Previously, when consumers turned to Amazon for the perfect holiday gift, many were surprised to find packages filled with counterfeit merchandise. In an effort to improve the customer experience, the retail giant is now implementing several new seller requirements to crack down on counterfeit products and ensure the legitimacy of all merchandise.
New sellers (existing sellers are grandfathered into the system) must pay a one-time fee up to $1,500 and provide three purchase invoices from the manufacturer or distributor, plus a letter from the manufacturer authorizing the retailer to sell its merchandise. While Amazon has yet to release an official statement, comments from the platform’s Community Seller Forum speculate brands requiring the fee and invoices might include Nike, Lego, Hasbro and more.
Previously, if unauthorized sellers sold brand products on Amazon, the brand was required to file a complaint and test-buy the products to prove the illegitimacy of the merchandise. This makes sense – but in a case in which the seller’s products were legitimate, that business could lose thousands of dollars in potential sales.
So, how will the changes actually impact the Amazon marketplace?
While Amazon’s intentions to protect consumers are positive, the company is restricting its marketplace and charging sellers more money. The new updates will give authorized resellers of affected brands a competitive advantage. This is good for retailers that have brick-and-mortar stores and need Amazon to support their business – large sellers should be able to afford the fee, and it will discourage smaller sellers, fostering less competition for the big players. For resellers, the higher the barrier to entry on a given brand, the better sales results.
However, Amazon’s new updates could create implications for smaller sellers, or liquidators that can’t afford additional fees from Amazon or won’t have required proof to resell products from major brands.