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Wed June 24 2009 09:43:56

Manufacturers Pressure Retailers over Online Sales

By: Ina Steiner

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eBay UK issued a report stating some manufacturers are deploying an array of aggressive tactics to prevent their products being sold online, and that many small sellers have no choice but to comply for fear their supplies would be cut off.

A survey of 458 online retailers participating in eBay UK's summer Online Business Index revealed that half of them have experienced pressure from suppliers trying to restrict the sale of their goods online. Retailers say they have experienced the following techniques used by suppliers to restrict online sales:
  • 45% of respondents said they were prevented from discounting goods;
  • 32% said they had experience display restrictions;
  • and 49% said they were outright banned from selling online.
The accompanying chart shows where online businesses get their supplies, according to eBay data published in its Summer Online Business Index.



The same issue came up at eBay's community conference 2 years ago when sellers said manufacturers were making policies that barred eBay as a sales channel for their distributors because it has a "damaged brand image." The problem cost one eBay PowerSeller $300,000/month in sales, he reported.

And there's the Leegin case in which the Supreme Court ruled that in some cases, manufacturers have the right to force retailers to minimum retail prices (price floors).

The UK report comes as Alice.com, a marketplace that cuts retailers out of the online selling equation, launches in the U.S., and as retailers increasingly face regulation and tax issues. Online retailers have never faced so many challenges as they do today.






Comments (19) | Permalink

Readers Comments

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: On Lies and Secrets

Wed Jun 24 11:19:04 2009

I have compassion for brand owners who do not want their prouducts on ebay.  The ebay brand is extremely problematic as many people associate ebay with fraud, counterfeit goods, stolen goods and overall poor business ethics.  I think there is some grounds for brand owners to claim that the presence of the name or likeness of their brands on ebay serves to dilute their brands and that they suffer monteary loss because of this.

I probably draw the line at disallowing goods to be sold on venues like ebay - I think they should be sold in other places besides retailers.  However, I think brand owners should have some protections for their brand names, trademarks, servicemarks and other iconography. That is, I think goods should be allowed to be sold on ebay, however, sellers should not be able to mention the brands or depict trademarks if the brand owners feel that association with ebay harms their brands.  A workaround for sellers is for ebay to allow buyers to be able to conact them directly by private email and make specific, individual inquiries about the brand of an item in personal correspondence (which is at odds with ebay's forthcoming policy to control communications between buyers and seller which is a bad idea, IMO).

If the ebay corporation cannot work anything out with brand owners who do not wish to be associated with ebay, then I hope these companies will get relief through the courts.

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: just me

Wed Jun 24 12:55:23 2009

If I was a brand owner there is no way in that hot spot I would want my brand even mentioned in the same breath as Ebay.

Ebay is full of fraud, scammers, liars, overpriced junk, excessive shipping and really bad attitudes.

That being said I wonder how much progress the Ho is making towards becoming the next Costco.

HAHAHAHA so funny.

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: Ebay R Scum

Wed Jun 24 13:28:36 2009

Instead of using some of the BILLIONS Ebay has made off our work, they fraudulently help these corporations with Vero requests, damaging good sellers. Another nail in Ebay's coffin, as the manufacturers will be going after the diamonds who only sell new garbage. Too bad Ebay ran off all the sellers like me that go out & find rare old goods from companies no longer in business. LOL

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: TekGems

Wed Jun 24 14:02:33 2009

Ina, I'm confused by what you are reporting? Is this about MAP (minimum advertised price) or manufacturers telling retailers to not sell on some venues? They are two different issues. I am surprised anyone would try to enforce MAP during this economic climate. The newspapers have been reporting that manufacturers are doing their to thin their inventory. MAP is an extremely foolish idea. Our distributors are removing MAP from products every day.

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

This user has validated their user name. by: Philip Cohen

Wed Jun 24 18:25:11 2009

How convenient! I would suspect that although there may indeed be some basis for these findings it is more likely simply another case of eBay “come in spinner”; the ground is being prepared for the announcement of another poor performance in the second quarter; frankly, the only real question is, can the turkey making all the bad decisions at eBay possibly survive another Xmas?

And you guessed it, I take absolutely everything that comes out of the many mouths of eBay with a grain of salt.

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

This user has validated their user name. by: Ming the Merciless

Wed Jun 24 22:38:03 2009

Deflation is every bit as damaging as inflation.

Deflation decreases intrinsic value, and it takes a long time to restore original value if it ever happens. It is particularly destructive to the manufacturers of quality, branded items.

Women who buy Coach handbags or Gucci shoes, for example, wouldn't be so eager to buy either if every minimum wage employee were buying them because they were dirt cheap. As soon as the fad wore off, both brands would be toast.

