Amazon Brand Gating Round Table Discussion

Transcript

Liz F: Thanks for attending today. We're going to get started in about a minute and a half, two minutes. We're still seeing some people that are signing on, so bear with us and we'll get started ... To today's webinar on brand gating. I'm Liz Fickenscher with eComEngine. A lot of you are familiar with us. We are the creators of FeedbackFive, RestockPro, and eComSpy specializing in software tools for Amazon sellers. We've got some great info for you today. We've got CJ from Amazon Sellers' Lawyer. We've got Liz Adamson and Dan from The Wholesale Formula. They're all going to be telling you different things about brand gating.

Liz F: We only are going to take an hour of your time, but in the interest of time we're going to get started. Today's agenda, we're going to talk about what is brand gating and we're going to get CJ's point of view. He's an attorney. We're going to get Liz's point of view. She's a consultant for Amazon sellers, and then Dan's going to tell us his strategies. We've got some special offers for you, and then we're going to take questions at the end. As we're going through the information and everybody's presenting, feel free to type your question into the GoToWebinar control panel, and we'll be capturing that and then we'll address all your questions at the end. We will have plenty of time for questions.

Liz F: Without further ado, just a general overview of brand gating. If you're a reseller, it can be tricky to gain permission to sell a brand, and if you're a private label seller, you might want to think about getting your brand gated. This isn't exactly a new thing. Amazon has been doing it in the fine jewelry category among others for a while now. It's definitely more a problem than it used to be. We're going to turn it over to CJ. He's going to tell you some great stuff.

CJ: Awesome. Thank you very, very much. First, a little introduction. I'm CJ Rosenbaum. I founded Amazon Sellers' Lawyer after representing entrepreneurs for roughly, I'm going to show my age, 20 years of brick and mortar. Started out with entrepreneurs who were friends of mine, and then people they've bought and sold businesses, and everything from dirty water dog trucks in New York City to brick and mortar stores and businesses and real estate, all sorts of stuff. Now, about 98% of my practice focuses solely on Amazon sellers. Today, I want to talk to you in terms of brand gating, the benefits and the protections that you get if you're able to obtain gating and how it can fit into your whole IP protection and help you protect your products and also defend yourself once you get the gating.

CJ: If you can go to the next slide. Okay. First, in terms of what we do, brand gating is a really, really great first step in brand protection. To understand what brand protection is and brand policing and protecting yourself, you need a little bit of background. This is like law 101 for sellers. Unlike law school, I'm not going to charge you $20,000 for these lessons. I'm going to give you basic IP law that sellers need to know.

CJ: IP law can really be broken down into three general areas. First is trademark. Now, a trademark is like the Nike swoosh or the M in McDonald's. It's something that you see and right away you know the quality you're going to expect. You're getting a Big Mac from McDonald's or a quarter pounder with cheese, you know you're not getting filet mignon but you know what you're going to expect. Same thing with Nike or Under Armour or Tiffany, all these marks have it. You know exactly what you're going to get on almost a visceral level. That's a trademark.

CJ: What you can't do with trademark, trademark violation means you're taking that Nike swoosh or that McDonald's M or the Tiffany blue box and you're using it for your product. That's a trademark violation. Most other things are not. That is. Gating protects your trademark. You need the trademark or an application to actually get the gating. It protects your trademark because now Amazon is jumping on that bandwagon and saying nobody else can sell your product with your trademark without permission. That's the basic law on trademark.

CJ: The next area when it comes to IP law for sellers are patents. A patent is a license that you get when you invent something. A license says you're the only person, the only company that's allowed to sell it. Sometimes you can get around patents by changing it slightly or changing it significantly to make a product better, but the way the gating is going to help you guys, if you can get the gate, it's going to help you because it's going to protect that particular product and make it that much easier to enforce your patent.

CJ: The third area of IP law that sellers need to know about is copyright. Copyright pertains to any type of creative work. It could be a jingle, it could be writing, it could be a picture. There's a lot of issues about whose image is on any type of detail page, and who owns that image. Copyright protects from what you guys do, you guys sell, the images and the verbiage on the packaging. Now, sellers are generally not violating copyright law if they're selling a genuine product. You are violating it if you take a competitor's product and you cut and paste what's on their boxing and stick it on yours. That's a copyright violation.

CJ: Gating can help these issues because again, it's giving you that initial protection to help you enforce the copyrights that you own. On the other hand, it hurts it a bit because the images are already there, and so if you get through the gating process and you own the images and now someone else can sell it, it's going to be difficult to enforce it. When it comes to copyright, gating is generally good but also creates some other issues.

CJ: There's a fourth area of the law that you need to know about and I neglected to put it on the slide is called trade dress. Trade dress has to do with color schemes and packaging shapes and the shape of a product, and it really is the whole thing. When you look at it, if you're making something that looks like somebody else's product and it's going to cause confusion because of the color scheme or the shape or other things with your packaging, that could be a violation of somebody's trade dress, which is something that's generally not filed with the government. It's really how something looks and feels. If it creates confusion, you might be violating trade dress. Those are the basics of IP law that sellers need to know.

CJ: Could you go to the next slide, Liz? Okay. What else do you need to know when it comes to brand gating and being a seller and obtaining brand gating? In addition to either having a trademark or filing for trademark protection, you can also get gating. It's very important if you have a distribution agreement. If you get an agreement either exclusive distribution, we're the only person or the only company that can sell a product line or semi-exclusive, that's something you can use to help you get brand gating.

