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How To Stop Unauthorized Sellers From Selling Your Brand
Unauthorized marketplace sellers sell products without brand approval, often below retail prices, damaging brand values. Learn how to stop them in 5 steps!
To be successful with your brand on marketplaces, you must have a strong brand image and stand out among endless product offers. Unauthorized 3P sellers can throw a spanner in the works by unjustly offering your products online.
An unauthorized seller is any third-party reseller who has no official relationship with your company whatsoever but still creates product listings on marketplaces, selling your brand's products. They do not only sell products without your permission but often undermine recommended sales prices, publish untrue product information and damage your brand's identity and value.
How Unauthorized Sellers Can Hurt Your Brand
Unauthorized or rogue sellers often sell your products for prices discounted well below your recommended sales price, forcing authorized sellers to reduce their prices too. A price war is set in motion, leading to a race to the bottom.
Lower prices result in lower margins and profits for your brands' resellers. Shoppers evaluate a brand by the perceived value it offers, which determines what they are willing to pay for your product. Record low prices can diminish the perceived value of a product, affect the actual quality and confuse buyers.
Finally, your products lose value, and the situation harms the relationship with authorized resellers.
Damaged Brand Reputation
Unauthorized sellers will sometimes deliberately add incorrect product specs to their product detail pages, such as an inaccurate (but impressive!) product image, to imply the product has features it doesn't actually have. This way, and via many other tricks, they try to attract shoppers away from their competitors— which are your authorized resellers, in most cases.
Suppose unauthorized sellers offer lousy service, sell malfunctioning products, or provide wrong information. In that case, shoppers won't get the shopping experience you had in mind for your brand, which harms the brand's reputation and value.
Lost Buy Box & Search Rankings
Unauthorized sellers can create multiple fake marketplace listings (for instance, through multiple Amazon ASINS for the same product) to increase their chances of getting top placement in marketplace search results.
Unauthorized third-party sellers can 'steal' your buy box place if they, for instance, offer a lower price. Losing the buy-box or not showing up in search results means you (and your authorized resellers) are missing out on a great deal of money!
Bottom line: As a brand, you should avoid the above problems caused by unauthorized sellers at all costs. At least, if you're looking to be successful in eCommerce (and we bet you are!).
5 Steps to Stop Unauthorized Sellers
1. Automatically Spot (Unauthorized) Sellers of your Brand
You might not spot unauthorized sellers because you have no idea (where or how) to look for them. So, where do you start?
One of the most valuable and cost-effective options is to deploy an eCommerce monitoring solution that can help you spot unauthorized resellers automatically. This type of software gives you a daily-updated view of who is selling your products without having to go through marketplace product listings one by one.
eCommerce monitoring solutions help you spot third-party sellers who buy your products and resell them on marketplaces such as Amazon and bol.com without your permission. For instance, product listing dashboards (see above image) help you visualize and overview the exact SKUs listed across marketplaces and associated sellers (see the column 'sold by' in the image above).
2. Deploy Price Tracking Software
Once you have an overview of who is selling your products online without your permission, find out how much damage they are causing— Are they deliberately offering rock bottom prices, driving public distrust, and making you and other (authorized) resellers lose money?
Daily tracking of selling prices and price deviations from Recommended Sales Prices (RSP) across marketplaces help you detect disruptive resellers snatching sales from you or your authorized retail partners. This helps you keep your products' prices stable, prevent price wars and protect your brand's image.
In the above image: SiteLucents' price tracking software shows an Amazon seller offering a product for less than 30% of the RSP.
3. Use Content Quality Scorecards
As mentioned earlier, unauthorized sellers can intentionally publish misinformation about your products on Product Detail Pages (PDPs).
Using content quality scorecards is a way to identify false promises and discover where product texts and assets go against your brand policy. Such scorecards let you compare your brands’ content guidelines against published content on retailer sites.
TIP: 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.
4. Document and Report Violations
If a problem occurs on Amazon, you can sign up for Amazon Brand Registry. You can appoint your company as the official 'brand owner' on Amazon by signing up. An Amazon Brand Registry helps you build and protect your brand on Amazon. You can create unauthorized sales listings, and Amazon may remove the account.
If the marketplace does not want to help you remove listings, you have to act yourself. Warn sellers who violate and take necessary actions if the situation persists. For instance, find out where the supply stream is coming from and pressure to stop the supply to this reseller.
One way to discover contact information and identify rogue sellers is to conduct a test buy to find the return address. Document every stage of your purchase experience and report it to the relevant marketplace, or contact them by yourself.
In case you have a distribution agreement (see step 5) in place and work with legal counsel, get a cease-and-desist letter to warn the seller that legal action may take place. Start with the largest and most disruptive sellers and make your way down the line to the smaller ones.
5. Set up Selective Distribution Agreements
To be better safe than sorry, we give you a final piece of advice for preventing unauthorized resellers in the first place: Setting up selective distribution agreements to help you take control of who is selling your products.
Before the explosive growth of eCommerce channels, most manufacturers applied an exclusive distribution model: a type of distribution where the manufacturer ties up exclusively with a distributor. As a result of the ability to shop on worldwide eCommerce platforms such as Amazon, brands nowadays have almost no control over how products are sold by their distributors and (unauthorized) sellers downstream end-users.
Once the authorized distributor sells to a retailer, that retailer will be free to sell to any customers in Europe, including on online marketplaces. This way, resellers can free-ride on the efforts of your brand's authorized sellers, eventually discouraging those authorized sellers from supporting your brand and damaging your brand's reputation.
Selective distribution is a sound strategy if you want to take maximum control over who sells your products. This strategy protects your brand value and maximizes profits. Selective distribution is when you appoint a selection of authorized distributors/retailers that meet certain criteria to sell your products. Sales outside of the network are prohibited unless they are to end customers.
Enforcing selective distribution is facilitated when working with skilled legal counsel with significant knowledge of the realities of eCommerce and the ability to leverage highly efficient software in the monitoring and enforcement of selective distribution systems in today's market.
Find out how eCommerce monitoring software can help you protect your brand online!