Amazon never promised private label sellers that they would be able to gate their brands to keep others off of their listings. For a lot of reasons, this would be difficult to accomplish, and it violated the spirit of an open marketplace.
At the same time, as the number of sellers who must regularly submit infringement forms and report knockoffs of their branded products skyrockets, Amazon must also reckon with the marketplace’s reputation as a haven for generic or fakes sold at lower prices than original products. Even if you eliminate one storefront selling your items under one name today, there will, undoubtedly, be another one there tomorrow, doing the same thing, at the same low price.
Things have changed over the past year or two. Amazon is nearly drowning in bad press and heightened awareness that their reactive process for handling bad listings or rights’ owner complaints creates intensely negative experiences for private label sellers. They invite you to report an offender and provide specific kinds of information, but do they consider the time, resources, effort and energy it takes for each seller to devote limitless hours to policing their products on Amazon? Likely they did not have a long term strategy for this problem, and as a result, gating festers as an unaddressed hot button topic.
What is “brand gating” exactly?
Brand gating / brand restriction means that third party sellers, who are not the original brand owners or pre-authorized sellers, are not allowed to “list against” certain “protected” brands on the Amazon platform. Simply envision an imaginary wall set up around certain brands. A third party who attempts to sell his products on a gated brand will receive a notice that he must get the brand-owner’s approval to list his products.
It’s a common misconception that brand gating is reserved for the mega or luxury brands. This is simply not true! The good news is that Amazon appears to be proactively rolling out some brand restrictions organically. We’re calling this “auto-gating.”
We also know that, in some circumstances, Amazon will set up brand restrictions around a private label brand upon request by the brand owner. The latter is a great option if you don’t want to wait around on Amazon to be one of the “chosen ones.”
What happens if my brand gets gated?
Because brand gating appears to be tied to Brand Registry (and you first must be enrolled in Amazon’s Brand Registry program before even requesting brand gating), any ASINs tied to the brand enrolled in Brand Registry should also be gated. However, sometimes, the brand restrictions are limited to certain ASINs, perhaps those that have been particularly susceptible to counterfeit activity.
Non-brand owners may be able list against these restricted brands if they can provide documentation from the brand-owner (or “manufacturer”) indicating that they are in fact an authorized online reseller for the gated products. We’re also seeing situations where third parties can still list against the ASIN “used-like new.” But the good news is that they’ll not be competing with the brand owner for the Buy Box; and, of course, in many categories one cannot list products as anything other than new anyway (e.g., health and beauty, and apparel.)
The great thing about brand gating is that it doesn’t discriminate.
So, it doesn’t matter if you have counterfeiters hopping on your listings, or perhaps third parties who somehow obtained your product through arguably legitimate means: gating will generally prevent third parties from listing products as “new” on your listings.
Whether restrictions are being put in place via auto-gating, or at the request of the brand owner, the result is great news for private label sellers! But how long will Amazon continue to help brand owners with gating? Is this just a fleeting opportunity, or is gating here to stay? Will brand gating eventually be possible for everyone? Or are we looking at a pay-to-play scenario, which is where Amazon seems to be going for many of its services? Only time will tell, but we can still speculate.
Amazon’s “Fee for Service” Future (And Present)
Amazon will be assessing fees for all kinds of services from now on, to separate out who has access to certain programs and services, and to reduce the amount of work they have internally to parcel out to teams that are already way overloaded. Requiring fees is yet another way we’ll be seeing Amazon separate the wheat from the chaff.
#1 Account Managers
Sellers still ask about the odds of getting an account manager. By now, most are aware they will have to pay for the ability to have one in the future. Others had one in the past, but when their manager left, nobody replaced them. All sellers want one, but who can have one? Some won’t want to pay the likely $3000 a month to have one, once they roll out their version of an “invitation only” starter program. Others will pay as long as it makes a difference with Performance and Policy teams, i.e., it keeps them off their backs and reduces the likelihood of listing or account suspensions.
From all reports, the pilot program designed to introduce some sellers to this “fee for service” approach to an account manager largely failed. Each seller expected some assistance in dealings with Performance and Policy teams posing the largest threats to their existence, and Account Managers or Account reps were unable to provide much help there. On occasion I heard of reps giving sellers a bit of the inside perspective on their account problems but they could not hold back the waters. Since then, there’s been less information available on when this will become a full invite-only program. But we have to assume larger sellers with fewer account problems will be offered these services for around $3000 a month in 2017.
#2 Brand Approval
As most sellers know by now, if you want to sell large brands on Amazon, you’ll need brand approval, and you’ll need to pay for it. While the fees range from anywhere around $500 to $5000, the concept remains the same: if you want to benefit from a brand’s reputation for quality and from Amazon’s many buyer eyeballs, you’ll need to fork over some cash.
Like the account manager saga, paying up won’t be the end of the story. Amazon requires invoices and verifiable supplier information. If you don’t have 90 days’ worth of sales documentation, you may get rejected. Amazon requires money and good solid supply chain documentation, at the minimum. You also must not have multiple policy violations or performance notifications littering your account, because those represent a dealbreaker.
#3 Brand Gating
If you are a private label seller and constantly must remove counterfeiters from your listings, Amazon wants to be on your side. I see a time where Amazon values a reduction in their work, a break from the hundreds or thousands of infringement forms and test buy pictures or written descriptions to prove a counterfeit product sale.
Instead, if they could collect a fee while also protecting a brand-registered private label seller from the daily chore of reporting another fresh seller offering their (more-often-than-not counterfeit) product for a fraction of the usual price, gating for all sized brands represents a potential solution for everyone.
Amazon knows they could drive down the numbers of contacts or complaints from private labelers dramatically if they roll out such a program. Similar to the statements they made when announcing brand approvals, Amazon will likely state that the fees collected will help them verify what products are good and which are bad, what FBA needs to purge and what FBA can keep as legitimate items.
We’re not sure yet when this would happen, possibly in 2017, possibly later, but there should be little resistance internally to scaling this work and rolling it out. It protects the integrity of the marketplace and keeps legitimate sellers selling, not wasting precious hours fighting off an invasion of counterfeiters.
If it adds to their coffers and saves them work, Amazon will offer a fee in exchange for that service. If it keeps troublemakers away, and it builds confidence that they are protecting buyers and sellers both from unsavory characters, then it will work.