Suppliers trying to stop us selling their products on Amazon, but still allowing others to sell there

[Ken Ball]

Hi there

We are a bricks and mortar store, with a fast growing Amazon store

Been selling items on Amazon for 5 years, but now have found a niche which is growing extremely quickly

Sadly for us, since we've suddenly become so busy on Amazon, our suppliers are being pressured into stopping us from selling their products on Amazon by another seller.

I understand that suppliers can stop their products from being sold on Amazon completely, but are they allowed to show favouritism to certain sellers by allowing them to continue to trade on Amazon, while stopping others?

 

[NickZ]

Have you asked them why, so all of sudden, changes are implemented?
Does the seller have competitors? I mean you could approach them and offer them your services.
Open a independent shop so you don't have to live in fear of being shut down by amazon itself.

 

[lesliedocherty]

WE had a similar thing with one of our brands, they had created a list of approved Amazon sellers, we were not on that list.

They also asked us not to use Google shopping, for us it was a small brand that we sold better instore, so did not pursue it.

 

[fisicx]

I understand that suppliers can stop their products from being sold on Amazon completely, but are they allowed to show favouritism to certain sellers by allowing them to continue to trade on Amazon, while stopping others?

Suppliers can do whatever they want. Have you spoken to them to see if you can come to some sort of deal?

 

[antropy]

Suppliers can do whatever they want.

No that's not true at all: https://www.skillcast.com/blog/prevent-anti-competitive-practices-tips

Paul.

 

[antropy]

We are a bricks and mortar store, with a fast growing Amazon store

Do you sell through your own website as well?

Paul.

 

[fisicx]

No that's not true at all

Yes but in this case the supplier can give exclusive distribution rights to certain sellers. It’s common place with many brands.

 

[antropy]

Yes but in this case the supplier can give exclusive distribution rights to certain sellers. It’s common place with many brands.

Right, so perhaps be more specific about what they can and can't do rather than a lazy "they can do anything".

Paul.

 

[fisicx]

They can do anything. Nothing to stop them dictating who they sell to or the conditions. I’m not sure there is anything anti competitive about this.

 

[antropy]

They can do anything. Nothing to stop them dictating who they sell to or the conditions. I’m not sure there is anything anti competitive about this.

Yes but that's not "anything" so you should have clarified. What they can't do is pressure a supplier to sell at a certain price.

Paul.

 

[fisicx]

Yes but that's not "anything" so you should have clarified. What they can't do is pressure a supplier to sell at a certain price.

This happens more than you realise. Many suppliers ‘suggest’ that selling at too low a price will result in reduced service.

Mercedes have been fixing prices at dealerships for years.

 

[Paul Carmen]

It's potentially illegal, unless they have a selective distribution agreement/arrangement to make this work that you and all other suppliers have signed up to.

Even then they can't tell you what to sell at price wise, only where, they usually control price by offering a better cost price to retailers who tick more boxes; e.g. the best prices are reserved for bricks and mortar retailers normally and those who follow the brand guidelines.

If you've bought stock outside of this, or no such agreement exists, they'd be on sticky ground. If you're selling very cheaply on Amazon, then they may have a mechanism to restrict supply or charge more. Only you can know this, as it will be in the supplier agreement T&Cs.

 

[antropy]

This happens more than you realise. Many suppliers ‘suggest’ that selling at too low a price will result in reduced service.

Mercedes have been fixing prices at dealerships for years.

Yes it definitely happens, especially from big Chinese suppliers that would be very hard to prosecute.

However, it is illegal.

Paul.

 

[fisicx]

Yes it definitely happens, especially from big Chinese suppliers that would be very hard to prosecute.

However, it is illegal.

Paul.

I agree. But that’s not what’s happening here. The supplier is just choosing who to supply. Nothing illegal about that. It’s no different to you choosing not to work with anyone from Scotland.

 

[Paul Carmen]

I agree. But that’s not what’s happening here. The supplier is just choosing who to supply. Nothing illegal about that.

Are you sure, why do you think that, surely it will depend on the supplier market dominance and availability of that/similar products?

Looking a the original post, the supplier already supplies the OP, and are now being pressured to stop supply by a (larger?) competitor.

That is potentially a problem for the supplier, as unless they have a very good reason, it may be anti competitive and unlawful, especially if it's a product they can only get from that supplier.

If it's a UK or EU supplier it would be worth the OP getting legal advice.

 

[fisicx]

We do need more detail but the basic principle that a supplier can close an account is valid. The reason why the account was closed may be worth investigating but that’s a different thing.

 

[Paul Carmen]

We do need more detail but the basic principle that a supplier can close an account is valid. The reason why the account was closed may be worth investigating but that’s a different thing.

That's only valid if that account was problematic or had a balance outstanding. If it's in good standing and the retailer was paying their bills, it's potentially anti competitive and illegal.

 

[RobPickering]

Hi there

We are a bricks and mortar store, with a fast growing Amazon store

Been selling items on Amazon for 5 years, but now have found a niche which is growing extremely quickly

Sadly for us, since we've suddenly become so busy on Amazon, our suppliers are being pressured into stopping us from selling their products on Amazon by another seller.

I understand that suppliers can stop their products from being sold on Amazon completely, but are they allowed to show favouritism to certain sellers by allowing them to continue to trade on Amazon, while stopping others?

If your supplier is based in the UK, then they are likely at serious risk of breaking the anti-competitive laws. A lot of people are unaware of how strict these laws are, or how major the fines. Take a look starting at the Government website that makes it clear they could have a fine up to 10% of their global revenue and up to 5 years in prison.

