I agree. Because of Amazon's scale selling counterfeit items is good for business. Only a minority of customers will notice the fake and return it, which they've streamlined so that it's no big deal.

Counterfeit items likely get Amazon more customers than it loses. The cheapness of counterfeit is attractive to new customers, and the ease of returns retains customers. Besides, everybody can't be a conesieur in everything they buy, so it's feasible to still be successful at high rates of counterfeit goods on the site. Some econ student could probably share some good studies on this kind of economy for us.

Maybe Amazon can try the pirate Bay argument that they just host the content they're not responsible for it respecting copyright?