This article was created to bring to surface some tricks on how unauthorized sellers get a hold of your products.
Why Unauthorized Sellers Want to Sell Your Product on Amazon
Products in special markets are great for Amazon sellers. The niche product groups allow amazon sellers to have a monopoly on the market. They’re products that have a developed hard core fan base and they’re difficult to get your hands on which means not a lot of sellers will carry the items. Less sellers equals more sales and money for them.
Manufactures and distributors set restrictions to online sellers by requiring the seller to have a storefront, sign agreements stating they will not sell on 3rd party sites and only selling to stores who sell similar or complimentary products.
How Manufactures Increase Barriers to Buying
- “We’re not taking any online retailers”.
- “We’re not adding any retailers currently”.
- Sign this agreement stating you won’t sell on 3rd party sites.
- “We only sell to retail stores, we’ll have someone come by and visit your store before selling to you”.
- They’ll ask to see images of your storefront before you become an approved buyer.
- If approaching a beauty brand, for example, and most of the items on your website are kitchenwares you can expect something like, “We only sell to beauty-dedicated sites.”
- Minimum advertised price policy.
- Large minimum orders, especially for first order.
How Unauthorized Sellers Maneuver Around Barriers
Unauthorized sellers don’t want to miss out on potential profits. They will do just about anything to sell your products.
Here’s unauthorized sellers get around barriers:
1. Create a fake website.
Let’s take the beauty category for example again: The store that sells mostly kitchen items will create a beauty store. The fake store will post popular name brand items for sale. This gives the brand new, fake beauty store credibility. The manufacture will see the popular/picky name brand item and approve the seller because they assume this company has already been vetted. If you’re a manufacture, go one step further. Check the name brand “authorized sellers” list. And while you’re at it, create one of your own to post on your website.
2. Signing the agreement to not sell on 3rd party sites but creating a new company name to sell under on 3rd party sites.
If you sell on 3rd party sites, you’re not required to list your store name as your business name (the one you report to the IRS). So, unauthorized sellers usually have aliases which are different from their legal business names. Thus making it difficult to track unauthorized sellers down.
3. Breaking MAP under the new company name opposed to the company name they used to sign the manufacture agreement.
Taking an image of another company’s storefront and photoshopping their name on it. Or taking images inside a retail store (which isn’t theirs) and sending it to the manufacture.
So what can you do?
Well, after reading this post, you know how to prevent (or at least fend off) most unauthorized sellers. If you forgot you can reference them in the “how manufactures increase barriers to buying” section. You learned the tricks of the really persistent unauthorized sellers. Just be extra cautious.
Double check and triple check information by:
- Looking up the stores address on google maps street view.
- Contact some of the bigger brands to see if they sell to the store who’s applying for wholesale.
- Place a test order off their website.
- Check this list of major US offenders.
Remember that it’s easier to be proactive than reverse damage done by unauthorized sellers. Take the extra steps initially to protect your brand.