There are two types of Amazon sellers. Both can be successful.
The first type is a reseller of other brands. This is a highly competitive type of selling with very small profit margins. The most successful long-term resellers have some type of supply chain advantage.
For example, several of the larger resellers are actually manufacturers’ distributors that already have the logistics in place to buy and sell products. They also have the relationships with the manufacturers to purchase directly. This supply chain expertise provides them with a cost advantage over smaller sellers.
Other resellers execute a form of online arbitrage. They spend much time finding products they can buy for less money on one site and sell it for more on Amazon. They have to sell quickly or the prices will gradually come down as other online arbitragers find the same products and compete for the Buy Box. Since there are so many resellers for the same product, this is a continual fight for the Buy Box. And low prices play a big part in their success, which erodes profitability.
The second type of sellers is a brand. Smaller brands (such as Juice Beauty) and national brands (such as Tide and Gillette) sell directly on Amazon. Many of these brands are the only seller of their products. They have prohibited resellers from carrying their product.
They control the competition for their brands in one of two ways. They have contracts with their distributors and retailers stipulating where they can and cannot sell their brands online. Or, second, they provide Amazon with exclusives and sell directly to Amazon as a vendor.
Having these types of contractual stipulations is one of the ways brands maintain control over how their product is displayed and priced on the marketplace.
They also use Amazon’s Brand Registry.
What is the Brand Registry?
The Amazon Brand Registry gives brand owners control of their products on Amazon. This allows the brand owner to regulate the detail pages for their products. Therefore, even if someone else sells the product on the marketplace, the brand owner controls how it is presented.
The Brand Registry is open to any manufacturer or brand owner — no matter how small — that can prove ownership.
Controlling how a brand is presented on Amazon is important. Amazon — and, presumably, all brands — wants to eliminate counterfeiters on the platform. The Registry gives the brand owner more resources to remove counterfeiters.
Amazon does not stop someone from legitimately selling a product. But the Brand Registry expedites the process of removing inauthentic and unauthorized products and sellers.
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How to enroll a brand
Brand owners can apply online to be included in the Brand Registry in their Seller Central accounts. The application includes several ways to prove ownership.
- Images of the brand packaging and labeling with the brand clearly visible.
- Images of the products sold under the brand, with the brand clearly visible.
- A website link for the brand that includes images of the products.
- A copy of the brand registration and trademark provided by the U.S. Patent and Trademark Office.
- Unique product identifiers used by the brand. These identifiers need to be consistent, unchanging, and easily discoverable on the package, product, website, and catalog. Identifiers include: manufacturer part number, model number, catalog number, and style number.
Amazon will continue to greatly impact retail — online and brick-and-mortar — via tremendous customer loyalty, one-click checkout, and Amazon Prime. Many brands have figured out how to use Amazon as another customer acquisition tool to grow their overall business.
Amazon’s Brand Registry can protect a brand from counterfeiters and unauthorized sellers. My suspicion is that Amazon will use the Brand Registry to reduce the number of resellers on the marketplace. This will help brands be more successful and have less competition for their own products.