← DTC Podcast
Loading summary
Transcript58 lines
- [00:00]
A
You have to be on Amazon in order to control the marketplace. If you're not Amazon controlling your listings, you're going to have someone else create those listings, buy your products for cheaper, and sell it on there. If you've got infringers or unauthorized sellers, they're driving down your prices, and they're also affecting your brand reputation. They're also affecting your customer experience. When you get into the basement of what's going on with these marketplaces, there is a lot of dirt happening, and it could be kind of scary.
- [00:35]
B
Mario, welcome to the DTC podcast. You fight the unauthorized sellers and copycats that hijack a brand's products on Amazon and other marketplaces. How big of a problem is this really for. For brands at scale, it's a problem.
- [00:50]
A
Now, it's not a problem for every brand, but the ones that do have even a little bit of this problem, it tends to really snowball into something bigger. So I would say every brand doing over 5 million should definitely be aware of it.
- [01:04]
B
So if, say you're doing 5 or even 10 million, what's like an amount that potentially you could be losing to, to this problem?
- [01:10]
A
Estimates show anywhere from 15 to 25% of your revenue could be going to infringers and unauthorized sellers.
- [01:17]
B
You told me an example of a fitness brand that was doing eight figures. Tell me about what happened there.
- [01:22]
A
Yeah, so this is. This is a brand that had an issue with unauthorized sellers. And what they tried is going to influence enforcement agencies. And also, when that didn't work, go into a litigation firm, they go to the agency, and most agencies are going to just go ahead and do very shallow work where they're just submitting the IP complaints to the marketplaces. And after a few months, they realize, hey, this isn't working. So then they're like, all right, what's our next option? Let's go to a law firm. Let's go try to sue these guys. They go to a law firm, and law firm's like, well, this is going to cost you some six figures to just get started. And we don't know if we're going to be able to remove them. And we don't know if you're going to be able to get any damages back. Because we could go in and sue and we, we could even win. But if the other party doesn't have any money, like, what are you going to get from them? Right? So they decide, you know what? We've had too much. We have no idea who these people are. We spent all this money And I'm just done with it. Right. The emotional toll, I think, is what really affects these founders. But with this specific brand owner, he just left Amazon. And this is on Amazon itself. They were doing about 1.5 million a year. So they left the marketplace. So when I talked to him, I was like, what's going on? They're like, well, we tried this, we tried that, it didn't work, and we gave up and we left. I was like, there's 1.5 million out there that you guys could get back.
- [02:45]
B
What about cease and Desist Descent Desist? Ever work?
- [02:49]
A
Yes and no. There's a lot of law firms, there's a lot of agencies that love to throw around the cease and desist letter. Right. My thing is we could, we could leverage that, but I have that sort of as a last resort. Eric. Right? You, you'll see videos if you go online searching for it. There's videos in Facebook groups and forums where people receive the cease and sis letters and they're like, okay, so what? Right? Oh, there's videos of them throwing it in their barbecue, sort of throwing. Burning it or in their fireplace. Right. It doesn't really do anything. And there's one law firm that really leveraged this and sort of now made it a bit futile where sellers don't even care. Especially if you go to a seller, you're like, hey, I'm going to sue you. They don't care about a lawsuit. What they really care about psychology is if you take away their account, their seller account, that they're more scared of than an actual lawsuit. Because if you take down their account, that's a big portion of their business, if not 100% of it. So again, cease. And since this letter, I'm not a fan of it, especially initially. If we're going to be using it, we should use it strategically.
- [03:54]
B
So back to the example of the fitness brand that was walking away from Amazon. What? So they went through a bunch of these steps. They probably spent. They burned a bunch of money trying to fight it, and eventually they walked away, which is crazy. So what, what did you do differently?
