3 Signs Unauthorized Sellers Have Gotten Their Hands on Your Inventory

By: Andrew Schydlowsky (TrackStreet) January 2, 2019

If unauthorized sellers have gotten their hands on your inventory, you’re going to learn about it eventually. But if you aren’t proactively monitoring your products’ resale activity online, you might discover the problem too late to prevent damage to your brand, including negative word of mouth, price degradation and declining sales. So if you see any of the signs we’re about to discuss in this post, it could mean unauthorized third-party retailers are already selling your products without your permission - and possibly hurting your brand. That means you’ll need to act fast to minimize the damage.

3 Signs Unauthorized Sellers Have Gotten Their Hands on Your Inventory

 

Of course, the best way to protect against the dangers of unauthorized sellers is to sign up for an automated, online brand protection service. This is your best chance of quickly catching leaks in your distribution chain and retailers selling your products without permission - before they have a chance to do the type of damage to your company we’re about to describe.

 

1. Reorders from your existing dealers slow down or stop altogether

Any of your official retail partners might pause their inventory purchases from your company for a number of legitimate reasons. But if several dealers begin slowing down from their standard reorder pace at the same time, one possible reason is they’ve have spotted unauthorized sellers undercutting their prices online - and they’re stepping back to see if you’re going to do anything about it.

If you’re wondering why these retailers wouldn’t all just call your company and tell you about their concerns, remember that it isn’t the responsibility of your resale partners to police your distribution channel for you. If they determine that your company doesn’t take enforcing your MAP or Resale policy seriously, they might just decide to phase you out as a supplier. An early warning sign that your sales leadership should be on the lookout for: your close rates suddenly dip.

 

2. Your sales team faces unusual difficulty adding new retail partners

When your in-house sales reps call on retail companies about adding your product lines to their physical or online stores, those retailers are going to do their own research.

If they get the sense your inventory is falling into the hands of unauthorized sellers (for example, because they see your products advertised at very different price points across retailers), these businesses might decide it’s not worth the risk to take you on as a supplier. They don’t want to be unfairly undersold by rogue 3rd parties after they’ve made the effort to join your authorized dealer program, and they don’t want to be associated with selling a brand that’s in a downward spiral. Retail companies have to protect their own brands, too.

Retailers might not cite unauthorized sellers as the reason for declining your sales reps’ offer to start carrying your inventory. It’s not their job to alert your company to problems they’ve spotted with your distribution channel. But if your reps begin to see a trend where it’s more difficult than usual to sign up new retailers, it’s worth investigating this as a possibility.

 

3. You start seeing a trend of negative customer reviews

Your company should actively monitor the web for customer reviews and star ratings. If you see an increasing number of negative reviews, you need to dig into the substance of those comments to figure out if the complaints refer to a common problem.

The issue might have nothing whatsoever to do with your products but instead reflect the fact that unauthorized sellers are creating disappointing purchase experiences for your customers. For example, if you find a series of negative reviews with comments such as “misleading product details” or “different packaging” or “missing warranty info” or other factors, these could indicate your customers are being fooled into buying from unauthorized sellers.

Your sales leadership may also begin to see a spike in complaints about pricing policy violations, if you have a MAP or other Resale Pricing policy in place, particularly among online sellers with which you have little to no prior relationship. It is not uncommon for unauthorized sellers to set up new accounts in marketplaces like Amazon, when they get their hands on more inventory, and using a variety of dirty tricks to hide their identities. Learn more about 13 of the dirty tricks that rogue sellers use to devastate brand value in this video series.

 

The solution: get proactive

 

Obviously there is no “good” way to learn that unauthorized sellers have somehow acquired your inventory and are now selling your products online with your permission. This type of discovery is always bad news.

But you don’t want your first hint of the problem to be any of the signs we’ve discussed here. By the time your legitimate resale partners start pulling away, or your sales team realizes it’s harder than ever to sign up new retailers, or negative reviews have piled up alongside the buy button for your products, and your brand will have already begun suffering  damage due to these unauthorized sellers.

Clearly, you want to find out if you have leaks in your distribution channel before any of these bad things happen to your company. And for that, you’ll need a brand protection partner. Contact us and let us help before you start seeing signs like these.

 

 

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