Earlier quoted context omitted.
And where are you getting this 1% number from? Why are you assuming a 99% false positive rate? It's not hard to identify bogus retailers in this case because luxury brands usually have direct contractual relations with retail partners rather than selling though wholesale channels. So if you see cheap stuff.com selling 'Chanel' merchandise and they're not on the list of authorized distributors, then by definition they…
Faulty logic. I'm not on the list of authorized distributors. I can sell a shit ton of Chanel merchandise. There is no definition of anything at all here that means I am selling knockoffs.
How? According to Chanel's corporate website, they only sell through their own boutiques and authorized retail partners. This is known as a selective distribution agreement, and here is a 2008 report on internet sales models (prepared for Chanel) which articulates the differences from normal wholesale-retail models: http://www.crai.com/ecp/assets/Selective_distribution_Caffar...
My whole point is that no, you can't just go into business as a Chanel retailer, and you'll find the same is true for Hermes, LV, and a variety of other luxury brands. A great many high-value manufacturers make use of selective or exclusive distribution agreements to maintain price discrimination and market positioning for their brand across a global market.