Kris and Dustin interview Robert Wright from Private Label Protection and discuss how his firm helps protect your brands on Amazon and what you can do to protect yourself.
Learn more at https://www.privatelabelprotection.com/welcome
See More of Two Amazon Sellers and a Microphone here:
See more of Dustin and Kris here https://sellozo.com/blog/?category=podcast
or follow our YouTube channel: https://www.youtube.com/channel/UCImqJsK7Ru_hC2ZLnBC_f_Q
or our Facebook channel: https://www.facebook.com/sellozo/
Hear more from the Two Amazon Sellers and a Microphone podcast here:
Google – https://podcasts.google.com/feed/aHR0cHM6Ly9hbmNob3IuZm0vcy8zNzY0OTgwOC9wb2RjYXN0L3Jzcw==
Anchor.FM – https://anchor.fm/2amzsellersandamicrophone
Read the full text here
Protect Your Private Label Brand with Robert Wright
– Hello everyone and welcome to episode 66 of Two Amazon Sellers and a Microphone. Today kris and I have on a special guest with us. We’ve got Robert Wright from Wright Private Label Law. Robert, how’s it going, man?
– It’s going great. Hey guys. Thanks for having me on the show today. Appreciate it.
– Absolutely. Thanks for coming on. We haven’t the legal aspect of the Amazon world is something that we haven’t really dove into very much and there’s a lot to cover.
– There’s a lot to cover. It’s certainly the topic that no one really wants to talk about, right? It’s not necessarily really fun talking, you know if you need a lawyer, it’s kind of a bad day in your life. And so certainly there’s that aspect of it. I try to be a lot more proactive in terms of my practice and really, you know, try to avoid the, Oh you found yourself in a jam and let me help you out of it. It’s more of, Hey, you’re building this business for a reason, let’s build it the right way, let’s lay a solid foundation. Let’s protect your personal assets. coming up with a brand name let’s figure out something that functions as a trademark and is available. Let’s help you grow and scale in a safe way such that hopefully, you avoid the pitfalls of selling, which, ultimately everybody experiences to some degree but if we can be proactive about things and kind of head those off early days it seems like that’s, that’s better for everybody.
– That’s interesting actually because usually, you call a lawyer after the fact we can talk all kinds of horror stories that Kris and I have had in our own business, but interesting so you, and we’ll dive into all about your business but you actually like to work with the clients before there’s issues.
– I really do. I really do. And you know, it’s interesting, early days, I launched my practice like a lot of practitioners. I always knew that I wanted to support small businesses, I had a pinch for really, working with entrepreneurs. And so I hung a virtual shingle and was really kind of serving everybody at that point. And, I got a, had a Facebook messenger message from a friend/client and they said, they’ve been hijacked. Right? And I immediately imagined this poor guy like in the trunk of a car. like an image from Taken, right? The movie Taken. I’m like, Oh, you know,
– Oh yeah.
– Can you show me proof of life? What do you hear around you? like all the things that you see in the movie. He was like, no stop being stupid, Like listing it’s been hijacked. Do you do that? I’m like, what are you talking about? And that really kind of opened my eyes to the world of Amazon and what it’s like to sell on the platform. And so I jumped full in, I thought it was a cool business model. It certainly something that’s a little bit different from law, but had legal aspects to it and so I started selling on the platform as well and as I did that, I mean one of the things that I took away from it was, really, I know all this bad stuff that can happen. Right? But if I can proactively kind of, again, build that foundation shore up the house early days whether it’s through, choosing a brand name, that’s not already taken, whether it’s being smart in the types of products that they bringing the markets that they’re not infringing patents, the earlier I can work with a client the better just because again, there’s a lot of things that can be avoided with a little bit of education and a little bit of guidance early days.
– Yeah. Wow, you’re absolutely right. And let’s go back a little bit because you mentioned you got that message from a friend and they had this law
– It was already taken, literally a guy in the back of a truck with a collar, getting comfortable.
– Yeah. Hijacker. That’s always a scary word. So what kind of law were you practicing before? Or what were you doing before that?
