Amazon is a gigantic marketplace with hundreds of millions of different product listings where over 2 million sellers have the opportunity to sell legally acquired goods. Amazon offers an enormous assortment of merchandise and employs convenient buying methods at competitive prices. At times, retailers are enticed to sell their products on Amazon simply to follow the prevailing trend. They may find, however, that Amazon is already saturated by vendors selling their products.
When supply of a product on Amazon is high, sales to any one seller may seem low due to demand dilution. On Amazon, the Buy Box influences which merchant will display its product offer to the customer, and as a result, the Buy Box algorithm determines which vendor will get the sale in cases where there are several vendors offering the same product. Where pricing is competitive amongst different sellers, and those sellers have similar performance metrics, the Buy Box will be shared among those sellers, resulting in each seller only acquiring a share of the sales for that product.
To better control content, stabilize pricing, and capture a large majority of sales on the channel, sellers need to protect their brand on Amazon. Here are just a few protectionary considerations:
- Understand that Amazon will not assist you in taking down unauthorized sellers – Amazon is a catalog-based business which encourages multiple offers on product listings. Amazon does prohibit counterfeit items, trademark infringement, and copyright violations, but it does not prohibit grey market products. Policing your brand becomes your own responsibility.
- Apply for the Amazon brand registry – You can enroll at the Amazon brand registry if you are the manufacturer of a branded product. After successful enrollment, you will receive a higher content contribution score so that other sellers cannot change your product detail page information. This however, does not exclude Amazon Retail from changing your listing content, as Amazon, itself, receives a higher contribution score than brand registered agents.
- Make your brand identity known to all – Keeping a public website where you can prove ownership of your brand will weed out counterfeit items, and it’s also a requirement to obtain Amazon brand registry.
- Put in place exclusivity and MAP policies for your distributors – Agreements which control pricing to the end consumer can lead to antitrust issues, so it’s best to implement Minimum Advertised Pricing policies, not agreements, with your retailers, resellers, and distributors. You may also enter into additional resale agreements (without pricing controls) that forbid your resale partners from selling your product on certain channels like Amazon.
- Handle unauthorized Amazon sellers proactively – Monitor your product listings to identify unauthorized Amazon sellers. Once identified, some common practices include issuing ‘cease and desist’ messages placing “test buy” purchases to validate product authenticity. If the product isn’t genuine, you can file a complaint to Amazon so that they take the seller’s offer down.