This startup is monitoring eBay and Amazon with AI to spot counterfeits

September 7, 2016

When browsing some of the world’s biggest online marketplaces, it can be hard for the everyday consumer to spot a counterfeit product from a third-party seller. And when a consumer gets a product that looks legitimate but performs poorly, it can sour that consumer’s vision of the brand.

Chicago startup 3PM Marketplace Solutions protects brands with machine learning algorithms that spot counterfeits and help companies understand how customers are coming across their products.

The company scrapes data from online marketplaces and analyzes it to determine which products are counterfeit. Founder Rob Dunkel didn't divulge exact details on how 3PM spots fakes, but factors like the posting rate of an account, what kind of items it sells and even potentially fake reviews on listed items can all point to a counterfeiter. Its clients can then submit claims with marketplace administrators, like Amazon and eBay, to get shady products taken down.

Dunkel said counterfeit goods are a “massive problem" in third-party seller marketplaces. Sellers can quickly move inventory under shifting account names, passing on bootlegged “Frozen” DVDs and then disappear — only to return a few weeks later with some “Transformers” Blu-rays to get rid of.

“Marketplace websites are the future of retail,” Dunkel said. “And while it's a great distribution channel for brands, it's also created a massive problem because brands don't know who is selling their product.”

3PM has spotted counterfeits in everything from perfumes and lotions to DVDs and products that have gained FDA approval. Now, they’re working with brands of all sizes to stop counterfeit goods. One of their first big clients was HBO, which was combating a rash of fake “Game of Thrones” DVDs. But Dunkel said smaller players may benefit more from the service.

“We built it for everyone,” he said. “We didn't look at it from 'Only big brands can use our platform.' Because we're collecting data on every brand, the platform is built for any sized company.”

Because it leverages machine learning, 3PM is able to stay on top of counterfeiters’ evolving tactics. And since it’s collecting a vast array of data to spot scammers, the company is also able to help brands keep track of how their products are being presented and sold by third parties on a variety of marketplaces.

Dunkel left his job at a Chicago algorithmic trading firm to start 3PM back in 2013. Since then, he’s brought on machine learning pros and has worked with advisors on both the technical and business sides of the house. Those advisors include an expert in complex databases and a former president of Sony Pictures Home Entertainment.

3PM recently closed a $450,000 seed round, helping it to build out its sales team. But the sales team won’t just be focused on presenting 3PM to potential customers. Dunkel wants them to bring back info on what customers are looking for. Since they’re collecting all that data, Dunkel sees a potential to grow the product swiftly in step with customer demand.

Image via 3PM Marketplace Solutions

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