Luxury beauty brands are targeted by the “gray market” - a lucrative industry that sells counterfeit products. How important is protecting your brand identity?
From street vendors in major cities to discount store shelves, beauty products have been distributed through the gray market for years. It was only a matter of time before these goods would find a home on Amazon through third party sellers –and, although Amazon has been making moves to rectify this issue (as we discussed here), these changes will not stop counterfeit products overnight.
In 2017, Amazon unveiled the beauty category while simultaneously creating three sub-categories: Luxury Beauty features high-end, department store brands while Professional Beauty displays products used (and sold) by salons, spas, and dermatology offices. Indie Beauty was created for up-and-coming brands that are at least 50% independently owned and not stocked by major retailers.
When it comes to the gray market, luxury brands are a popular target which has deterred them from setting up their platform on Amazon. However, with the launch of Luxury Beauty, Amazon has given brands control over gray market retailers by allowing them to stop unauthorized vendors from changing, tarnishing, or devaluing their image, voice, and reputation. Amazon has further pushed phony products off the site with the Vendor Central stir last week.
However, Amazon can't fight this battle against luxury knockoffs alone. The best and easiest way for a luxury beauty brand to protect their reputation is to simply sell on the platform. As they say, sunlight is the best detergent, and knockoffs can't hold a torch to an authentically branded and produced product.
Beauty brands have historically resisted selling on Amazon, but these recent additions to the online retailer's platform mean major luxury brands should no longer hold out.
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