In the rapidly growing e-commerce landscape, protecting your brand is becoming more and more crucial to reducing risks and ensuring long-term success. According to a recent Forbes report, the global e-commerce market is expected to reach a whopping $6.3 trillion, this year.
While practising brand protection is important across all e-commerce channels and marketplaces, Amazon has been one of the channels of concern for most businesses. With a revenue of $514 billion as of 2022, Amazon has democratized e-commerce more than ever by lowering the barrier of entry for third-party (3P) sellers.
However, this democratization of e-commerce has also made the market rife with counterfeiters and unauthorized 3P sellers, becoming a significant threat to businesses and brands of all sizes across categories.
In response, many companies have turned to brand protection solutions and software like GreyScout to safeguard their brand equity, drive profits towards first-party (1P) channels, and most importantly, protect customers.
As a SaaS-based brand protection solution, working with businesses across industries, GreyScout has created this essential guide to developing e-commerce brand protection strategies and choosing a brand protection solution that’s suitable for your business.
This introductory guide will cover some critical topics, including what brand protection means, why brands need protection, what do we mean by a brand protection tool, what type of brands need a brand protection solution, and so on. Keep reading to get all these questions answered.
What does brand protection mean?
In the e-commerce world, brand protection refers to safeguarding a brand from potential counterfeiters, copyright infringers and other unauthorized 3P sellers who may unethically sell products which are not suitable for selling or are materially different from the ones you sell.
Branding is a crucial aspect of any business. That’s why, brand protection solutions focus on implementing measures to prevent unauthorized usage of your brandings such as colours, names, or logos. Ergo, keeping tabs on legitimate distribution channels, and monitoring online platforms for any counterfeit merchandise, infringements of Intellectual Property (IP) rights, and listing of products unfit for selling.
Why does your brand need brand protection?
The need for brand protection in e-commerce cannot be overstated. Here are four reasons why brand protection is essential for any business:
Loss of revenue: An estimated $7 billion to $10 billion worth of products are sold by unauthorized distribution channels every year, as reported by the Harvard Business Review. These figures shed light on the magnanimous impact unauthorized sellers can have on businesses.
Having too many unauthorized 3P sellers competing to offer the best prices on a product can lead to price erosion. You may be selling as a 1P seller on e-commerce. And still, it can get impossible to battle the prices offered by unauthorized 3P sellers who may be listing grey market products for a bargain.
This means, your business can lose revenue drastically, as prices spiral out of control.
Loss of customer loyalty: It takes years to build a loyal customer base, but just one bad product experience can damage it irreversibly. If a customer unknowingly purchases a grey market product, it can result in them losing trust and loyalty towards your brand.
This means that the Customer Lifetime Value (CLV) of your most loyal customer base diminishes drastically. Moreover, negative reviews resulting from this can also negatively impact other current and future customers.
Read our blog on why is it important to monitor negative reviews for e-commerce brand protection.
Potential loss of key retailers and Channel Partners: It is crucial to maintain a good relationship with your authorized retailers and channel partners, whether they sell online or offline, as they drive your business forward giving you widespread reach and visibility. Unauthorized 3P sellers on e-commerce marketplaces like Amazon, eBay and Google Shopping can strain this relationship.
Due to price wars between unauthorized 3P sellers, legitimate retailers can be forced to lower prices, thus incurring losses. This can discourage them from doing business with you in the future. Therefore, even if your brand doesn’t directly sell online, it is likely that you will still require brand protection to ensure malpractices on e-commerce do not affect your relationship with offline retailers.
Legal complications: Geo-blocking laws restrict certain products from being sold in certain countries. Nevertheless, unauthorized 3P sellers may overstep such regulations, putting the brand at legal risk. This is especially dangerous for sensitive industries like pharmaceuticals or food and beverage, as certain raw materials used in such products may not be legally approved for buying and selling in all countries. A lack of proactive brand protection from unauthorized 3P sellers in such a case can lead to legal battles that cost millions.
What is a brand protection solution or brand protection software?
A brand protection solution is a tool or service that helps businesses maintain and protect their brand from unauthorized 3P sellers, counterfeits, or other forms of IP infringements in the marketplace. Many such solutions generally include automated monitoring and detection of grey market products, and counterfeit items helping brands better manage their distribution channels, and taking legal action against infringers when necessary.
Does your business need a brand protection tool?
Any business can be affected by malpractices in e-commerce, regardless of the industry it operates in, the scale of its customer base and the distribution channels it has. If you want to maintain your brand’s reputation, protect your revenue, establish customer loyalty, and avoid costly legal battles, then the answer to the question is an unequivocal yes.
