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Online Guide: How to Stop Unauthorized Amazon Resellers

by Andrew Schydlowsky (TrackStreet)        August 30, 2018


How To Stop Unathorized Amazon Resellers

INTRODUCTION: If you’re a manufacturer or brand owner, an unauthorized reseller on Amazon is any third-party retailer who has no official relationship with your company — and no right to buy your products to resell them to customers — but who nevertheless sets up sales pages on Amazon advertising your products.

What’s particularly problematic about this is that Amazon is well known for often choosing to remain neutral in manufacturer-retailer disputes.

Amazon might quickly remove a retailer’s listing from its marketplace if the manufacturer can prove the retailer has committed a crime — such as illegally using the manufacturer’s intellectual property (trademarks, brand name, etc.). But Amazon will in other cases refuse to take any action if that retailer is simply listing products below the manufacturer’s MAP pricing policy. Amazon’s seller team often tells manufacturers that it does not get involved directly in pricing disputes between brand owners and retailers on its site.



How Unauthorized Resellers on Amazon Operate

Rogue retailers employ all sorts of tricks to sell products on Amazon without the permission of the manufacturers or brand owners of those products. Here are a few of the more common examples.

  •     Using phony ASINs to avoid detection by the manufacturer.

Imagine a retailer who isn’t part of your Authorized Dealer Network and has no official relationship with your company, but who still wants to make money selling your products on Amazon. One trick they’ll employ is to create fake ASINs (Amazon Standard Identification Numbers) for each of your products they want to list.

With this trick, they can place their sales pages on Amazon and your company (or even your price tracking software, if you’re using one that isn’t great) might not catch it — because while you’re scanning the marketplace for your ASINs, they’re selling your products on Amazon in broad daylight because they’ve made up their own ASIN.

TrackStreet advises its customers that there should be a one-to-one relationship between ASINs and UPCs. If new ASINs pop up when TrackStreet crawls the site looking for products, it is likely that someone is playing games, and further investigation is required.

 

  •     Selling under phony retailer names to avoid detection by the manufacturer.

Like the rogue retailers who use the phony-ASIN scam, these companies are also able to hide in plain sight, at least for a while. They develop listing pages on Amazon to advertise your products, usually at prices discounted well below your MAP-approved levels, and your company might not spot them because you have no idea to look for them.

Worse, even if you do manage to catch these retailers and threaten them with legal action if they don’t stop advertising your products on Amazon, they can be challenging to identify and reach. And if you can figure out who they are, they can just pull those listings and then rebuild their identity under yet another phony company name as a “new Amazon Seller.” It’s the rogue-retailer version of the whack-a-mole game.

 

  •     Creating multiple phony ASINs for the same product, to push legitimate sellers’ listings down on search-results pages.

Many brand owners and legitimate Amazon sellers have complained that rogue sellers intentionally create multiple fake ASINs for the same products — products they have no permission selling in the first place — to increase their chances of winning a higher slot in an Amazon shopper’s product search results, or even the buy box.

These rogue sellers are taking advantage of the fact that Amazon allows for multiple ASINs on similar but not identical products, such as products with different colors or sizes. In reality, this is just a clever way to “hog” the top search results and crowd out the authorized retailers who are legitimately selling these same products, by pushing those listings to the bottom of the search results.

Some of these clever rogue sellers will also create multiple phony ASINs for the same product not under the name of a single retailer but under the names of several sellers — all existing in name only, and typically under the operation of that single rogue seller.

If you encounter such an issue, you should report it to Amazon immediately.

 

  •     Tweaking a manufacturer’s product details on their sales pages, to lure customers from competitors also selling the same products.

Unauthorized resellers of your products on Amazon know the sales listings they’re creating on the marketplace will be going up against competitors (your authorized resellers, in most cases) who are selling the exact same products.

So they will sometimes intentionally add inaccurate, exaggerated product specs and other details to their sales listing pages to lure customers away from their competitors.

For example, they might add an untrue statement about your product in the features section. They might use an inaccurate (but impressive!) photo to imply the product has characteristics it actually doesn’t. They might try all sorts of tricks to give a shopper a false impression of your product — so the customer buys from that reseller instead of all of the others on Amazon offering the product.

The problem, of course, is that this trick — and the many others that unauthorized resellers of your products on Amazon use — will likely lead to customer anger, public distrust and, eventually, an erosion of your brand’s value.