- [04:08]
A
One thing we do differently is we'll go ahead and obviously do due diligence, find out who these people are. But we're going to different departments within Amazon, and Amazon will sometimes care more about their policies being violated than the actual damn law. Right? So if a law firm or an agency is going to Amazon and just saying, hey, there's IP infringement here, Amazon's like, eh, okay, right. Especially for unauthorized sellers. Because Amazon's policies, we don't enforce private agreements that you guys may have or lack of those agreements. So if you go to Amazon and say, hey Amazon, this is our authorized seller, these are unauthorized, remove them. Amazon's like, that's not our problem. Right. Because Amazon thing is, anyone that's selling the genuine product can go ahead and sell it. It's the first sale doctrine. So what we have to do differently is now bring up IP enforcement, but in a different way. There's something called trademark material difference that says if my brand is selling this pen and a unauthorized seller is also selling this same pen, but my brand now offers pre sale support or post sale support or has some sort of warranty that is only offered to people that buy from my brand or my authorized retailers. Now that creat according to the law, it creates a distinction between the product that this brand sells and what the unauthorized sellers are selling thereby. This is now inferior and materially different. Right? That's part of trademark law. So if you have to make arguments like that and on top of that, you have to take a look at Amazon's policies. Amazon has several policies that you could look at. Their counterfeit policy being one that says if you're selling a product on Amazon, you should know the entire supply chain. Most of these people don't have invoices to show the entire supply chain back to the manufacturer or the brand owner. So those are arguments that you could bring up. On top of that, knowing what arguments to make, depending on which department and which contact you're going to at Amazon, that makes a huge difference. Right? So that's the approach that we took.
- [06:13]
B
They're ultimately protecting the customer experience. And if you've got a product and it's the same as another product that's cheaper and it shows up, you know, it's, they'll put it next to the, to the buy box. And if all things are the same, the, the better customer experience might be the cheaper one. So it makes sense that you're highlighting the aspects of their customer experience that are inferior or, you know, outright fraudulent in some cases.
- [06:35]
A
Exactly. So again, the point is to prove that, hey, these products may look exactly the same, but they're materially different. And let me tell you why.
- [06:42]
B
And marketplaces are a frustrating example for sellers because of that idea of the buy box. Right? Because they will literally like if you're advertising on Met, there's no, you know, tool on Meta that allows them to show up right next to your offer while they're trying, while you're trying to sell them on your offer, whereas on Amazon, it's right there.
- [07:01]
A
Yeah. On Amazon and Walmart both operate the same way. Right. Where it's one listing, but several different offers could be there. So, for example, ebay, if I'm selling the same pen as you are, this pen, it would be a separate listing. Right. If someone, if a customer goes to that listing, they're not going to probably see yours as another option for that product on the exact listing. But Amazon and Walmart are structured differently, and that's where you get the unauthorized sellers all competing for the buy box.
- [07:27]
B
Interesting. So take me back to the fitness example. Like, walk through the process that you went through in this case to get them back on Amazon and beating their. Their copycat.
- [07:36]
A
Yeah. So our client already had sort of the good bones already in there. Right. The. The framework was there where on their website, they said, hey, this is our manufacturer warranty. And our manufacturer warranty is only valid if you purchase from us or from these brick and mortar stores. So that's one thing that we were able to leverage. Now for other brands that may not have that, that's something that we help them create because it has to be authentic. It can't just be for the reason of I want to take down this unauthorized seller. That's why I have this sort of framework in place or these policies in place. It has to be authentic, and it's something that the brand itself has to be exercising and actually utilizing. So we identified that there was probably around four or five unauthorized sellers. And when we talked to the client, too, what we learned is that the products were supposed to be going out of the country. So this is a larger brand and they sell it globally. The products were supposed to be going to Africa, but the client learned that, hey, these products may not be leaving the States, the United States. The client may come to us and say, hey, I'm going to take this to Africa. But it never happens. They somehow end up going back to Amazon. And that's something that we've learned throughout the years, Eric, is there'll be people that approach larger brands and say, Eric, you've got a great brand with those DTC hats. You know what? I've got a couple of brick and mortar stores here. Why don't you give me an order for a million units? And next thing you know, they place the order, and next thing you know, they're coming back for more. Like, wow, that brick and mortar was able to get rid of that many units. But what's happening with These sellers is your units, your hats, DTC hats are going to their brick and mortar store, but they're also vanishing from the back end, being sold to another illegal entity that they own. And that legal entity is now selling on Amazon, on Walmart, on ebay and Shopify. So it's like you look at the listing as far as the entity that's selling on Amazon, you're like, it's company abc. I never sold to them. Right, but you sold to company A, who then sold to company abc. So that's what we figured was happening here. We approached Amazon with a trademark material difference and with marketplace policy violations that they were committing. And again, the argument with Amazon is we want the best for you guys, for your customers and also for our, for our client, the brand and the best experience for your customers is going to be if our client is the only one that's offering these products. Right. Especially with the warranty that they can go ahead and provide. So that's the approach that we took. I can't remember at which stage we, we got it removed because there's about eight to 10 stages we could go through with any of these sellers as far as escalation. But we could go to their legal department brand registry, all the way up to their litigation council out of Seattle or, or to the Washington, Washington State, Washington Attorney General. So I can't remember which one it was, but we've gotten rid of I think four out of the five. There's only one more left, but our client's back there selling and now he's got control over 95% of the listings. So huge win for him. And just two days ago I learned that he, he got a licensing deal with a major studio. So now they're going to be using the licensing of those characters for, for their, for their accessories, which is super cool.
