Amazon seller / vendor here with over $5MM in annual sales.
We sell to both Amazon directly and fulfill via FBA when PO's are delayed due to their archaic purchasing system.
Let me tell you guys what the real problem is, you ready for it? CHINA
When Bezos opened up the platform to Chinese sellers in 2015, they FLOODED the market with not only counterfeit items but straight illegal business practices (the notion of piggybacking on listings and selling an item for 50-90% less than normal and never actually shipping a product until they get banned. Rinse and repeat).
The other side of the problem is the American consumer: I want it fast and for as cheap as possible. Some of the worst customers are in the US; they "rent" products and return them used and incomplete before the 30-day return window. Even worse, during Q4 when Amazon gives them 90-days to rent something for free. The American consumer is a big part of the problem and Bezos and friends simply know how to take advantage of this and bump up their bottom line for shareholders.
Amazon DOES NOT CARE because they take fees on each purchase sold by the Chinese trolls.
And like someone previously stated, before a major tier-1 brand gets burned hard, nothing will change.
Apple doesn't sell to Amazon, they don't need to. They have their own channels which are incredibly successful.
The small brands suffer and they suffer simply and purely because of the Chinese.
Most (>95%) Chinese sellers are cancer to the platform. But the consumer is seldom damaged because of Amazon's (still great) customer service.
Get rid of the Chinese and most of this will be resolved. Joe Blow isn't counterfeiting products and selling them on Amazon. At least 9/10 times.
The solution is two-fold:
1) Severely limit anyone without a legitimate US-based company (registered entity, taxed, EIN, etc) to sell on Amazon. Further, require bonds, throttle traffic, limit the number of ASINs "new sellers" can list on, initiate tariffs for non-US sellers (government can only do this).
2. Consumers simply need education that buying on Amazon today is a different game. Their risk is high and the reward low. PR and articles like this help but more consumers need to educate themselves on what is happening. But this is not easy - when you want the cheapest possible price, you're going to the new Amazon Bazaar.
So the mindset of the American consumer is flawed and Amazon plays into this beautifully. They're not stupid and they know exactly what's going on.
There are many technical comments here and they are all righteous. But the problem is a very top-level problem. It is simply the Chinese. Period.
Limit the Chinese and Amazon will be the Amazon of old.
Chinese (or any non-US) sellers should absolutely NOT be allowed to sell anything on Amazon.com. They don't pay income tax and this is simply another loophole Amazon has found in their domination of cheap e-commerce.
This doesn't happen anywhere else in the world. If you sell a product in Europe, you're on the hook for VAT, import taxes, etc.
Not the case in the US of A.
Big systemwide changes are needed.
As an aside: Shit will definitely hit the fan soon and Amazon will start to feel it. But it will take time. Their brand is already suffering due to this counterfeiting mess and it's not getting any better. As someone who used to buy everything on Amazon, I don't buy much anymore. I'd rather go to the brand's site and purchase directly or a brick and mortar.