It is an unfortunate fact that unauthorized sellers plague the Amazon Marketplace. Manufacturers, brand owners and authorized sellers are constantly facing abuse from these bad actors. They list without permission, stealing sales and damaging brand reputations.
This article is going to share with you how you can recognize the different types of Amazon unauthorized sellers and what you can do to stop them from hurting your business.
Who Are Considered Unauthorized Sellers?
In short, Amazon unauthorized sellers are third-party retailers who buy your products and resell them without first getting your permission to do so. They, therefore, have no right to sell these products because they haven’t established an official relationship with your company. But they do it anyway. And they usually sell at lower prices to steal customers away. They can also be worse, creating or purchasing knockoffs to pass off as your product to unsuspecting customers.
We can generally group unauthorized sellers into three categories:
Individual seller: A seller who sells only a couple of units or SKUs. This seller is probably an individual liquidating the products he got as gifts.
A subcategory of this seller can be professional “Retail Arbitrage” individuals, who go to major retailers, scoop up their clearance items and relist them on Amazon for a profit. These are one of the most common causes of complaints of legitimate retailers.
Counterfeit sellers: These sellers either knowingly or unknowingly sell counterfeit products of your brand. These kinds of products can be acquired online or from overseas, and sometimes the seller might be a first-time retailer, who thought they were original products of your brand.
Regardless, you have to identify them and act on them fast.
Liquidators: These are sellers that got your products from a shop closing down or through other means. They sell them through Amazon for a profit.
To identify them, you should check how many SKUs of yours they sell and monitor them over a period of time to see if they are a short-term or long-term seller.
Issues with Unauthorized Sellers
Unauthorized online sales create a number of problems, including:
- Upsetting a company’s authorized distributors
- Making it difficult to attract new distributors
- Increasing price pressure
- Lowering profit margins
- Damaging to a company’s goodwill/reputation
- Eroding the brand
- Losing sales
For these results, it is important for Amazon sellers to stop Amazon unauthorized sellers.
Does Amazon Take Action?
With all their rules and guidelines, Amazon does not always have very clear policies. One of these is product listing. It can be inferred that listings on the marketplace are available to all who sell the same products. Unauthorized sellers take advantage of this gray area by listing against brand pages. They aren’t necessarily counterfeiters, but they manipulate the policy to undercut brand owners.
When unauthorized sellers sell below a manufacturer’s Minimum Advertised Price (MAP), they are technically in violation of MAP policies. It isn’t a severe violation, however, so it goes on under the radar. More often than not, Amazon decides to stay out of disputes between manufacturers and resellers, even the so-called “gray” ones.
When pricing is mentioned, many get a standard response when bringing Amazon unauthorized sellers to the marketplace’s attention. Basically, Amazon does not get involved in pricing disputes. Any complaint that centers on someone selling below MAP will likely be ignored.
Amazon will, however, remove any unauthorized seller listings that violate the law. Unfortunately, they do not keep a close eye on such violations, and the burden of proof is on you as the rights owner.
How to force unauthorized sellers off of Amazon?
- If your product has a warranty, then refuse to honor the warranty unless the product was purchased through an authorized seller. Make sure this policy is clearly stated on your website and in your product materials. Now, an unauthorized seller who is selling your product without its warranty is violating your trademark. In our understanding of trademark law, your product sold without its warranty constitutes a material difference. Send the unauthorized seller a message, politely letting them know you will report this violation to Amazon unless they remove their listing within 72 hours. If they don’t remove it, report the violation to Amazon. It is always best to consult with a qualified attorney when dealing with thorny issues such as trademark and other intellectual property violations.
- Where applicable, you could refuse to offer follow-up customer service after the sale unless your product was purchased from an approved seller. Similar to the warranty issue, you can report this to Amazon as selling a product not as described.
- Conduct test buys of your product from the unauthorized seller(s). If you find anything different whatsoever…altered packaging, altered or removed UPCs or serial numbers, missing accessories, missing instruction manuals, etc. then you can make a case that these constitute material difference in the product and are therefore a violation of your trademark. Report these violations to Amazon.
- If your product has any special handling or storage requirements whatsoever, let Amazon know that you cannot guarantee the safety of products not sold by authorized sellers, because there is no way to know whether the product is being handled and stored properly. This will often be enough to get Amazon to gate the product(s) in question, meaning only sellers you authorize (or Amazon authorizes) are allowed to sell the product.
- If you have had any kind of authenticity issues with your brand at any time, then have an attorney get in touch with Amazon’s legal team, and they will often be able to get Amazon to gate your brand and only allow approved sellers.
There is no foolproof way to keep all unauthorized sellers off of Amazon at all times, but in many cases, you can almost completely eradicate the problem by following the advice outlined in these two podcast episodes. If you create pressure both through the supply chain as well as directly on the unauthorized Amazon seller(s), that is enough in most cases for them to decide it’s not worth selling your brand and to look for greener pastures.
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