Product recalls are one of the most challenging events for brands to manage and a quick response with an effective plan for action is critical….
How to combat unauthorized Amazon sellers & protect your brand online
Blogs | October 14, 2020
With eCommerce success comes the unwanted spotlight of unauthorized sellers taking advantage of your momentum. Often a byproduct of a legacy commercial policy – 3Ps can be bandits of the marketplace that can so easily turn your fantastic growth on platforms such as Amazon into the Wild West.
3P sellers who get ahold of your product without permission, often selling them on Amazon at a cheaper price without any post-purchase experience, can be extremely detrimental to your brand. It gets worse when you consider some rogue sellers list knock-offs and counterfeits of your products, quickly taking advantage of your shoppers before shutting down the account… potentially causing irreparable harm to the customer!
These rogue sellers aren’t just a threat to your brand, their practices are often illegal. While Amazon is taking things more seriously with the launch of its Counterfeit Crimes Unit, this is still a very slow and reactionary process. To ensure the best shopper experience (and thus brand equity) we always recommend brands to be proactive to combat these unauthorized sellers to protect your brand online.
Firstly, you need to get to the root of the problem with a prevention strategy. Secondly, you need to be able to know how to report sellers and stop the problem from escalating.
1. Proactive changes – how can we prevent the problem?
Many brands think the way to tackling this problem head-on is to enforce corrective action and report sellers to remove them from the marketplace. But this course of action only works temporarily, with sellers able to easily change their storefront name or create a new seller account and quickly get set back up to flood the market with their inventory. The most effective way to beat rogue sellers is to prevent the cause of the distribution leakage in the first place.
Education: Your entire organization needs to understand how marketplaces enable unauthorized sellers to source your products. It is integral to communicate with different departments across your entire organization as this is not just an eCommerce team problem to solve – eCommerce, brick & mortar and field sales all play a role. Explaining how detrimental it is to your overall brand if stock makes its way from unintended sources onto Amazon is your first priority to begin reducing opportunities for 3P sellers to source your products at a discount.
Promotional Tactics: Outside of a massive commercial policy reinvention project, an easy proactive win is to consider the standard promotional mechanics used by retailers to drive volume, and to be mindful if these can be dialed back while still being useful. Do you really need to have 40% off or will 25% still convert/switch the shopper? Can you put on cart limiters of 2 items per basket rather than unlimited items? Is participating in a category-wide 30% off promotion really incremental to your brand over the course of a year? Anything you can do to reduce margin arbitrate opportunities or introduce some friction into unauthorized sellers will go a long way to reducing the leakage.
Distribution: Once your entire team understands how their decisions along with their retail customers fit into the marketplace ecosystem, it’s important to revisit distribution agreements and ensure they are airtight. For example: ensure you are clear in your agreements with what happens to overstock – do you have first refusal to back it or does the contract stipulate destroy in field? Another project to explore is to look at how you leverage off-price channels for out of season or end of life products. Should you set up selective 3P distribution agreements for off-price sales on eBay?
2. Enforcement – How do we Flag, Identify, and Action?
Even if you have the most efficient plans in place, inevitably there will be some rogue sellers who are able to sneak your goods into the marketplace – whether that be through illegal organized retail crime (ORC) or legitimate means. So what is the best course of action?
Keep an eye on customer reviews: Your shoppers will provide you with the first warning signs that something is wrong so make sure you are listening. Tracking customer reviews will allow you to see if a particular product has an influx of negative feedback – this can mean one of two things, either a product is faulty and needs a recall/reformulation, or, more likely, a seller is selling your product into the marketplace that is expired or has improper storage/shipping. Keeping an eye on reviews means that you can see who is selling the faulty product and conduct test buys in order to secure evidence to take to Amazon to help get the seller removed ASAP.
Prioritize enforcement around data: Drilling down further into marketplace data can help enormously when it comes to combatting unauthorized sellers. Data solutions from providers like POTOO can allow you to analyze and understand all the 3Ps currently selling your brand and enable you to keep an eye on any unusual activity – who is pricing it significantly above or below MAP/MSRP? How much stock do they have, and have they had abnormal inventory builds? Who are they? Getting your hands on this data allows you to prioritize enforcement.
Thoroughly understand marketplace policies: Amazon’s Brand Registry claims to give users ‘greater influence and control’ over your brand’s listings on Amazon. But it isn’t a court of law, and it’s easy to misunderstand what Amazon will and will not take action on. Understanding the eligible reasons Amazon will accept to remove a seller can be complex. It’s helpful to work with someone who understands those policies and can leverage that information to remove a rogue 3P seller. Your Amazon agency should be able to support you on this, as well as a dedicated brand protection service such as those from POTOO.
Create and own your brand visibility: Creating a home for your brand via the Amazon Store is an effective way to showcase your products to your customers and help them discover and navigate your portfolio. The store is free and available for 1P and 3P sellers enrolled in the Amazon Brand Registry. It allows you to have more control over your marketplace by focusing the shoppers on proper authorized ASINS, becoming a seller yourself, as well as giving you a direct line to your customer.
As always please reach out to learn more about tracking rogue sellers on the marketplace!
Protecting the world’s most valued brands in the online marketplace.
Pharmapacks, an online seller of health, personal care and beauty products, is packing up operations after a failed IPO and the inability to secure additional…