I’m curious if any other sellers have EVER gotten a notice from one of their manufacturers or brands letting them know to NOT sell to a rather extensive list of stores that have been banished from direct purchases at the brand itself.
I’ve been doing this over 20 years now (yeah, I know I’m just beyond rookie stage) but don’t recall ever seeing anything like this. I did get flagged by my largest wholesale account for a violation when the brand told them to let me know I was a bad guy. I ended up going direct so that I could get the MAP notices after that!
Here is what I received from one of my main sales reps:
"Good morning. Please see attached for the updated ‘Do not sell’ list.
This list is primarily maintained for our distribution partners and likely does not pertain to your business, but since terminated dealerships may reach out to other retail dealers to source products, we wanted to supply this list to our dealers as well.
The dealers / marketplace sellers on the attached list are no longer authorized to receive XYZ product due to repeated violation of XYZ’s MAP policy. On the off chance you happen to be contacted by any companies on this list, please refer them to me.
Thank you for your continued support,
Kind regards"
and it was followed by an attachment with a list of 33 store names that had been banned.
I have neither sent nor received anything like this. That brand is serious and tired of dealing with the folks who won’t follow the rules. Good for them!
Yes, similar, but not with anything Amazon related. We are provided lists of companies and websites, from some of the brands we carry, that we are not to accept orders from because they have sold the products for unauthorized pricing, violated the brands’ restrictions on PPC advertising or engaged in unethical business practices. It is easier for brands to restrict sales of their products this way, instead of trying to track down rouge online sellers with cease and desist letters and legal action.
If a brand is serious about controlling distribution it has to be from the source. If you don’t have the product to sell you can’t violate MAP/other restrictions.
If you have an uncontrolled distribution network, a lot of times cease and desists don’t work, legal action is prohibitively expensive, and for every seller you shut down 2 new ones will show up.
And this is why the brand is warning its authorized distributors about selling to these other resellers.
If a banned store ends up with stock again, then the brand will be better able to track down the source amongst its authorized distributors–and then ban that leak.
There’s no magic button to find a distrib leak; it’s all just research, awareness, and trial-and-error.
Yep, it’s a lot of work to track down leaks which is why a lot of brands don’t do it. You also need a viable tracking method which not all products have. Without some way to identify which distributor is responsible (either directly or indirectly) for the leak any kind of warnings/threats are basically just hot air.
Some companies try to match the Amazon seller information to a wholesale account, but any smart MAP violator won’t have that information match.
Serial numbers (along with a corresponding barcode) are the best way to track products, but that’s fairly expensive to get set up to print and track every unit, along with the additional labor to properly record where every unit is going.
“If a brand is serious about controlling distribution”
A big if. Sometimes brands look the other way when their distribution channel has a leak, so long as the beneficiary of the leak does not put the products reputation and pricing in jeopardy.
I had been a beneficiary of such a leak back when I had my computer company.
I was buying one product from a networking hardware company, which they were selling to a major computer manufacturer to sell under the computer manufacturer’s name. We were doing pretty substantial business with this modestly priced product.
The computer manufacturer decided not to continue the purchase of the product.
One of the regional distributors for the computer manufacturer was also a distributor for the networking company, though located on the other side of the country from me.
The manufacturer would not approve any reseller for only one product. You had to sell the entire line, and be trained on the entire line. I would not sell the entire line. I would not invest a person in training for three weeks.
We struck a deal with the distributor and became the difference between his meeting quota or not. $150k per year was a good sized bite in the 80’s and 90’s.
The manufacturer looked the other way about our arrangement, they knew me, how I was selling, and that they had no risk to the product.
They could easily have tracked down the product and its source, and probably have lost the distributor.
If you’re the manufacturer, and you’re selling a product at $9 wholesale, you’re getting paid $9 either way. Whether the retailer’s selling it for the MSRP of $18 and getting a profit, or selling on Amazon for $13 and losing money after considering FBA fees and returns, the manufacturer’s getting paid the same.
Of course, there’s other considerations if you want to build brand equity, but a lot of times manufacturers just don’t care as long as they’re selling enough volume and making profit. Where that volume comes from is irrelevant.
There’s millions of products sold on Amazon that once you factor in all the fees and account for some % of returns/FBA stealing your inventory/other shrink, the sellers are operating at a loss, and a lot of times there’s 30 sellers on the ASIN. Those manufacturers are clearly doing zero enforcement and will sell to anybody who will pay.
7-8 years ago I made a killing off “we sell to anybody who will pay” manufacturers. But that market dried up fast as there’s no barrier to entry and eventually the race to the bottom will happen.
You just batch-embed unique identifiers. XXX-01 goes to Reseller 01. It doesn’t have to be engraved or printed-on-product. You then record that R01 has XXX through XXX. It’s not that big of a deal money- or time-wise and serves multiple purposes.
But some companies send stock to so many resellers that they just code by region.
Anyway, my point is just that it’s not that much of a hassle or investment for most (not all) brands/manufacturers, and in fact most (not all) already do.
You can usually tell by what the qualifications are to be authorized. If they are few, the manufacturer does not care. They may be counting on MAP to protect price levels and accept churn in resellers as inevitable.
Then there are those who have been famous for their controls. Bose is so tight in their controls that all returns must be sold back to Bose and not discounted, and Bose buys back all bankruptcy inventory of their product.
It is mighty rare to find any Boze products in even liquidation channels. The exception appears to be their ear buds.
Yes, that is a rare case as they’re a super high end brand and will spend extra money to prevent potentially damaged/defective products from harming their brand image.
I would say most brands are somewhere in the middle. They will often have reseller agreements that include things like a MAP or no reselling on marketplace clauses, but their enforcement of those agreements is usually lacking as it’s expensive to properly enforce it. I’ve actually had a sales rep tell me “If you order less than X units / month they don’t enforce the no resale on Amazon rule.”
As far as putting in unique identifiers per reseller, that is rare as you’d have to know in advance how much a reseller is going to purchase to print it at time of manufacture. I’ve seen many products with batch #s or lot #s (and those are usually primarily for quality control), and using those to trace products is iffy as 1 batch or lot # will go to multiple resellers
Sounds like they are counting on the crappy pricing you are getting to prevent you from doing much damage.
Low volume resellers have less motivation to P*ss in the Soup. They have little profit, and rarely get any soft money.
When I have had a sales target which offered me a significant invoice credit for meeting a sales target, you bet I met it, even if a portion was sold at cost to meet the target.
The problem here is that most companies don’t understand how much this mentality hurts retail. How could I possibly sell something in store at a higher price when people are scanning it on their phones. It also pisses me off when their MAP policies do not apply to Amazon themselves selling it.
Yes, hence why I said it hurts brand equity to do that. It basically cements them as a cheapie brand which a lot of retailers don’t want to carry because the profit margins suck.
Also, I’m pretty sure Amazon treats suppliers like their sellers, they hand them a unilateral agreement and if you don’t sign it they won’t buy. Amazon agreeing to MAP isn’t part of that agreement for sure.
We have gotten a list like this from one vendor (that I can recall). We don’t distribute that brand, only sell to end customers, but they were working on getting rid of a band that was buying on Amazon, and then reselling on Amazon. IIRC, the buyers would swap out for knock-offs, return those for a refund, and then resell the real ones.
Two of my companies have been told by Amazon that as long as other sellers are below MAP Amazon will not change their prices. It only takes one jerk to spoil the entire ASIN.
As a result, the one company I posted this about is getting aggressive on ALL sites, not just Amazon.