CJ: What they generally say is that you're going to agree to sell such and such a brand or such and such a product line, you're going to agree with that brand to maintain the prices that they want, it's sort of the old map agreements modernized, and in exchange you're going to sell a certain amount or volume, you're going to get a certain discount, and a lot of these agreements also require you to do the brand policing either to obtain the gating or to periodically do sweeps which is in both parties' interest.

CJ: The basics are what you're going to pay for the goods, the prices you're going to have to charge, and the protections you're going to offer. If you're negotiating these type of deals, and this is really a hot, hot topic since July where third party sellers are really trying to get these distribution agreements to ride the brand wave that Amazon has put us on is also this delivery risk of loss issue. If you're buying massive quantities or even smaller quantities, when you're doing one of these agreements you want to decide who's going to be responsible for the cost of shipping and who's going to be responsible for the risk of loss.

CJ: If you've been selling on Amazon, they lose your stuff, your stuff gets delivered there and they claim the weight was wrong, the packaging was wrong, the quantity was wrong and they lose your stuff, each of these distribution agreements in addition to pricing and policing and your discount, you're also going to want to have in those agreements who bears the risk of loss during which periods of time. Exclusive versus semi-exclusive means either you're the only person selling or it's going to be limited to four or five or 10 sellers, and what it's really also allowing is the brand and as ... The distribution agreement is to regain control over the distribution chains.

CJ: The biggest issue that most brands have when they have a lot of different third party sellers is that they don't like that you're able to obtain their products. This is another goal to tighten up that distribution chain so that unauthorized sellers or people who do not have the distribution rights can't get them from different warehouses or suppliers. It's really a tightening over that, and that's something you want to also address when you're negotiating these distribution agreements. One, who is going to be responsible for those obligations, and number two, how extensive are the efforts.

CJ: If you're responsible for tightening up the distribution chain, you want to know what your exposure is if you don't do it properly or you just can't control it. If it's the brand's responsibility, you want to make sure they're doing their job. You don't want to be the seller who's charging MAP prices or inflated prices when another seller is getting them from the same warehouse at 20% less than you. These are issues that you really need to address if you're going to start working on getting distribution agreements. I think this is the way business is saying. They're saying that it's easier to ride the horse in the direction that it's going, and I think this is the wave, and what we can all do as sellers is ride the wave of Amazon which is focusing on the brand. We highly recommend you start working on getting distribution agreements. If you can get it exclusive, it's great. This will help you ride the trend towards a brand centric atmosphere and obtaining brand gating. Liz, did I take too long?

Liz F: No. You're awesome.

CJ: Okay. I'm seeing some questions pop up. At the very end, we're going to have some time, and I'm happy to answer your questions.

Liz F: Great. Thank you, CJ. All right. Now, we're going to hear from Liz Adamson.

Liz A: Thanks, Liz. I'm excited to be here today and share some thoughts with you on brand gating in Amazon. My name is Liz Adamson and I am the founder and lead consultant at Egility. Here at Egility, our goal is to help retailers navigate the Amazon marketplace, and not only navigate it but make sure we're maximizing your profits and sales. I've been working with Amazon sellers since 2011. My primary focus is on product page optimization, brand management and marketing. I've worked a long time in those fields and I use those skills and apply those to Amazon to make sure your brand is doing well, it's being found and being sold for profit on Amazon.

Liz A: Go ahead next slide, Liz. Let's talk about the benefits of brand gating. Now, when this was rolled out late last year, many sellers grown in frustration. When Amazon expanded its program it seemed like another hurdle, and then more hoops we all had to jump through and more red tape to deal with. If you look at the bigger picture, brand gating isn't entirely a bad thing. CJ covered some of those thoughts on protecting your own brand and preventing others from knocking off your products and your branding. This is what Amazon is trying to do.

Liz A: Brand gating is one of Amazon's solutions to control the increasing problems that they're having with counterfeiters. They got a lot of really bad press last summer when Birkenstock announced that it would no longer sell its goods on the Amazon marketplace due to the dramatic increase and the difficulty in managing the number of cheap knock-offs. There was a lot of sellers manufacturing a cheap imitation of the Birkenstock products, listing them on Amazon, listing them on Birkenstock, on listings. They got fed up and they announced they would no longer be using that marketplace as one of their sales channels. Amazon doesn't like the bad press. It also does not want to lose customer trust and wanted to ensure customers and brands that they could continue to trust the marketplace as a good place to sell and buy authentic products.

Liz A: They moved quickly to take further steps to address this problem. That was the brand gating program. There are a few other things that they have likely done in the backend, but this brand gating program has been the most visible one. This consists of if you want to sell a particular brand say Nike or Adidas, some of those big brands, you must submit a letter of authorization from the brand owner or manufacturer. You have to submit invoices showing that you purchased the product from an authorized source, and in many cases you do have to pay a fee anywhere from $1,000 to $1,500. That fee does vary. There's a fee to get that branding gated for you.

Liz A: All these measures are really to prevent again those cheap knock-offs, those counterfeit products, to provide gating, provide a gate that prevents them from selling these inauthentic products. A couple benefits here for sellers is first off it's reducing your competition with those knock-offs. If you are an authorized reseller of say Nike or Adidas or another brand, you now don't need to worry about those cheap knock-offs jumping on your product listing selling it for 50% of your price. It's undercutting you, and not only is it doing that destroying the price point of it, it destroys the product reviews for the product as customers buy those items, they're obviously not the real thing, and then they start leaving negative product reviews. This brand gating is protecting the integrity of your product listing and your pricing.

