The unauthorized sale of products on third-party websites such as Amazon, Jet and eBay is significantly impacting many businesses and shifting the economics of supply and demand. More importantly, as a brand owner, it is causing you to have daily phone calls with your B&M partners, and you’d like a break from it.
Here’s a three-step program to address unauthorized sellers with more details provided below.
First, a company should revise its policies, procedures, and agreements to
- support legal claims against third-party unauthorized sellers, and
- differentiate its products from those sold by unauthorized sellers.
Second, a company should implement a tiered enforcement system. The purpose of this system is to eliminate authorized sellers through the integration of monitoring technology, investigation, and enforcement tactics in violation of policies set forth by the brand.
Third, we recommend implementing a communications strategy that:
- demonstrates to authorized distributors that the company is protecting them (providing measurable results from the enforcement system), and
- demonstrates that products sold by unauthorized sellers are unreliable and often do not come with certain services and benefits, or do not have the quality controls that the company has established.
Some More Steps to get back Control:
Is there a formal process of vetting your sellers?
We were up front in our approach that Amazon is one of our primary platforms. Have your other sellers done the same? The reason for asking is that usually, we find brands have many sellers selling below MAP under a different name than originally purchased. Amazon may be one of your customers- but are they too currently violating your MAP price? Usually, Amazon will not violate MAP first. That is, until another seller does, they will do so without hesitation. Our response has been to adhere to pricing while reaching out to you for assistance to see how we can help you as well. You can gauge your other authorized sellers accordingly and decide if they are partners wishing to be brand your brand ambassadors, or if they are acting in their sole interests.
Is the actual MAP schema enforced?
If you have a list of approved sellers, we can assist you by providing you the sellers thereby giving you better visibility and enabling you to control by enforcement. Many vendors have had to adopt a hardline approach to this such as one warning and if not immediately corrected, they are then banned from purchasing again with no opportunity to return stock. The challenge here from a sales perspective is that you and the team you are responsible for are ranked on sales volume- you may not want to lose that customer. This, in turn, must be weighed by the potential loss of OTHER customers NOT purchasing as a result, as well as brand perception. Do you really want to have your brand become the low-cost leader in the sphere? No way!
Alternatively, there are some specific things your legal department can do here.
A suggested Monthly approach is this:
Try the following initially:
- Use us to obtain a list of MAP violators’ seller names, product, quantities on hand and price being sold.
- Have your legal department send each an electronic contact C&D (Cease and Desist) as per the agreement, etc. This is easy and cheap via the Contact Seller link on Amazon listing.
- Purchase products from those vendors who did not remove after the electronic C&D received. This will, in turn, assist in finding real identify (or using Brand Registry).
- For those sellers who do not comply- Have Legal send physical Cease and Desist letter via registered mail to start the foundation for further enforcement.
- Once again, obtain a report from us, showing results of efforts, etc. by creating the report.
- If you don’t want to use your Legal department due to inexperience or workload, a suggested partner that specializes in this can be found at here.
What repurchase agreements do you have with existing B&M locations to control supply?
Usually, if a brand has an abundance of non-authorized sellers, it is a result of over-supply in the typical marketplace with existing sellers deeply discounting product to make shelf space available for other products. These discounted products are then snapped up by online sellers in a practice known as retail or online arbitrage- yes, benefiting from those price inequalities just like Warren Buffet does for undervalued stocks. A suggestion here is to look at your existing customers and look for abnormalities which may indicate a secondary channel of distribution not authorized. Do you see a spike in orders from customers’ average order volume, etc.? This will give you clues where you may have supply chain leaks that end up on Amazon, and elsewhere.
Have you registered with Amazon’s Brand Registry 2.0?
This will provide you with great control over the listing as well as sellers ON the listing. If not, we can help with this as well.
We hope these suggestions provide a solid path for you to take back control of your brand and control the way it is portrayed and those who sell it.
If you’d like additional assistance, we’d love to grow our relationship and would eagerly seek to do so. We will not over commit, as we are realists.
Using Amazon as an example, who is on track to become a trillion-dollar company, they and many other sellers, have infinitely deeper pockets than us. As such, we would not expect an exclusive relationship to distribute your products via the Amazon channel.
We would hope that by increasing our value to you while reducing the number of predatory sellers faced, your sales to us would increase and our partnership would deepen.
Thanks for taking the time to read this, and we hope there are some actionable insights herein.
We can Help
At Jim’s Whims, we have demonstrated experience spanning years assisting brands with eBay.
Additionally, we can bring value to our brand partners by improving Amazon listings optimizations and Pay Per Click (PPC) Advertising campaigns at a very reasonable cost while building your brand with your image. We’re upbeat about the future, and would love to talk further, call us at (469) 487 8221
About Jim’s Whims
We’ve built relationships on trust, results, and a long-term vision for growth and sustainability. Ultimately, we are passionate about creating a business of quality endeavor and connectivity. This is how we seek out partnerships with brands and distributors; a genuine, personal investment in the lives of customers. We will get to know you. You will get to know us. Let’s get to mixing!
By: The Team @ Jim’s Whims