Insights

Implementing Brand Protection and Channel Control

The latest evidence suggests that consumer electronics manufacturers of the top brands are willing to abandon value recovery if it comes at the expense of protecting their brand and controlling sales channels. 

While there is near universal acceptance of single-unit consumer-to-consumer (C2C) or small business-to-consumer (b2C) sales on eBay, Amazon and other Internet C2C sites, original equipment manufacturers are reticent to relinquish bulk sales of branded products to an uncontrolled channel.

With this in mind, there are two very important rules that you should consider following when using a private marketplace platform to maintain control of your secondary channel.

1. Do not sell to bulk liquidators

Although it’s tempting to be seduced by offers of cash up front and the ability to quickly clear your warehouse floor by selling to bulk liquidators, you’ll quickly lose control over downstream sales.

If brand control is of concern to you, resist the temptation to use bulk liquidators or third-party reverse logistics service providers who will remarket your product as they handle disposition.

2. Require buyers to agree to Terms & Conditions

Terms & Conditions should be part of the registration process on your auction site, stipulating geographies, named accounts or other conditions that are to be permitted or otherwise. Should you wish to exclude current channel partners and bulk liquidators, you can mark them on a “Denied Parties” list that can be screened during your auction site’s registration process.

While we’re on the topic of Terms & Conditions, you might like to contemplate certain criteria, such as whether to include warranties, credit and shipment terms and serial number tracking to prevent returns. You may also want to consider having your products either de-branded or re-branded. This is a low-cost alternative that often gets overlooked, as while you’ll certainly sacrifice a certain percentage of the recovery that having a brand brings, it may still be a favorable trade-off for having brand protection.

Summary

When it comes to maximizing value recovery from a secondary channel, it’s important to use an auction platform that allows you the freedom to implement effective rules and regulations that will protect your brand and control channel sales. 

Through its own online private marketplace platform, FreeFlow provides the easy-to-use tools that will move your excess inventory through both existing and alternative channels, providing you with complete control over routes to market without compromising your brand integrity, pricing strategy or channel relationships.

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