Falkon Focus: Open marketplaces have revolutionized eCommerce, but their weak seller verification has opened the door to fraud, identity theft, and counterfeit listings. Brands can’t afford to wait for better oversight. With Gray Falkon’s AI-powered monitoring, automated marketplace policy violation reporting, and proactive seller engagement, brands can detect fraudulent activity early, protect their reputation, and restore trust in the marketplaces that drive their business.
A New Age of eCommerce
Marketplaces like Amazon and Walmart have redefined accessibility in eCommerce. They’ve made it easier than ever for anyone, anywhere, to start selling online. That accessibility has fueled innovation, expanded selection, and created countless success stories. But recently, it’s also exposed a darker side of the marketplace model: weak vetting and minimal verification standards are allowing fake sellers and stolen identities to slip through the cracks.
A recent CNBC investigation into Walmart’s third-party marketplace revealed how easily scammers can create fraudulent storefronts, sometimes even using the business information of legitimate sellers without their knowledge. This practice isn’t unique to Walmart, in fact, most major marketplace platforms, including Amazon, TikTok Shop, eBay, and more, struggle with unauthorized and fraudulent seller accounts. These fake accounts aren’t just a nuisance, they represent a growing threat to brands, consumers, and the credibility of the platforms themselves.
The result? Rampant gray market activity, counterfeit products, identity theft, and widespread confusion over who shoppers can actually trust. When marketplaces prioritize rapid seller growth over rigorous verification, the door opens to deception, and both brands and customers pay the price.
The Marketplace Problem: Speed Over Security
The foundation of modern marketplaces is speed. Fast onboarding, fast listings, and fast growth. Modern marketplaces like Amazon, Walmart, and TikTok have built vast ecosystems by lowering the barrier to entry for third-party sellers. The problem is that the same efficiency that fuels expansion also enables exploitation.
In pursuit of scale, marketplaces may prioritize volume over verification. Seller onboarding can be completed in minutes, sometimes relying only on basic documentation or lightly automated checks. These systems, while efficient, are easy to manipulate. Bad actors have learned how to:
- Create multiple fake accounts using stolen or fabricated business credentials.
- Clone legitimate stores to impersonate trusted brands and siphon off sales.
- Evade enforcement by relisting products under new accounts when caught.
The CNBC report on Walmart’s marketplace found that fraudulent sellers were able to open storefronts using incomplete or fake business details. This industry-wide weakness highlights the troubling reality that marketplaces are verifying sellers faster than they can verify their legitimacy.
What began as an effort to democratize eCommerce has, in some cases, turned into a system where the identity of a seller is less scrutinized than the authenticity of the products they sell. And that imbalance has serious consequences for brands and consumers alike.
Real-World Consequences: Scams, Counterfeits, and Brand Damage
The rise of fraudulent seller accounts isn’t a distant or abstract problem. It’s affecting real brands and real consumers every day. Weak marketplace verification allows these sellers to operate in plain sight, using stolen business identities and nearly identical storefronts to mislead shoppers and hijack sales from authorized sellers. The damage ripples in every direction:
- For brands, it’s a direct assault on reputation. When customers receive fake or defective products, they don’t blame the unauthorized seller, they blame the brand name on the box.
- For consumers, it’s a trust, and often a safety crisis. Shoppers who fall victim to scams or receive poor-quality products lose confidence not only in the brand but in the marketplace itself.
- For authorized sellers, it’s lost revenue and visibility. Fraudulent storefronts manipulate search rankings, undercut pricing, and siphon traffic intended for authorized listings.
And because these fake accounts are often short-lived due to being quickly deleted and recreated, monitoring and enforcement becomes a game of whack-a-mole. By the time one fraudulent storefront is detected and removed, another may already be live.
Why Hasn’t Marketplace Oversight Kept Up?
Despite the growing visibility into unauthorized distribution and gray market activity, marketplace oversight still lags far behind the scale of the problem. Amazon and Walmart host millions of third-party sellers, with new accounts created every day. The same speed and automation that power these platforms also limit their ability to thoroughly validate where products come from – and whether a seller has any legitimate right to offer them.
Marketplaces rely heavily on automated verification systems that confirm basic business information (business names, tax IDs, addresses, documentation). These systems are not designed to track distribution chain legitimacy or identify unauthorized sellers accessing diverted, expired, bundled, or region-restricted inventory. They also miss context – such as mismatched regional data, shell entities created solely to resell branded goods, or sellers reusing identities across multiple accounts. Manual reviews are often reserved for severe violations, leaving seller onboarding decisions made primarily by algorithms. This creates several major gaps that gray market sellers exploit:
- Volume Overload: With millions of active sellers and new accounts added daily, it is impossible for marketplaces to investigate whether each seller is authorized, compliant, or sourcing through legitimate channels.
- Identity Fragmentation: Marketplaces do not share identity or violation data across platforms or regions. This allows unauthorized sellers to reappear under new business entities, new addresses, or slightly altered documentation — often immediately after being flagged or removed elsewhere.
- Reactive Enforcement: Marketplace enforcement is overwhelmingly reactive: unauthorized sellers are typically addressed only after brands file complaints.
- Inconsistent Regulation: While the INFORM Consumers Act requires sellers to provide accurate business information, the mandate is limited to basic business disclosures — not verification of authorization or supply-chain legitimacy.
