The digital retail world is getting smaller, and threats to brand health and profitability lurk around every corner. As marketplaces have expanded over the years, brands and brand protection professionals have been pleading for assistance in safeguarding their products online. The evolving landscape requires vigilance and a multifaceted approach to ensure that brand integrity remains intact.
Brand protection encompasses multiple aspects, each with specialized companies and individuals dedicated to tackling specific issues. Key concerns include counterfeits, intellectual property (IP) infringements, and the grey market, which involves the unauthorized sale of authentic goods. Addressing these challenges is crucial for maintaining brand reputation and ensuring long-term profitability in an increasingly competitive and complex digital environment.
As marketplaces continued to grow and become a larger piece of the global marketplace, two notable initiatives were brought forth to protect the public from unscrupulous 3P sellers.
Amazon's Brand Registry
Amazon's Brand Registry program is a comprehensive initiative designed to help brand owners protect their intellectual property and maintain control over their product listings on the Amazon marketplace. Launched to address the growing concerns of counterfeit products, IP infringements, and unauthorized sales, the program offers a suite of tools and resources that enhance brand protection and ensure accurate representation of branded products.
At its core, the Brand Registry program provides registered brands with powerful tools for identifying and reporting violations such as counterfeit listings, trademark misuse, and intellectual property (IP) infringements. This proactive approach helps brands maintain their integrity and build customer trust by ensuring that only authentic products are sold under their name.
One of the key features of the program is its automated monitoring system, which continuously scans the marketplace for potential violations. This system significantly reduces the burden on brand owners to manually monitor for counterfeit products and other infractions. Additionally, the Brand Registry provides advanced search and reporting capabilities, enabling brands to efficiently find and address potential IP violations.
As you would expect, Amazon's brand registry site does a great job of communicating what brands can expect by signing up for brand registry.
Benefits
Amazon's Brand Registry program offers several key benefits to help brands protect their intellectual property and maintain their reputation on the platform. The registry provides tools to help brands identify and report violations such as counterfeit products, IP infringements, and trademark misuse, thereby maintaining brand integrity and customer trust. As mentioned, automated systems proactively detect and remove suspected infringing or counterfeit listings, reducing the burden on brands to constantly monitor for violations. Brands have more control over their product listings, including the ability to manage product details, images, and descriptions, ensuring accurate representation of their products. Additionally, brands can access advanced tools like Transparency, which enables unique codes on products to ensure authenticity, and Project Zero, which allows brands to remove counterfeit listings directly without waiting for Amazon's intervention. The program offers powerful search and reporting tools, enabling brands to efficiently find and report potential IP violations and counterfeit listings. Registered brands can also utilize enhanced marketing and promotional features, such as A+ Content, Sponsored Brands, and Amazon Stores, which help improve product visibility and customer engagement.
Limitations
While Amazon's Brand Registry offers several benefits, there are some areas where it may fall short in terms of brand protection. Although Amazon uses automated systems to detect and remove infringing listings, these systems are not foolproof. Some counterfeit or infringing products may still slip through, requiring brands to continuously monitor and report issues. Many protective actions require brands to identify and report violations themselves, which can be time-consuming and may not always result in immediate action from Amazon. The process for reporting violations can be complex and cumbersome, particularly for smaller brands with limited resources, leading to delays or multiple submissions to resolve issues. Enforcement of brand protection measures can be inconsistent, with some brands experiencing better results than others, causing frustration and ongoing challenges in maintaining brand integrity. The Brand Registry does not address the problem of grey market goods—authentic products sold through unauthorized channels—which can still harm brand value and customer perception. For brands operating internationally, enforcing brand protection across different Amazon marketplaces can be challenging due to varying local regulations and enforcement standards. While the Brand Registry offers tools for reporting and removing infringing listings, it does not provide legal recourse or comprehensive support for pursuing legal action against counterfeiters or infringers. Lastly, brands relying heavily on Amazon for brand protection may find themselves constrained by the platform's policies and limitations, which can change and impact the effectiveness of protection measures.
Inform Consumers Act
The INFORM Consumers Act, short for "Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act," is a legislative measure designed to enhance transparency and accountability in online marketplaces. Enacted to combat the proliferation of counterfeit goods, IP infringements, and unauthorized sales, the Act aims to create a safer and more trustworthy environment for consumers and legitimate sellers.
Key provisions of the INFORM Consumers Act include the requirement for online marketplaces to collect, verify, and disclose essential information about high-volume third-party sellers, such as the seller's identity, contact details, and bank account information. This transparency allows consumers to make more informed purchasing decisions and helps deter fraudulent sellers.
The Act also mandates that online marketplaces provide a clear and accessible mechanism for consumers to report suspected counterfeit goods and other fraudulent activities. This empowers consumers to play an active role in identifying and eliminating counterfeit products, enhancing the overall safety of online shopping.