- [10:41]
B
Even if that deal would have come without them having Amazon, you need Amazon once you get that deal because that's where everyone wants to go shop. So it has a real knock on effect if you end up, you know, being scared away from these marketplaces by these fraudulent sellers.
- [10:56]
A
Yeah, Eric, I'm sure you've talked to brands where they're like, hey, I've got my own website, I'm doing well. I don't want to be on Amazon. Right. Nowadays it's not your choice because if you're not Amazon controlling your listings, you're going to have someone else create those listings. Right. Buy your products for cheaper and sell it on there and sell it on Amazon. So now Nowadays you don't have a choice. You have to be on Amazon in order to control the marketplace.
- [11:18]
B
You mentioned the different parts of, of where you might appeal to Amazon. In this example, which department of Amazon were you appealing to?
- [11:27]
A
Usually we'll go to the legal department as like the third or fourth option, and that's usually where we see the most results. But we also have to show Amazon's legal department that we tried the other departments first, the lower level departments, and we were unable to get any movement, any results. Therefore, that's why we're coming to you guys. But here it was probably, I could look it up and sort of provide you with information later, but I do believe it was, it was their legal department, Amazon's legal department. But we could also go to their executive department too. They have, they have plenty of departments.
- [11:58]
B
How long does a process like this generally take?
- [12:01]
A
So for infringers, it could be a little bit faster. Meaning if someone is literally ripping off your brand name and created their own listing, that could be faster. With unauthorized sellers, it could take about 30 to 45 days to see the first sort of results. Right. So it does take a little bit longer. There is a lot of framework and groundwork you have to set initially before you approach Amazon, especially if the brand doesn't have it. But it takes a little bit longer, but I would say within months.
- [12:28]
B
I think probably a lot of people listening might think of brand protection as a cost, but you make the argument that it's actually a number one revenue driver. Can you make that case?
- [12:37]
A
I don't think it's just my argument, Eric. I think, I think it's, it's the truth, right? If your brand, brand protection isn't giving you back revenue, then I don't think it makes sense. What do I mean by that? If you've got infringers or unauthorized sellers, they're driving down your prices, right? Or at least you have no control over the prices anymore. And they're also affecting brand reputation. They were also affecting your customer experience. Now, if we just look at it that way, that's perfectly fine and maybe worth every penny you pay. But the way we look at it is how can we get rid of these unauthorized sellers and these infringers to allow the brand owner to absorb more of that revenue? In this case with, with exercise accessories, there was 1.5 million out there now. 1.5 million he absorbs now, Right? And if, let's just assume 20% profit margin, that's 300k, a brand like that would be selling at, let's say 8x, or even if we say 5x, let's be super conservative and say 5x multiple. So 300 times 5x, that's 1.5 million in brand equity value, enterprise value that we're able to deliver back to him. Right? It's like, why not? That's how I look at it. Like, we need to make sure that we're able to deliver at least a 500% ROI on every single penny that they pay us, on every single dollar. We. We should be able to show that, hey, we got you back $5. And on top of that, being able to set the legal infrastructure in place to increase the value, making sure all their IP is in place. If there's any gaps, go ahead and suggest that, hey, client, you might want to get DTC registered as a trademark, maybe globally, maybe in China, right, Where you manufacture, making sure all of your retailer and authorized seller agreements are in place, your map policy is in place. So adding all those to it increases the marketplace value too.
