Brand Protection

In the ever-expanding universe (or in some cases, black hole) of third party marketplaces, it is more important than ever for brands and brand owners to protect themselves from collapsing due to the forces of brand erosion caused by pricing wars and rogue sellers.

The competition for the Buy Box has never been greater, and retailers both authorized and unauthorized have shown they will do whatever is necessary for their survival, many times at a brand’s expense. In this cut-throat environment, online brand protection solutions are incomplete without effective methods of reseller price monitoring and advertised price enforcement. How can you ensure that all of the blood, sweat and tears you have spilled to get your brand to where it is today were not for naught while also ensuring that you will continue to grow, day after day, year after year?

The key is to implement a solid brand protection strategy, allowing you to maintain relationships with your valuable retail partners while minimizing the negative effects of unauthorized and rogue sellers that erode your brand’s reputation and, ultimately, its bottom line.

AUTHORIZED VS. UNAUTHORIZED RETAILERS

There are primarily two forces at work: Authorized Retailers and the unauthorized sellers (rogues) who undercut them–and you. Good vs. Evil, right? Not so fast. In order to understand how each can erode a brand’s reputation and bottom line, it is important to look a little deeper at those two forces. Once you do, it will become clear why a solid Amazon brand protection strategy is so vital for your success.

AUTHORIZED
RETAILERS

Know and vet your retailers! Choosing the right retailers to represent your brand on a third-party marketplace is one of the most crucial decisions you can make for the health and longevity of the brand.

A solid plan and thorough vetting process is imperative to ensure that you have knowledgeable and qualified retailers, ones with the expertise and know how to navigate the intri- cate and dynamic world of the 3P marketplace and a will- ingness to play by the rules (i.e. to abide by your MAP policy). These partnerships will not only benefit your brand but will also benefit your other retailers (including brick-and-mor- tar). Failure to properly vet your retail partners can lead to an unlevel playing field, not to mention the erosion of prices and your brand’s reputation.

This is a case where bigger is not necessarily better: large numbers of retailers does not necessarily equate to high sales volume, bottom line profits, or brand success.

Furthermore, all “authorized retailers” are not created equal. While many retailers are genuine, honest, and rule-abiding, others have been found to be subversive, secretive, and in it for themselves. And bigger retailers are not always better: large retailers mean sales, sales and more sales, but those sales can come at the cost of price erosion and the detriment of your smaller partners. Even some of the largest and most well-known retailers have been known to breach their retail agreements, especially when it comes to violating MAP policies. Some are downright duplicitous, hiding their identities by creating and using unauthorized 3P storefront names to list products without a brand’s knowledge or consent.

UNAUTHORIZED RETAILERS

As the name suggests, unauthorized retailers are those sell- ers who obtain inventory by various means and then list that inventory on a platform without your consent or knowledge. Unauthorized retailers can disrupt your brand in many ways.

They can undercut authorized retailer MAP pricing, erode your brand’s image and reputation by selling inferior or counterfeit products, neglect your customers by failing to provide customer services or honor warranties, or ignore quality controls.

When purchasing products, consumers believe they are also purchasing all of these associated services, and having a negative shopping experience, fighting with poor packaging, or suffering through poor quality control erodes the credibility you have worked so hard to achieve. Unauthorized retailers know there is no way for you to enforce a MAP policy against them, so their presence on the platform has a direct negative effect on your authorized partners, who find themselves losing the Buy Box (or “Featured Offer”), outpriced and competing with sellers who operate by different standards. Unauthorized retailers can force an otherwise great authorized retail partner to have no alternative but to violate MAP or find other creative methods to sell through their product.

THE FIRST SALE DOCTRINE AND THE MATERIAL DIFFERENCE EXCEPTION

So how do you manage these unauthorized sellers? One way is to successfully argue that the so-called “First Sale” Doctrine does not apply to an unauthorized sale.

(A disclaimer: the following is not legal advice and you should consult a qualified attorney for more detailed legal discussion and advice.) Generally speaking, the United States gives the right for a purchaser of a trademarked product to resell that product without the authorization of the brand/trademark owner. This is the First Sale Doctrine. However, there are exceptions to this rule, one of which is called the Material Difference exception : the First Sale Doctrine does not apply when the trademark/brand owner can show that the resale of the product(s) may or does cause consumer confusion. This confusion can arise when a consumer purchases a product from an unauthorized retailer under the belief that the purchase is accompanied by the services, con- trols, promotions, and warranties described previously, when in fact, the purchase is not. Courts have held that this is a Materially Different product from one purchased from an authorized retailer. A material difference can be any differ- ence a consumer would likely consider to be relevant when purchasing a product and is not necessarily a physical difference (i.e. counterfeit).

BRAND PROTECTION STRATEGY

Knowing your rights as a brand owner along with imple- menting a strong and sound Amazon brand protection strategy will help ensure that the hard work of building, maintaining and growing your brand will not be in vain. Working with an experienced Amazon brand protection agency can help you successfully and consistently manage both authorized and unauthorized sellers before they have a serious impact on your brand’s health and longevity.

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