Amazon has changed the lives of many entrepreneurs. It has produced a growing number of millionaires in the past few years. It has helped small and medium-sized businesses (SMB) grow exponentially and increase their profits and revenue. After all, SMBs continue to produce interesting and innovative products, bringing in massive diversified groups of new customers.
Nonetheless, Amazon’s business depends heavily on the trust and confidence of the shoppers. This is why the retail giant is committed to providing excellent and unparalleled shopping experience to its consumer.
The world’s biggest online selling platform has continuously raised the bar in customer experience. It has a clean and streamlined process that prevents errors and delays. It has an amazing customer service team. Just recently, Amazon is stepping up to make sure that consumers do not get fake or counterfeit products.
Is Amazon a Brand-Friendly Marketplace?
Amazon is aware that the rising number of counterfeit goods is not only affecting consumers, but brands as well. The retail giant’s problem has ballooned over the last few years, causing brands to lose a significant amount of profit. Even if Amazon prioritizes the welfare of the consumers, it has a number of programs that protect sellers and brands, too.
In line with the Federal Government’s effort to fight counterfeiting, Amazon imposed some restrictions for third party sellers who sell big brand names on the platform. This restriction is called brand gating and it’s designed to put an end to the brands’ profit leaks. This initiative also protects big brands like Apple, Baby Bullet, Coleman, Gucci, NutriBullet, and Nike from unauthorized sellers, counterfeiters, and supply chain leaks.
What is Amazon Gating and How It Can Affect Both Brands and Third Party Sellers?
Amazon Brand Gating or ABG is a policy that restricts third party sellers from selling certain brands. It was rolled out on August 30, 2016. This policy requires third party sellers to secure an approval from both Amazon and the brand before they can sell their certain products.
ABG is part of the Amazon counterfeit policy. It aims to reduce counterfeit items, fake listings, and unauthorized sellers. This policy protects brands and authorized sellers.
You see, Amazon’s counterfeit problem can negatively affect brands in many ways. It can create profit and revenue leaks. It can reduce their brand value and potentially damage their reputation. It can also reduce their buy box percentage which can drive down their monthly sales numbers.
This policy is not very friendly to third party-sellers. To continue selling certain branded products, resellers must:
Submit a letter from the manufacturer saying that you are authorized to sell their items.
Furnish Amazon a copy of three different invoices or receipts for products that you purchased from an authorized distributor or the manufacturer.
Pay a non-refundable fee of up to $1,500 (most gated brands require $900 to $1000).
Fill out the selling application form.
The $1,500 non-refundable fee is a huge hit for smaller sellers. It’s clear that the cost of compliance is quite high, so these sellers may have to raise their prices to help cover the fees. This could reduce their market share, revenues, sales, and buy box share. This tool will definitely make it harder for small sellers to find huge success on Amazon. With this process in place, the resellers that have more diversified product offerings are most likely to succeed.
But, keep in mind that Amazon is not launching a vendetta against third party resellers, especially the legitimate ones. The retail giant is just trying to weed out counterfeiters and unauthorized sellers.
How to Get Your Brand Gated?
you’re a brand owner, it’s wise to take advantage of the ABG policy as this helps stop revenue leaks and preserve your brand’s integrity, value, and reputation.
To have your brand gated, you need to follow these steps:
Step 1 – Register Your Trademark
You can’t take advantage of the Amazon Brand Gating program if you’re not the official trademark owner. This is why you should first register your trademark (brand name and logo) with the United States Patent and Trademark Office.
Go to the USPTO website and see if someone is already using your brand name. If not, you can submit an application and provide information like your name, address, citizenship, detailed description of the brand, and drawing of the trademark.
Step 2 – Join the Amazon Brand Registry
The Amazon Brand Registry or ABR is a program that gives brand owners access to a plethora of privileges. It allows you to fully control the content of the product listings associated with your brand. It also has a powerful search engine that makes it easier for you to find specific products and ASINs.
But, what’s amazing about ABR is that it helps you protect your brand from counterfeiters. After you submit your product documents, Amazon will start scanning the online store to look for counterfeits and remove fake listings.
Having a registered brand also makes you eligible to join Amazon Project Zero, an anti-counterfeiting program. This project has three powerful tools, namely:
1. Automated protections
This tool uses Amazon’s powerful machine-learning technology that scans more than 5 million ASINs per day to look for and remove suspected counterfeits.
2. Product serialization
This allows you to apply unique codes to your product to confirm its authenticity. Product serialization is not required, but these codes make it easier for Amazon to detect fake products. But, take note that this service is not free. You have to pay $0.01 to $0.05 for every product sold.
3. Self-service counterfeit removal
Amazon has a tool that allows you to report counterfeits. But, if you’re part of Amazon Project Zero, you no longer need to do that. You can just remove the listing yourself. Amazing, right?
This tool is so powerful. But, you should use this with caution. Amazon randomly checks the accuracy of removals and if they found out that you’re using the tool to eliminate competition, you’d lose your Project Zero access.
The Amazon Brand Registry does more than provide brand protection. It also allows you to add rich multi-media content using features like Enhanced Brand Content and Amazon Brand Content.
Also, don’t forget to divide responsibilities and provide Amazon of the list of brand contacts such as the administrator, the brand owner, or a registered agent (if you’re using an agency).
Step 3 – Provide the ASINs of the Products You Want To Gate
Make a list of the ASINs (Amazon Standard Identification Number) that you would want to gate or restrict. Reach out to your current support contacts and send them your list. If you have a thousand ASINs, please don’t send all of them. You just have to prioritize the one that’s associated with various counterfeit activities. You can also prioritize the product that brings the most value to your business.
Step 4 – Explain Your Anti-Counterfeit Efforts
Amazon prioritizes brands that actively fight counterfeiters. This is why you have to detail everything you’ve done to protect your brand from counterfeiters.
Step 5 – Provide Your Amazon Seller ID
Amazon Gated Brands: What Can Resellers Do to Minimize Losses and Selling Expenses?
If you’re reselling big name brands on Amazon, here are a few things that you can do to minimize the negative effects of Amazon Brand Gating:
Become an authorized seller. Make sure that you have a contract or document stating that you’re authorized you to sell your products on Amazon.
Keep your receipts when you purchase the products from authorized distributors.
Avoid selling restricted or gated items. This can save you at least a thousand dollars.
Below is a comprehensive list of popular gating items that you should avoid:
It’s clear that Amazon Brand Gating ultimately benefits brands. It helps brand owners preserve their brand integrity and reputation. It also helps solve Amazon’s long-standing counterfeiting situation.
If you’re a brand owner, it’s best to take advantage of this program. Gating certain ASINs can plug the revenue, profit, and supply chain leaks. I can also help you protect your brand value and status. Register your brand in the Amazon Brand Registry of you haven’t already. It’s also wise to provide authorization to your approved sellers. It’s the least that you can do for them.