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Amazon fails to prevent clone cartridge sales

January 12, 2018

Reputable German remanufacturers feel under threat in the face of a tide of Chinese-based distributors selling clone cartridges via the online retailer.

Spiegel reports that Western producers of alternative cartridges are being left at a disadvantage, due to an onslaught of Chinese sellers purveying clone cartridges on Amazon and eBay without having to worry about VAT or recycling. As a result, the Chinese-produced cartridges are “unbeatably cheap”, prompting German remanufacturers such as Werner Sandten* to lament that, “Since the Chinese low-cost suppliers flood Amazon, we sell virtually nothing”.

Sandten owns a company which manufactures alternative printer cartridges, designed to be compatible with Epson and Canon devices. There are a number of such remanufacturers operating throughout Germany and wider Europe, including Pelikan and Edding, and although there has always been “friction” between OEMs and remanufacturers, now both kinds of company are facing a new and worrying opponent.

According to Spiegel, Chinese producers of clone cartridges, many of which initially began as suppliers to Western manufacturers, have now gone to become their major competitors, flooding online retailers like Amazon with their “one-to-one replicas” of original cartridges. Many of these Chinese manufacturers “do not care about existing patents”, and, unlike German remanufacturers, they are not required by law to take responsibility for the recycling of their products.

In addition, while producers like Sandten need to charge VAT – “Otherwise we would go to jail” – his Asian competition “often do not pay VAT”, meaning they can charge lower prices for their cartridges.

“Many of these sellers are not playing fair,” commented Charles Brewer of Actionable Intelligence. “That’s a real problem.”

Sandten has repeatedly written to Berlin-Neukölln, the office responsible for Chinese dealer tax, but has received no reply.

“If the legislature does not soon ensure that there is fair competition, then the alternative manufacturers and the refill shops in the cities will break,” he said.

There are already indications that there is a “power shift” toward Asia, with a Chinese consortium taking over Lexmark and German remanufacturer Pelikan selling its licenses to Print-Rite.    

“All Western companies have losses,” says Brewer. “In the US alone, the number of cartridge manufacturers has dropped from 4,500 to less than 750.”

In Germany, the government response to the onslaught of Chinese sellers promoting clone products has been slow, with Finance Ministers only agreeing on a “legislative initiative to stem online tax fraud” at the end of November 2017.

As for Amazon, the online retailer has yet to take any definitive action to halt the tide of dubious clone cartridge purveyors,

“The sale of counterfeit products on Amazon is prohibited,” the retailer said, adding that, if tax regulations are violated by a seller, “processes have been established to check the account and close the seller account, the seller should not submit a valid VAT number.”

However, a previous report conducted by Spiegel Online revealed that a Chinese electronics retailer is still selling on Amazon without sales tax. Meanwhile law-abiding manufacturers such as Sandten continue to struggle, while at the same time being reluctant to rock the boat by complaining to the global online retailer, worrying that Amazon will respond by placing them “further behind in the search results.”

*Not his real name

 

 

 

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