Brand-Gating – In a practice known as ‘brand-gating’, Amazon has begun requiring sellers to provide proof that they are purchasing certain branded products from licensed manufacturers or distributors. While their requirements for this proof has been defined very broadly in the past and only required under certain circumstances, it would appear that the company is tightening its definitions on what can be considered proof.
While a letter from the manufacturer stating you have permission to sell their product is an easy way to prove you are a legitimate seller, for those who are only occasional or small-business sellers, such a letter can be hard to obtain. For those who cannot obtain a letter, they must be able to provide invoices that meet the following criteria:
- Dated within the last 90 days
- Include both your name and address and that of the manufacturer or distributor
- Shows that you have purchased at least 30 units
- Shows that you have purchased at least 5 different products
Needless to say, such strict requirements for invoice proof of sales will cut out a lot of counterfeit sellers, but that’s not all Amazon is doing to stem the tide of fakes.
Counterfeit Costs – The problem with all these new requirements is that Amazon is going to have to pay for the time and manpower to review the documents, verify their authenticity, and process the paperwork required to approve new sellers for each brand. This is time-consuming and expensive, and Amazon isn’t one to eat into its own margins. In this case, the cost is being passed on to the legitimate sellers.
While there has been no official announcement by Amazon yet, and not enough instances reported by sellers to get a good lock on which brands will cost which price, so far it appears that most brands that are being subjected to ‘brand-gating’ will cost sellers between $1000 and $1500 to continue selling those brands on Amazon. This cost has some sellers angered, as they claim that many large-operation counterfeiters would have no problem paying such a price, while smaller legitimate sellers will find it prohibitive and be unable to continue selling their products with that obstacle in their way.