Birkenstock is cutting ties Amazon.com due to the influx of counterfeits and unauthorized selling on the online shopping site. As a result, the sandals company will no longer supply products to Amazon in the U.S. beginning January 1, 2017. And that's not all: Birkenstock noted in a letter to the U.S. online giant that it will no longer authorize third-party merchants to sell on the site, either.
In a memo from Birkenstock USA, dated July 6, CEO David Kahan, says: "The Amazon marketplace, which operates as an 'open market,' creates an environment where we experience unacceptable business practices which we believe jeopardize our brand. Policing this activity internally and in partnership with Amazon.com has proven impossible." A company spokesperson confirmed the letter's authenticity but declined further comment.
Per CNBC, "Birkenstock, founded more than 240 years ago in Germany, is one of the many brands, big and small, struggling with Amazon's growth in counterfeits. It's a problem that's exploded since Chinese merchants started flooding the site in the last couple of years. Scores of legitimate sellers are hurting because fraudsters are knocking off their products and utilizing tactics such as paying for reviews, jumping into their listings and taking advantage of loopholes in Amazon's logistics system. For example, Amazon commingles inventory from distributors at its fulfillment centers, so authentic products and fakes can get mixed together."
Birkenstock has seen legions of Chinese sellers promoting its flagship Arizona sandal for $79.99; that is $20 below the retail price. According to Kahan, the only way to get Amazon's support in its fight against copies is by selling the entire catalog to Amazon. CNBC noted: "It's part of the online retailer's effort to be the one-stop shop for anything and everything. Plenty of brands have opted to team up with Amazon and hand over full collections instead of engaging in a never-ending fight. But it's not a workable option for Kahan, who wants to maintain control over the Birkenstock brand. So he pulled the plug."
Birkenstock will be telling consumers to purchase only from authorized retailers, and that any products listed on Amazon can't be trusted. "So, buyer beware," he wrote. And the message to stores: "We will be vigilant in handing any retail partners who choose not to comply after January 1, 2017."