Although third-party sellers can be effective partners for brands, as third-party distribution increases, so does the likelihood that unauthorized goods will slip under the radar. In the Amazon accessories categories with the largest ratio of third-party to first-party listings, 70% of listings are sold by third-party sellers, according to L2’s latest Amazon report. This increases the likelihood of unauthorized distribution flying under the radar.

Gray market

One telltale sign of unauthorized distribution is when a third-party seller lists a product at a significant discount from the manufacturer’s suggested retail price. Customer reviews complaining that a product is counterfeit or doesn’t appear as advertised can also signal that a listing is unauthorized.

Contemporary brands such as Michael Kors, Tory Burch, and Maui Jim are often targeted by unauthorized sellers because of the strong sales their products generate on Amazon. These brands also have a high percentage of third-party listings, making it easier for unauthorized sellers to fly under the radar.

Michael Kors

While Amazon can often seem like an unregulated marketplace, the company has taken steps to crack down on unauthorized sellers. Since Nike became an official Amazon partner in July, the brand has worked with the e-tailer to reduce the number of Nike-branded third-party listings by 20%. It’s unclear, however, whether Amazon will continue to actively regulate Nike’s Marketplace distribution in the long run.  

Ultimately, brands—not Amazon—are responsible for holding vendors and distributors accountable. Brands need to ensure that they engage only with authorized sellers and that third-party listings adhere to the suggested retail price and other policies.

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