Liz A: This is of course increasing customer trust and loyalty. If you know Amazon, you know that their number one priority is their customers. That is the lifeblood of Amazon's business and our business. Without customers, we wouldn't be here, we wouldn't be making money, we'd have no one to sell to. They're ensuring their customers that when you buy a product on Amazon, it will be the real thing. If you buy a Samsung or HP or Nike or whoever it is, they want to ensure customers that that product will be the genuine deal and not a knock-off.

Liz A: Go ahead next slide, Liz. Okay. Thanks. How do we then manage this? It is some more red tapes, it is more hoops to jump through, and so we need to know how to manage those so we can read the benefits of brand gating. For resellers, before you buy, before you make that large investment in overstocked or discontinued goods at a trade show, be sure you're checking that listing on Amazon. Pull it up on your app on your phone, on your seller app, check the listing, attempt to create the listing, and you'll notice immediately whether or not you're able to create that listing or if it's been gated and you're required to submit some paperwork to be able to sell that. Don't buy that inventory if you don't think you can provide that paperwork. That will obviously be a big loss on your end if you're dependent on the Amazon's sales channel. Be sure you're checking those listings before you buy.

Liz A: Also, be sure you're buying from authorized sources. Many sellers have grown their business relying on retail and online arbitrage and receipts from Target or Walmart or whatever sale you hit up to buy your inventory is not going to fly with Amazon against brand gating. They want to see those authorized invoices, they also want to see the letter from the manufacturer, so again, if you want to be selling a particular brand, work directly with an authorized distributor, or even better work directly with the brand or manufacturer themselves. Make sure you're purchasing those products from sources that have authorization to distribute that product.

Liz A: The last thing I recommend to anyone that I work with who sells on Amazon is to really diversify your sales channels. Amazon will always be an incredibly large and profitable sales channel for many resellers, but you really shouldn't be putting all of your eggs in one basket. Amazon is ever changing. I like how CJ termed it. We have to be riding that Amazon wave and working with whatever new policies and procedures they put in place, and if something changes that diminishes your ability to sell on amazon, you're going to want to have other sales channels with revenue coming in to keep your business stable.

Liz A: Now, for private label sellers, work on getting your brand gated. CJ covered some of the things you should be looking into to make sure you can get that done. Trademarking, copyright, etc, those will need to be done to protect your brand identity and your products, especially if you've got patented or unique products. To get brand gated in Amazon, the first step is you'll need to register on the Amazon brand registry. Once you're on that brand registry, that is the first step to begin to request Amazon that they gate your brand from other unauthorized sellers.

Liz A: They're still new at doing this. Working through seller support can be very frustrating. I'm sure many sellers can relate to that. You'll contact seller support and they don't really know what you're talking about. You can attempt to work with seller support to get your brand gated and try to get to the right person to get that request access for you. If you're not willing to put in the time and effort to work with them and the frustration that comes with that sometimes, there are third party consultants and others specialized in working with Amazon to get your brand gated and they can help you navigate that process.

Liz A: Some of you who are already brand registered and perhaps have been selling on Amazon for some time, you may notice that Amazon has actually already gated your brand. We're not exactly sure what criteria they're using to decide who's getting gated and not, but I have noticed with many of my clients that certainly after the rollout when we went into their account we noticed that they were brand gated. Amazon had already taken care of that. If you're not one of those and you would like to be as a private label, reach out to Amazon, reach out to specialists who can help you navigate the process to get your brand gated. If you have any questions, as Liz and CJ mentioned, submit them to GoToWebinar in the chat box or in the questions box, and we will be sure to address those at the end of the webinar. Thanks.

Liz F: Thank you, Liz. All right. Next, we're going to hear from Dan from The Wholesale Formula. Dan, take it away.

Dan: Hey. Can everybody hear me?

Liz F: Yeah.

Dan: All right. Great. All right. Actually, super happy to be on here and follow up those two wonderful people. I feel like I could offer a pretty neat perspective because we're a true Amazon seller. One of the things that people might not know about us is we started in the retail arbitrage. I know how the brand gating can definitely affect the people that are there. We ended up transitioning to the wholesale model that we use now. Whenever we saw a brand gating announcements and really saw what it was doing, it was one of those things where it was like I realized that it was going to be troublesome for other sellers, but for our model it was actually incredibly beneficial. I think once people adopt the mindset of how these changes can help them, then you really learn the power of brand gating and how it can help the brands you're working with.

Dan: Much like CJ and Liz said, Amazon is a constantly changing market, but there's one thing that all of their changes that always happens and it's that these changes are always in the benefit of the customer. What happened here was they were addressing counterfeits, and that helps to restore customer confidence which also helps us as retailers. Whenever you think about it in that mindset, it makes the platform a significantly more safe platform, and in addition it also helps us secure better relationships with our manufacturers.

