Understanding Brand Gating on Amazon
The term “Brand Gating” means in the broadest sense “brand protection”. In the specific context of Amazon, Brand Gating implies that a service has been introduced to “protect” branded products. Protection is provided because active gating enables the owner or main person responsible for a brand to decide which third-party providers may sell a branded product on Amazon. With most articles on the Amazon marketplace, almost any seller can “hang on” to it, i.e. an already existing product can also be offered. Brand Gating severely restricts this free access to the product catalogue.
Why Is Brand Gating Introduced?
Reason 1: Brand Gating prevents a negative pricing policy
The primary function of the Amazon Marketplace is that, in principle, any retailer can offer any retail product at a freely definable sales price. The central component is the product catalogue with all its different categories. Most of the articles listed here have an EAN or ISBN displayed as ASIN at Amazon. If a seller has already created a product and a second seller now wants to sell the same product (identical EAN / ASIN), then both offers are combined on the same product detail page. In the so-called “Buy Box” often only the best offer wins, meaning the seller who sets the lowest price, this often results in a downward spiral of the price, which, from the point of view of the brands and manufacturers, sharply reduces the average market price and harm the image of an article. So, if only one or a few sellers are competing, the price war will likely be less intense, resulting in more “controllable “sales prices.
Reason 2: Brand Gating prevents counterfeit products
Amazon is committed to being the most customer-friendly company in the world, ergo the customer satisfaction of consumers is in the foreground. If a buyer now receives a counterfeit product, this is 100% contrary to this principle. To avoid this issue, Amazon has cleverly introduced Brand Gating because the more sellers from the “grey market” can sell branded products without restriction, the higher the risk that counterfeit goods will come into circulation. Through active Brand Gating, the brand owner can decide for himself which resellers are allowed to sell their products on Amazon.
Reason 3: Brand Gating increases content quality
A widespread problem for many vendors on Amazon is that their products are displayed incorrectly or at least not as expected on the Marketplace. One of the reasons for this is that virtually any seller offering an ASIN can change and overwrite the existing content (product title, bullet points, product description, backend keywords and product images). This is often a big problem, especially when it comes to product photos because incorrect or unfavourable representations of the products prevent purchases or trigger unnecessary returns. Also, changes in product data affect the Amazon ranking and performance in Amazon Advertising. If, for example, essential and relevant keywords are deleted or changed by “third party players”, this often has a noticeable negative influence on the organic and inorganic visibility of the corresponding products. With an active Brand Gating, the change in content on the product detail pages can be restricted to at least very few parties or, in the case of exclusive sales of articles, completely limited by only one seller or vendor.
Amazon Brand Gating in the USA
The Brand Gating exists since 2016 in the USA, on Amazon.com, and was introduced when the Birkenstock brand withdrew from the platform with the direct sale of its products. The reason for this was (at least officially) the fact that third-party sellers had joined Birkenstock’s existing, active products and in some cases had also sold plagiarisms. A reaction from Amazon was the introduction of the Brand Gating program to protect other brands from counterfeit products easily being put into circulation in the future. The Brand Gating on Amazon.com is also active for other (large) brands such as Lego, Hasbro, Nike, Adidas, Samsung and Asics (source: legal-patent.com).
Amazon Brand Gating in Germany and Europe
Currently (as of May 2019) Amazon is in the process of launching Brand Gating for the uk and other European marketplaces with selected brands. This form of trademark protection is not yet available for all brands registered in the United Kingdom and active on Amazon.
Brand Gating vs Amazon Project ZERO
As already mentioned, customer satisfaction is an enormously important issue for Amazon, and this also includes curbing and preventing the sale of counterfeit products as much as possible. The Brand-Gating-Program was and is one of Amazon’s first steps to better protect consumers and brand manufacturers. Since 2019 another plan has been in place to curb further the sale of plagiarism on Amazon. The “project ZERO” is similar to Brand Gating in that it is a kind of self-service but has a different detailed approach. While Brand Gating generally requires ASINs to be activated or blocked from the outset for third-party sellers, project ZERO is based on an automated approach with machine learning. Also, products can be better protected by a serial number that is invisible to third parties. More about project ZERO: https://www.intomarkets.com/wiki/amazon-project-zero/
Is Reselling on Amazon with Brand Gating Still Possible?
The Amazon marketplace has always been based on the fact that any seller can offer any product. Even if brand manufacturers did not offer their products directly on Amazon (e.g. via a B2B relationship or a vendor contract with Amazon), resellers/retailers could offer these brand products themselves. Thus, Amazon could and can provide its portfolio of products on an enormously broad basis. With increasing complaints from consumers and brand suppliers about counterfeit products, e.g. from China and Taiwan which are precisely the result of reselling, Brand Gating is a significant limitation. In the future, brands will be able to decide for themselves which resellers are allowed to offer their products on Amazon, so access for many third-party players will be severely restricted or ultimately denied. A classic reselling would only be possible to a minimal extent.
How Can I Register for Brand Gating on Amazon?
Currently, Amazon Brand Gating is not freely available for all brands and is manually activated on Amazon.com as well as other countries by the Vendor Manager in consultation with the respective vendor. The following steps are necessary to register the Brand Gating:
- The trademark must be registered at a country-specific registration office (e.g. DPMA in Germany).
- The trademark must be filed with the Amazon Brand Registry.
- A specific ASIN list must be sent to Amazon for which the Brand Gating is to be activated.
- Third-party providers/resellers must be released by the trademark owner for each ASIN after Brand Gating has been activated. As a rule, the prerequisite for this is that you can provide written proof that you have purchased at least 30 branded products from the respective manufacturer within 90 days.
Criticism of the Amazon Brand Gating Program
The Brand Gating program is criticised above all in the sense that third-party sellers are asked to pay for the activation of each brand. The costs for brand activation can be between 500 and 5,000 USD (source: Internetrecht-Rostock.de). Another point of criticism is the manual selection of brands by Amazon, which will be activated for the Brand Gating program. Like the “project ZERO”, Amazon selects the brands according to its criteria and enables brand protection only for a few (rather large) manufacturers/vendors. The criticism is obvious: In this way, many smaller brands are denied access to Brand Gating for the time being.
Conclusion on the Amazon Brand Gating
In general, brand protection and thus the fight against product counterfeiting on part of Amazon is the right step. The sovereign administration of the product data by the trademark owner is also appropriate and necessary for some categories. As a specialised Amazon agency, we regularly have to deal with overwritten content by third-party sellers, whereby the quality of the product presentation and also the performance of the advertising campaigns suffer greatly and sometimes mean a robust competitive disadvantage for the respective vendor. The downward price spiral is also a significant problem about falling margins and thus limited possibilities for advertising measures, which is triggered or at least favoured by the so-called “grey market”. A Brand Gating makes it easier to solve this problem.