What ebay fails to understand is that there are hundreds if not thousands of sellers who are selling AT or BELOW COST (some even with free shipping) in order to channel buyers to their websites where stolen and knockoff products are as common as legitimately obtained inventory.

How many millions or billions does this cost ebay directly? When ebay sellers sell stolen merchandise as loss leaders, what does this do for ebay's increasingly tarnished reputation?

Just how far into he shadows is ebay willing to go?

Someone enterprising California prosecutor ought to issue an arrest warrant for The Ho for aiding and abetting.

DEATH to ebay corp. in 2009.

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: FoothillWebDesign.com

Thu Jun 25 00:01:54 2009

I am very skeptical of eBay's report. Having said that, I'm not surprised manufacturers are setting rules for eBay sellers. If they're getting wholesale prices, they shouldn't even  be selling on eBay. I remember when I found my wholesaler undercutting me on eBay. What a bad business decision. If a company like Coach sells 90% of its product at a certain price, and 10% gets sold on eBay for near-wholesale, that's really not fair to Coach's other customers.

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: The Shaft

Thu Jun 25 14:17:52 2009

Hey Ebay, how do you like it? You've done it to all your longterm sellers, now it's your turn to get the dirty end of the stick, HAHAHAH! Bet they are starting to regret running off 70% of Ebay's clientele now!!!!

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: fruity

Thu Jun 25 17:06:23 2009

ebay wants to pretend they're on the side of small businesses but in reality they want to bring in the manufacturers and big retailers and kick the small ones out the door. ebays going to pretend they're on your side but the goal is to bring in the retailers and manufacturers and forget you.

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: Stick a fork in Ebay

Thu Jun 25 18:26:10 2009

Fruity, of course the fundamental flaw in that is once a real retailer gets one of those numpty buyers, they start to rethink selling in a market where buyers are unverified, and can open an account at anytime to "buy", registering Fraudulent info which Ebay will never ever verify. Just putting in a simple algorhythym that verifies a zip code matches the town, or blocking the ever popular phone # of 1234567890 would be one nice tiny baby step to protect us from the paypal aided crooks. And who wants to buy new junk you can find anywhere WAY cheaper at an actual B&M costco or odd lots where you can examine the item for flaws? Because we all know how excellent that Buy & shoplet's customer service is, hundreds & hundreds of non delivery SNAD negs. In 11 years I have less negs than either managed in their best month. JD is clueless.

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

This user has validated their user name. by: Ming the Merciless

Fri Jun 26 04:25:33 2009

We should seriously consider that distinct possibility that The Ho and The No aren't nearly as interested in good customer service by ebay sellers as they would lead us to believe.

These ridiculous feedback and DSR systems are, IMO, nothing more than smokescreens to incrementally get rid of as many non Diamond sellers as possible.

They still need our fee revenue for the time being, but The Ho envisions the day when the "macro" economy improves enough that only the shoplets of the world will be selling on ebay.

One can only hope that these diamonds will soon read the handwriting on the wall and ditch ebay before the losses they're sustaining are unrecoverable. Selling on ebay is not expensive for them, but it damages their brand.

It won't be much longer before many brands will be VEROing anyone trying to sell their brand on ebay, and sellers might be reducing to tactics like in the 50s when half the cover missing and today with 1/2 Price Store clothing whose labels are blacked out with magic marker.

This is what the micro brains are creating.

Even with the price increase on subtitles and a major increase in fixed price listing FVFs effective June 30, ebay's fate is sealed.

DEATH to ebay corp.

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: shipwire order fulfillment

Fri Jun 26 15:57:06 2009

There seems to be another trend very similar to this.  Retailers pushing manufacturers to drop ship for them (so that retailers don't have to hold inventory).  This can be a challenge for some manufacturers; but, clearly if a manufacturer was attempting to protect their MSRP and channels then staying involved with the fulfillment process may make sense.

Not sure if Ina allows links; but, here is more info some of the trends leading to manufacture drop ship fulfillment.  I also put it the practicalecommerce/blog

http://www.shipwire.com/help/manufactur
er-and-supplier-drop-ship-demystified/

Cheers,

Nate

Shipwire

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: SK

Sat Jun 27 07:54:16 2009

Look, you sell me a product, I can resell it however I'd like.  If you don't want me to sell it online, then don't sell me the product.

But for God's sake, don't start telling me what I can and cannot do with my inventory that I paid good money for.  

If you only want to sell your crap to upscale over-priced B/M stores, then that's what you should do.  Don't sell 100,000 units to someone who's only biz is online, take the money, and then whine about your reputation being hurt.  It didn't seem to hurt when you took my $$.

Let the markets decide what something is worth.  The only companies complaining are those being demolished by the new world economy.  

You can't have it both ways.  You want to sell $2,000 handbags, then you sell them to very exclusive retailers in small quantities.  If you want to sell in large quantities, they aren't going to sell for $2,000.

