Can a manufacturer stop me selling on Amazon?
Hello
I’m hoping someone might be able to help with the below, or if someone else has had an experience like this.
We sell various pet toys here on Amazon amongst hundreds of other pet related products. We purchase the toys from a couple of different authorised wholesalers. This particular brand introduced a new European Authorisation Programme around 14 months requesting that all retailers register with them for permission to sell the brand.
Having spoken to the company, they have agreed to give us permission to sell their products on our own website. However, they have said it’s IMPOSSIBLE to give us permission to sell on Amazon as they’ve restricted the number of authorised sellers on Amazon to a specific number (less than 6 I believe).
Now here is where the problem. With the current trend, and the pandemic. obviously more and more consumers are coming to Amazon to purchase goods. So what the manufacturer is effectively doing is creating a monopoly for this handful of sellers on Amazon to charge whatever they want and completely killing all of us independent pet retailers off.
They are not basing their authorisation decisions on the quality of the company, reviews from customers, location, feedback etc. It’s just because they’ve hit the maximum number of sellers and refusing all new companies from selling on third party websites.
We received a letter from their lawyers demanding we delist all of their products from Amazon. This is really going to impact us financially having purchased thousands of pounds worth of stock legitimately from their authorised suppliers with the intention of selling it on Amazon. When I spoke to them on the phone, they said they had already managed to get 120 sellers to delist their products on Amazon through these lawyer letters (apparently Amazon won’t help them directly despite them owning the brand here).
With a view of the above, do you think what they are doing is against anti-competition legislation in the UK and EU and what would our next steps be? We have tried working with them, spoke to them numerous times on the phone, showed them our store and 98% feedback score etc but they said the restriction count is in place and there’s nothing we or anyone can do to change their minds.
Thank you
26 replies
Seller_NoLYurmb006tq
Hi what yo will find is manufactures will restrict so they can manage there operation better.
You will find certain wholesalers won’t allow you to sell on any platforms online or only limited platforms.
We have one wholesaler which we can sell some of thier products but not all on marketplaces.
Seller_BS5lg2keRs2QO
I’d ask if they’d allow you to sell the remaining inventory or even if they’d like to buy it back.
Longer term I don’t think there is much you can do.
Seller_2BrPSydGy6oyq
They can do this based on changes to EU anti-competition law following a few court judgements, so likely they have been very careful in setting the selection process for approved retailers, in case of challenge.
However, if no such restriction was in place when you purchased the stock and have been selling on Amazon, then I don’t see they can stop you from selling, but can refuse to sell you further stock.
As you point out Amazon will not enforce distribution rights and if they found a way to report you, then of course you can provide legitimate invoices to prove the goods are authentic, so the ‘lawyers’ are in my view trying to bully you into removing yourself from the platform.
What I don’t know at this point, is if they can take furter legal action to remove you, as you have done nothing wrong, but be careful in responding to them.
Have you checked out this law firm, I assume IP rights lawyers?
Seller_5Qk2OCkmLZ8H3
In that paragraph provides your answer. You have chosen under your own steam to ignore their policies and have come unstuck when challenged. You cannot suggest you were ignorant of the position as you have informed us of the company policy and decision yourself. Your choice in this situation is to either remove the products or get ready for very expensive litigation if they decide to take it further. You must decide for yourself if your profit from Amazon sales is worth what you are likely to spend on defending your position should it go to court and if you can afford the likely outcome if it goes against you.
Seller_zRxGmTYygCKIT
It is possible for a brand to be “Gated” on Amazon. This means only select sellers can sell that brand.
It rarely happens though, as Amazon want competition in order to push prices down to consumers.
It’s also a grey area with price fixing… Price fixing is against the law.
Seller_NoLYurmb006tq
I can see 2 names and a little unsure if its the same person or two different issues so…
@MikeBP
As far it been taking further it is extremely unlikely unless they had evidence you have caused severe impact to thier businesses which is unlikely.
What is more likely is for them to repeat the complaint to Amazon and then Amazon take thier law upon your metrics.
You have been told not to sell it from the off so should not have done so.
@Picas_Pets if there was nothing in the contract you originally signed when opening a account preventing you from doing so with the wholesaler any stock you have been sitting on up until the date the inforcement come into play you would be OK with - Unless it was specifically mentioned otherwise but if so they should have offered you a return option. Any stock purchased after that letter well you already knew you were not supposed to from the letter.
Seller_z6B2L9xab6HlP
As @The_Pink_Panther says they can’t really stop you selling the stock you already have by any means you want, as long as that limitation wasn’t there when you bought the stock.The EU Trademarks directive (2015/2436) allows for this and the same requirement is in Section 12 of the UK Trade Marks Act 1994:
Article 15 - Exhaustion of the rights conferred by a trade mark
- A trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the Union under that trade mark by the proprietor or with the proprietor’s consent.
- Paragraph 1 shall not apply where there exist legitimate reasons for the proprietor to oppose further commercialisation of the goods, especially where the condition of the goods is changed or impaired after they have been put on the market.
Seller_vgqxMss12D3od
Sorry for the delay responding (it’s been one of them weekends!), and appreciate it’s brought an interesting debate here.
@PeterT - Fortunately we haven’t had this issue with any other brands. Our wholesalers allow us to buy and sell anywhere as we please. This is the only brand which is refusing us to sell their products on Amazon. We purchased the stock AFTER the brand introduced this new program, however, our wholesalers have continued to allow us to buy. It’s only on our last shop they mentioned that the brand had been in contact and they were no longer able to sell this particular brand to us. The other 3 wholesalers haven’t stopped us from buying further stock…
@The_Pink_Panther - “they have been very careful in setting the selection process for approved retailers”. My issue is the restriction on new sellers. They are saying they’ve hit max capacity (5 or 6 sellers) and it was “impossible” to approve any more sellers for Amazon. Surely this is against anti-competition laws? They are not basing the decision on the quality of seller, feedback etc… They’ve hit a number and that’s it. So this handful of sellers are getting the entire monopoly of online sales from 3rd party websites with no new competition.
Seller_vgqxMss12D3od
Thank you, I appreciate it.
I guess we’re going to have to suck this one up and remove all the products. It’s such a shame as it most definitely feels like we’ve been wronged. We told them on the phone that we would remove all their products from our website too unless they gave us permission to sell on third parties too. It didn’t help unfortunately. Hopefully they will notice the big hit to their sales up North as we were spending over £100k pa on their items.
Best,
