Join us for the 2021 eControl360 Virtual Summit, November 1-5. Register Here
October 6, 2020

Three Common Unauthorized Seller Enforcement Tactics That Don’t Work

three-common-unauthorized-seller-enforcement-tactics-that-dont-work.jpg

There continues to be confusion about which enforcement tactics are effective against unauthorized online sellers. Brands often mistakenly believe that these three tactics will allow them to gain control over unauthorized sellers (they will not): MAP policy enforcement; “you’re-not-authorized” communications; and marketplace takedowns. Here’s why they don’t work:

1. MAP Policy Enforcement.

Unauthorized sellers are, practically speaking, not subject to your MAP. MAP is a unilateral policy. No retailer, and certainly no unauthorized seller, needs to follow it. Thus, MAP “enforcement” comes down to a brand’s ability to ultimately stop supplying an offending retailer. In the unauthorized sales context, most brands do not know who these sellers are or how they are getting their products. Thus, they have no way of cutting off their supply when they continuously break MAP to win marketplace sales. Further, sophisticated unauthorized sellers know that they are under no obligation to follow a brand’s MAP. As such, MAP and associated monitoring is not an effective unauthorized seller enforcement tactic.

2. “You’re-Not-Authorized” Communications.

Simply telling a marketplace seller that they are “not authorized” and need to stop selling your products is, in most instances, an empty threat. Generally speaking, there is nothing wrong with buying and reselling genuine goods. This is known as the “first sale doctrine,” and most experienced online marketplace sellers are very familiar with it. Brands must have a specific legal foundation to overcome the first sale doctrine and be positioned to remove unauthorized sellers. Without such foundation, brands typically have no basis to stop unauthorized sales.

3. Marketplace Complaints.

Amazon and other online marketplaces do not enforce brands’ distribution agreements or other authorized reseller programs. Setting counterfeits aside, Amazon’s brand registry and other marketplaces’ reporting systems do not exist to enforce against unauthorized sellers. Brands must conduct this enforcement themselves directly against the unauthorized sellers leveraging an appropriate legal foundation – the marketplaces will not help you.

For a comprehensive overview of how your brand can stop unauthorized sales and achieve online sales control, see our ebook: “Achieving Brand Control & Stopping Unauthorized Sales Online.” Or contact Daren Garcia (dsgarcia@vorys.com or 513.723.4076) to discuss your brand’s challenges.