Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Tue Feb 18 2014 16:58:33

Should Brands Like Lululemon Ban eBay Resellers?

By: Ina Steiner

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Lululemon banned certain customers it said were reselling its products on eBay but later apologized, according to a report on CTV News. According to the company's reselling policy: "We completely recognize that once someone purchases our product they can do what they want with it. We do not, however, support those who acquire large volumes of our product to resell at an elevated price point."

The company told CTV News it had gone too far in enforcing the policy and was in the process of reaching out to apologize to those impacted.

On Facebook, fans weighed in on the issue. Many comments suggest the company frequently runs out of stock on new items, and some suggested that practice encouraged the practice of buying quantities of items to resell on eBay. Wrote one Facebook fan:

"Another perspective on the reseller issue... On one hand there is nothing wrong with reselling the occasional item that you no longer use, doesn't fit etc. However I don't think this was the intent behind Lulu's new policy. It was to address the issue of eBay resellers trolling Lulu related blogs for highly desirable/anticipated items, then buying up product in bulk, jacking up prices and creating scarcity for Lulu customers. The recent Gratitude Wrap is an example. It sold out within hours of release, however within days over 80 showed up on eBay by individual sellers selling multiple sizes and colours. Lulu's policy may have angered some, and unjustly impacted innocent customers and this is unfortunate. Although it needs fine tuning, they were responding to customer complaints about the issue. With apologies for the loooong comment."

Another customer wrote, "You guys SUCK. You have a problem of resellers because you don't make enough of each item! Tried to buy camo speeds and surprise surprise, by the time I was finally to a point where the site would function, they were sold out. Ridiculous."

Some suggested Lululemon limit the quantity customers can purchase. "Ya simple maybe if they don't want one person buying bulk items they should limit the quantity of a single item that can be purchased or maybe they should realize that when they only make so much it's going to be driven by supply and demand. If they want to stop the reselling then they need to make more however that seems to be the driving force of their sales and prices. They know people will buy what they like for ridiculous prices online when it comes out because if u don't buy it right away you won't get it. It's a catch 22."

As online sellers, what do you think of companies that try to ban customers from reselling products? Does it make a difference if it's a regular customer or a reseller? And should companies impose limits on the quantity a seller can buy of any one particular item?




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Readers Comments

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This user has validated their user name. by: Puck

Tue Feb 18 17:36:51 2014

Let them get VeRO involved and that will drive a stake through the heart of all eBay secondary market sales...with the possible exception of the Well Worn aficionado " underbelly niche"

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by: AngelaTC This user has validated their user name.

Tue Feb 18 19:09:00 2014

I think the posters that suggested limiting quantities, at least during the initial release, have the right solution.  

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by: AngelaTC This user has validated their user name.

Tue Feb 18 19:11:20 2014

What get me is this:  "The company blacklisted dozens of IP addresses linked to people who sold Lululemon clothes online." (https://tinyurl.com/llt4sgl)

So eBay is just handing out that information because ..... ?

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by: abprules This user has validated their user name.
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Tue Feb 18 22:09:35 2014

But wait, isn't that what ebay's Stub Hub is all about? People (or machines) buy up all tickets to a concert and then sell on ebay? And isn't that what the Nike game is? And why should there be limits on anything you buy? If someone wanted to purchase 100 items that we had, we would welcome them and give them discounts, not punish them. If I am getting what I want for an item, I really don't care what others sell it for. Why should any other retailer?  

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by: pace306 This user has validated their user name.

Tue Feb 18 23:13:42 2014

This issue is why VERO was created - to protect brands rom resellers.

Verowatch.com gets companies like this to pay up, then they feed this info to VERO who then in turn removes sellers.

Most established brands HATE that their items are on eBay - just ask Denon, Skullcandy, Casio, Whistler, Celluon, Alpine, Kenwood, JVC, Sony (car audio), Pioneer, Garmin, Suunto, Michael Kors, Kate SPade and many many more.

I went to CES in Vegas back in Jan - guess what the FIRST question/statement from each manufactorer was???? "Yuo arent going to put it on eBay are you? thats against our policy and we will NOT sell you as a dealer if you do so."

Monster, Sony et al use Net Enforcers to troll eBay (and Amazon) and then shut sellers down.

SONY, in TWICE magazine trumpets in thier advertisements how many 3p sellers they have sued/had removed/put out of business - its their badge of courage (like it will make their over priced TVs sell any better!)

