Brand Protection: How to Stop Unauthorized Selling of Your Business’s Products
If you sell products online, you’ve probably had issues with counterfeiters and unauthorized sellers. Amazon is a favorite platform for malicious sellers. If you take down one unauthorized seller, another one pops up. To deal with this issue, you need a brand protection strategy.
See Can You Protect Intellectual Property with David Cooper for a complete transcript of the Easy Prey podcast episode.
David Cooper is the founder and CEO of IPSecure, a brand protection company with a focus and emphasis on Amazon. It was born from David’s two decades of experience in the intellectual property space. He helped build brand protection programs for some of the largest companies in the world, including Nike, Microsoft, the NFL, Apple, and others. He created IPSecure to address the shortcomings he saw in that space. Additionally, IPSecure expands markets and the types of companies and people that perform brand protection. It also makes the internet a lot safer for people to shop.
The Risks of eCommerce
The internet is fertile ground – both for legitimate ecommerce and malicious sellers. Amazon’s market cap is bigger than the GDP of 92% of countries in the world (as of 2021). That’s a lot of commerce. It’s basically irresistible for counterfeiters, unauthorized sellers, and other bad guys.
When you have platforms like Amazon … there’s so much commerce activity occurring that it’s basically irresistible for counterfeiters, unauthorized sellers, and bad guys of lots of flavors.David Cooper
Businesses need solutions and strategies to approach these problems. Counterfeits and unauthorized sellers online can erode trust in your business. The issues are only getting bigger as the internet and ecommerce expand. Ecommerce is already huge, but it’s still only a fraction of the size of the total retail market. Theoretically, it could see decades of growth. The possibilities are exciting, but it’s also scary if we consider how the problems will also grow.
Brand Protection Beyond Legal-Focused Solutions
Before founding IPSecure, David ran a company called MarkMonitor. It became a world leader in online brand protection, and it focused almost exclusively on large brands with corporate legal departments. In the United States, brand owners have a real legal responsibility to protect their intellectual property. The legal departments David worked with focused on risk mitigation and reducing liability.
Historically, brand protection was legal-focused. Companies that offered it would collect data, put it in a system for analysts to look at, then go to the client and say, “We see counterfeiting here, let’s take legal action.” It feels good to take down unauthorized sellers, but it does nothing from a business standpoint. If you stop a hundred unauthorized sellers, a hundred more will pop up in their place.
When David went to big brands and met with corporate legal departments, right down the hall was a team of ecommerce, sales, and marketing experts. They had the same data, they were just thinking about it differently. David saw unauthorized sales and counterfeits as not just a legal problem, but also a threat to sales and growth.
IPSecure was born out of necessity. It combined traditional brand protection techniques – violation reporting, cease and desist letters, litigation, etc. – with a simplified platform and ecommerce ecosystem analysis. It changed the measure of success from “How many counterfeiters did we take down?” to “Are we selling more?”
What IPSecure Offers
IPSecure measures everyone in an ecommerce ecosystem, legitimate sellers and counterfeiters alike. This makes it easy to compare legitimate sellers to unauthorized sellers and counterfeiters. It works whether you have a channel of licensees, sell direct-to-consumer, or sell to distributors who sell to consumers.
As you purge illegitimate sellers from a platform, it’s like a balloon. If you push on one side, the other side puffs out, but the amount of air inside never changes. With Amazon, for example, unauthorized sellers will keep coming. What matters is who’s in that buy box on the side. If you or a core group of authorized sellers are the only ones there, the result is a revenue increase. That’s how IPSecure measures success.
People will keep coming to Amazon to purchase the products. The key is who’s in the buy box and what sellers are there with offers at that point in time.David Cooper
Stopping counterfeiting isn’t the only use for IPSecure. Lots of clients use it to manage their licensees and resellers. Some businesses give other parties the rights to sell their products online, but only certain products in certain ways. IPSecure can be used to monitor and enforce those rights.
How to Identify Counterfeits when Shopping Online
There are some universal tools you can use to identify counterfeits and protect yourself when shopping online, regardless of where you’re shopping. Some tools, though are specific to Amazon. Since Amazon represents almost half of every ecommerce dollar spent in the United States, it’s important to understand its unique challenges.
