010 – How to Deal with MAP Violators and Unauthorized Sellers on Amazon (Part 1)

Some introductory thoughts:

  1. Your products will be sold on Amazon whether you want them to be or not.
  2. The only question is whether or not you’ll have control of what’s happening on your brand with Amazon. The “do nothing” strategy is a very poor decision for your brand.
  3. Amazon doesn’t care about your distribution channels, and they don’t care about your pricing. They stay out of it. The only person who can care and do something about it is you.

Why you should care about unauthorized sellers and MAP violators

  1. Can’t verify that the product being sold is new, genuine, undamaged, and properly stored and handled
  2. You don’t know what level of customer service is being provided to people who buy your product – are products correctly identified and packed? Are customer messages handled promptly and courteously? Are customers sent helpful tips and information via email after they purchase?
  3. You’ll often end up with duplicate listings or poor/inaccurate content on product detail pages
  4. MAP violations are a significant threat to your wholesale distribution – they make brick and mortar retailers hesitant to carry your brand

Why you should consider only allowing one authorized seller of your products on Amazon:

  1. You can control product availability, inventory flow, content on product detail pages, and enforce guidelines for customer service and interaction
  2. You can be in control of pricing – you won’t create the temptation for sellers to undercut one another and violate MAP pricing or create duplicate listings

3 options if you go with only one seller of your brand on Amazon:

  1. Sell directly on Amazon as a 3rd-party seller with a Seller Central account
    • usually the best margins, and gives you the most control
    • can do it yourself or can contract a 3rd party to manage your Seller Central account for you (we provide that service for clients)
    • can take advantage of FBA, so you don’t have to do order fulfillment yourself
    • good for cashflow because you get payouts every 14 days
  2. Designate one authorized 3rd party seller of your products on Amazon – must have a good relationship with them and a good understanding between the two of you about what the guidelines for your brand are on Amazon
  3. Sell directly to Amazon as a vendor
    • gives you the least control, other than the “do nothing” strategy
    • gives you access to some additional marketing tools (although, more and more, AZ is making these tools available to brand-registered Seller Central accounts)
    • it can feel low maintenance, because you get a PO from Amazon every Monday and just ship them inventory
    • gives you very little control over retail pricing
    • can be hard to get issues fixed if you have a problem
    • ties up more cash, because AZ usually wants net 30, or even net 60 or net 90 terms

What you need to do to take control of unauthorized sellers and MAP violators:

  1. Pick your approach from the options I listed above.
  2. Clearly communicate your policies down through your wholesale distribution channels.
    • Who can and can’t sell on Amazon?
    • Make sure authorized sellers have signed a MAP pricing agreement
    • Any authorized sellers on Amazon need to tell you their Amazon seller name
  3. Go through Amazon’s Brand Registry program.
    • You’ll need an active trademark registration
    • You’ll get more control over your brand on Amazon
    • You’ll get access to some great additional marketing tools