The annual revenue of Amazon stands at around $120 billion in the United States, the majority of which comes through third-party sellers on the platform. If you are a brand manager for a major retail company, you might feel a bit daunted by the idea of putting your products up on Amazon (given all the potential challenges of Amazon account suspension and the subsequent Amazon suspension appeal). However, the fact of the matter is that a lot of your products are likely to end up on Amazon for sale whether you want them there or not. Also, your competitors might be selling there already.
At the end of the day, ignorance or a lack of awareness is not an option when it comes to dealing with the e-commerce giant. Be it selling or advertising on the platform, you have to figure out your relationship with it and control your brand so that you can be competitive and increase sales. This includes taking all possible measures to avoid an Amazon account suspension and the subsequent tedious Amazon suspension appeal process.
So, let’s take a closer look at what challenges Amazon can create for your business and what you need to do in order to avoid an Amazon suspension of your account and be successful in this e-commerce world.
A Potential Amazon Problem
First, let’s get this straight. Either you can sell your stuff on Amazon OR sell it TO Amazon. If you decide to wholesale, then Amazon will own the product, make all decisions with regard to pricing, and have the final say over what stuff should be kept in stock and what shouldn’t. This one is pretty straightforward. Complications start to occur when you sell your products on Amazon through third-party sellers. Not only does this bring challenges like Amazon suspension of seller accounts and tricky processes of Amazon suspension appeal, but there is also the problem of unauthorized sellers who can carry out fraudulent activities using your products and brand name.
These are different companies or entities that might not be affiliated with your brand in any way, but they will find ways to sell your products on Amazon. This is when things can become problematic, especially when you lose control over your inventory and others gain access to your stuff. Pricing will be out of your control because you don’t have any idea who the sellers are. And when you don’t know the sellers, you won’t be able to control your Amazon channel. This can ultimately lead to an Amazon account suspension because buyers might complain about the quality of your product when in reality you probably didn’t even sell it to them in the first place.
Pricing Transparency and a Lack of Control
Whether you are in control of your brand on Amazon or not, your retail partners will be able to easily see what is going on in the marketplace. They might have differences with you over the prices due to the actions of these third-party sellers. On the other hand, you have no idea who these sellers are and don’t want to budge on the prices you are offering.
Ultimately, it doesn’t matter if you know the third-party sellers or not because customers don’t care who is selling while the retailers will only be concerned about the bottom line. Simply put, if the consumer can always find the product at a cheaper price on Amazon, then there is an Amazon channel problem for your brand and a possible Amazon suspension of your account might take place in the near future.
Controlling Your Brand
Brands often go the legal route when dealing with these unauthorized sellers and the first step in this regard is sending them to cease and desist notices. However, this rarely works because such sellers won’t stop selling your product simply because they received a legal notice from you.
Many of these third-party sellers are sophisticated grey market sellers with strong legal representation and they are very good at playing the “first sale doctrine” game. The First Sale Doctrine is a legal concept according to which “anyone has the right to buy a product in the country (USA) and then sell it further.”
Obtain a Trademark to Counter First Sale Doctrine
Once you have a trademark in place, you can structure it so that it isn’t just the brand name but also how the product is taken care of – how it goes from a retailer to the end consumer. There are about 75 different ways to define and enforce your trademark. Adopt what fits your brand and aligns with your business goals to counter the threat of third-party sellers.
Controlling Your Channel Will Help to Save Your Business
You probably can’t maintain 100% control over your channel but you can enact enough obstacles to deter sophisticated grey market sellers. Seeing your level of protection, they will most likely decide that selling your brand is too much of a hassle and will begin targeting some other brand that isn’t managing its trademark very well.