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In early March, Amazon suddenly and without explanation cancelled orders it had placed to buy products from thousands of wholesalers across a wide range of product categories.
Even more troubling for these sellers, Amazon’s order-cancellation emails informed them that the company would no longer buy products from them in the future—and that the only way for these wholesalers to do business with Amazon going forward would be to set up their own Amazon storefront, manage their own inventory and shipping, and sell directly to end-user customers.
As for its own retail operations, Amazon is now suggesting it plans to buy inventory only from the brand owners directly—not from any resellers.
For brands that struggle with crooks selling counterfeits of their products online, Amazon has just unveiled a new program to help. It’s called Project Zero (named to reflect Amazon’s goal of driving counterfeits down to zero), and it represents the company’s biggest program to tackle this problem since the Amazon Brand Registry.
We’ll discuss the positives and negatives of Project Zero below. But it’s also worth keeping in mind that signing up for this program—like signing up for the brand registry itself—is not a panacea for all of the damage unauthorized sellers can cause your brand on Amazon (or anywhere else online). So, if you do decide to apply for acceptance into Amazon’s Project Zero, remember that this should be only one part of a comprehensive online brand protection strategy.
On March 11, 2019, Amazon confirmed it has ended a longstanding policy that forbids sellers on its marketplace in the US from offering the same products for lower prices on other sites.
Amazon didn’t comment on why it removed this rule, which has become known as its “price parity” policy. But increasing pressure from politicians probably played a role. In recent months Senators Elizabeth Warren and Richard Blumenthal, and even President Trump, have publicly discussed investigating Amazon for possible antitrust violations.
Whether or not Amazon’s price parity rule actually stepped over the antitrust line, the ability to prohibit third-party sellers from underselling the company on any other website gave Amazon a significant amount of control over the eCommerce ecosystem of its sellers.
So, Amazon’s decision to remove this rule, and allow sellers to advertise products for less elsewhere, sounds like great news for both brands and retailers. But is it? Here’s our take.
It’s unfortunate, but we at TrackStreet still see manufacturers and brands making these MAP pricing policy mistakes all the time. Let’s make sure you know to avoid them when drafting and enforcing your MAP policy.
Some manufacturers have the mistaken idea that when they sign up for the new Amazon Brand Registry, Amazon will protect their brand from all threats at its marketplace. While the new version of the program does give brand owners some additional safeguards, you need to understand that Amazon Brand Registry was designed to meet a limited set of objectives—Amazon’s objectives, not yours.
If unauthorized sellers have gotten their hands on your inventory, you’re going to learn about it eventually. But if you aren’t proactively monitoring your products’ resale activity online, you might discover the problem too late to prevent damage to your brand, including negative word of mouth, price degradation and declining sales. So if you see any of the signs we’re about to discuss in this post, it could mean unauthorized third-party retailers are already selling your products without your permission - and possibly hurting your brand. That means you’ll need to act fast to minimize the damage.