Stopping Retailers Using 3rd Parties

[thetiger2015]

I'm sure this question has been answered before but is it legal to ask your customers only to sell your products on their own website?

Basically, some of our products are appearing on a couple of 3rd party market places and they're selling them cheap. On their own website they've kept them at the RRP.

I basically want to say woah, terms of sale mean you can sell on websites you own or in shops you own but not via 3rd party market or discount sites.

Any ideas?

 

[Paul Norman]

The legalities I will leave to lawyers!

However, such restrictions are not an uncommon feature of supply arrangements. A number of major brands require retailers not to engage in the kind of activities you mention.

How enforceable that is, I do not know. The reality, of course, is that they will sometimes simply cancel the supply agreement if retailers do not comply. Personally, I am relaxed about that (as a retailer). In this case, that is probably the only effective thing you can do.

 

[deniser]

My suppliers make me sign a contract to the effect that I can't use their photos on 3rd party or market place websites or even on Facebook. But it doesn't mention the products themselves. But as most people don't bother with their own photos (or of they do they're vastly inferior so it looks like you are not selling the original item) it's effectively the same thing.

I am more than happy to be banned from selling on 3rd party sites if it stops people undercutting on price. I wish more suppliers would enforce it.

 

[Lawyer]

Under the Competition Act 1998 and EU competition law it is lawful to set up a selective distribution net work which has quality requirements and quite common to say that resale must be from a high quality shop or a high quality your own website.

In fact there is a case from Germany on its way to the European Court at the moment looking at whether a restriction on reselling on EBay and Amazon is okay or not. I would argue the restriction is probably okay.. If it's not held okay then in similar cases the clause will be void and unenforceable and companies would be free to resell anywhere they want.