- [14:25]
B
And once you go through this process once with a seller, is it more likely, is it like a precedent set so that if another one pops up, it's easier to go through the second time or you have to kind of start from scratch each time?
- [14:36]
A
Yes and no, right? All the letters are there. So it's like, we could go ahead and reuse it. But also it sets the precedent in the marketplace that, hey, if you sell this product, you're going to be taken down and possibly get your accounts suspended. Amongst sellers, amongst wholesalers, there's forums, there's Facebook groups where people will talk and say, oh, don't talk, don't take on any DTC products. He's going to go ahead and get you suspended. There's forums out there that'll go ahead and talk about that. Right. But also for us, it becomes easier to know that, okay, this seller we've worked with before, the same violator or the same unauthorized seller that you have for your DTC brand, we worked with them before and we know who they are and sort of where they're getting products from. And on top of that, we could add more information into the legal letter that we sent over to Amazon or the enforcement letters we send over to the marketplaces.
- [15:27]
B
You have this idea of using the marketplace's own army against. And I like it because I think there's probably risk associated. Like, I think people's first instinct is to go to the unauthorized seller and maybe, you know, with some kind of thread or you Know something, hey, take this down kind of thing. But if they're unscrupulous enough to be copying you in the first place, they're probably unscrupulous enough to, to ignore it or maybe even worse. What, what, what are some of the downsides of going head to head against these unscrupulous sellers?
- [15:55]
A
Yeah, so a lot of our brands, when we give them the option as far as like, hey, we could go, approach them, because anytime you send a cease and assist letter or anytime you're contacting them directly, they're going to know that it's DTC brand that's coming after me. Right. You have no idea who these other sellers are, what they're capable of. I've seen some horrible things happen to brands. I think I've shared that with you before. We could also share it here too. So why even put yourself at risk for that? You don't want them messing with your account, with your listings. Any black hat tactics that they could do, let's just stay away from it as much as possible. Let's reduce that risk. So why not go to Amazon and say, hey, Amazon, that's the bad guy over there. And let me tell you why, they're hurting you along with us, right? And have Amazon step in and say, hey, you're a bad actor. We're going to go ahead and remove you for violating this policy and this policy, all right? So that's, that's my philosophy and I've always operated that way.
- [16:45]
B
And then what happens to those sellers? Generally they get fully kicked off the platform.
- [16:49]
A
So they could get suspended. So there's a few things. Number one, the listing itself, if they're selling an infringing listing, the listing itself could go ahead and get suspended, Right. Maybe not their account, but if they've got several violations because Amazon and these marketplaces like track your quote, unquote criminal record, right? If you've had several violations, they could go ahead and suspend your entire account too. Now, the marketplaces do allow you to appeal, right? To try to sort of say, hey, we made a mistake or this is what happened, or there was a misunderstanding and get your account back. But that is going to be a very difficult obstacle to get through is getting your account back. The listing is sort of a slap on the wrist, but the account suspension or termination is a bit of a death sentence. Now can they go create additional accounts and. Yeah, but usually they won't come back and sell on your own listing, especially if they know you're actively enforcing on your, on your brand.
- [17:42]
B
You've laid out, I think, these pillars in your example that you've talked about. But just be clear and lay out your framework with your three pillars for how you approach this situation.