Dan: We were really happy about this. I know a lot of people believed in diversification, and we were always in the middle of the road about how we wanted to diversify from channels. Whenever we saw this announcement and saw how it was starting to take place and shape, we actually ... I guess it's counterintuitive. We doubled down on Amazon. We removed our focus from other channels and are now doubling down on Amazon because we feel that what they've done is they've created effectively higher hurdles. We're a company that loves high hurdles. I think that most entrepreneurs and Amazon sellers can adopt that mindset because as entrepreneurs we're all problem solvers. With that, I think once you're able to navigate the process and figure out how to solve a problem, it becomes a great opportunity for you as a seller.

Dan: Next slide, Liz. The two ways you can actually become authorized to sell a product are getting three invoices from the manufacturer or a letter of authorization from the manufacturer. One of the things that we really loved about this whenever we saw it is that it forces the people that want to protect their brands, it forces those sellers to become known to the manufacturer, and they can choose. If it's somebody that's working with them and doing a great job, it allows them to continue selling to them, or it effectively allows them a way to keep bad sellers off of listings or problem sellers.

Dan: One of the things that we pride ourselves on in our company and our approach is that we are a very brand first company. We don't simply buy product and sell product from the brands that we work with. Our goal is to get on there and help them increase their brand presence and awareness and reach on Amazon. Now, whenever there's problem actors on those listings and they don't know who they are, that makes our job harder and it makes them less successful overall. Giving them the measures to learn who their sellers actually are was an incredible benefit for us because it's going to help alleviate some of the problems we have with trying to navigate this.

Dan: Next slide, Liz. All right. Going through option one. One of the things that we ran into early on in this process, I think we've been ungated for about 20 or 25 brands. Between 20 and 25 brands at this point. We've actually went through this process a lot. We've encountered a huge amount of hurdles along the way because it is what it is. That's the one thing about Amazon is they don't necessarily tell you all the criteria that they're looking for, and you kind of have to learn as you're going. One of the more annoying things that we noticed is that whenever you're submitting invoices, if it doesn't follow the formatting that they like, sometimes they will reject it. It turns into an annoying process.

Dan: The one great thing about working with Amazon in general is it's very predictable. Amazon is a logical machine. If you give them the right information, you will always get through a brand gate. You will always get ungated into a category or whatever. Amazon is a logical machine that just follows a set of simple directives. With your invoices, some of the things that they can require is you definitely want to have the date on there. If the company doesn't have the date ... And this is where you need a better relationship with the vendors that you're working with. If the company doesn't have what you need on the invoice, go back to the company and talk to them and be like, "Hey, can you make me a special invoice for this and use the following format?" Give them a set of criteria.

Dan: What we're learned is we've had to do this quite a few times, and it is an inconvenience for them, but if you've established yourself as a growing brand partner they're going to want to help you. For us, it tends to take like two or three days before they're able to get back to us with the invoices that we're looking for. One thing you definitely need is the date. That date has to be within the past 180 days and show purchase and delivery. One of the things that we've seen is whenever you start submitting those 160, 170 day invoices, it gets a little awkward because sometimes Amazon may reject those and ask you for 90 days. If you can get them in the 90 day timeframe, you're going to generally get through it much easier.

Dan: Another thing you're going to need is the name of the product or a description of the product on the invoice. Basically, Amazon needs to be able to easily discern that that is the brand that you're trying to be ungated for. The next thing, you will need your name and business contact information. One of the confusing parts of this is it has to be not your company name on Amazon or your Amazon storefront. It needs to be the name that is in seller central. This is confusing to a lot of people and they get rejected and they're like, "What did I do wrong?" That means whenever you're setting up with manufacturers, you need to be using the company name that is registered with Amazon to make this process a lot easier and not DBA or some stuff like that. You can't get through without those things. It's just going to make it more difficult.

Dan: One of the things that we focused on a lot was trying to simplify the process so we can move through these ungating processes more quickly. The faster you move through these things, the more efficient your company is going to be and the more money you're going to make. Make sure you're using your name from seller central. If you can have your address, phone number, email and website on there, that's great. That's not always going to be possible. A lot of times, you're going to have your name, your phone number and your address. That's always good enough, but the more information they have, the better. Amazon likes to be overwhelmed with information and like to have more information. It makes you seem more genuine and authentic as possible. Again, if you can get that on there, great. If you can't, don't worry about it.

Dan: The last thing is they're going to need their name, address, phone number, email or website. Again, the more, the better. Amazon wants to see overwhelming information on that invoice. Whenever you're getting these invoices, they need to be able to see that the issuer's name matches whatever Amazon can see. If the company has a website, it needs to have that same address. This is really awkward sometimes because we had a couple of vendors that they have their headquarter address on their website, but on their invoices they have it sent to wherever they're shipping from, one of their shipping facilities which is not the same address. We ended up getting those rejected. You may have to ask to have the address changed to match the website on the invoices that you get from the vendor you're working with.

Dan: Once you have that and once you submit those three invoices, generally we've actually never been completely denied on a product. We have never once had Amazon say, "You submitted this information and you're not going to sell." Sometimes, it might take a couple tries where there was something off on the invoice. One of the things that as awkward and annoying as it can be, you definitely need to ... If you get rejected, first off, if they were nice enough to give you information which is a rarity with Amazon, they don't like to generally give that much information as to why they're rejecting you, but if it was, go through that invoice with a fine-tooth comb and make sure that you're given then the information that they need as well as the way that they need it.

