Ah, counterfeiters, wretched beings that lurk within every corner of every online marketplace.
Amazon is trying though.
In this article, we’ll look into one of its proposed solutions to the counterfeiting problem—the Amazon Transparency Program, what its pros and cons are, and if it's worth it for you.
Related Reading: Amazon Transparency vs. Amazon Project Zero
Related Listening: E398: How To Defend Yourself Against Copycats and Sabotaged Listings
What is Amazon Transparency?
Here’s how Amazon describes it:
Transparency is a product serialization service that helps identify individual units and proactively prevents counterfeits from reaching customers.
In other words, Transparency is a service available to Amazon brands and third-party sellers that gives each and every product you send into FBA a unique ‘transparency code’ that counterfeiters cannot generate for your brand. It contrasts a UPC code or an EAN, which is public knowledge and can be duplicated by nearly anyone.
This code can be scanned:
- By Amazon, to verify that the products coming into their Fulfillment Centers are authentic;
- By retailers (If you’re a manufacturer); and
- By customers, using the mobile app, to make sure that they did not receive knockoffs or inauthentic items.
With Amazon, there is a lot of incentive to lower prices in order to win the Buy Box. To do this, sketchy sellers will use cheap materials to reproduce good products and even hijack your listings to sell their knockoffs. This is bad for customer experience and, in turn, hurts your brand reputation.
Transparency is one of Amazon’s ways of keeping counterfeiters at bay and boosting brand confidence for brands enrolled in Brand Registry. If a seller cannot provide a valid Transparency code to Amazon, the unit will not reach the customer, or at least the customer gets a heads-up that it’s not your actual product.
How does Amazon Transparency work?
Transparency is akin to how big brands assign serial numbers to every unit of every product they sell (i.e., every iPhone has a unique serial number).
With Transparency, when you ship products into the Fulfillment Center, Amazon will look for this code for authenticity and will not accept units without any transparency code.
Amazon will also verify the code right before the unit ships out when you make a sale.
When an order reaches your customers, they can scan the code to verify authenticity and check other information. A green check mark indicates that the product is authentic, while a red cross mark will tell them that it's a knock-off. Customers can then get in contact with the Transparency team to report a potential counterfeit.
Sellers can still show other identifiers and unit-level information on the print label, as long as they comply with the format shown above. This means that you can show the UPC, FNSKU, and information like manufacturing date, ingredients, and materials used on the print label. As of writing, a lot of sellers were expecting Amazon to enable them to place a link to a brand page or an Amazon storefront.
Can I enroll in Transparency and be FBM?
Yes. If you’re selling on a Fulfilled By Merchant model or Seller Fulfilled Prime, that is, if you handle the pick-pack-ship process yourself, you can still use Transparency.
You can still get Transparency codes from Amazon, but you have to provide them with the specific codes of all units you ship to customers yourself.
Does the Transparency Code Replace the UPC?
No. Global Trade Item Numbers (GTIN) such as Universal Product Codes (UPC) or European Article Numbers (EAN) are used to identify a certain product on the market. On the other hand, Amazon Transparency Codes are used to identify each and every unit of a particular product.
So if you’re selling 5 units of Product X, you’re gonna have 5 unique Transparency Codes, but only 1 UPC code.
Note: A legitimate GTIN is a standard requirement to be eligible for the Transparency Program. More on that in a bit.
What are the Pros and Cons of the Amazon Transparency Program?
While Transparency sounds good up front, it’s not a free service. It adds some extra steps (and extra costs) to your supply chain. Check out the perks of Transparency and what it will cost you below:
Amazon Transparency Pros
- Keep counterfeiters at bay. Every party in your supply chain can verify your products using the transparency code, making it difficult, if not impossible, for counterfeiters to hijack your listings. (Just make sure to keep your codes safe)
- Protect and boost brand image. When customers scan your transparency code through the app, a green check mark will pop up to signify authenticity. Not having to worry about hijackers and copycats dragging your brand down is an easy win.
Amazon Transparency Cons
- Extra steps in the shipping process. Transparency will require you to apply the labels to your products, which is quite tricky to automate, since every code is unique.
- Not a free service. Transparency labels will cost you between 1 to 5 cents per label, depending on your order volume.
Also consider the costs of printing and applying each label to each of your units.