 

Bottom line: To effectively protect both your honorable retail partners and your brand value, you need to know that there might be unauthorized retailers on Amazon (and on other marketplaces) using them against your company at any time and how to deal with them effectively.

 

5 Options for Handling Unauthorized Resellers Selling Your Products on Amazon

1. Ignore the violations.

Many manufacturers take the head-in-the-sand approach when they spot an unauthorized reseller violating one or more of their guidelines on Amazon. There are several reasons for this.

In some cases, the manufacturer has tried dealing with the rogue retailer directly and had no luck stopping the behavior. Maybe they could not identify or communicate with the seller. Or perhaps they sent a warning message and the retailer simply ignored it and continued with its unauthorized sales listings. And the manufacturer doesn’t know what else to do.

In other cases, the manufacturer has taken its case to Amazon. But if Amazon determined that the retailer wasn’t breaking intellectual property laws, they might have told the manufacturer there wasn’t much they could do. So that manufacturer might have concluded they simply had no recourse if they ever again spotted a MAP pricing policy violation on Amazon.

Finally, in some cases an employee of the manufacturer’s company might have noticed a violation on Amazon and simply chosen not to address it because he didn’t know what to do.

But of course, ignoring reseller policy violations, on Amazon or anywhere else, is the worst possible approach—because it can quickly lead to additional violations, a price war, furious partners in your authorized resale network, and eventually harm to your brand value.

 

2. Complain to Amazon.

This strategy can be worth trying — but it’s important to keep in mind that Amazon tends to take a hands-off approach in disputes between brand owners and retailers involving such issues as violations of company pricing or brand guidelines.

As we stated above, however, there is one major exception to this trend: Amazon will step in and help remove a rogue reseller’s listing if they determine that the sales page contains copyright or intellectual property infringements. The marketplace does not want to be a party to any illegal activity, and hosting content online that is proven to violate the law could put Amazon itself in legal jeopardy.

The good news here — if you can think of any of this as good news — is that if you’re dealing with an unauthorized retailer selling your products on Amazon, you might be in a better position to make a case that the company is violating your intellectual property. If they have copied and pasted your company’s sales copy, for example, and if they are using your brand’s logo or taglines or any registered or trademarked material, you might be able to appeal to Amazon that they are in fact violating your intellectual property rights.

But if your real issue with this retailer isn’t that they are using your copyrighted material, but rather that they are offering your products on Amazon below your MAP-approved price levels, or that they aren’t part of your Authorized Dealer Network, you might need to look to someone other than Amazon for help.

 

(NOTE: Below you will find more strategies that you can use to report rogue retailer abuses to Amazon, which can increase your chances of getting help from the marketplace.)

 

3. Sign up for Amazon Brand Registry.

A more practical option to prevent (or at least cut down on) unauthorized resellers offering your products on Amazon is to establish your company or a trusted resale partner as the official “brand owner” on Amazon — by signing up for Amazon Brand Registry.

You can find the details and benefits of Amazon Brand Registry here. For our discussion here about rogue retailers, just understand that by establishing yourself as brand owner on Amazon, you will enjoy additional protections for your brand across the marketplace — including greater barriers to stop rogue retailers from create unauthorized sales listings and enhanced monitoring and enforcement tools on the Amazon platform itself to give you a better chance of spotting even the more sophisticated rogue retailers.

 

4. Apply to become a Restricted Brand on Amazon.

Unless your company is trying to prevent counterfeiters from selling phony versions of your products on Amazon, this might be too aggressive an approach to dealing with unauthorized resellers.

Amazon’s Restricted Brand status puts your brand (or specific products) on a list that limits which resellers can offer those products on Amazon’s marketplace. Brands on this list are typically those in categories most vulnerable to counterfeiting — such as luxury apparel brands, high-end handbags, and many types of consumer electronics. Getting onto this Restricted Brand list requires effort, though, including an application to Amazon

And if Amazon accepts your brand onto its Restricted Brand list, they will be much more aggressive in preventing sellers from creating sales listings of your products on Amazon (other than those retail partners you specifically allow).

The downside of this approach is that for many manufacturers it will go too far in other direction — making it more difficult for the manufacturer’s retail channel to sell its products through Amazon.

Sellers often complain that Amazon prevents them from listing certain products on the marketplace even though they are members in good standing of the manufacturer’s Authorized Dealer Network.