Moreover, the INFORM Consumers Act places significant responsibilities on online marketplaces to ensure compliance with these requirements, including verifying seller information, maintaining accurate records, and taking prompt action when violations are reported.
In essence, the INFORM Consumers Act is a crucial step toward curbing the sale of counterfeit goods and protecting intellectual property online. By increasing transparency and accountability, the Act helps create a more secure and trustworthy e-commerce environment, benefiting consumers, brands, and legitimate sellers alike.
The bill provides the Federal Trade Commission with the authority to enforce these requirements, and the FTC is a good source to explain the details.
Benefits
The INFORM Consumers Act brings several significant benefits to the fight against counterfeit goods, IP infringement, but less to the grey market. One of the primary advantages is the increased transparency it mandates for online marketplaces. By requiring these platforms to collect, verify, and disclose detailed information about high-volume third-party sellers, the Act makes it easier for both consumers and brands to identify and scrutinize sellers, reducing the prevalence of counterfeit goods and discouraging fraudulent sellers from operating anonymously.
Additionally, the Act provides a clear mechanism for consumers to report suspected counterfeit goods, leading to quicker identification and removal of counterfeit products. This consumer empowerment enhances overall brand protection. Furthermore, by increasing the accountability of third-party sellers, the Act indirectly supports efforts to combat IP infringement, enabling brands to more easily track and address violations.
Limitations
Despite its benefits, the INFORM Consumers Act has some limitations in its scope and effectiveness. One major limitation is that it primarily focuses on transparency and accountability rather than directly addressing IP infringement. While increased seller information can help identify infringers, the Act does not provide specific tools or measures for brands to tackle IP violations directly. Brands still need to rely on their own resources and legal avenues to address such issues.
Another limitation is the Act's impact on the grey market, which involves the unauthorized sale of authentic goods. While the increased transparency can help brands identify unauthorized sellers, the Act does not provide specific provisions to prevent or manage grey market activities. Brands may still face challenges in controlling the distribution and sale of their products through unauthorized channels.
How these initiatives help brands
Grey Market blind spots?
Counterfeit goods are a serious problem and that is why Brand Registry highlights three different initiatives to combat that issue. Similarly, IP infringements can lead to a myriad of issues that harm consumer trust. Both of these issues are bad for marketplaces and the consumer. The third issue, the Grey Market, the unauthorized sale of authentic goods is only bad for brands, which is why marketplaces like Amazon and the government are not going to help address this issue. Reselling products is capitalism, and the First Sale Doctrine provides a lot or protection to sellers which the government is not going to fundamentally change.
As reported by statista.com, Amazon generates approximately 2/3 of their marketplace sales through 3P sellers. They capture a commission from these sales by allowing sellers to list products on their marketplace and using their fulfillment network without having to invest in the inventory. This relationship allows them to have the largest product selection and multiple sellers create an environment for lower prices, which is exactly what Jeff Bezos wanted to accomplish, as outlined by Brad Stone in his book, "The Everything Store."
How to protect your brand in today's digital world
The marketplace is a reflection of the total market, but you can steer it to maximize your profitability and consumer experience, which contribute to the overall brand health with a little effort. First read our blog post, "Things to Consider & Where to Start - Addressing the Grey Market." Every brand that we've worked with has had nuances that contribute to Grey Market listings, but they all can be generalized in certain categories that can be addressed/enforced in similar ways.
We specialize in the analysis, data mining, and source of product identification of unauthorized listings. Due to this specialty, we are able to work with several amazing partners and can help you put together or evolve a plan based on your policies.
Conclusion
In conclusion, these programs on their own and combined didn't deliver what most brand protection professionals were hoping for, while Amazon’s Brand Registry program and the INFORM Consumers Act offer significant benefits in protecting brand integrity and enhancing consumer trust, they also come with limitations. The Brand Registry program empowers brands to control their product listings and combat counterfeit goods, thereby maximizing product value and driving profitability. Similarly, the INFORM Consumers Act aims to increase transparency and accountability among online sellers, further safeguarding consumers.
However, both initiatives fall short in addressing the complexities of the grey market. Brands must navigate these unregulated channels to maintain control over their distribution and ensure consistent product quality. The ease for sellers to create new Seller ID's and the number of marketplace sellers, it is better to control what you can control before taking legal action. Using this approach brands can better protect their reputation and achieve long-term success in an increasingly competitive marketplace.
Ultimately, a comprehensive approach that includes robust brand protection measures and strategic distribution control is essential for maximizing product value and profitability.
Counter Diversion is a boutique SaaS company - we don't have marketing and we don't use high-pressure sales tactics. Our goal is to have solid, honest conversations about the issues at hand and then either recommend our service or another one that is a better fit for your needs. If you'd like to engage in that type of discussion, please schedule a free consultation. info@counterdiversion.com
Comments