Avoid and report anti-competitive activity

Understand and avoid all types of anti-competitive and cartel activity including price-fixing, collusion, bid-ridding and sharing markets. Know how to report concerns to the CMA.

www.gov.uk

Having operated on both sides of this kind of issue... the only legal ways or preventing you are pretty difficult and would likely mean preventing you from buying at all.

 

[fisicx]

Does this mean any supplier has to supply to anyone that asks? Can a supplier not change their terms to restrict who gets their products?

The legislation doesn’t say you can’t decide who to supply. It just says you can’t give preferential deals to one.

 

[Paul Carmen]

Does this mean any supplier has to supply to anyone that asks? Can a supplier not change their terms to restrict who gets their products?

The legislation doesn’t say you can’t decide who to supply. It just says you can’t give preferential deals to one.

They could potentially refuse to supply a new company and site capacity/stock availability, credit rating of new company etc, as long as it's a legitimate and valid non anti competitive reason. For a company they already supply and their existing supplier base, no, they can't just change their terms or refuse to supply, unless that company is in breach or a non payer.

In a previous life as a buyer, I worked with a couple of major international suppliers who wanted to stop price erosion on the web. They took a long time to put selective distribution agreements in place, this required lots of legal work, and a significant amount of horse trading to get all the big retailers to sign up to it, and fully in place across the UK.

 

[jfrm]

This is standard practice for internet sales these days. The most effective path for a manufacturer/distributor is to say that they only wish to sell to say 5 retailers or allow only 5 retailers to sell on Amazon/marketplaces, a perfectly reasonable position to take. Then they have a word with the chosen retailers, usually face to face and mention that they "hope" that retailers will stick to their RRPs at the same time as pointing out how fortunate it is that the retailer has been selected. The implication is clear and if a retailer doesn't toe the line, sooner or later, they will find they are no longer on the list of "approved retailers". They have effectively price-fixed and yet they have not explicitly told the retailer to sell at any price nor done anything technically illegal and it would be virtually impossible to prove different. It's not all bad either - for many ubiquitous products where the supplier does not control which retailers can sell their stuff, it's simply a race to the bottom - some cowboy or idiot is always willing to sell things at a such a low price on the internet that eventually they will go out of business but in the meantime, none of their more sensible competitors can compete and so none of the retailers make any money...

 

[AmazonGeek]

A manufacturer can choose who gets the rights to sell their products. A high-end brand for example won't want a budget shop selling its products because it would erode the value of the brand.

You may have a high street shop and may want to sell Gucci jeans but Gucci are well within their rights to refuse to supply you. Amazon is no different. Brands can choose which sellers are allowed to sell their products on existing Amazon listings and if you aren't on that approved list then expect to get kicked off the listings. And since the product listings are already in the Amazon catalogue you can't create new listings.

 

[Will.Lu]

Hi there

We are a bricks and mortar store, with a fast growing Amazon store

Been selling items on Amazon for 5 years, but now have found a niche which is growing extremely quickly

Sadly for us, since we've suddenly become so busy on Amazon, our suppliers are being pressured into stopping us from selling their products on Amazon by another seller.

I understand that suppliers can stop their products from being sold on Amazon completely, but are they allowed to show favouritism to certain sellers by allowing them to continue to trade on Amazon, while stopping others?

what kind of products do you serve?

 

[sdob]

Without knowing more detail, it sounds like your newly found popularity if found by undercutting the prices. I'm not surprised your supplier wants you to stop selling - you're cannibalising their products. Maybe sit down and have an open conversation

 

[AmazonGeek]

Be careful with this though - you don't want to be accused of price-fixing...

 

[annabelleme]

Hi there

We are a bricks and mortar store, with a fast growing Amazon store

Been selling items on Amazon for 5 years, but now have found a niche which is growing extremely quickly

Sadly for us, since we've suddenly become so busy on Amazon, our suppliers are being pressured into stopping us from selling their products on Amazon by another seller.

I understand that suppliers can stop their products from being sold on Amazon completely, but are they allowed to show favouritism to certain sellers by allowing them to continue to trade on Amazon, while stopping others?

I would say maybe review supplier agreements and contracts, as well as different laws such as Antitrust, Competition Laws, and Price Discrimination Laws.

In terms of suppliers, if they are starting to change their minds on where you can sell and causing difficulty, it might be a good idea to diversify your suppliers more. As well as review, brand and manufacturer's, and Amazon's policies.

Steps you could take are reviewing your legal position, communicating with your suppliers and exploring newer supplier options.

 

[greyster]

Hi there

We are a bricks and mortar store, with a fast growing Amazon store

Been selling items on Amazon for 5 years, but now have found a niche which is growing extremely quickly

Sadly for us, since we've suddenly become so busy on Amazon, our suppliers are being pressured into stopping us from selling their products on Amazon by another seller.

I understand that suppliers can stop their products from being sold on Amazon completely, but are they allowed to show favouritism to certain sellers by allowing them to continue to trade on Amazon, while stopping others?

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Hi there,

I’ve faced a similar issue before. Suppliers do have the right to control where their products are sold, including restricting sales on platforms like Amazon. However, it’s generally not fair or ethical for suppliers to show favoritism by allowing certain sellers to continue while blocking others. If you believe this is happening, you might consider discussing it directly with your supplier to understand their decision. Additionally, reviewing your agreement with them and seeking legal advice could help ensure your business interests are protected. Hope this helps!