How brand abuse impacts revenue

 

Brand abuse is the unauthorized use of a brand’s general reputation and IP-protected assets, including its name and logo, for unlawful financial gains. It can happen in many forms, e.g., phishing, impersonation, counterfeiting, and cybersquatting.

 

Consumers falling for such a scheme usually suffer financial losses, ranging from a little money to their entire life savings, depending on the nature and scope of the scam. Brands and businesses also have to face revenue losses, but these come from more complex sources.

 

 

The three main pillars of brand abuse that cause revenue loss

The first group of losses is the easiest to grasp. Counterfeiters and/or brand impersonators siphon sales from legitimate brand channels, which causes direct revenue loss for brands. In addition, complaint tickets can start flowing into the brands’ customer service departments for bad quality products that they didn’t even produce.

 

 

Illustration of a frustrated customer service agent dealing with a difficult phone call

 

 

However, this is far from the only related problem businesses have to face.

 

Customers, when encountering fake products of subpar quality or dubious online messaging, will not immediately recognize a scam. In fact, more often than not, customers will associate the issue with the legitimate brand, causing a loss of trust that is usually very difficult to come back from. Should a scam affect a business on a large, highly visible scale (as is often the case in the era of social media), the damage to its reputation may be irreversible.

 

Discover the real value of a brand’s reputation

 

Finally, the third tier of revenue loss from brand abuse is SEO and ad damages. Scammers use SEO to divert traffic to their own sites, but the results go well beyond the cost of lost sales and fewer online visitors. The fake pages can steal backlinks from legitimate websites, with their duplicate content distorting rankings and confusing search engines.

 

Moreover, the negative customer reviews caused by the scam may find their way to a legitimate brand’s webshop and product listings, causing further loss of reputation and sales. This starts the cycle anew, and can stay with brands for a long time even after the original case of brand abuse has been dealt with.

 

 

Brand abuse in numbers

According to a joint report issued by the OECD and the EUIPO, the global trade of fake goods reached an annual value of $467 billion, representing 2.3% of all global trade. Clothing, footwear, leather goods, electronics, watches, cosmetics and jewellery are the most affected product categories both in terms of volume and individual value.

 

In the clothing industry in the EU, this translates to an average loss of sales of 12 billion euros, representing 5.2% of all EU sales in this product category. In the case of cosmetics, these numbers are 3 billion euros and 4.8%, while for toys the losses amount to 1 billion euros and 8.7%.

 

 

Illustration of a customs agent examining incoming packages

 

 

Amazon alone has seized 15 million counterfeit products on its marketplaces worldwide in 2025. Over the same period of time, TikTok Shop removed more than 70 million AI-generated fake listings from its platform.

 

Let us take a look at each type of loss in more detail.

 

 

Direct revenue loss for businesses

Counterfeiting is thus both directly and indirectly responsible for considerable financial losses for both consumers, brands, and businesses. In the EU, it directly contributed to a loss of around 200,000 jobs over 12 months.

 

Revenue losses start when customers looking for a brand’s products land on a fake website instead. Counterfeit listings and entire fakeshops use SEO to divert traffic to their site, duping shoppers into believing they found what they were looking for. Thanks to AI, fake webshops can often mimic genuine ones to the dot, making it very hard for users to realize they’re being duped.

 

Find out how to identify a fakeshop!

 

Quite often, fraudsters offer significant discounts to lock in buyers. Depending on the quality of the actual product that arrives, consumers may not ever realize they’d bought a fake. In such a case, when the product inevitably starts malfunctioning, the original brand gets the blame.

 

 

Margin erosion

Discounts offered on fake products don’t only cause direct losses from lost sales, but also affect brands’ pricing indirectly. As they undercut authentic pricing, counterfeit products also contribute to margin erosion.

 

The situation is very similar to the margin erosion caused by grey markets, where price differences between regions may motivate merchants to buy authentic goods in lower-priced regions and sell them somewhere else for a wider margin.

 

 

Related topics

Online vs offline grey markets

 

Grey markets across industries

 

Grey markets on online marketplaces

 

 

At the end of the day, these price differences train customers to look for lower prices and may even make them question why they should pay more for a branded product that they could get for less. In some cases, this even motivates consumers to deliberately purchase fake products.

 

 

Illustration of bargain shopping deals with tags showing significant price reductions

 

 

Customer trust

Counterfeit goods, although they often vary in quality, are usually well below the quality level people expect from a branded product. And when the fake product inevitably fails to live up to those expectations, the resulting loss in customer trust falls back on the brand, even though they had nothing to do with the product.

 

The same can be said of grey market products. While these are original, their sellers are unable or unwilling to provide the same after-sales services and shopping experience that authorized sellers do. Once again, this falls back on the brand, even if it’s not their fault.

 

This loss of trust and reputation is especially bad for luxury brands, whose image depends on exclusive quality and services.

 

These experiences often result in bad customer reviews, which, thanks to the eternal life of the internet, can haunt a brand for a long time and ruin its reputation for future customers.

 

 

SEO and ad damages

Setting up a successful SEO strategy takes time, funds, and effort. If counterfeiters hijack brands’ keywords and divert traffic to their fakeshops instead of a business’ legitimate site, that effort is not only in vain but actively finances fraudsters to steal from the brand.

 

This ad spend dilution distorts a business’ SEO strategy, with negative customer reviews causing even long-term damage that can’t be easily corrected by the brand. Moreover, the duplicate content that is created when fraudsters copy brands’ genuine pages has a further negative effect on overall SEO performance.

 

Once the damage is done, reclaiming these lost spaces and rebuilding SEO is a slow and difficult process, consuming a significant amount of time and financial resources.

 

 

How early action benefits brands

Taking action against individual counterfeit listings can help address immediate infringements, but isolated takedowns alone may not provide a complete view of the underlying risks.

 

Without further investigation, broader infringement patterns, connections between individual cases and the identities or activities of those responsible may remain undiscovered. As a result, recurring infringements can be difficult to address effectively and systematically.

 

A comprehensive online brand protection program combines continuous monitoring with risk analysis, investigation, and targeted enforcement. By identifying patterns and connections across seemingly unrelated infringements, brands can gain a clearer understanding of the underlying activities and take more informed and effective action.

 

This approach helps organizations move beyond reactive takedowns towards a structured, long-term strategy for protecting their brands and intellectual property online.

 

Moreover, the systematic removal of infringing content can improve conversion rates and diminish the negative effects of counterfeits on brands’ reputation.

 

 

Conclusion

Brand abuse has serious, long-term effects on brands’ sales revenue and reputation. Leaving fraudulent listings unchecked is harmful, but eliminating them one-by-one is not an efficient solution either.

 

Instead, businesses need to set up targeted brand protection strategies to counter the effects of online infringements. Continuous online monitoring and quick enforcement action ensure that no issue can remain undetected and unanswered for long, eliminating the harmful effects on brands’ revenue and reputation.