Unauthorised Sellers on Amazon and Ebay

The Problem

      Manufacturers and their authorized resellers face an array of problems in contending with unauthorized individuals and businesses selling their products on Amazon and eBay. These companies have come to realize that are several negative consequences of unauthorized distribution of their products, including general lowering of product price points, unhappy legitimate resellers, and degradation of their online brand.

It’s common, of course, for product manufacturers and their partners to sell their products through legitimate online and retail channels. But there is a major problem that can be found in virtually any industry. When large volumes of their products are sold without authorization by sellers on Amazon and eBay at ridiculously low prices, the result is usually that legitimate sellers will entirely abandon the manufacturer brand. A disastrous result indeed.

Unauthorized sellers often reach a point of tremendous advantage, because they usually obtain their products through illegitimate means—so they can sell at substantially lower prices. Given the explosive growth and reach of Amazon and eBay, this seemingly intractable problem equates to significant revenue loss for both large and small manufacturers.

Conventional solutions

      Various manufacturers have a number of methods for dealing with unauthorized sellers. Typically, they use internal staff to locate all of their products on Amazon and eBay. After attempts to identify these sellers, they move toward delivery of legal notices. Another common method is to have their staff covertly purchase these products and attempt to identify the sellers that are causing the biggest problem. Then, they invest most of their effort in pursuing legal action against these bigger violators. Because of our experience with a number companies, Highpowerv CIS has experience with virtually every technique for monitoring activity on Amazon and eBay.

Why most methods fail

      There are several challenges that keep companies from achieving anything beyond marginal success in their programs to stop unauthorized sellers. Most importantly, the manufacturer doesn’t realize that the problem is bigger than they can handle with their existing monitoring tools and internal staff.

After performing an exhaustive survey of the landscape, a legitimate product company may find itself contending with 30, 100, or more than 200 unauthorized sellers. Facing such numbers, management realizes that their staff doesn’t have adequate capacity to deal with the problem. Then they realize that their computer systems and software can’t accommodate these larger numbers. Because of these and other factors, Highpowerv CIS finds in most cases that product companies are quite inconsistent with enforcement of their authorized seller program. Since in adequate attention is given to the problem, the responsible managers in these companies express significant frustration with the poor results. Often, they give up and simply tolerate the problem. In many cases, a good opportunity is lost. Along with significant revenue.

Specifically, the two most common problems have to do with monitoring and identification. We find that most software monitoring systems simply don’t report the information that’s necessary to officially and properly deal with unauthorized sellers. Critical elements of information include: the number of products that the unauthorized seller is selling, the size of their storefront, and the most efficient methods for contacting the seller electronically for delivery of legal notices. Lacking any of this information, a manufacturer will consume many hours of effort trying to decide which are the highest priority unauthorized sellers (those worth pursuing) and the best means to connect with them.

The other specific problem is the difficulty in precisely determining the actual identity of the unauthorized sellers. Many times, we’ve seen untrained staff spending what little time they have to spare from their primary jobs to perform the role of a cyber investigator. While these efforts occasionally yield results, it is often after a significant amount of effort and frustration.