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Gene Zelek

Gene Zelek is a Partner with Taft Stettinius and Hollister Law Firm. Right after graduating from Law, he practiced as a marketing lawyer at a big law firm prior to working as an in-house at Quaker Oats where he also became a brand manager. When he went back to practicing law, he focused on Marketing Law including antitrust, pricing and distribution, and brand protection. Since 1989, Gene has helped design, implement, and enforce more than 470 successful policies addressing minimum resale price, minimum advertised price, and their variants in diverse industries for both consumer and industrial products.

Gene is co-author of the seminal 2003 antitrust article Establishing and Maintaining an Effective Resale Price Policy: A Colgate How-To, as well as the 2020 Harvard Business Review article, Pricing Policies that Protect Your Brand: How to Prevent Unauthorized Discounting.

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Here’s a glimpse of what you’ll learn:

  • What Gene has seen brands do to evolve in how they manage their online channels over the last 20 years
  • The challenges in pricing discrepancies across channels that Gene Zekel saw while working at Quaker Oats
  • The long-standing tension between retailers and manufactures and how online selling has aggravated that tension
  • Gene talks about the process of removing unauthorized third party sellers from Amazon and how brand control on who gets their products can mitigate these scenarios
  • How Gene assists brands whose salesforce don’t implement their brand pricing policies
  • Addressing pricing transparency and controlling pricing across different online channels
  • Best practices for brands in enforcing pricing policies externally among distributors and retailers
  • The importance policy enforcement is important and the consequences of not enforcing pricing policies
  • Gene’s advice on the best way to get people to make changes

In this episode…

There has been rapid growth in the use of online selling channels by brands over the last 20 years. While their views and management of online channels have evolved, there is still work to be done to ensure brand policies are followed across these channels. And these online channels offer greater transparency in pricing which poses benefits and disadvantages to brands and to an extent, to consumers as well.

In this episode, James Thomson interviews Gene Zelek of Taft Stettinius and Hollister Law firm about using pricing policies that solidifies channel management both online and offline. They talk about how pricing transparency brought about by online marketplaces has impacted brands, the various challenges brands face due to pricing discrepancies, and best practices for enforcing pricing policies. Stay tuned.

Resources Mentioned in this episode

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Episode Transcript

Intro 0:09
Welcome to the Buy Box Experts podcast we bring to light the unique opportunities brands face in today’s e commerce world.

James Thomson 0:18
Hi, I’m James Thomson, one of the hosts of the Buy Box Experts podcast. I’m a partner with Buy Box Experts and formerly the business head of the selling on Amazon team at Amazon. I’m also co author of the controlling your brand in the age of Amazon book and the co founder of prosper show one of the largest continuing education conferences for Amazon sellers in North America. Today’s episode is brought to you by Buy Box Experts. Buy Box Experts takes ambitious brands and makes them unbeatable. When you hire Buy Box Experts, you receive the strategy optimization and marketing performance to succeed on Amazon. Buy Box experts combines executive level advisory services with expert performance management and execution of your Amazon channel service. Go to buyboxexperts.com to learn more.

Today we are joined by Gene Zelek, a partner with Taft Stettinius and Hollister law firm. Gene focuses on marketing law, including antitrust pricing and distribution and brand protection. Since 1989, he has helped design, implement and enforce more than 470 successful policies addressing minimum resale price, minimum advertised price and their variants in diverse industries for both consumer and industrial products.

Gene is co-author of the seminal 2003 antitrust article ‘Establishing and Maintaining an Effective Resale Price Policy’ as well as the 2020 Harvard Business Review article, ‘Pricing Policies that Protect Your Brand: How to Prevent Unauthorized Discounting’. So Gene, thank you for joining us today on Buy Box Experts podcast.

Gene Zelek 1:55
No, thank you, James. It’s a pleasure to be with you.

James Thomson 1:58
I’d like to start today’s discussion by Getting your thoughts on what you’ve seen brands do to evolve the way they manage themselves in online channels over the past 20 plus years?

Gene Zelek 2:10
Well, first, I think online selling in general caught a number of people by surprise in terms of its rapid growth and its implications. On the beginning, I think people were feeling their way around. And they thought it was the greatest thing in the world. And they’ve learned that just like anything else, there, there’s some downsides associated with it. I think on the consumer side, that things have moved much more smoothly and are more developed. On the industrial side, there are plenty of b2b sellers who are waking up to find out that they’ve suddenly got a problem. And so we’re seeing a lot of things going on a continual evolution, continuing to learn what the implications are and how to cope with And I try to stay on the curve. You know, I think about it . As you mentioned, I’ve done a lot of pricing policies. And some people ask me, well, what’s the average life of a pricing policy? And we’ve done so many of them that now we’ve got some history, and we’re finding most of our policies get updated, either on roughly a five year cycle, which means they last for five years before they’re updated for developments. And we just did one that was 12 years old. That updated it. And I guess that’s because we try to focus on getting it right right out of the box and providing plenty of language that contemplates flexibility. I’m not so sure that’s answered quite answered your question. But we again, we’ve seen a lot of developments. A lot of people are trying to cope with this. I think the realization that and I’ve heard you say this, Amazon is not necessarily your friend, and you have to understand what you’re getting into. It can be very Helpful can be a very good place to be. But at the end of the day, be careful.

James Thomson 4:06
Let me go back to you coming out of law school you started your professional career as a brand manager Quaker Oats. I’m curious if you got to see firsthand any of the challenges of pricing discrepancies across channels.

Gene Zelek 4:21
Yes and no. First, when I came out of law school, I actually practiced as a marketing lawyer at a big firm, and then moved over to be an in-house lawyer at Quaker Oats. And then from there, I became a brand manager and then went back to the law. But one of the things that we did see and this is in the early days, were quicker historically sold in grocery stores and there was a new channel that cropped up. Mass merchandisers, yes, and mass merchandisers originally sold only what’s known as dry grocery, meaning things like patches of dry dog food or change. dog food or other kinds of products, they were not into refrigeration refrigerated products or frozen products yet. And that was an issue with the outset, which was okay, how do we deal with these folks? And the argument that was made, and we still hear this from time to time from a legal point of view is, it’s a different class of trade. And it turns out that that is not a justification at all for charging different prices. Under the Robinson patman act,

with the standard is who competes against whom the law requires you to treat competing customers alike, unless you have a good reason to differentiate. So we had to dig into it and we had to say, Okay, first you can’t say that if I buy my bag of dog food at Target. I won’t buy it at all. It doesn’t compete with Safeway, but that same sale on that same bag of dog food, so they do compete against each other. And then secondly, though, our differences in doing business, the grocery stores that Then typically advertised once a week on best food day in the newspapers, where the mass merchandisers ran rotos once a week, with a much longer lead time, well, obviously you had to take some of those things into account and deal with them in a different way, and find a good way to justify the differences. There are also different payment terms, all of which could be incorporated and dealt with appropriately. But you couldn’t just blanketly say, oh, different class to trade, therefore, we can treat them differently. Now you have to find some justification for treating them differently, which wasn’t so hard when you dig down.

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