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November 12, 2020

Gated on Amazon Luxury Beauty? Beware Unauthorized Sellers on Other Marketplaces

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High-end beauty brands may currently enjoy the benefit of brand gating in Amazon’s Luxury Beauty category, meaning that unauthorized sellers are prohibited from offering on applicable product ASINs. Obviously, for eligible brands, this is a significant benefit – allowing them to effectively avoid unauthorized seller disruption on Amazon.

However, we are increasingly hearing from brands in the Luxury Beauty category whose products are being increasingly sold by unauthorized sellers on other marketplaces – like Walmart and eBay – that do not have an applicable brand gating equivalent. These sellers quickly disrupt sales, harm brand equity and create conflict with existing channel customers. These listings can also lead to suppression of the buy box on Amazon, which significantly reduces sales. In addition, many of the impacted brands believe that, with the exception of Amazon Luxury Beauty, other marketplaces are not consistent with their desired brand image.

eCommerce is an increasingly flat market – traditional distribution channels are becoming obsolete, national borders are eroding, and sellers are extremely opportunistic – if blocked on one marketplace due to platform policy, they will quickly pivot to another, with their disruptive effects soon to follow. This dynamic further reinforces the need for brands to design, implement and maintain a holistic eControl solution that enables brands to maintain effective, efficient and legally compliant control of all online sales, without being overly reliant on any benefit extended by a particular marketplace, like gating on Amazon’s Luxury Beauty. An important part of such an eControl solution will be ensuring that the brand has established the necessary legal foundation for enforcement against sellers on other platforms. Otherwise, savvy diverters and unauthorized sellers will continue to find ways to obtain your products and the sell them online in a location and manner in which is damaging to your brand.

For a detailed overview of how your brand can maintain online sales control and stop unauthorized sellers, please download our eBook, Achieving Brand Control & Stopping Unauthorized Sales Online.