Dan: If you don't get the information, again, what you're going to want to do is go back and make sure your invoice was dated, check the names of your products. One of the things that's not on here that should be on here is the product needs to be purchased in commercial quantity. A lot of people are like, "What is commercial quantity?" Sometimes, you're going to see Amazon say 10+ units. What we have found in ours is Amazon generally wants to see more than 30 unites. Every time we submit them with more than 30 units, we never have any problems.

Dan: Another issue you might run into on your invoices is that sometimes the vendors will put it in the form of a case pack. You need them to specific units on this invoice. Make sure that if it's units and case packs, that the units are easily visible, that they can see how many units you actually purchased. Commercial quantity, what we suggest is how can you do this in one day. It's like if you're going to be purchasing 100 units of a product you can break those invoices up and have them issued on different days. You don't want your invoices issued on the same day. Be like, "Hey, can you invoice this 36 units here, 36 units here, and the remainder of units on this last invoice over the next three days?" Generally, that's going to go through Amazon's system much easier.

Dan: Next slide, Liz. All right. This is actually our favorite way to get authorized. It's been the easiest for us because it's a very simple template. Amazon has their criteria and all they're wanting to see is that you're an approved seller. For us, this is incredibly easy to get. This is what we've been telling people is it's now more important than ever to be upfront with your vendors about where you're selling your products. I want my vendors to know that I am an Amazon seller. I tell them. Whenever we contact them that we're going to be selling the product on Amazon it's more important now than it ever has been because it makes things like this, getting changes made to invoices, and more importantly a letter of authorization. If you can get that letter of authorization, it's very easy to get through these ungating processes.

Dan: What you actually need on that is ... I don't know why they said this. I think it's actually quite comical that they said legible. I have to imagine that at some point somebody tried to submit a hand-written version of this. I just can't imagine why they would otherwise make this illegible, but it needs to be dated within the last 90 days. Again, it needs to be dated to show that you are a current vendor. That's what they're wanting to see is that you are a current and authorized vendor of the product. The next part is it needs the name and contact information. This needs to again, match the website, be able to match that website.

Dan: One of the things we've seen is sometimes you may look at an Amazon listing and see that the manufacturer is incorrectly labeled. Whenever we encountered that same issue and it was very annoying because we got rejected and Amazon said it doesn't match the listing. We were like, "Okay. I'm just telling you the listing's wrong." What we actually did is we took pictures of the product and it showed the brand, and then we linked them to the website and then we resubmitted our letter of authorization and actually got through that way. If you get denied because something doesn't match up, there's always a way to get through. Again, Amazon is a very logical machine and just needs to see that you're giving them the right information and that you're basically being a legitimate business. It needs to include the manufacturer name and contact information.

Dan: Next, it needs to include your legal business name. Again, it's always the one. Whenever Amazon's requesting information, they always want the account information page in your Amazon seller central account. Make sure that that is the case. Include your physical address. This needs to match the address on Amazon's file. It doesn't matter if your shipping address is different, but you need to include the address that Amazon has on file. Lastly, it has to be in English, which I think it can actually be a bit awkward. We've not encountered this one yet.

Dan: All the companies that we do business with currently are based in the United States, except for one, that one's not been gated yet, and one in the UK. All of the companies that we do business with are domestic, so we've not encountered this yet, but I don't know how this is going to affect brands that are based in other countries. I'm not sure how you'll be able to navigate the process, but if anything here's one thing that I do know is when that comes up and it's more important, Amazon always has a means to address it. It may not be convenient. It may be an annoying process, but they always have a means to address it.

Dan: I think it's really important to keep that in mind when you're going through things like this because a lot of people whenever they're going through this and they're getting frustrated like, "I keep getting rejected and I can't seem to get this information right," we went through actual brand where we were rejected nine times before we were authorized. Again, I hate to say it, it was actually our fault. We weren't going through as thorough as we needed to be. Every time that you actually get rejected, make sure to go through and just double and triple check the information that you're giving to Amazon.

Dan: Again, I've seen some questions popping up here. We'll get to those afterwards and I'll definitely answer any questions you guys have. Just stay on and we'll get to those later.

Liz F: Thank you, Dan. We have a lot of questions actually folks, so we're going to get to as many as we can in the amount of time that we have left. You'll see some special offers on the presentation with eComEngine. We're extending 30-day free trials for FeedbackFive and RestockPro, or 150 credits with eComSpy. You can sign up for all of them using the coupon code that you see on the screen. Liz is offering a 30 minute consultation. Just email her at hello@egility.co and mention this webinar. Dan has a landing page that you can use to download the letter of authorization template. He's made that real easy for you, and you can just do that by going to TheWholesaleFormula.com/ungating. You'll see that up on the screen too. CJ is also offering consultation time. You can email him at CJ@amazonsellerslawyer.com.

Liz F: Let's go ahead and jump into the questions. I'll leave these special offers up on the screen so that you all can see those. I guess we will just jump in to the questions now. My panelists, you lovely people, do you want to get started or do you want me to do it for you?

CJ: First, I've got to ask everyone if you tell other lawyers that I'm talking to you for 30 minutes for free, you're going to get me thrown out of the bar. Okay. The first question is ... I'm just jumping in because I see my initials. What if Amazon sells your trademark without authorization? Okay. You need to separate actual United States intellectual property law and Amazon's own little environment here. Generally, if it's a real product and it has the trademark, there's nothing wrong with selling it. It does not violate IP law at all. There's no violation. No matter what anybody says, there's no violation. We have this thing called a fist-sale doctrine which someone asked in a different question, but it doesn't really matter as long as it's not counterfeit and not taking that mark and sticking it on someplace else.