- [17:51]
A
So, because we've spent all this time in the, in the Amazon space, because my background, I used to sell on Amazon when I was in law school, right? Built it, sold two brands. So it's like we've got a pretty good understanding of how the marketplaces work. So when we looked at what the options were for brands right now, Eric, we saw that most of them were just using one sort of pillar, which is IP infringement, to report these infringers and unauthorized sellers. Okay? What we said is, hey, there could be a few other pillars. So the second pillar we, we came up with is the marketplace policies that I mentioned earlier. All right, if they're violating Amazon's policies or the marketplace policies, let's go ahead and put that in there in the letter to, in the enforcement letter. The third one is if there's any regulatory compliance issues. And I'll tell you an example of what that is. But those are three pillars of what we rely on when we're trying to take down these infringers and unauthorized sellers. If you've got one, that's okay. But if you could combine two or more of those pillars, if they're being violated, you've got a lot more powerful argument you can bring to any marketplace. So let me go back to the regulatory compliance and sort of give you an example of where we've used that. There was a Fortune 500 company I was advising, and they had used attorneys, they had to use enforcement agencies. And they're like, we know the products are coming from Germany, they're coming over here to the US Being sold, right? And one thing that I thought of is, why aren't you guys Talking about Prop 65? Prop 65 is a California law here that says any product that contains any of these chemicals, and it's like a list of like 2000 chemicals right? In the state of California, keeps on adding to those. Anytime any of those chemicals are in there, you need to have a warning on there. Now, if you're selling on Amazon, that warning needs to be on the product listing itself and also at checkout and preferably on your product, too, because you don't know who's going to buy it from Amazon. It could be someone from California, someone from Florida. So that's one thing that I advise them. I'm like, why don't you guys report that to Amazon, you guys don't even need to go to any regulatory body, just report that to Amazon. And that's the angle that they took and that's what worked for them. But there's a few other examples like that if there is FTC violations, such as a competitor saying this is made in the usa, but it's actually not, right. FTC has gone very strict about that. And maybe we don't even go to the ftc, but we report that to Amazon and Amazon does care about that. Or any FDA statements that are being made about a product that they make medical claims. Right. Those are things that Amazon will take very, very seriously.
- [20:17]
B
Are brand owners always aware whether this is happening or not and to what degree? Is it something they're keenly aware of or is it something that kind of flies under their radar in some cases?
- [20:26]
A
My number one fans are our marketing departments. And the reason is because for some reason founders have convinced themselves that any brand protection work belongs to the marketing department. Right. And if they see loss in sales or map pricing being violated, they'll sort of put that on the marketing department and say, how do we fix that? How do we get more of the. More of the buy box? Right. How do we increase our buy box percentage? And most brands are aware if they have the problem. I think what they're unaware of is the extent of the problem because their marketing department is doing a million different things. Right. And they're not going to be able to have time or the tools or resources to be able to scour the Internet and the marketplaces and realize how deep is this problem. So to. The short answer is they may be aware of it, but most don't know the extent of it.
- [21:16]
B
You gave me some good examples in the pre interview of the downside of what happens if you're trying to go head to head direct with one of these, you know, unscrupulous sellers. And I think you had some, some interesting examples that kind of raised my eyebrows. What are some of the stories you've heard or been part of where the unscrupulous people really fight dirty?
- [21:35]
A
Yeah, so these are stories that I've, I've been a part of, meaning it evolved. Our clients. One of them is a bad actor apparently flying to Costa Rica where Amazon has allegedly. Right. Amazon has one of their, one of their departments called the captive department and allegedly taken a duffel bag full of money, $20,000 and bribing that employee to go ahead and suspend our client's account. That part is alleged. What I did witness with My own ears is that same person calling our client, leaving a voicemail and seems like it's out of a mob movie, but saying, hey, just stopped by your store. You weren't there, went and knocked on your mom's door. No one was there. I'll stop by again tomorrow. But we got to figure out what we're doing with the situation on Amazon. All right, so that's one story. Other story is black hat actor going ahead and putting cocaine. Our client was a supplement brand putting cocaine in the back end keywords of our clients listing. This is before brand registry really, really developed putting cocaine on there because he knew Amazon's boss. Amazon's algorithm is going to scan for for certain words and Amazon still doesn't allow market the sellers to provide cocaine or offer cocaine. So that listing was shut down. Right. So it's things like that or, or another thing that I witnessed with my own eyes is a bad actor putting a picture of the. Is it the guy Fox mask? Right. Putting that mask on their, on their listing, changing all the product pictures with that. So those are some stories, but the normal consumer has no idea about any of this. Right? The Amazon shopper. Everything looks perfect from the outside, but when you get into the basement of what's going on with these marketplaces, there is a lot of dirt happening and it could be kind of scary.
