It takes more than a sales team to combat gray market sellers. They will not dissipate by themselves. That said — what measures are appropriate for overcoming rampant gray market sellers and what does that look like in the day-to-day?
On the latest episode of Owning the Buy Box, we sat down with Chris Anderson, the CEO of eEnforce, to discuss the evolving landscape of online selling and the challenges brands face in tackling the gray market problem.
They delve into the economic efficiency of combating gray market sales and the importance of convincing decision-makers that this initiative is essential to the bottom line. They also discuss why using specialized agencies, like eEnforce, can be more efficient than using your in-house legal teams in this space.
Join us as we discuss:
- Challenges in the landscape of online selling over the years
- The economic efficiency of combating gray market sales
- Using legal firms vs specialized brand protectors
Challenges in the landscape of online selling over the years
When online selling first became commonplace through pioneers such as eBay, most of the challenges we face today did not exist. As Amazon rose to power, it brought accessibility and availability to a level we had not previously witnessed.
Every innovation has a cost, and for Amazon, the price was security and control over the marketplace for smaller brands and independent sellers.
There are two main challenges in the online market today with night and day differences in solutions: counterfeit sales and unauthorized sales. While counterfeit sales are the platform's responsibility, unauthorized sales land on the brand to police their products.
“With counterfeit sales, you’ve got fantastic tools. There's a lot of ways to solve that problem,” Chris says. “But with unauthorized sales, you have Amazon saying these tools are not for this issue because they don't want to wade into the sale of legitimate products by people the brands don't necessarily want to sell.”
As policies and new laws drop into place, the window for what a brand can do against these issues shrinks. Loopholes close, backdoors lock, and we’re left to figure out the best path forward using the available tools and resources.
The economic efficiency of combating gray market sales
When authentic products appear seemingly out of nowhere from unauthorized sellers — the gray market — it can feel like a relentless task to snuff them all out if we can’t find the source.
According to Chris, there are two basic ways to address this issue:
- Stop some or all of the supply of low-cost products flooding Amazon
- Enforce through legal action
This choice can mean the difference between an endless fight and a fruitful resolution.
“You can absolutely do something about it legally. You’ve got to jump through a few hoops to do that right, but it’s not terribly expensive to get yourself set up as a brand with legal rights,” Doug says. “It's about the mechanics of going out and enforcing those legal rights.”
Addressing gray market sales takes a conscious collaboration between the eCom team, brick-and-mortar, and legal, whether internal or external. This type of alignment is critical for growing brands, no matter the entity size.
That harmony is what eEnforce supports and cultivates to give each brand they work with the best shot at getting ahead of gray market sellers, protecting brand economy and preserving authenticity.
The best time to start tackling gray market sales was yesterday; the second best time is now.
Using legal firms vs. specialized brand protectors
Enforcing legal rights as a brand, particularly when going after gray market sellers, takes a level of digging. These efforts are best supported by specialized brand protectors with practiced commitment to getting to the bottom of the issue. Legal firms help, but they must know where to aim first.
Chris champions the ‘layering effect’ meant to weed out the smaller players from the serious threats. It starts with a pointed investigation, followed by letters, and concludes with bringing in legal action as needed.
“We're out scanning every day and dropping the worst ones into investigations to find their real IDs and locations. From there, we’re dropping letters onto doorsteps,” Chris says. “Most of the stuff out there the majority of brands deal with will fold if you lay down your cards in the right order.”
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