CJ: If Amazon is doing it with your products, they're taking your inventory and adopting it, you really got to keep a good track on your inventory and make sure that you can track whose inventory it was. We have seen cases where a seller will ship in their product and instead of being put in their bin, Amazon adopts it and sells it as their own. This is really like an inventory management question. It's not really an IP violation to sell someone else's product even if you take the extreme example it's stolen off the back of a truck. That has some other consequences, but it's not an intellectual property law violation. Liz, you want me to keep going?

Liz F: You can. Why don't you take a couple more of yours and then we'll just go in the order that we presented during the webinar unless it makes sense to throw one related question in. I'll let you guys decide.

CJ: Okay. Somebody asked if your branded kit was a trademarked product in it as well as other products. That's the question. You can do that. Again, if it's a real product and it has the trademark on it, you're not violating anything. Similarly, Dimitri asked if there's a violation of trademark when you have not been authorized by the manufacturer even though if you bought it through a distributor. Again, if it's a genuine product you're not violating anybody's rights. It's not an IP violation, and that's why the vast majority of the IP violations on the Amazon platform are baseless. One of the things that we spend in probably 40% of our practice is getting brands to withdraw their complaints because they're baseless. If it's not counterfeit, it's almost never a significant IP violation.

CJ: Let's see. Steven asked that if you buy it, can you resell it? The answer is yes. If you buy a product and you don't change it, generally you can sell it and it doesn't violate IP law here in the United States. It's a bit different if you're selling in the UK because their authorization to sell is part of their IP law, but not so here in the United States.

Dan: Do you want me to jump in on one?

Liz F: Yes.

Dan: Okay. Mathew asked one of the brands that we were ungated for said that we had to have more than five items on each invoice. We've actually encountered this one pattern too where they wanted multiple items. What we did in that instance is we ... Because three of the items were difficult because there were three items that were really from a small company, and we just ordered those in our ordinary quantities and had them break it up over three invoices. The other two items, we actually carried in a significantly less quantity. We did closer to the 10 unit minimum. Whenever we submitted those, we explained to Amazon in the note section that we don't stock those items as deep as we do stock the other three items, and those are the three items that we primarily sell or we're hoping to sell.

Dan: You can definitely do that. You will still have to get the other items on there 22, something like that. It's uncommon. We actually asked the brand themselves if they'd do anything special to do that, and they didn't even know they were gated on Amazon. I don't know with what frequency that's going to pop up. We've seen it once.

Dan: Somebody said can you please explain how you would get your own private label product? What paperwork would you need? Honestly, CJ may be able to answer that better than me. I know from the seller side we've tried to work with brands to get their products gated. It's awkward because every time we have went through the brand gating process with a brand, the products have become our brand registry process. Every time we've done the brand registry process with a brand, the products have become gated. We've never had to go any further than that, but I suppose that what I suspect would actually need to happen is once you have that product registered is that you would need to reach out to notice@amazon.com and tell them you would like to get the product restricted based on the fact that you don't want counterfeits to enter the marketplace and you would want to protect your brand. That's the way I would go about it. I've not had to go through that process yet. I'm kind of just assuming there. CJ, do you have any experience with that?

CJ: Yeah. It's really not as difficult as it sounds to make your own product become a private label. You really want to develop your own logo, what your special sauce is, you want to get into something that you know well. I always recommend to people to get into a product that they actually have a personal interest or a love for. If you're a chef, maybe you want to get into making certain tools for cooking of baking, if you're into clothing you want to follow that, or jewelry or health and beauty, whatever you're into. Once you figure out what you want to make, the actual getting it made is only frightening the first time. It's called sourcing. You may want to go abroad to one of the trade shows. I can introduce you to people who have connections to different factories in China who can really build anything to your specs.

CJ: Once you decide how you're going to have it built and where you're going to have it manufactured, you want to have a contract with that factory, we're constantly suggesting that in those contracts if there's a dispute or a violation you're taking them to court where the factory is located because I got to tell you, the factories in Vietnam, in China, in Thailand, they could give a hoot about what a court in the United States has to say, so you don't want to have your venue in the United States. You want to bring the fight home to them if they start breaking the contract. The first time it's a bit intimidating, but if you have an idea or a product or a product line, like Nike said, just do it. Once you learn how to do it, there are lots of just regular people who've taken the plunge, who are making products every day just for them and having them sourced. You create your brand, you grow your brand, you market your brand, and then you get brand gating and all the IP protections that come along with it.

Liz A: Yeah. I'll add to that, CJ. Private label really is a great opportunity to build your business. What I encourage sellers to do is not just knock off another product. We've seen a lot of crowding in the marketplace where there's a lot of private label sellers really selling the same thing. There's not a lot of differentiation between products. That won't benefit you. If you're just competing against same products and you can't articulate why your product is different and why a customer should buy you over them, you're going to struggle and you're going to have a hard time. If you can come up with a product that solves a unique problem, that is again like CJ said, close to your heart, something you're passionate about and that can bring a unique offering to the marketplace you'll have a lot more success launching your private label product. It's a matter of using your imagination, finding a problem to solve, and then finding the right manufacturer to build that product for you that you can trust and have a good contract with.