– Yeah. Oh yeah. Yeah. I mean I’ve always done intellectual property law. I was coming out of college, kind of the heyday of Napster. When, you know, if you had a big T1 line you could all of a sudden take your poor little galore and expand it into like a master catalog of every song that you possibly wanted. I was really bothered by the fact, what did they teach you in day one in kindergarten, right? It’s you share with your friends, right? And all I’m doing is sharing music with my friends. All my friends are doing and sharing their music with me, and this is lovely, and this is great. I was really, I was pretty upset when like all that got shut down and I was again, headed out of college in the law school while this is happening. I’m like, I want to understand why that’s so wrong. And so started kind of heading down the path of copyright which led me to the trademark, which led me to patent. And so, as I spun out of law school, I very much knew I wanted to do that stuff. You get to work with interesting people, you get to deal with frankly cutting-edge legal issues. I mean, the law always really lags behind technology and the internet becoming what it’s ultimately become and frankly, where it’s going. There’s just, it’s a lot of outside-the-box thinking. So knew I wanted to do that and really didn’t want a physical brick-and-mortar office never had an interest in that. And so I launched what I believe is the first virtual law office in Kentucky and I have always operated virtually kind of filling that niche between kind of the legal zooms of the world that are kind of do it yourself sort of fill out the form, answer the questions sort of thing, and big law, you know, fancy office downtown nice furniture secretary, really big bills. To me, there’s a sweet spot kind of in-between where people need, top-shelf legal guidance around matters, such as trademarks, copyrights, and patents, and leveraging technology for me to be able to deliver those in a cost-effective way. It was kind of the mission and purpose of the practice early days and it worked well, but really, things started to accelerate and grow when I doubled down when I niched down and said, “You know what, this private label stuff, Amazon law,” “I’m all about it.” I really want to just go all-in on that. And I’ve been doing that for good the last five years or so Amazon pretty much exclusively.
– I love that you’re like like you’re a seller like you’ve been at it And so if somebody comes to you, there’s not like explaining what’s going on. Like, I don’t have to explain why I got a letter on it. Like I can say, Hey, Rob, I did this and you understand it.
– No, I did and I mean, that’s honestly what I signed up for I mean it was twofold, again, e-commerce is interesting, private label is just being able to take a product that already exists, you put a brand name on it you get it to market, you sell it, you do it all over again. That was just intriguing to me. But I also, I’ve always wanted to be in a position to really understand the plight of my clients to be able to serve them better, and I thought there’s absolutely no better way for me to do that than to jump headfirst into this thing and so I sell here in the States, I sell over in Europe I have what I considered a very much a global business multiple skews. I’ve had multiple brands at various points in the life cycle of the business. I’ve had my accounts suspended, I’ve had my listings suspended, I’ve received notices you know, no one, I don’t care how much knowledge you have. You know, sometimes you goof up. Sometimes you choose the wrong keyword, right? You didn’t know that was a brand name. Doesn’t seem like it’s one, but the next thing you know, it’s putting your listing in jeopardy. And so, you know, it’s been quite the roller coaster ride and I’d do it all over again a hundred times for sure.
– Yeah. I really love it, I keep popping up. I like that you’re in it. Like, that’s such a huge, huge win, especially for people starting out, they can, I need a brand name. How do I get a trademark? What I gotta do. So that’s a huge bonus for anybody out there who needs any type of protection or wants to start a brand.
– Robert’s the guy, he’s in the business. He knows what’s going on.
– I appreciate it.
– So go check him out.
– That’s very kind, I appreciate that for sure.
– And it’s also, I mean, the fact that your niche because I mean, people who started Amazon businesses people like the three of us talking here. I mean, maybe not you because you’re always thinking about law. Legal issues are not on your radar when you’re starting this you’re thinking, Oh my gosh, I want to talk to a supplier, I can’t wait to get my first product here, you’re looking at what’s selling out there and then you get super excited about your first sale. And then you don’t and, all the things that are the details like am I infringing on a trademark is it a patented product. Did I just buy 5,000 units of something that I was going to not be able to sell? You don’t think that, and I can speak from plenty of experience though, Kris can too, that is a terrifying email to get or a letter to get in the mail, a cease and desist
– it is.
– Throws you off because it’s not what you were prepared for. You’re prepared for, you’re prepared to launch this business so you can quit your day job.
– I was going to say, no one puts that reality that you just described on the YouTube channel or marketing the course or in the Facebook app. But, but it is a reality of selling, right? It’s a reality of doing business online, and I think about, receiving a cease and desist letter, whether it’s communicated directly vis-a-vis Amazon, that someone’s complained and now they’re saying, Hey, we took your listing down and you need to do these following things. Or you actually get communication directly in the mail or via the platform, that’s a really scary feeling, right? There’s this notion, there’s this assumption that man you’ve done something wrong because somebody, is now pointing their finger at you and saying you’re in the wrong here. I always take those with a grain of salt, right? I mean, until you’ve actually received notice of a lawsuit right? Or that’s a really big step, right? That escalated quickly. But you know as you receive notices, I mean, don’t assume that you’ve done something wrong a cease and desist letter is an opinion. Effectively, it’s an opinion from somebody in different varying levels of opinions, right? If a cease and desist letter comes from another seller directly. They didn’t invest in legal counsel. That tells me a lot, right? That is some other person’s opinion. We all know on the internet people have all sorts of opinions about everything, you want to be mindful of it. You don’t want to just throw it away, but at the same time, you want to take it for what it is. If you’ve received a cease and desist letter and it’s from your law firm, okay. Is it a small law firm? Is it a boutique practice? Is it a big law firm? How much did the person complaining invest in getting this letter over to me? Because that’s going to tell me a lot about, well, how serious or how big of a deal this is. Right? And then certainly if you receive notice of a lawsuit that’s been filed, that’s a whole other thing you know, you’ve got to take that super seriously. But at the end of the day, until that claim has been adjudicated and a judge/jury weighed in and said you actually did something wrong here. There’s a lot of opinions floating around at that point. So, give yourself a little bit of grace when you receive those letters, take them for what they are, but also, get in front of somebody who knows what they’re doing to be able to interpret, what does this mean? What I need to worry about here, and how much of a risk is this to my business.
