EcommerceBytes-NewsFlash, Number 3167 - October 04, 2013     1 of 4

Amazon Restricts 3P Sales in Beauty as It Pursues Prestige Brands

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Amazon is prohibiting its third-party merchants from selling cosmetics and certain beauty products on its marketplace, including those selling merchant-direct and those using Amazon's FBA fulfillment service. As we noted in June, Forbes reported Amazon was going to be re-launching its beauty category this year and would be going after the "prestige" beauty products from high-end designers. On Thursday, sellers began dealing with the fallout.

Third-party merchants on Amazon began receiving notices from Amazon in September informing them of bans of certain beauty brands they'd been selling on the site and began discussing the issue on discussion boards. But a seller who contacted EcommerceBytes on Thursday said she never received a notice and said it took an Amazon customer service rep 30 minutes to figure out why Amazon had made some of her longtime listings "inactive" with the reason "no longer allowed for sale on Amazon's site."

She said Amazon made a business decision to sell certain brands exclusively via Amazon. "So far I have had 25+ listings taken down. It appears to be all big name brands - Strivectin, Nars, Stila, Ahava, etc. This is troublesome for seller who have stock and only sell on Amazon. It is creating a huge headache for me as I scramble to re-list items on eBay that were not listed there before-hand," she said.

She said she believed Amazon was "taking the sales from their third-party sellers for their own profit and restricting every name brand," and said, "In my mind, this sends buyers right to eBay or elsewhere to purchase their beauty items. This will hurt all of the sellers in this category, esp. with Christmas coming soon."

Sellers who began discussing the policy on the Amazon boards in September debated the reason for the ban, with some believing it was due to pressure from aggressive brand owners. However, one seller who disagreed wrote, "This is not about protecting brands. This sounds to me like controlling the market and price. We are missing quite a few pieces of this puzzle but something is afoot."

Another seller disagreed with a different theory that had been proffered, writing, "All this brand protecting is really about maximizing profit. This not about counterfeits."

Adding insult to injury, some sellers said Amazon had sent them last month a list of "Product opportunities" they should sell on the marketplace that included some of the very brands that they are now banned from selling, including:

  • J'adore By Christian Dior;
  • Estee Lauder Spray Favorites Perfume Gift Set For Women E;
  • Burberry Brit By Burberry For Men;
  • Lancome Eye Care 4.2 Oz.

"Is this supposed to be some kind of a joke," asked one. "For us to go around and invest in these Product Opportunities so that Amazon can tell me they are restricted the next day?"

Another wrote, "Chanel and Lancome. The above brands are also included in my Product Opportunities for me to sell on Amazon."

Here is a copy of the letter some sellers said they received in September:

Hello from Amazon,
Amazon is continuously innovating to provide the best possible experience for customers. As a part of our ongoing efforts, we are creating a new Beauty experience and implementing listing restrictions on select brands.

If you are receiving this message, effective October 3th, your listings will be removed for ASINs from the below brand(s).

(list of brands customized to each seller, but no master list)

There is no penalty for this removal, but we request that you refrain from relisting removed products as FBA or merchant fulfilled offers until further notice.

We appreciate your cooperation in this important matter.
Regards,
Amazon Services

Amazon did not respond by press time.


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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