What Does it Mean To Ungate A Brand on Amazon?
Counterfeit goods and malicious third-party sellers are finding their way into many online marketplaces at an alarming rate.
In response to these concerns, Amazon, as probably the largest venue hit, started implementing “brand gating” – a process requiring manufacturers to apply for approval to sell their products on the platform.
In this article, we’ll explore the current state of affairs on Amazon and the challenges that brand gating poses for manufacturers and sellers.
Let’s learn what you need to know about brand gating Amazon, from how it works to all the potential benefits.
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The Amazon Empire Strikes Back
In the world of online retail, Amazon is the undisputed king. They own a whopping 44% of the US e-commerce market.
But even the e-commerce giant isn’t immune to fraud and abuse.
According to CNN, Amazon invested more than $700 million, and employed more than 10,000 people last year to protect its store from counterfeiters and other bad actors.
It wasn’t very long ago that Amazon seized more than two million counterfeit products sent to Amazon warehouses.
According to CNBC, Amazon established a “Counterfeit Crimes Unit” to refer suspected counterfeit cases to law enforcement.
The unit has already referred several cases to federal and state prosecutors, resulting in charges against more than two dozen defendants.
Amazon’s efforts are paying off.
The company says its proactive measures have prevented millions of dollars worth of counterfeit goods from being sold on its site.
And that’s good news for everyone who shops on Amazon—because no one wants to end up with a fake product.s.
Plus, it is better for sellers because they can be trusted and potential customers are more eager to buy.
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Brand Gating: What Is It and Why Is It important?
Manufacturers use brand gating to retain control over their brands and labels.
In other words, it’s a way to keep the little guys from selling your stuff. A company will require all resellers of its products to adhere to specific guidelines to protect its image.
Amazon is known for being a tough negotiator, and when it comes to brands, they’re not pulling any punches.
To become an authorized reseller of a brand on Amazon, you must show Amazon manufacturer invoices within the last 90 days, written permission from the brand to sell their products, and a payment of up to $1,500 per brand.
That’s right – Amazon is essentially charging brands a fee to be sold on their website. So what does this mean for shoppers?
This policy is sure to add an extra layer of protection for consumers, who will now have greater assurance that they are receiving authentic products when shopping on Amazon – the most customer-centric company in the world.
Even Bezos claimed that focusing on the customer “obsessively” is the most critical thing Amazon can do!
The brand gating policy may require extra effort and expense for manufacturers and resellers. However, the increased trust from consumers will likely be worth the investment.
In addition, brand gating can help prevent Gray Market activity, where unauthorized resellers buy products from overseas and then sell them in the US at lower prices.
By following strict guidelines, companies can control how their products are sold and ensure that they are represented in the best light possible.
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What Is The Significance Of Brand Gating For Third Party Sellers?
For third-party sellers on Amazon, “brand gating” can be a potential obstacle. To sell products under a specific brand, sellers must overcome a variety of measures and restrictions imposed by Amazon.
For example, sellers must have a proven track record of positive customer feedback, fulfill specific qualification requirements, and pay fees.
You must have a proven track record before you’re approved to sell gated brands on Amazon. This means that you need to have good metrics, which are measures of your performance.
Your account must meet specific metrics: order defect rate, cancellation rate, return rate, late shipment rate, A-to-z Guarantee claims, and seller feedback rating.
To improve your metrics, you must ensure that you’re providing excellent customer service, shipping orders on time, and keeping your account in good standing.
By meeting these criteria, you’ll be well on becoming an approved seller of gated brands on Amazon.
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How To Gate Your Brand If You’re A Manufacturer?
If you’re a manufacturer and want to gate your brand on Amazon, follow these steps:
1. Join Amazon’s Brand Registry program.
In this step, you will provide proof of ownership of your brand, such as a trademark registration with the FTPO.
2. Show Amazon which ASIN’s will be gated
To gate your brand, you will need to list the ASIN’s (Amazon Standard Identification Numbers) of the products you want to protect.
To prove that you are taking steps to protect your brand from counterfeits, you will need to provide Amazon with a demonstration of your efforts. Amazon prioritizes sellers who have a “comprehensive anti-counterfeiting program.”
4. Brand Enrollment Fee
Last but not least, you will need to pay a brand enrollment fee of $1,500 per brand. This fee goes towards Amazon’s investments in protecting your brand on their platform.
Remember that these steps are to gate your brand on Amazon.
To sell your products on Amazon, you must become an approved seller.
Final Note on Brand Gating on Amazon
While becoming an approved seller can seem daunting and time-consuming, both customers and sellers benefit from an extra layer of protection against counterfeit products.
Plus, since many existing sellers and potential new sellers don’t want to do the work of trying to get permission to sell, it means the competition is less fierce for sellers willing to do the work.