– Whenever those letters come or those emails come my heart just sinks. I’m like what the hell
– It’s scary, it’s scary.
– because you don’t know what you don’t know, right? And so, one of the things that I’ll work with sellers especially in the early days is how do you avoid that, right? How do you get smart around trademarks and not using someone’s trademark term, a competitor’s brand name, putting that in your listing title, or even on the back end of your keywords, you want to stay away from that, right? Because that’s going to create an opportunity for people to send that letter and come after you as you’re sourcing products. Right? The more interesting, the more dangerous the product is, right? If something’s unique, if it’s novel if it stands out, that should be a red warning light of just patent, patent, patent, patent. Go find something else to sell. There’s more fish in the sea. Stay away from all that sort of stuff. A little bit of education, early days around those points will really save you a lot of heartburn and headache down the road.
– Yeah, for sure. All right. I’m going to tell you a little, a quick story of something that happened to me and it’ll be a good warning story, I feel like for other sellers. And then I want you to, if I had to come to you before all of this and work with you I’d love to see how you would have helped resolved, or helped guide me away from this problem. But regardless, the first product I launched was my best seller for many, many years. The brand registry, I wanted to get a brand registered, so after I’ve been selling for a long time got like 500 reviews, this product’s killing it. I decided to get brand registered, so I applied for a trademark.
– The second, I applied for a trademark and, I guess they were like open disclosure or whatever happens with trademarks. I got a cease and desist letter from a huge, huge company, and they were very big saying you, we’re going to challenge your ability to apply for this trademark. It’s too closely related to our brand.
– Let’s talk with a lawyer. It was going to be super expensive to fight it and just had to work it out to where do the trademark and spend a whole lot of money with legal fees, so it can happen. I think what happens to a lot of sellers is, you launch the stock, you launch everything and even branding is sort of secondary to you, but now you want to open up with brand registry and so you apply for the trademark. Well, that can open up a can of worms
– Possibly. Quite possibly. Yeah, no, it’s an interesting question, right? I mean, one of the things that I’ll work with early days for folks, again, it’s this notion of as you choose a brand name, does it function as a trademark? Meaning you don’t want something that describes the product. You want something that is coined an invented term like the more, you know, arbitrary, capricious, made up, the better, just because that’s the strongest type of trademark you can possibly have, right? So early days as people are coming up with their private label brand helping them kind of push them towards that end of the trademark spectrum, as opposed to something that’s descriptive. or even suggestive of the products outside of the legal frame, certainly there’s merit to having branding that kind of speaks to the types of products I get that. But legally speaking, we want to move away from that. But then that second piece of the puzzle is this brand name that I’ve come up with, is it available? Right? I always, any attorney what their salt as they do trademark registrations, is going to use a clearance tool to go out and look for all the linguistically similar marks that exist, right? Because if there are marks that are similar to yours that are already registered already out there, they’re going to make getting registered very difficult. And it sounds like you’ve kind of had the inverse of that you had a Mark that was, you were using you were getting great traction on the platform. Then you go off to register it kind of, keyed in this bigger brand to come in and say, no, no, no, no, no, your mark is too similar to ours, You can’t use it, we’re going to squash you, right? Again, proactively, maybe early days had you come to me and said, “Hey, I’m going to launch this product.” “I’m thinking about this brand name.” Maybe we find them early on we say, well, let’s change the brand name because this is going to be too similar, we want to avoid that. We come up with a different brand name, you never experienced that problem. But I really do believe in the mindset of whatever the problem presented you work the problem, right? So you’ve got a situation where a larger brand has accused you of what’s called the likelihood of confusion. Meaning the belief that a consumer is going to think that your product comes from the same source as their product right? Well maybe that’s true, maybe that’s not. likelihood of confusion is actually it’s a pretty complicated analysis. What we care about is how do the marks look? How do the brand names look? How do they sound? What categories of products are they associated with? Within those categories, what actual products are we talking about here? What types of consumers are buying these products? Are they sophisticated? niche, boutique customers, are they, the guys and gals running around your Walmarts and your Targets, just your general retail type folks. What are the channels of trade? Maybe these move through a specialty-type store distribution channel, maybe they’re just publicly available to anybody. All of these factors are kind of mixed around in a pot and a determination made as to whether or not there’s a likelihood of confusion. So it’s not a simple effort, right? And so really I would want to run through that analysis to see okay of all those factors which ones weigh in our favor, which ones hurt