So unless you are concerned about counterfeiters on Amazon luring your customers away with knockoffs of your products, you might want to stay away from the Restricted Brand approach.

 

5. Set up an automated brand protection platform that can help deal with unauthorized resellers on Amazon.

Finally, one of the most practical and cost-effective options is to deploy a price tracking and brand protection solution backed by a team of experts who can also help you specifically address rogue retailers on Amazon.

This type of software application will monitor your brand’s presence across Amazon (as well as the entire Internet) 24/7/365, and will help you to take action against unauthorized resellers who are hijacking sales from your authorized retail partners on the platform.

 

Will Amazon Help if You Report an Unauthorized Seller?

If you identify a rogue retailer listing your products on Amazon, you can report this abuse to the marketplace directly. But here are few things you’ll want to keep in mind:

  •  Amazon generally limits its involvement in manufacturer-retailer disputes to those that involve violations of intellectual property rights, counterfeit products, or other issues in which the manufacturer can prove the retailer is in some way defrauding consumers.
  • Amazon explicitly states that it is not the company’s policy to assist manufacturers or brand owners in enforcing their own reseller policies or distribution agreements.
  • When Amazon Seller Central conducts an investigation into your complaint against a retailer, they will be looking for violations of Amazon’s own seller policies — not violations of your company’s own policies or interests.

There is some good news, however: Even though it’s not Amazon’s policy to help you remove listings of your products just because you claim a retailer does not have your authorization to sell them, there are several ways in which a rogue retailer might also be in violation of some of Amazon’s own guidelines. If you can prove these abuses, Amazon will likely help you remove such listings from their marketplace.

 

If You Spot an Unauthorized Retailer on Amazon, Documenting These Violations Will Help Your Cause

NOTE: Because you will need documented evidence of these Amazon seller violations to bolster your case, often the best strategy when you spot what you think is an unauthorized seller of your products will be to conduct a “test buy” and document every stage of your purchase experience.

 

  •      Attempts to divert transactions or buyers

If you go to the Amazon listing page of a rogue retailer selling your products, and that seller’s listing page includes links or other calls to action encouraging you to leave the Amazon site to buy their products, you have caught a violation of the marketplace’s seller guidelines. Document these messages for reporting to Amazon.

 

  •      Maintaining multiple seller accounts

We discussed the fact that to game the Amazon marketplace, many rogue retailers will create several seller names both as a way to hide from manufacturers and to keep operating even if the manufacturer catches one of their phony names and gets it shut down. So if you can trace multiple unauthorized resellers to the same rogue operator, document this and present it to Amazon.

 

  •      Misuse of ratings, feedback, or reviews

Sometimes a rogue retailer that has just begun published listing pages of your products will attempt to create the illusion of legitimacy by posting phony customer reviews to their own pages, or paying others to pretend they have purchase the products and leave their own fake positive feedback. If you can spot an unauthorized reseller of your products on Amazon, check out their customer reviews, document any that seem fraudulent, and report them to Amazon for investigation. This might be yet another way to shut down a rotten retailer selling your products without your permission.

You can find many more Amazon violations to look for and document on an unauthorized reseller’s listing page by visiting Amazon’s Prohibited Seller Activities and Actions page.

 

Two Final Pieces of Advice for Stopping Unauthorized Amazon Retailers

1. Put distribution agreements into place

We at TrackStreet highly recommend that you implement distribution agreements with your wholesale and retail partners. Unlike MAP and other pricing policies, which should in most cases be structured as unilateral statements by the brand owner to remain on the right side of antitrust laws, these arrangements with all of your distribution partners can and should be drafted as two-way agreements.

A distribution agreement will establish, for example, which companies your wholesale partners are allowed to sell your inventory to — based on an authorized dealer program you will also establish. It will also insist that your retail partners to sell only to end-user customers, and not to other retailers. These agreements will help restrict where each of your distribution partners may sell your products, which will help reduce the “leaks” in your supply chain that can lead to rogue retailers getting their hands on your inventory to list on Amazon.

 

2. Deploy an automated reseller monitoring and enforcement software app

Finally, it’s important to understand just how massive an undertaking it will be to police the enormous Amazon marketplace at all hours of every day — let alone the rest of the Internet — which is what your company will have to do to quickly spot unauthorized resellers in the first place. For that reason alone (not to mention to protect your brand’s reputation), you should consider implementing an automated program to monitor your product on Amazon— and to help you deal quickly and aggressively with violations.


 

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