- [23:36]
B
We talk so much on this podcast, especially in the last few years, just about how important your brand is. Building a moat around your brand, protecting your brand, building it up. And you know, we, we talk a lot about performance marketing, but there's a lot on, on the brand marketing side that comes up here increasingly in a world where people can spin up brands really quickly using AI your brand is your moat. It really is what separ from your competitors and from all the other choices that a consumer might make in a day. How do you think about building a brand moat on marketplaces like Amazon where there are so many copycats?
- [24:08]
A
Yeah, I think there's a few moats. We sort of look at building for clients. Right. Number one is making sure that all of your IP is registered up to date and there's no gaps. What I mean by gap is if you've got DTC trademark but it's only for apparel, meaning like shirts and not for the shoes that you also sell. Let's go ahead and identify and make sure we go ahead and file it. Or as I mentioned earlier, if you've got it only in the US and not in China where you manufacture, let's make sure You've got a trademark over there, too. Let's also look at copyrights, any design patents or utility patents you could go ahead and get. And let's go ahead and identify all of those and make sure all of them are maintained and up to date. The second thing is, let's go ahead and make sure you've got the framework for the material difference, right? So making sure that if you have any authorized seller agreements, all of those are captured. If you've got a MAP policy, let's go ahead and see if we can improve it. Give it some real legal teeth, meaning maybe you have audit rights. If anyone you're selling to, you could go ahead and walk into their store or visit their website anytime and say, okay, what are your prices? And then have some repercussions if they're not following. So MAP policy, trademark material difference memorandum. But on top of that, I think it's gathering intelligence about what's going on with brand enforcement. So let's take a look at competitors and see what trademarks they're filing. Is there a new area that they're going to? But those are some of the modes, some of the framework you could build around your brand to really give it additional value. And that's. Those are things that a sophisticated buyer will definitely consider and look into.
- [25:40]
B
How did you get into this? You mentioned you had a few brands. Did you deal with this, like, personally before you decided to get in and build a business around protecting it?
- [25:48]
A
Yeah, so when I started selling on, on Amazon when I was in law school, Eric, I started selling kitchenware, right? And the reason I got into that is because I looked at my mom and my grandma, I was like, you guys spent a lot of money on kitchenware. Maybe I should get into that, right? But after a while, I got a little bit cocky and I ordered four or five rolls of artificial grass. These were like this big, right? Four or five rolls of them. They're in my, they're in my driveway. And I'm like, I can't sell any of them this, right? It's a completely different product that I can't sell on Amazon. That's, that's, that's what I knew and went through hell selling one of the products, hiring guys to put it in a van, driving it halfway across la, in, in LA traffic. And I don't even think I even made any money on that. I was like, this is bs. So I just let that stay for a few months. One morning I'm having coffee, just looking at these and just disappointment, right? Like, Mario, what the heck were you thinking? I was like, what if I cut these up into doormats? All right, so I go hire a few guys. I'm like, go ahead and cut it. And the cuts are all crooked, Eric. They're not even straight. The bags that I put it in, rolled and put it in were from Uline. The label I printed with my own printer, just black and white. I listed those and it just took off. We couldn't keep up. So I called my manufacturer. I was like, this is what I want you guys to do, right? Cut it up and think. And this is a manufacturer that was providing artificial turf to like FIFA stadiums. Like, what the hell do you want to do, right? I was like, okay, that happens. And the next thing I know, I've got people just ripping off what I was doing, right? And at the time I didn't know anything about ip. I was in law school, but I didn't have any IP classes, any trademark copyright patent classes. I called a few attorneys and really all of them were saying the same thing. Let's go ahead and sue them or let's go ahead and send them a cease and says letters. All right? On top of that, the language that I was speaking, being from the Amazon world, being from the e commerce world, they had no idea, right? They didn't understand how the marketplaces worked and so forth. If you've got an infringer from China, like, good luck sending them a cease and desist letter. So I was like, you just feel hopeless, right? Like there's there and you're calling attorney. And most people just like me at the time, thinking if I'm going attorney, they're going to have solutions, they'll know what to do, they're going to be the problem solver. And that was not the case. So I was like, you know what, whatever. But that always really stuck with me. And I knew like there was a few million I left on the table by not being able to protect that, right? So I was like, okay, now it's like every time we're doing something it's like, oh, if someone like me was, was around back then, we, we could have gone to some sort of design, pattern, copyright, get trade, dress around it and really protect it and build something, right? So that's been my experience with brand enforcement and IP enforcement. And really when I was selling, there were no attorneys helping brands, e commerce brands. So it's like that's what we've been doing for the past eight years.
