that helps you protect your brand and customers from counterfeit.
What is Amazon Transparency?
Amazon Transparency was officially launched in 2018 to combat the sales of counterfeited goods on their platform. How it works: As a brand, you can enroll in the Transparency Program (*3). Amazon will issue to you uniquely serialized Transparency codes to be applied (or printed) on each saleable unit as a Data Matrix 2D barcode. This code, called Authenticity Identifier (AID), is a unique 26-digit, alphanumeric code generated by Amazon.
Brands can choose which SKUs to enroll in Transparency (maybe only the ones at the highest risk, or all SKUs). Once the brand enrolls a SKU in Transparency, the brand is responsible for placing a Transparency code on every single unit sold, whether the unit will be sold on Amazon or any other channel.
When Amazon receives an item on Transparency at their North American Fulfillment Centers, the Data Matrix 2D barcode (with serialized AID unique to each unit of sale), is read by the Fulfillment Center and Amazon can determine whether that number is real or fake, or not on the product at all.
How to get value from Amazon Transparency?
I think that Amazon Transparency is an outstanding initiative and has started, and will continue to actually allow brands to reduce or eliminate counterfeits sold on the Amazon platform. I dare to say more: I think that Amazon Transparency is potentially disruptive to e-commerce by putting serialization and supply chain digitization on the map and driving what the pharmaceutical industry has done for years into new industries.
As it happens with any disruption, new opportunities arise. Once Amazon Transparency is adopted, there is so much that can be done to drive value out of your supply chain. The Amazon Authenticity Identifier (AID), a uniquely serialized number, is the ‘gateway’ to digitization. To leverage supply chain digitization and drive business intelligence, we have developed our cloud-based solution, Adept Connect. The unique serial number is the basis for ‘item level digitization’ and allows Adept Connect to create a unique digital identity for that specific, unique item, in the cloud.
Once you digitize your supply chain, you can do a lot of things and derive additional value from your Transparency investment. We discussed supply chain digitization with several companies and we were told of many, major pain points that Adept Connect and supply chain digitization will outright solve for them:
- Channel Management: Transparency can detect whether a product received by an Amazon fulfillment center is real by verifying the AID. What Amazon cannot tell you is whether that specific item of your product was supposed to be sold on Amazon in the first place. Adept Connect enables, in a very simple way that is not disruptive to your current process, to assign the serial number of each unique item (AID) sold to a very specific sales channel. (Maybe say…Adept Connect assigns the serial number of each unique item (AID) sold to a very specific sales channel. This is done in a very simple way that is not disruptive to your current process.) If that specific AID shows up on Amazon you will know, with certainty, that the item was diverted and, and you will know who diverted it
- LOT and Expiration Date Traceability: Imagine, for example, fulfilling orders of food or cosmetics products. Companies are not able to know (and track) precisely which LOT a customer received. In the scenario of a recall, they will not be able to pinpoint with precision to whom all the items on LOT 123 were sold. Adept Connect and supply chain digitization solve this issue. In Adept Connect you can assign any attribute to each item sold. It could be LOT, Expiration Date but also the specific packaging line that packaged the product or the manufacturing date with a time stamp. Whenever the item is sold, it will carry all these attributes so if you want to identify in your supply chain all the items from a specific LOT packaged between 2:30 and 4:30 pm on a certain date, you can, at the unit level.
- Fulfillment Errors: I don’t know about you, but I get very upset when I do not receive precisely what I ordered in the quantity I ordered it. Fixing fulfillment errors is also very costly, about $45 per error (*). Adept Connect, brings fulfillment errors down to zero, fulfilling the perfect order for each shipment because the digital identity of each item put in the order can ‘communicate’ during fulfillment with the operator and inform him or her whether that is the right item to put in the order, in the correct quantity and whether that item is expired or was recalled. The cost reduction can be in the hundreds of thousands of dollars per year
Those are only among the top 10 issues that were presented to us by our clients. I am looking forward to engaging in a constructive conversation on the subject of supply chain digitization and on our solution, Adept Connect.