- Eligibility requirements. Like other Amazon opt-in programs, you’ll need to put in some work to get enrolled in Transparency, although I could argue that the requirements are something you should be doing as a serious seller anyway.
- Transparency is only for your listings. If counterfeiters are trying to sell your product outside of your listing, you’ll need to raise an IP concern.
- Amazon requires you to apply Transparency labels even on units sold outside of Amazon. If you’re concerned about Amazon tracking seller data and where else they sell their products, this could be a red flag to you.
How Much Does Amazon Transparency Cost?
Amazon transparency costs anywhere from to 1 to 5 cents per code.
On the back of your mind, you’re probably thinking: Why are the sellers being made to pay? Doesn’t Amazon have its own counterfeiting problems? (Remember when they ripped off Peak Design’s sling bag?)
You’re guess is as good as mine.
At 5 cents per code as of writing, it’s not exactly cheap to implement especially since the costs can add up.
In any case, you could say that a couple of cents per unit per code is a small price to pay to avoid the headache of having counterfeiters drive your business to the ground or get you suspended.
To avoid this cost adding up, Amazon offers volume discounts. At the time of writing, the rates were:
- 5 cents per code;
- 3 cents/code if you order at least a 1 million codes at a time;
- 1 cent/code if you order over 10 million codes at a time;
Another cost to consider is the costs of printing and applying the labels to your packaging. You will either have to print the labels yourself or buy them from a Transparency Service Provider (TSP) approved under the program.
How do I sign up for Amazon Transparency?
A lot of sellers say that signing up to Transparency is a relatively painless process, which, let’s face it, we don’t often hear about Amazon.
Here’s a neat little graphic from Amazon’s Transparency page:
1. The ability to verify yourself as the brand owner for your products.
This means being registered to Amazon’s Brand Registry or securing a trademark over your product. Of course, it makes little sense trying to protect your product from counterfeiters if you don’t have rights over it in the first place.
You can hit two birds with one stone by checking out the Amazon IP Accelerator Program, which enables you to process an application for IP by working with Amazon-accredited firms and get enrolled in Brand Registry much quicker.
Related Reading: The Ultimate Guide to Protecting Your Brand on Amazon
2. A Global Trade Item Number (GTIN), such as a UPC or EAN barcode on your products.
You need to secure a valid GTIN over your products. Valid means that Amazon will be able to confirm it on the GS1 registry. Ergo, get your GTINs from official sources.
3. The ability to apply unique Transparency codes on every unit you manufacture.
You can do this by either:
- Working with a Transparency Service Provider (TSP);
- Printing labels yourself and sticking them onto your packages; or
- Using the design-in packaging method
Applying the labels yourself will probably save you money, but the design-in method (integrating the codes to your artwork and packaging) streamlines the process and works better for marketing.
Once you’ve got those basic requirements sorted out, you can go to the ‘Get started’ portal on the Transparency website to sign up. Amazon will ask for your contact details and brand information.
After some verification, an onboarding specialist will contact you within a couple of weeks to set you up for the program.
A good number of sellers say this process is somewhat painless, and that Amazon was quite helpful throughout the process.
When you’re set up, you can begin registering your products and ordering transparency codes. On the Transparency service portal, you can select for which product you want transparency codes and indicate how many codes you wish to generate. You can also access transparency code files or transparency reports here.
Should I sign up to Amazon Transparency?
Like most Amazon programs, Transparency is a better fit for some sellers more than others.
It’s certainly worth considering if you’re already on Brand Registry and have a trademark on your product. In other words, if your product is mid-way through its life cycle and it’s worth protecting.
It’s also a no-brainer if you’re selling a high-value product that’s susceptible to counterfeiting, such as electronics and unique widgets.
By the way, as of writing, Amazon allows you to enroll only certain ASINs to Transparency and not your entire product line. This lets you test the waters or even just prioritize your best seller. For every product you enroll, you will need to apply a unique Transparency code on every single unit manufactured for that product.
Amazon Transparency is not a flawless service, but it’s a good effort from Amazon to protect genuine brands and ease its counterfeiting headaches.
The requirements to sign up are steps that you would (and should) take if you want to protect your brand and stave off those pesky counterfeiters.
Have you tried Transparency? Leave a comment below.