- [28:43]
B
And probably lawyers without specialization in the Space, it would be pretty easy for them to rack up a big bill doing things that won't have an impact. Right. They'll send the cease and desist. They'll do the things that may not be effective, and it'll end up costing you an arm and a leg, but with no results.
- [29:00]
A
Yeah. The funniest thing I've heard, clients come to us. And just to be clear, I mean, a lot of attorneys are smart ones, will go ahead and sort of hire us or someone like us to go ahead and consult with them for their clients that really understand the marketplaces. I've been an expert witness before for attorneys that are dealing with Amazon issues, et cetera. Right. But a lot of attorneys will go ahead and give bad advice, which, again, trademarks are sort of, let's sue them. The funniest advice I've heard is let's go ahead and sue Amazon. Right. My thing is, like, why, number one, even if you could win, Right? And props to Amazon. Their attorneys, I've worked, we've taken them to arbitration. Super professional, super intelligent. But Amazon's mentality, just like a lot of these larger corporations, is I'd rather spend a million dollars on litigation but refuse to pay you $25,000 because I don't want to set the public precedence. All right, so it's like, number one, that's going to happen. Number two, attorney that's suggesting we go ahead and sue Amazon, it's like, what do you think is going to happen to your client's account once you sue? All right, now, every experience that I've had taking Amazon to arbitration, they've been very trustworthy and they've been very upfront and haven't done anything to our client's account. Right, but do you really want to put that, take that risk, even if the chance is 1% or less than 1%, does your client want to take that risk? So, again, there's plenty of bad advice coming from attorneys that don't understand the marketplace, and there's plenty of attorneys that are actually willing to learn. I've done several CLE talks for attorneys about how marketplace enforcement works. About two months ago, I was in Florida at the Florida bar speaking to the attorneys over there about brand enforcement on these marketplaces. So there's plenty of them that are now learning. But back then, that wasn't the case.
- [30:51]
B
Eric, Amazon's going to, I guess, be the lion's share of where this problem occurs. But is it also. It's also a problem on. You mentioned ebay, places like Walmart Any, any others that it's. And my, my question is, are there some platforms that are more on it or more, more willing to listen or easier to work with or harder to work with than others?
- [31:09]
A
Yeah. So as far as, when we, when we take on a case, going back to this idea of it should be a revenue driver, right? Brand protection should be your biggest ROI driver because it's protecting what you already own. Instead of going out building new products or creating a new product launch, what we look at is where are the biggest infringers or unauthorized sellers? That's what we look at initially, right. And time after time we find they're on Amazon. That's usually the primary target is on Amazon. Now, if you remove them from Amazon, they are going to go to different marketplaces. They're not going to just magically vanish. Right. But I would say Amazon is the first marketplace. After that comes probably Walmart and TikTok shop, those two marketplaces. After that, eBay, Shopify and some of the Chinese marketplaces, those are sort of the priority that we've seen time and time again. So Amazon is the primary marketplace. Going back to your question about which one's easier, which one's more difficult, the US Marketplaces seem to value brand enforcement a little bit more. You know, in my personal experience, it's been easier dealing with the US Marketplaces compared to Alibaba or Aliexpress, the foreign marketplaces.
- [32:24]
B
So if someone in the audience is listening and they suspect or know this is happening to their brand right now, but don't really know the extent to which it's happening, what do you recommend they do?
- [32:34]
A
So they could go ahead and contact us. We'll go ahead and do a free brand audit just to identify if there's any unauthorized sellers or any infringers and how much revenue they are taken away from your brand. So that's what they could do. It's completely free. If you think you've got even a small problem, let's go ahead and take a look at it and see how extensive it is. Or maybe you guys have done a great job, your marketing team's done a great job, and maybe it's completely under control, but at least you'll have that visibility.
- [32:59]
B
Makes sense. You want to restore control and restore your pricing control too. Like, because you don't want to get in a race to the bottom. Like, that would be one of the worst things you can do, I guess, is just start like lowering your price to compete.
