How to Stop Unauthorized Sellers on Amazon, Part 1: Who They Are and the Damage They Do

Unauthorized sellers are a persistent problem for anyone selling on the Amazon Marketplace. These unscrupulous sellers harm brands and manufacturers by cutting into their sales and damaging their reputations. Amazon typically doesn’t do much to police the situation—they view cutthroat pricing competition as a benefit to their customers. Thankfully, there are ways to take matters into your own hands to protect your sales and brand. The first post in this two-part series looks at who unauthorized sellers are and the damage they cause. The second offers advice for how to get rid of them.

Why are Unauthorized Sellers Bad for Your Business?

The proliferation of unauthorized sellers on Amazon often results in a race to the bottom, where brands find themselves competing with their own suppliers and others to win the buy box. In addition, because these unauthorized sellers don’t adhere to the same standards that you do, they can tarnish your brand’s reputation. Most of the time customers don’t realize (or, frankly, care) that they bought your product from an unauthorized seller on Amazon. And when something goes wrong with their purchase, they’ll place the blame on you.

How Do Unauthorized Sellers Get Away with It?

Amazon has an endless amount of policies and guidelines. With so many rules, loopholes are an unfortunate reality. This is especially true when it comes to product listing pages. There is a gray area that can be interpreted as suggesting that all listings on the Marketplace are available to anyone who sells the same product (or, in Amazon’s terms, ASIN: Amazon Standard Identification Number). Unauthorized sellers take advantage of this policy interpretation to compete against your brand.

What are the Different Types of Unauthorized Sellers?

Amazon unauthorized sellers are third-party retailers or distributors who buy your products and resell them without your permission. We regularly encounter three types of unauthorized seller scenarios:

1. A known distributor who is competing directly with you on Amazon. This is the most common scenario and can be solved by putting a wholesale dealer agreement in place—one with explicit language about your Amazon re-sell and pricing policies. Be forewarned that you’ll need to continually monitor and enforce the policy with your distributors.
2. A re-seller who is purchasing your products from a distributor. This scenario takes a little more detective work, but brands can usually trace the seller back to a known distributor. An explicit distributor agreement can help here too.
3. A re-seller who is selling expired or counterfeit products. These unauthorized sellers can be truly dangerous. Counterfeit products can harm people, not to mention your brand’s reputation. If you suspect counterfeit or expired products of yours are being sold on Amazon, you can place some test buys. If the products are, in fact, counterfeit or expired, you can file a claim with Amazon and, in these cases, they will take action.

Why Doesn’t Amazon Do More to Remove these Sellers?

The Amazon Marketplace is massive, which means Amazon needs to be selective about what they actively track and police. The benchmark for action is extremely high. They’ll remove any seller who violates the law, or someone selling expired or counterfeit products. But for everything else, not so much. The most common example of unpoliced activity are pricing disputes. When unauthorized sellers sell below a manufacturer’s Minimum Advertised Price (MAP), they are in clear violation of MAP policies. However, even if the violation is egregious, it usually isn’t flagged. When brands submit a complaint to Amazon and mention pricing, they tend to get the same generic, unsatisfying response: “We don’t want to police or intervene in Brand MAP disputes on the platform.” Remember, Amazon is in business to give the best price to their customers, so it makes sense for them to look the other way. It’s frustrating, but thankfully there are partners like Amify who specialize in helping to not only identify unauthorized sellers but stop them in their tracks.  We’ll cover some of the most effective methods for doing just that in part two. In the meantime, contact us if you’d like to discuss how Amify can help you win the battle against unauthorized sellers.