Many manufacturers come to Vorys eControl puzzled because they see their products being “shipped from and sold by Amazon.com,” when they don’t sell directly to Amazon in a first-party or retailer relationship. How did this happen, exactly?
Make no mistake about it, these are Amazon first-party unauthorized sales. When they occur, it can be very disruptive to the brand’s third-party Amazon strategy. So, what do you do? How do you approach this problem and combat the disruption?
In this edition, we share a few insights on how Amazon may be getting your products and how to determine who is supplying Amazon. With this information in hand, you can take proper action.
Amazon is likely selling First-Party (1P) US inventory outside of the States and vice versa. So, even if a manufacturer has a third-party Amazon seller strategy established for the U.S., that strategy may be disrupted if the manufacturer supplies Amazon First-Party (1P) outside of the US.
While manufacturers can still have a hybrid 1P/3P Amazon strategy globally, doing it in a way that supports each country’s specific Amazon go-to-market strategy will likely need to involve global strategy considerations and conversations. In addition, it must include potential outreach to your Amazon vendor manager in the countries in which your company has a 1P relationship to address any ongoing cross border supply issues.
Vorys eControl diversion diagnostics is often a prudent first step for this problem. This is where our team of legal, business, and data professionals analyze sales data to determine what customers or accounts have purchased the product variety and quantity being sold by Amazon First-Party.
While this does require data access, if your customers have concerns about sharing that data, there are steps ours lawyers can take. The data is then shared solely with Vorys eControl, rather than with the manufacturer, for purposes of the analysis. This can also entail a non-disclosure agreement or an NDA.
Product tracking or lot code tracking, as well as subpoenas, are alternative methods to surface the necessary information. Test buys over a period of time showing specific lot or product codes may help identify which of your accounts could be potentially providing products to Amazon. If the manufacturer has a broader eControl program with a formal authorized seller program implemented in its US distribution channels, the manufacturer could also consider subpoenaing relevant parties for the source information. This is one of the many reasons why it is so imperative for the manufacturer to have a broader US eControl program, so it has robust tools to identify sources if and when this issue occurs.
Whatever the case, Vorys eControl and our team of experienced channel control professionals can help.
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