In a previous article, we discussed why brands need to pay attention to what’s happening with their products on Amazon—even if they don’t actively participate in selling their products on this channel. We also covered how brands should be rethinking the role of the Amazon channel in their overall business strategy. In part two of our discussion, we’ll cover three critical best practices for brand executives to protect your brand on Amazon.
Channel Governance Is a Three-Pronged Battle
Taking control of your brand on Amazon requires effective channel governance—essentially, taking care of your brand so you can effectively counter the many challenging forces in play on the Amazon channel today.
You can think of channel governance as a three-pronged battle to ensure that your brand is properly represented on Amazon. These three components are:
- Brand Control
- Counterfeit Control
- Distribution Control
Let’s talk about each of them in turn.
Brand Control: Amazon Brand Registry Is Essential, But It’s Not Enough
To ensure that a brand is properly represented in the Amazon catalog, a brand executive needs to ensure that the brand’s products are correctly and consistently represented on Amazon—and consistent with the branding used in non-Amazon channels.
A couple years ago, Amazon launched the free Brand Registry program, providing brand teams with the opportunity to protect their brand by confirming and maintaining ownership of content in the Amazon catalog. Once the brand provides Amazon with paperwork confirming its registered trademarks, Amazon gives the brand the ability to submit and lock down content in the Amazon catalog. Typically brands will set up a third-party seller account—not necessarily to sell anything—but to leverage that Brand Registry permission to submit and control authoritative branded content that other sellers can’t overwrite.
However, even if the brand submits authoritative content, its brand control work is not complete. The next step is evaluating if other Amazon sellers have created duplicate listings.
It’s not uncommon for third-party sellers to create product listings in the Amazon catalog using UPCs that are not from the manufacturer. Amazon’s catalog is designed to take a unique pair of a UPC and brand name to create an Amazon product listing. Third-party sellers will sometimes create unnecessary or inaccurate product listings by using alternative UPCs. Sometimes these UPCs are purchased from other companies that don’t need all of the UPCs they’ve bought. And sometimes, sadly, sellers may just make up UPCs, adding more noise to the Amazon catalog.
In either case, the presence of an incorrect or duplicate listing makes it harder for the brand to control all of the branding of its products in the Amazon catalog.
So what can the brand team do? Basically, it needs to go looking for bad listings (e.g., duplicate or incorrect listings) that involve the brand name. Then the brand team can use its third-party seller account to file support tickets with Amazon, requesting these bad listings be merged onto corrected listings. Why merged? Unfortunately, Amazon rarely removes bad data altogether—data can be overwritten but not outright eliminated without replacement of other, hopefully corrected data.
This task of finding bad listing data is an ongoing process, especially for products that are popular among gray market sellers that purposefully create duplicate listings in an attempt to draw Amazon customer traffic from higher-traffic listings. Given Amazon’s intent to create a single product listing for each unique pair of UPC and brand name, the brand can maintain a clean catalog if it is prepared to search and clean on a regular basis.
There is also a problem at times with erroneous third-party sellers using variations of the brand spelling. If the brand name is not perfectly accurately spelled, Amazon’s catalog can be fooled into creating duplicate listings. So again, the brand team needs to go looking for common misspellings or misrepresentations of the brand name, then file support tickets with Amazon’s seller support team to get listings corrected.
Counterfeit Control: Test Buys Are a Brand’s Best Friend
As an open marketplace, Amazon welcomes millions of sellers a year to offer products to Amazon customers. Unfortunately, not all of the branded product is legitimate, and Amazon’s policing powers are not able to evaluate every seller’s products before they’re offered to customers. As a result, counterfeit product often finds a home on Amazon.
For brand teams aware that their products have counterfeit problems in other channels, it’s a safe bet to assume that some seller(s) may attempt to offer counterfeit units on Amazon too. Yet, depending on the type of product, Amazon customers may not be easily able to detect a counterfeit, or even care if the product is counterfeit.
That’s why we encourage brands to implement a formal program for doing test buys of products from Amazon sellers, to ensure that Amazon customers are getting legitimate product.
What happens if a brand team finds through test buys that counterfeit product is being offered on Amazon? The test buy, combined with the brand team’s evaluation of the product, usually serves as validation enough for Amazon to remove the counterfeit offer. Although Amazon is typically responsive to a brand’s complaint (especially if the brand is registered in Brand Registry), the onus of counterfeit detection still falls primarily on the brand.
Distribution Control: Know Who’s Selling Your Product and Where It’s Going
Historically, brands have used a minimum advertising price (MAP) policy or a manufacturer’s suggested retail price (MSRP) policy to push its desired retail price on authorized retailers. But because the Amazon channel often presents brands with unauthorized resellers, these types of policies are not effective price policing tools. Amazon has even publicly indicated that it will not help brands police their distribution agreements.
This means the burden of controlling distribution falls squarely on the brands themselves.
As a result, brand teams have had to upgrade their enforcement tools to include online reseller policies. Such policies—if properly developed and used in ongoing monitoring—provide brands with a legal upper hand to squash gray market sellers’ use of “first sale doctrine.” This area of the law allows anyone typically to resell a product without the brand’s permission. A smart online reseller policy can allow the brand to seek legal damages against any reseller that the brand views as violating its trademark rights.
While these legal efforts can help brands control which sellers represent the brand on Amazon, each brand leadership team should evaluate to what extent its current distribution and sales agreements facilitate product being diverted for sale on Amazon. Many brands don’t pay enough attention to exactly which resellers and distributors their sales team is providing product. In essence, product leaks are usually created by a lack of oversight of current business partners.
In diving into the details of where product actually goes, brand teams will often uncover a scary fact: the more business a distributor or retailer does of the brand’s product, the easier it is for that distributor or retailer to divert product without the brand’s detection.
So how can brands ensure that their product isn’t diverted? One best practice is to use detection tools such as RFIDs, serial numbers, batch IDs, or even invisible ink to label your products. This helps tie diverted products back to specific distributors or retailers that shouldn’t be diverted to the Amazon channel.
Protecting Your Brand on Amazon Is Challenging But Possible
Even if your brand never intends to be on sold on Amazon, if protecting the brand is crucial to your leadership team, there is definitely cost involved in properly managing the Amazon channel. By implementing and policing against a distribution control agreement (like an online reseller policy), running an ongoing test buy program to monitor the presence of counterfeit product, or ensuring that branding content is adequately managed in the Amazon catalog, today’s brand teams can ensure that their brands are fairly and correctly presented to Amazon customers.
With these three best practices in mind, you’ll be on your way to creating a strategy to protect your brand on Amazon in 2019 and beyond. If you need more help putting these best practices into action, get in touch with us.