Comment by michaelmrose
7 years ago
The doctrine of first sale means you can't keep people from reselling your branded products and if you don't offer your products on Amazon at this point others will offer fakes and with Amazons cooperation acquire your customers while offering them cheaper competitors products.
Its a lovely situation to say the least. All strategies are sub optimal. Logically we need a law forcing them to divulge who your actual product is coming from on the page before you buy effectively ending comingling.
The issue isn't reselling branded products.
The issue is selling fake products as a branded products. Amazon makes this easy to do by commingling inventory and not matching/tracking sellers to inventory items.
This fact by itself would probably make Amazon liable for product liability claims in any court in the US, it's traditional CDA liability sheild notwithstanding.
EDIT: Products liability law is complicated, but generally even if Amazon wouldn't be treated as a seller, they could still be held liable for their negligence in providing the wrong/defective item out of their (commingled) inventory. Amazon doesn't match sellers to inventory items so they have literally no way to defend themselves from such a suit especially if the seller can show that they provide products straight from the manufacturer but Amazon commingled with other sellers' inventory. (I'm aware of several such suits that were almost immediately settled by Amazon with NDAs attached.)
> Amazon makes this easy to do by commingling inventory and not matching/tracking sellers to inventory items.
That is not correct. Amazon's seller help pages and Amazon spokesperson comment on e.g. this FT Alphaville article https://outline.com/4R7fp6 say that Amazon tracks the original supplier:
> The system is purposefully designed so that similar products are not placed next to or near each other, and Amazon can also track the original seller of each unit.
I.e. commingling only means that any sellers' inventory can be used for fulfillment, not that the inventory is physically commingled.
I think thats pedantic. If I can't demand the seller I want, from my point of view it is commingled.
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Amazon "says" they can track the original supplier.
In practice, they clearly don't. I've had a client that was the only manufacturer of a product receive fake versions of their own product that was part of Amazon's commingled inventory. This happened last year.
Also, unless Amazon removes tags prior to delivery, there is no mechanism on many items that would allow them to track goods short of maintaining physical separation, which it is abundantly clear that they do not.
If this physical separation exists, it is useful only to Amazon if buyers can still be fulfilled by any of the sellers.
When evidence builds for fake product, Amazon can halt use of a particular seller's inventory...but prior to that you might get a fake, regardless of the seller's reputation.
The doctrine of first sale means people can re-sell your products.
It does not mean you have a right to do so on Amazon.
Or more to the point, you cannot claim they are being sold directly from the manufacturer.
Sure, but even if you're openly a reseller, Amazon doesn't have to let you on their platform.
They could say "we'll only let Apple sell Apple products here".
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It's not clear that you can limit a buyer's ability to resell it on any market without a contract with the buyer that may or may not be legal or enforcable based on jurisdiction. It also doesn't seem likely that people willing to defraud people with any agreement.
> It's not clear that you can limit a buyer's ability to resell it on any market
Depends on who the "you" is here.
Nike can't forbid me from reselling shoes. Nike can ask Amazon to willingly forbid me from doing so on their platform, and Amazon can agree.