- [33:09]
A
Eric, I'm so glad you brought that Up. So a lot of the brands that we talk to, they'll go ahead and say, I'm not worried about those unauthorized sellers because they're selling it at a higher price than I am. Right? For example, if my price is $30, they're selling it at $40 or $45. I don't care about removing them. Right. Versus the ones that are selling lower than them, those. It's like an emergency, right? But the ones that are even selling at higher prices, what do you think happens when you run out of stock because there's no brand that's got 100% in stock rate? So what happens? Your customers are now going to be buying at that $45 price tag, right? What does it do to your customer experience? What sort of expectations are you setting for your customers, especially the ones that have been purchasing you from a long time? And at what point do they say 45 is too much for that DTC hat? Eric, I'm going to go ahead and look at that other brand who's selling it at $30 or $35. So it's, it's never a good idea to have any unauthorized seller on there. To me, it doesn't matter if they're above your price or lower than your price.
- [34:10]
B
And if they're copying, if you have a copycat, like, and if some, not all sellers will, or buyers will even realize that they're not buying from you. So like, it could have, you know, residual effects, knock on effects on your brand. If they buy the other product and they have a bad experience, right? Then. Then they see your product elsewhere and they're like, oh, they're scammers or whatever, right? But they're thinking about the scammers.
- [34:29]
A
So, so it's funny you brought that up. One of the clients we're helping with now, he came to us, he sells adult gummy gummies for like adult activities, right? And his brand, he found out that someone else had copied his entire website going back to AI and sort of how easy it is, right? There was two websites that they had copied. Same name, same thing, right? And they even had the damn phone number of, of my client's phone number. So customers were calling and saying, hey, I placed an order, I never got it. And my client's looking through his CRM saying, we don't have an order from you. Like, what do you mean, here's my receipt, emails it to them and so forth. They're like, where'd you get this? And like this website, they take a look at it like, oh, my God. We're now working on removing this guy, but this guy is doing. The scammer Copycat is doing about a million dollars a month in revenue. It's actually getting to the point where it's going to be a little bit more than what my client's doing monthly. Right. So that's how bad it could get.
- [35:29]
B
It's funny you mentioned this hat. There's someone right now selling our D2C hats on market, or one of them. They just got a hold of one of our hats, and they're selling it on Marketplace for 80 bucks, which makes me think I should be selling these hats for 80 bucks as, like, a business model, maybe. Seems like. Seems like. I'm surprised they're trying to sell them that high. But I don't think Marketplace is going to take them down, unfortunately. I think you gave the great call to action. The website is eskgo esqgeo.com and if you think you're having this problem, give Mario a call. I. I was just looking on your website here because you can get this. Sometimes you can get this done pretty quick. You have a supplement brand here that had $162,000 in marketplace leakage, and you stopped it in under seven days.
- [36:10]
A
Yeah. So that. That's another client we were helping. He's selling, like, herbal supplements, and next thing we know, the Chinese sellers. Most of the people that we took down were Chinese sellers, and these were actual infringers. They weren't even jumping on his listing because he wasn't even on Amazon. He was selling just on Shopify. And next thing he knows is he's got people selling under his own brand name from China. Right. The bottle looks exactly the same, or at least the image does. Right, Eric? I'm like, you got to get on Amazon number one, but number two, let's start taking these people down. And he did. He was smart enough to have a trademark, but that's what we did. Right. It's sometimes a compliment. You can look at it that way, right? Where it's like you're doing something right. Otherwise people wouldn't want to copy you. So it is a compliment, but it stops there. Now let's go ahead and get back control.
- [36:58]
B
I just think a lot of people just don't know where to start. Right. And I think it's good service you're offering here, so I'm happy to promote it here to the DTC audience. Thanks for coming on the podcast today.
- [37:08]
A
Appreciate. Eric, thank you for.
- [37:16]
B
Thanks so much for listening to today's episode. If you're not a subscriber to our newsletter, you can do that right now at directtoconsumeralloneword.
- [37:24]
A
Co.
- [37:25]
B
I'm Eric Dick and this has been the DTC podcast. We'll see you next time.