What Lulu COULD DO , is cut a deal with eBay like Skullcandy did - and just open an eBay store to undercut EVERYONE. They could then restrict 3p sellers, have all the "hot items" for themselves on eBay, and be able make sales with no worries about DSRs or Negatives.

The question posed here is rediculous - it happend each and everyday with almost every major brand - and Ina/David/Julia - you can contact me directly to learn more!

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by: Steevo This user has validated their user name.

Wed Feb 19 16:12:33 2014

Isn't sales what business is about?  Why in the world should there be shortages?  They should just make enough to meet all possible demand and there would be no secondary market.

That said, under the first sale doctrine anyone who acquires a product legally can do whatever they want with it.  

Sell it, throw it out, destroy it, whatever.  

Some companies hate that and want to sell things and still control them, but that's just illegal.

Check out the tabberone website, it's quite a read.  They were sued by Disney, Warner Bros, someone like that over pillows made from licensed fabric bought legally at Walmart.  Tabberone kicked their a**.  Non lawyers, went to federal court themselves with no attorney and beat a big company fair and square.  

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by: DonC This user has validated their user name.
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Thu Feb 20 00:30:53 2014

If the resellers are paying full retail let them buy all they want.If the design takes off buy more. If not, you unloaded a looser at full price.

Anyone who wants to buy my motorcycle gear and resell it is welcome. The link is right above this message :)  

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by: comet This user has validated their user name.

Thu Feb 20 11:25:50 2014

NO!  

They should be flattered that anyone wants their overpriced crap and will go to any length to get it---even using the flawed and possibly illegal ebay platform to do so.

I might be wrong but I think that some of the reasons that VERO was created was to "protect"  the BIG names (Tiffany; Hermes etc) from FAKES being sold as real,  which is quite understandable.

After that some clever person saw it as a billy club to "take down"  anyone who DARED to try and "re-sell"  anything with a NAME on it.  

The problem is---once we all walk into a store or go on line or for that matter wander into a yard sale and find something with that NAME on it---we are free to do what we CHOOSE to do (as has been pointed out).  But---these greedy-guts seem to feel that once they sold something they have control over it forever and ever amen.

They might grudgingly "let" you sell a used and maybe damaged item--IF you only appear to have ONE of them.  Maybe.  But they are shocked--SHOCKED!!!!!---when they find a dozen or a hundred of their product selling on line.  And why IS that?  Did they not get ALL the money they now think they SHOULD?  Well then raise your prices and see who is lining up.  But--this is actually no object---how much IS a Hermes Kelly bag these days?  Cause one just sold from a very new seller for just shy of $4000 on ebay. (With about a 2 line description I might add!)    I have heard the wait time for these can be YEARS.   Is this a REAL wait time?  Or is it another trick by a very spendy maker to keep people LUSTING after their product?

Isn't the whole POINT of the market to "Buy low sell high"---and surely the material etc in a Lululemon or even a Hermes is not THAT much----so THEY are making a PROFIT long before the "re-seller"  gets their mitts on it.

I call it entrepreneurship.  Other wise known as capitalism.  

I actually read somewhere recently that one ETSY seller COMPLAINED that because she sold on the site her designs were OUT THERE BEING LOOKED AT and COPIED.

Um----So tell me--how DO you plan on selling things?  Sight unseen? OR taking the "risk"  that I see it on you and copy it?  OR buy it and re-merch?  

Wanna buy my stuff and see if you can do better?  Be my guest!

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by: mazelgirl This user has validated their user name.

Thu Feb 20 11:46:42 2014

Vero was absolutely created to stop fakes-not to stop resellers of real products they acquired legally.
Unfortunately eBay has no control or even knowledge of what Vero is doing.  I listed a used Seiko Tank watch (this was their name for it-not mine) that I got tired of wearing. I was contacted by someone who said they were from Cartier politely asking me to take it down. I went to the Cartier Vero page and emailed them just to see if the email was legit.  The email bounced back as being no good. I called eBay CS (at the time it was all USA) and asked about this and they had no idea  if the email was real or why Cartier had a bad email address.  So just to save myself further hassle I took down the watch and sold it on Bonanza--where there were no hassles.  A little off topic--but when I think of this it still annoys me.  

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by: pace306 This user has validated their user name.

