Recently, Amazon vendors have reported that they are receiving notifications that they must have Amazon Brand Registry associated with their account to continue receiving purchase orders from Amazon. This comes hot of the heels of similar reports from numerous Amazon vendors that they were not receiving purchase orders anymore with no additional information from Amazon as to the reason why.
From our skewed perspective as people who are more privy than most to conflicts on the Amazon marketplace, rogue vendor accounts were behind a higher than average proportion of bad behavior on the Amazon marketplace like listing hijackings, sale of generic products on Amazon listings, and various unorthodox methods used to kick competing sellers off of listings or to get an unearned buy box share advantage.
From a broader perspective, it looks like Amazon is continuing to pare back its commitment to the Vendor Central platform. In 2018, Amazon cancelled the Vendor Express program, which had often been used by both legitimate sellers as a backdoor to access special business programs that were supposed to be exclusive to Amazon Vendors such as Amazon Marketing Services, which has long since been merged into the general Amazon advertising platform. Third party sellers would pick a throwaway product that they didn’t care much about, enroll it in Vendor Express, and then gain access to various advertising features that were only available to vendors at the time.
There are a several reasons why Amazon may continue to cut back on its vendor program as it is currently constituted:
Buying and owning inventory places more legal risk on Amazon when it sells counterfeit products or lists used products as new
Refusing to abide by MAP policies could pose risks to Amazon when they are the seller of record
The hands-off, highly-automated approach that the Amazon Vendor program has mostly had as it relates to inventory decisions was never as nimble and sophisticated as third-party sellers could be
Amazon earns more profit from fees charged to sellers than it earns as a retailer of goods
Storing inventory that it owns is a much less profitable use of warehouse space than renting out that warehouse space to other people who are happy to bear the costs and risks of owning and selling that inventory
This recent change points towards a recognition on Amazon’s end that rogue Vendor Central users have used enhanced editing privileges to alter listings on the catalog to their advantage in various ways. Vendor Central, while geared towards brands, has also long been accessible by people who are able to convince Amazon that they are authorized distributors for the brands that they carry and/or have other kinds of brand authorization. In some situations, that has not been true, but those rogue vendors were still able to abuse their catalog editing privileges to vandalize competitor listings, perform unauthorized listing merges, and perform other attacks.
For example, if you have ever seen a successful product on the Amazon catalog vandalized to have its main image changed to that of a character from a Wachowski brothers movie from the mid-2000s, it was probably done through a rogue Vendor Central account. Another example of these types of cases are those in which a rogue vendor has sold a bunch of counterfeit inventory to Amazon, has it shipped and sold by Amazon to customers getting superior buy box share by doing so, and then running off into the sunset with the money before the reports start coming in.
Forcing vendors to also have Brand Registry authorization puts a stop to a lot of that behavior even if it does restrict some of the legitimate business models that were previously possible using the Vendor Central system. With this change, at least in theory, all vendors will need to have their account explicitly authorized by the brands that they sell. Without that authorization, Amazon won’t make purchase orders.
This is ultimately a positive move for the integrity of the Amazon marketplace.
While public perception of the Amazon marketplace tends to place greater trust in the “shipped and sold by Amazon.com'“ label, people with more experience as buyers, sellers, and vendors on the marketplace know otherwise. As Amazon continues to try to head off negative public opinion about the sale of counterfeit products and other issues on the marketplace, we expect more changes coming down the line particularly in how all the systems governing how sellers, vendors, and brands interact much like this change.