Dan: That's awesome advice, Liz. I think a lot of people whenever they try to do private label tend to air towards just creating a replica of an existing product. Being able to differentiate it does have a huge amount of value and it sets you apart in the marketplace.

Liz A: Yeah. That really just shoots you in the foot.

Dan: One of the questions that I saw was from Mathew. He said where can we find information that we need to have on the invoices? If you go to the landing page that Liz mentioned, TheWholesaleFormula.com/ungating, what we actually have there is we went ahead and put up a whole ungating document that we use internally as well as our own templates. Definitely check that out. TheWholesaleFormula.com/ungating. Kim says do the invoices need to be a certain dollar minimum? No. Actually, this is awesome. If you can get ungated on cheap products, a cheap brand, they don't have to be of any dollar minimum and you can obscure your pricing. Amazon actually suggests that you obscure your pricing. We're not really seeing that it tends to be a factor too many times. We've submitted them where we've obscured it, we've submitted them where they can see it. Funny enough, we usually leave the really big numbers. If we have a really big invoice, we'll leave that for them just so they know we're serious. Most of the time, we actually obscure them, and I would suggest doing that even if it was a fairly large dollar amount. To Amazon, that won't be a factor at all. Liz, do I keep going?

Liz A: I'll jump in here. Sorry. I'm just going through the questions and there are several questions around people asking how do they know if their brand is gated. The method I use, and it'll be a little tricky if you don't have access to a second seller account is I'll jump in to another seller account and attempt to list as a different seller, and then you'll see whether or not your brand has been gated. Again, that's a little hard if you don't have a second seller account, which most people don't, but if you have a colleague who can check that for you, that can help. As for how to get your brand gated if you're a private label seller, there's a lot of mystery around that actually still. Like I said, many of my clients seem to have just been pulled into the program by virtue of the brand registry. They've been on that, and Amazon has gated their brand without even really notifying them. We found out quite by accident for some clients.

Liz A: Other clients, they've been on the brand registry, they've been selling products, but they're not gated. When you contact seller support, there's not currently a seller facing platform or representative who is in charge of this or that allows sellers to simply apply for brand gating. There are a couple specialists who have contacts within Amazon who can help with that. Another thing that definitely helps, in what we've seen, often Amazon won't be gating your product if there is no record of counterfeiting. If you haven't been submitting complaints about counterfeiters or violations, Amazon is not going to want to need to put that in place for your product. The first requirement that we do know of of course is brand registry. Get on the brand registry, see if that gets you gated. If not, you can try some of the emails that are available to email Amazon directly such as notices@amazon.com, or you can try seller support if you can get to anyone. Worst case scenario, if it's just not working which it may not, they don't have a process around this yet, you can contact a specialist who has contacts within Amazon to help you.

Dan: I can actually hit two question with the same answer. Joseph said how do you submit documentation to Amazon? Do you submit a ticket through seller support or email somebody directly? The second question was from Jill and she said that all three invoices need to be on the same product. Now, the reason you can answer both at the same time is the way it works currently is whenever you go to list a product, it'll tell you that this product is gated and you have to apply to be ungated on a product. Whenever you apply to be ungated, they're going to ask you for the three invoices or the letter of authorization in most cases. With that, we've only submitted it. I can't say for certain that with a brand if you would need three invoices that can have different products, but we've only submitted them with the same product. I presume you would because that's the product you ... You're actually applying to a product to be ungated, and then once you're ungated on that product, it unlocks the whole brand for you. I think the answer is yes, that you would have to have three invoices on the same product.

Dan: And then, somebody said does Amazon maintain a list of authorized distributors that they will accept invoices from for ungating? We've never actually went through ungating with a distributor. It may be unfamiliar to a lot of people, but our model is we purchase directly from brands. Theoretically, in the instances Liz mentioned earlier with Nike, if I want to carry Nike products I would be purchasing directly from Nike from their commercial sales team. Our invoices all come from the brand themselves. I assume that they probably do. I know they do with category ungating with specific like DVDs and things like that. There's certain authorized vendors that Amazon accepts. That list is not public. As far as that goes, I don't think it would help a lot even if they do have that list it doesn't help you because you're never going to know who those vendors are unfortunately.

Liz F: Great. Thank you, Dan. CJ, do you have any more that you want to tackle?

CJ: Yeah. Let me take a look. I was looking through them a bit. Let me just scroll back.

Liz F: There was a question about if Amazon offers brand gating to vendor central vendors or if they're considering doing so if somebody wants to take that one.

Dan: Are you talking about the question ... I'm trying to find the question itself. Is it the one where can they go through vendor central to become brand gated? Is that the question?

Liz F: Yeah.

Dan: Okay. On that specific one, for us what we've seen, you may be able to. I know that they had a program with your own brand where you could agree that it would only be available online through Amazon, and they would automatically gate you. That was done through-

Liz A: Yeah. That's the exclusive program I believe.

Dan: Yeah. You're smarter than me. Yeah. That's the one thing I think you can do through vendor central, but for the rest of the ones I've seen, it is generally tied to brand registry which is kind of awkward because we don't know the process. It's so funny because we went through this process, we talked to ... We had a couple private label brands that discontinued and just started selling to other people so they could sell the products on Amazon. We didn't know that those products were gated. Again, just like Liz said it's just more like a surprise that, "Hey, these are actually gated now because we had them on brand registry."