Identify Counterfeits Anywhere
When shopping online, make sure you know who you’re buying from. Look at the seller. Check for signs of legitimacy, longevity, and reputation. Can you contact them? Do they list a phone number? Do they have a positive reputation on their platform?
If you’re shopping on a third-party platform, look at the number of negative reviews. An illegitimate seller might show up with a brand new account and have five negative reviews. They’ll sell products for a few weeks, then disappear.
Third-party sites don’t always make it easy to tell who exactly you’re buying from. Pay attention to the actual seller. When in doubt, go to the manufacturer’s website and buy the product directly from them. David thinks that’s always the safest way to buy online.
Identify Counterfeits on Amazon
The way the Amazon platform is designed, it’s not advertised who you’re buying from. You find a product, look at the listing, and click “Buy Now.” But there’s an algorithm that decides which seller is in that buy box. You and your friend might both buy the same product from the same listing, but yours was sold by Jim while your friend’s was sold by Sally.
When you look at the listing, below the Buy Now button, it will say, “Sold and shipped by XYZ Company.” Click that name and look at their profile. See how long they’ve been on the platform. Do they look like a legitimate business? Do their customer reviews seem real?
On Amazon, bad guys hide in plain sight. It’s very difficult for people to tell exactly who they’re buying from.David Cooper
The typical case of counterfeit products on Amazon isn’t designer handbags, it’s products people buy every day. Household staples and over-the-counter medications like Tylenol are prime targets for counterfeiters. Look closely at the seller, and if in doubt, don’t buy. Third-party marketplaces can deceive. It’s not necessarily intentional, but the way they’re set up, it’s easy to be tricked. Go to the manufacturer’s website directly if you can.
Brand Protection and the Gray Market
The services that come with a product are actually considered part of the product. In the US, there’s something called the first sale doctrine. With it, if you walk into Walmart and buy something, you can go home and sell it on the internet completely legally. A lot of gray market sellers hide behind the first sale doctrine.
Let’s say you acquire some electronics and put them for sale on Amazon, but you don’t offer the same warranty, customer support, or other service elements that the manufacturer offers as part of the product. The manufacturer could legally make an argument in court that the product you’re offering is different. They could take you to court and make a case similar to a counterfeiting case.
But going to court is expensive. IPSecure often gets small companies asking what they should do. They can’t afford to lose 30% of their sales to counterfeiters or gray market sellers, but they also can’t afford a ton of expensive litigation. IPSecure is a great brand protection tool because the platform is cost-effective. Small businesses can control unauthorized sellers to avoid losing revenue without paying for a team of analysts. One client has only seventeen products on Amazon, and they spend a few hundred dollars a month to monitor and protect themselves on Amazon. They don’t pay more because they don’t need more. IPSecure provides simplified tools – paying for services is optional.
David also likes to point out that you don’t have to hire a lawyer to send a cease and desist letter. You own the brand, it’s your company, you can send the letter.
Brand Protection on Amazon
Amazon does take steps to protect consumer safety, and they are proactive in some areas. But generally, anyone can come and go. There’s no way to tell Amazon, “I don’t sell on your platform, please take down any listings for these products because they’re not authorized.”
Nike invested in Amazon and built a store there, but later they pulled all legitimate product listings from the platform. But “Nike” is still the #1 most-searched keyword on amazon.com. It worked out for them in the end because they created their own ecommerce ecosystem, but most brands are not Nike. Unless you’re a luxury brand or your core demographic doesn’t shop on Amazon, it’s highly unlikely you’ll be able to turn your back on Amazon and still be successful.
Whether you like it or not, your products are being sold there [on Amazon].David Cooper
Amazon does a lot to limit counterfeiting and unauthorized selling. In the end, though, they’re victims of their own success. They’re so big that it’s practically impossible to stop all the new illegitimate sellers that pop up every day. Law enforcement isn’t going to hunt down patent infringers, either. You, as the creator, are responsible for protecting your own intellectual property. Investing in brand protection just makes sense.
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