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: ebay r scum

Mon Jun 29 11:32:53 2009

vero is a fraud, Ebay will do nothing to help a wrongly veroed user, but they will lower your policy compliance. They are supposed to send you an affadavit to protest & fight it, but they refuse to send the form over & over and tell you too bad you work it out. They love the money all the bootleg sellers in China and on Buy bring them, but they refuse to help wrongly accused American users. Ebay management R SCUM

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: Another Wronged Seller

Mon Jun 29 20:44:52 2009

@SK

Absolutely right! The manufacturers want to have their cake and eat it to.

Some companies go to great lengths to protect their brand.

In addition to my online sales, I also have a construction company that does work for retail stores. I frequently have to close down store locations for various chains. I get a very specific list of signage, banners, ad material, etc.. that will need to be taken and destroyed. Fixtures with logos need to be destroyed or the logo removed. Logos cut out of carpet. Neon signs destroyed. Anything that shows the brand has to be removed or destroyed. Some chains are more emphatic about this than others. they spend a lot of money to make sure this gets done.

As a seller on the bad side of a vero infraction last year, I think manufacturers are going too far. I had been selling an ''as seen on TV'' product that was also sold through one of the big shopping channels. I received a vero notice from ebay from the manufacturer in europe. Manufacturer still sells product in europe for about three times what it sells for in the US. It was less expensive for intl buyers to buy it here even with shipping.

Appealed, with full documentation proving authenticity and was told to contact the manufacturer in europe. No reply from manufacturer after several emails, letters and phone calls. Re-contacted ebay multiple times. Received the same form email suggesting ''I contact the manufacturer''

VERO is a joke! There is no REAL appeal process. Guilty until proven innocent, EXCEPT there is NO way to prove innocence with VERO.

Ebay gives carte blanche to the manufacturers just like they do to the diamonds.

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: Vero is fraud

Tue Jun 30 00:22:33 2009

According to Ebay rules, they are supposed to supply you with a vero counter notice, which is a sworn affadavit, and forces Ebay to take action.

In practice, the scum CSRs at Ebay will do anything to avoid sending the notice. I have been lied to, told it was sent, told I had to go to the rights owner, etc, all so ebay can avoid doing a single thing for the billions they make. Lazy, arrogant & useless. That's why Ebay is dying.

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: Biker

Fri Jul 3 17:23:51 2009

The Vero program is a pain for sellers.  It is possible to get Vero Strikes removed.  There are several hoops to jump through, (including getting the MFG to admit that their report was incorrect), but it is possible.  I work for a Platinum level powerseller, and we had an issue about 6 months ago.  It was quite time consuming and rather frustrating to say the least.  Your eBay account rep should be able to assist you with removing the strike.  

I feel that sellers should be able to use manufacturer images as well as logos.  It seems logical to offer your retailers compelling and descriptive ad copy, as well as high quality images.  I can sympathize with how easy it is to hijack images and ad copy.  I feel more emphasis needs to be put on patrolling online retailers that are selling counterfeit goods.  Hats off to whomever figures that one out.  

The negative view that many have of eBay is a result of anyone being able to create an account and attempt to offer products.  Just because you can create an account does not mean that you are qualified to offer customer service or have any clue of basic operations necessary to be successful selling online.  
eBay is a great foundation to start an ecommerce identity.  I do agree with previous comments indicating that eBay is not interested in servicing the needs of the small fry.  They do however offer an established viewing base that is mostly there with the intent to buy.  In order to get a stand alone online retail marketplace, you need to get your brand identity out there in front of potential customers.  Regardless of how much we all disagree with some of the changes that eBay has made over the years, they are still a great place to find buyers and push that image.  

I completely agree that brands need to protect their images as well.  We work with several vendors that enforce MAP pricing restrictions, and we honor them.  If we can’t sell it for what the manufacturer states we must sell it for, we stop offering it.  As long as the other retailers offering the same products also adhere to the MAP terms, it evens out the playing field.  Who is the cheapest no longer matters.  It comes down to how well you present the item, and how well you service the customer.  

As long as eBay continues to allow sellers such a wide range of presentational control over the body of the listing, I suggest putting extra emphasis into making your listing stand out while identifying the key points that the customer should choose to do business with you when everyone else has it for the same price.  

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: Joe

Tue Jul 7 10:22:27 2009

Ebay web site is their product and their business, they set the rules in what you can and cannot sell, they will pull an add if it breaks one of their rules.

So manufacturers want to set the rules regarding their product for their business.

I think ebay have a cheek wanting me to sign their online petition

Manufacturers Pressure Retailers over Online Sales   Manufacturers Pressure Retailers over Online Sales

by: fee

Thu Feb 24 04:45:22 2011

dont sell the product if they dont want you to sell it
simple



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