How Brands Can Protect Themselves Even When Marketplaces Don’t
Until marketplaces implement stronger verification and identity safeguards, brands must take protection into their own hands. Fortunately, there are proven steps that can help minimize exposure, even when platform oversight falls short.
- Strengthen Internal Seller Authorization: Document who is allowed to sell your products online, under what conditions, and where. Maintain an updated list of authorized resellers and distributors, and communicate this to your teams. This prevents confusion during enforcement and helps marketplaces validate legitimate listings when disputes arise.
- Monitor for Impersonation and Duplicate Listings: Fraudulent sellers frequently reuse product descriptions, images, and even brand names to appear legitimate. Regularly audit your product listings across Amazon, Walmart, and other marketplaces for duplicates, mismatched SKUs, or suspicious storefront names that mimic your brand.
- Use Marketplace Reporting Tools: Tools like Amazon Brand Registry’s Report a Violation or Walmart’s Brand Portal can help brands escalate gray market issues when they involve IP misuse, material differences, marketplace seller policies, or product quality concerns. Submitting clear evidence – screenshots, order confirmations, packaging comparisons, and proof of authorized product specifications – strengthens your case and increases the likelihood of action.
- Identify Seller Patterns and Recurrences: Gray market operators often rotate through new accounts, shift ASINs, or relist products using slight catalog variations to evade detection. Tracking seller IDs, offer behavior, timing patterns, and recurring product discrepancies can reveal repeat offenders and help marketplaces justify stronger enforcement.
Even in a marketplace environment where verification remains inconsistent, brands that combine vigilance with automation can stay ahead of emerging risks, protecting both reputation and customer safety and trust.
Gray Falkon’s Role in Protecting Brand Integrity
Trust is the foundation of every successful brand, and protecting it requires speed, scale, and precision. Unauthorized sellers leave brands vulnerable, but Gray Falkon helps close those gaps with AI-powered detection and engagement.
AI-Powered Monitoring Across Marketplaces
Our proprietary AI technology continuously scans Amazon, Walmart, and other leading marketplaces to detect unauthorized sellers, suspicious listings, and patterns consistent with gray market activity. Rather than relying on random audits, our solution analyzes the full ecosystem of a brand’s product listings, helping brands identify where fraudulent activity originates and how it spreads. This always-on monitoring ensures that no matter how fast the sellers move, your brand has real-time visibility into emerging risks.
Marketplace Engagement and Violation Reporting
Detection is only the first step. When violations are found, our Full Deployment solution automatically generates marketplace-compliant reports for faster, more effective enforcement actions to be taken by the marketplace. Each submission is built on documented evidence, ensuring that marketplaces have the proof they need to act decisively. This process delivers:
- Faster takedowns of fraudulent and duplicate storefronts.
- Higher accuracy through structured, policy-aligned reporting.
- Consistent documentation for internal compliance and long-term brand protection.
Falkon Connect: AI-Powered Seller Engagement
Fraudulent sellers often rely on anonymity, but Falkon Connect brings them out of the shadows. This AI-driven engagement engine communicates with sellers at scale, collecting sourcing information and encouraging voluntary compliance. By combining automation with compliance-focused communication, Falkon Connect allows brands to act faster and more intelligently against threats.
Answer Policy Questions With Ask Gr[AI] Falkon
Ask Gr[AI] Falkon is Gray Falkon’s AI-powered policy recommender designed to help brands understand Amazon’s policies. Instead of digging through lengthy policy documents and Seller Central announcements, you can ask direct questions and receive clear answers and actionable guidance.
Whether you need to know what documentation Amazon requires for a brand approval request, how to address an ASIN flagged for review, or what constitutes a product detail page violation, Ask Gr[AI] Falkon delivers instant, policy-based answers drawn from marketplace policies and Gray Falkon’s extensive knowledge base.
Marketplace Brand Protection Portal
Transparency drives better decisions. Full Deployment clients gain access to our Marketplace Brand Protection Portal, a suite of dashboards that turn detection data into actionable insight. Key dashboards include:
- Overview Dashboard: See brand protection impact across marketplaces and regions.
- Products Dashboard: Identify which ASINs or SKUs are being targeted.
- Sellers Dashboard: Track unauthorized seller activity.
Together, these tools give brands the clarity to understand not just who is posing the threat but how to stop it before it spreads.
Marketplaces Need Better Vetting Systems, but Brands Can’t Wait
The explosion of third-party sellers has reshaped eCommerce for better and for worse. While open marketplaces have unlocked massive growth opportunities, their weak verification systems have also made them vulnerable to fraud, impersonation, and counterfeiting. Every fake storefront that slips through vetting doesn’t just harm consumers, it undermines the credibility of the entire platform.
Marketplaces like Amazon and Walmart are taking steps to improve oversight, but the scale of the problem outpaces even their best efforts. For brands, waiting for stricter verification policies isn’t a viable option. The responsibility to detect, report, and enforce has shifted downstream — onto the very brands being targeted.
That’s where Gray Falkon steps in. By combining AI-powered monitoring, automated marketplace engagement, and intelligent seller engagement, Gray Falkon gives brands the control that marketplaces lack. From detecting rogue listings and identifying policy violations to tracking repeat offenders, our solution makes brand protection both proactive and scalable. Schedule a demo today and start protecting your brand against unauthorized seller activity.