Thu Feb 20 23:42:38 2014

@mazelgirl

VERO was NOT created to remove fake items from eBay.

Look into ANY category and see for yourself that THAT isnt whats heppening.

If you dont believe me, report a fake item (and there are loads) and see - watch that NOTHING happens. PERIOD.

Being here since 1998 and having had many entanglements with them - I can tell you that you are factually INCORRECT.

VERO was intended to give eBay whats known in the "copyright biz" "Safe Harbor". Nothing more, nothing less. Its what Verizon, Cablevion, Time Warner etc have when it comes to downloading music/movies off the net. It gives them a safety valve and an opportunity to remove items and to make sure THEY dont get sued.

eBay saw from being sued by Vitton that it was an absolute imperative to protect themselves from the wrath of hungrier, bigger, more ambicious companies.

eBay was told in plain english "either create a mechanism that we can use to complain and remove people OR ELSE". The OR ELSE was be sued in court.

Thus VERO was created.

1) They arent lawyers
2) They dont know the law(s) at all
3) They wont advocate for you if you're right
4) They wont do anything without being told to by the complaintant OR a lawyers letter
5) They wont talk to you on the phone - you can only contact them via vero@ebay.com - they hide like scared little girls from the very people they enjoy hurting
6) They take money from verowatch@ebay.com - from manufactorers who troll ebay looking for "victims"

shall I go on?

VERO isues never happen on Amazon, Sears, Buy.com or anywhere else - FOLLOW THE MONEY (verowatch.com)

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by: Susan Averello This user has validated their user name.
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Fri Feb 21 10:08:17 2014

They don't have a leg to stand on with this one. They're right once a customer buys it, it's there's to do as they please whether it's 1 item or 1000 thousands. The only thing they can do is not sell in large amounts to them.
I hope they fight it and not just back down.

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by: Cassie This user has validated their user name.

Sat Feb 22 22:58:15 2014

Lululemon can only ban eBay re-sellers if they wholesale with a no compete market platform agreement on eBay or Amazon if they sell on these internet market sites. If the re-seller broke this agreement then yes.

If Lulelemon uses a inventory liquidation broker well there is an issue otherwise known as wholesale warehouse drop-shippers. Some not only take and liquidate Surplus inventory the also take customer returns and recall products that they really don't sort but drop ship to eBay or amazon re-sellers. This cause a headache as it creates problems with damaged returns being sold unreported damaging their products and business's image/integrity further.

Most re-sellers have bought a book wow easy profit on drop-shippers and/or went to a retail show failed to inquire if these drop-shippers are all they cracked up to be.Often their goal is profit over the unsuspected re-seller leaving them taking the profit loss hit on damaged goods with the added shipping expense. I've worked in retail and with retail or merchandise liquidators. They usually stick these drops-ship rookies with a 10% to 30% purchase volume in worthless products in mixed lot sales they also fail listing a no-compete market agreement tied to specific inventories especially if purchased in mixed lots! Lululemon probably realized this and backed off attacking these re-sellers recognizing they were equally victims too! Usually, mixed lots tell me oops mistake sorting avoiding getting rid restricted inventory or worthless goods. It seems to me eBay, Lululemon and the re-sellers fell into that trap forced to make a goodwill public apology hopes to avoid counter suits with the re-sellers that are equally responsible not doing their vendor or supplier homework. So I doubt any re-seller can sue business disruption which is valid in business investigation on sale of damaged/recalled goods entering the market. This happens a lot worked with a manufacturer that had to contend with counterfeits and/or    second hand handlers that suppose to sell to outside markets. Outside countries like China or etc buy these and suppose to dump on other final sale lesser markets as seconds but turn around re-sale back into the very market often it's a practice where they avoid shipping as they're suppose to sort these items here for redistribution. Now you all know the truth about what I've seen over the course of various jobs that is common business risk! (error or deliberate intent the latter hard to prove). There are some businesses better at the profits game even playing dirty learned in the corporate world. They take the risk if they figured out how making it a little slap on the wrist. Usually spreading the liability upon the re-seller as participants (as accessories)!          

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by: semper fi This user has validated their user name.

Mon Feb 24 12:23:19 2014

This is flat out restraint of trade, and they should be sued for their actions as should eBay for assisting their illegal actions. Once I buy and pay for anything, is is mine to do as I damn well please. We are a free market country and LULULULU had better read the laws governing them! Besides, their stuff is over priced as it is.



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