Given the pace at which e-commerce is growing, it is impossible to manually detect every unauthorized 3P seller or counterfeiter on every e-commerce platform. Monitoring their activity constantly, ensuring they do not resurface, and authenticating and verifying the products they sell, is impractical without a technological solution that can automate at least part of the process.
Having a brand protection solution is therefore not an option but a necessity for most businesses today.
What to look for in an eCommerce and online brand protection solution?
There are innumerable brand protection solutions in the market, each with its own offerings, advantages, and Unique Selling Points (USPs). So, how do you go about choosing one that is right for your brand? Here are three important aspects to consider.
Automation at scale:
As e-commerce continues to grow rapidly, automation is necessary to keep pace with hundreds of thousands of unauthorized sellers and counterfeiters that crop up every day. First, take stock of the number of counterfeiters your business is dealing with, the most important e-commerce platforms they are present on, and the types of infringements prevalent. Then, look for a brand protection solution that automates the process of monitoring, detecting, and taking action against prevalent malpractices on those specific platforms. This will allow you to solve the right problems for your business at scale through the power of automation.
Market-leading expertise:
Look for a provider that has a proven track record of delivering a strong Return on Investment (ROI) to their clients. Does this provider have clear case studies with a success rate of 90% or more? Meaning, were at least 90% of infringements flagged by them delisted successfully? Another crucial thing to consider is, do they work with the relevant e-commerce players in the market today. Do they have knowledge of the already existing frameworks or integrations on those e-commerce platforms to act against infringers? Asking such questions can help you pick the right brand protection solution with the right expertise in the constantly evolving e-commerce landscape.
Advanced reporting:
Comprehensive reporting is an integral part of a successful brand protection solution. A good tool provides a clear dashboard of unauthorized reseller profiles, counterfeit product listings, important websites they are listed on, and other highlights of risks in this space. Actionable reports can also help you track progress, recommend further actions, and quantify the current and future impact on your business.
How can GreyScout help?
GreyScout is a leading global brand protection solution in the e-commerce space, trusted by brands like Samsung, Netgear, Dorel and WaterWipes. With its SaaS-based technological solution, it has been successfully supporting e-commerce, marketing, legal and sales teams in pharmaceuticals, FMCG, electronics and other industries, to achieve scalable brand protection in the ever-evolving e-commerce domain. To achieve this, GreyScout follows an extensive three-step process:
Detect and Monitor:
If you are in the sales, eCommerce operations or legal/policy function of an organisation, you have likely already defined and strategized a selective distribution agreement resale agreements, channel optimization and eCommerce digital shelf tactics.
GreyScout brand protection solution also lets you monitor grey market activity and counterfeit listings through a single dashboard at scale, giving you a clear view of unauthorized sellers, the products they have listed, whether they are active or inactive, if they resurface, and other crucial updates.
Moreover, a seamless brand protection solution will also work complementary to digital shelf initiatives, such as MAP policy, and Lost Buy Box monitoring. Read our blog on how you can use a brand protection solution in sync with digital shelf solutions.
Verify and Authenticate:
Once detected, GreyScout allows you to discover the channels through which unauthorized resellers first procured your product. GreyScout’s proprietary verification and authentication technology is designed to retrieve supply chain documentation and evidence helping you to verify sellers and authenticate listings at scale.
Furthermore, the tool also helps to understand the links between grey sellers and the most problematic areas of your distribution chain while simultaneously shedding light on the right to resell by region, channel, or product.
Read our blog on the impact of grey market sellers on brands and the importance of e-commerce brand protection.
Enforce and Report:
GreyScout also allows you to take enforcement action against sellers who fail to respond or comply with your brand’s policies. This can be done through online brand protection portals that GreyScout integrates with. Additionally, it also helps enforce, delist and geo-restrict sales of key products. Thus, giving you more control of your products, and protecting brand perception and more with the selective distribution.
In conclusion, proactive brand protection is essential for every business, regardless of whether it has a strong presence in e-commerce. If neglected, unauthorized 3P sellers and counterfeiters can negatively impact businesses of all sizes, through loss of 1P revenues, customers, retailer relationships and more.
The Bottom Line
A strong brand protection solution can help alleviate some of these issues by keeping a close watch for unauthorized activity and taking the right action at the right time.
GreyScout is trusted by businesses all over the world to protect their brands in the constantly changing e-commerce landscape through highly innovative features and quantifiable impact.
Want to dig deeper and know more about whether your business needs an online brand protection solution? Reach out to us to find out more and we will help you easily monitor online marketplaces, detect unauthorized grey market sellers, and stay a step ahead of those looking to damage your brand reputation.
