Apr 11, 2023
How To Protect Your Brand from Retail Arbitrage
In our last blog post, we explored the #deinfluencing trend and how it provides an opportunity for brands affected by knockoffs or low-cost imitators. Catch up on it here.
Thanks to Amazon’s accessible marketplace format and low barriers to entry, dupes and knockoffs can pose a particular hazard on the ecommerce platform. Both well-established and emerging brands are constantly at risk of losing some of their hard-earned brand equity to unscrupulous vendors seeking to replicate their success. While the tips we provided in our previous blog post can and do help, additional tactics are needed to address the particular kinds of “duping” that occur on Amazon.
Tale as old as time: retail arbitrage
Retail brands that sell on multiple channels may fall victim to retail arbitrage on Amazon, by which resellers buy discounted products from one channel and resell them on another at a higher price. In the case of one of our clients, T.Marzetti’s Flatout Flatbread, unauthorized sellers were buying the product from their local grocery stores and reselling them on Amazon. Without the carefully managed supply lines that keep the product fresh from the factory to the freezer section, Amazon shoppers received damaged and rotten products from these resellers, leading to a deterioration of the brand’s reputation.
A cursory Google search for “retail arbitrage” yields troves of guides teaching people how to profit from reselling products this way. How can brands protect themselves (and consumers) from such a widespread practice?
Protecting your brand from resellers on Amazon
Amazon is aware that retail arbitrage occurs on its platform and provides some remediation without infringing on its ability to provide an open marketplace. Here’s how we work with Amazon to successfully protect our clients’ brands:
- Establishing brand credibility: By registering a brand in Amazon’s Brand Registry (a process which requires several steps to prove ownership of the brand), brands are granted access to more robust advertising and storefront options, all of which can make your listings appear more credible.
- Reporting unauthorized sellers: Amazon offers a “Report Abuse” function through its Seller Central portal. The catch is that, due to the sheer volume of tickets Amazon receives daily, getting someone’s attention on your issue is often a matter of repeat submissions and a lot of perseverance. We do this work for you.
- Consistent, cross-posted branding: It may seem elementary, but brand recognition is still a powerful way to build consumer trust. While resellers can simply reuse brand photos in their listings, fraudulent vendors will not have access to display A+ content and other privileges granted to Amazon Brand Registry brands.
- Reviews: Building up large numbers of authentic, positive reviews can help steer consumers to “official” seller accounts and listings.
- Partnerships with authorized sellers: Sometimes, selling individual units directly to consumers is not cost effective (as was the case for our clients at Flatout Flatbread). Partnering with a retailer with different capabilities or distribution channels can help close the gap.
We used many of these strategies to help Flatout Flatbreads overcome its case of retail arbitrage (and resulting damaged brand reputation)—read more about it here.
Is retail arbitrage sabotaging your brand’s reputation and bottom line on Amazon? Are your support tickets not being seen or resolved? Not sure if you’re doing everything you can to protect your brand on the marketplace? We’re happy to help. Contact us today.