Dan: We've had companies that have brand-registered us as the brand registry representative on Amazon. Within a few days, the products became gated. There's nothing we did to do it. We were hoping that they wouldn't become gated so we could run through the process and try to do it through the notice@. I feel like that's the right play because notice@ is effectively like the Amazon label team, isn't it, CJ?

CJ: I'm sorry. I took put my mute on for a second there. I don't have a lot of information. Actually, I don't have any information on that whether or not it's going to apply to those types of sellers.

Liz A: Yeah. With vendor central, my guess would be if Amazon starts to notice counterfeiting complaints coming from customers because when you're on vendor central you're selling the product wholesale to Amazon and they're becoming the retailer. My assumption would be if counterfeiting becomes a problem on that particular listing, Amazon would gate it just simply even just to protect themselves as a retailer. I don't know of a process through vendor central or vendor express where you would apply for that brand gating yourself. Again, this whole process is still very opaque. We don't really know what criteria is. We have indications that of course brand registry you have to be brand-registered and that there's other indications that we need to be able to show or have a history of the fact that counterfeiting has possibly been a problem for your product, although that hasn't applied in every case.

Liz A: Again, this process is new, very opaque. It's not uncommon for Amazon to launch an initiative without all the wrinkles being ironed out. They often just throw it out there and then fix the problems later or come up with processes after the fact. This will continue to evolve, I'm sure. Hopefully, more information will be given out as the process is refined. For now, I would say if you're interested in getting gated, apply for that brand registry. If you have any counterfeiting problems, either work with seller support, try the legal team at Amazon, work those methods to see if you can get in touch with anyone who's actually familiar with the process and can help you with that.

Dan: I'll jump in to a couple more I saw that were really interesting questions. I think it's maybe [Capille 00:57:03] said do you have to pay every time to ungate a brand? We've actually paid zero times. We've went through between 20 and 25. Actually we've become ungated on those brands and we've not had any where we paid a fee. What we've noticed is it tends to be the larger brands that have the fee associated, but you got to look at it from this perspective. If you actually did have to pay to become ungated, again, it's one of those things where it's a higher hurdle and would be something I would embrace doing. I would actually be happy about paying that fee to become ungated because I know I'm going to see a profit for a really long period of time afterwards. We've not had to do it. On any of the brands that we've seen gated, we've not encountered it, but we focus on small to mid-sized companies and that's our specialty is we feel like we're able to help them gain additional reach on the platform. That tends to be our bread and butter.

Dan: The next one was from Victor and he said I'm a retail arbitrage seller on Amazon. Unfortunately, I sell a brand which does not wholesale or have any distribution. The only way to sell it is through the brand store. Amazon has not been accepting receipts at the time. As far as grandfathering in, I'm not sure. Some people have been grandfathered in on certain brands. I'm not sure if that's going to be ... I personally don't believe that's going to be the case over time. I think once Amazon is able to check and make sure the demand is going to be met, they'll probably require everybody to go through the process, but congrats so far on it. I will continue to watch it pretty closely and maintain low stock levels and run it fairly tight.

Dan: As far as getting ungated with receipts, I've not seen a single person get brand ungated with receipts. They specify that it needs to be invoices on the brand ungating side, so I would highly suspect that if it's not impossible it's extremely unlikely.

Liz F: Great. Thank you, Dan. I think we have time for one more and then we're going to have to wrap up. CJ, did you have one in particular that-

CJ: Yeah. I did. I think it was Dimitri who asked a question. Is there any responsibility on behalf of Amazon for suspending sellers based upon unverified or false accusations or trademark violations or counterfeit? What's Amazon's liability in all this stuff? A couple of things. Most sellers, what you guys want to do is to get back to selling as quickly as possible. If you're suspended or your sales rank is down or someone's made some nonsense accusations against you, your first call is to get you back to selling what you want. Every seller, everybody listening to this show, Amazon is not the final word. It feels that way, but it's not true. They're not the final word on any of the problems that you have with them.

CJ: The final word is right there in your terms of service and it says if you have a dispute, you have the right to take them to arbitration with the American Arbitration Association. It's not anywhere near as long or costly as litigation. You're talking about a process that takes about three months, three and a half months from beginning until end, and you take the decisions where you've been accused of counterfeit or trademark or related accounts or whatever it is your problem is. If Amazon's decision to you is jump in a lake, you can take them to arbitration and have that arbitrator decide what's going to happen. The positive side is that Amazon follows the decisions.

CJ: Dimitri, if you're being accused of false accusations or trademark violations and Amazon either won't put you back on or won't reimburse you for the damages, which we've never seen them voluntarily do, you can take them to arbitration and you can ask for the damages that you've lost, and you could also ask for reinstatement of the ASIN or your account, whatever the problem is. We all have that power that ultimately it goes to arbitration. It's not always Amazon's decision.

Liz F: That's great information, CJ. We're three minutes over time. This has been so great. If you have asked a question or your question was not addressed, do not fear. We will be figuring out a way to address those with you at a little bit later date. We're also going to distribute the recording of this webinar to all of you via email. We thank you for your time today. Thanks especially to CJ, Liz and Dan for their thought leadership and their participation. This was definitely a really great webinar today, so thanks everybody.

CJ: Thank you for having us.

Liz A: Thanks.

Dan: Yeah. It was my pleasure being on here.

Liz A: Thanks everyone.

CJ: Bye, bye.