us? Right? And is there the opportunity to coexist, right? You know, large brands with large legal budgets love to just kind of snuff out the smaller guys because it’s cost-effective, it’s easy. Right? But I really believe if you have merit to your claim, right? You go through that analysis, you figure out wait a minute, I’ve got, had a little bit of traction, the likelihood of confusion isn’t just about how they look or how they sound, there’s more to that, right? So maybe I’ve got an angle here, maybe if I’m only selling on Amazon and I know that everything is so keyword-driven that actually, you know, that matters here, right? That’s going to make me stand out from this brand where their stuff is just plastered all over the place. Maybe they’re not even really effective on Amazon. Maybe that helps me, right? Putting that into the mix, using that, to get them to the table, to talk about a coexistence agreement, right? Hey, we just wants brand registry on Amazon’s platform because it opens up all these benefits to us. We’re not going to branch into other things we’re happy to just kind of wall this off in a nice little place on the internet. Are you good with that? Right? And really put up a fight because you’ve got a little bit of merit. I think that would have been an interesting discussion. I would also point out that a lot of people don’t understand that they think that you have to register a trademark to have one, that is not true. Trademark rights arise upon use. And so soon as you take that brand name you slap it on a product, you have rights in the geographic area where you’re selling. Now certainly with e-com and you’re selling kind of everywhere but not really anywhere, and so registration absolutely makes sense. And I don’t know the specifics of the brand that kind of came after you, but What you did tell me is you had that brand name you were selling for a while, you had a lot of reviews that to me you add a brand footprint somewhere and common law rights at least in that geographic bubble if we could kind of piece that together to say, “Hey, we’ve got rights. Maybe our rights predate yours.” “So why don’t we talk about you” “creating a likelihood of confusion with us” in this small little geographic pocket.” Again work the problem, there’s always an angle, maybe a coexistence agreement could have resulted from that at a minimum to allow you to brand register and continue with that particular skew.
– Should have called him.
– This is why you need someone on your side and someone who’s in it for sure. Yeah. I actually ended up with an agreement to co-exist, I guess.
– There you go cool, and oftentimes when you’ve got that sort of potential confusion, it’s a good compromise, right? You know, it, I think this is one of the areas whereas you think about the why right? Why did you want the trade? You wanted the trademark because you wanted brand registry, you wanted the additional, the enhanced brand content. You wanted additional advertising exposure. You wanted brand enforcement on the platform. If that coexistence agreement gets you that why right there, it opens all those doors, well great, that’s really what you were trying to do in the first place. So why not co-exist? I think whatever the legality is that you’re dealing with you have to always understand, why are we going after this? What are we trying to do with this? Is it about protection? Is it about building assets in our business? Is it about something else? And making sure that whoever’s driving that effort, understands that why so it can be achieved, legalities for legalities sake just doesn’t make a whole lot of sense to me. You always have to have kind of a good strong business driver that’s supporting the effort.
– So interesting. Yeah. It’s so nice to actually hear a lawyer who’s in the space talk about something like brand registry
– I wasn’t getting that. That wasn’t, my conversation it was purely about the trademark. I think that you come at it at an angle I think this is where you’d be such a benefit for sellers just to work with right from the get-go because you’re in it and you speak the language. What, does it look like for sellers? Let’s say we’ve got someone listing right now, who’s just launched their brand or getting started or whatever. What does it look like to work with you right from the beginning? How does that arrangement work?
– Yeah, so I mean, one of the things, from a fee perspective I do everything on a fixed fee basis, right? And I also bundle my services with a lot of kinds of non-legal related services. So I have a design team that I work with so that if you need a logo, a proper logo, not something that’s done by some guy on some site that charges five, $10 not naming any sites. But I think it’s a really nice logo that’s well done. I kind of look at the end result, right? So like, if you’re going to brand register, the trademark is the key to entry to that, but then what do you do? Right? Well, you need a better listing. So you need a framework for that. You need logos, you need labels that make your product stand out and actually look like, you know what you’re doing? You need to look like a legitimate, good business. So whatever package, whatever I’m working with a client, the legalities are certainly a key component, but there’s also, I want to bring those business aspects to it because being brand registered without, an A-plus content template, without a proper logo without a proper label to help, make your product stand out and look, the Pass Muster with Amazon, it doesn’t do you any good. Right? And so really kind of packaging together, the legalities with design aspects I think is a really, it’s an interesting thing to do. It’s one of the things that has been really well received by my clients. So certainly doing that, and then just, other issues as they kind of bubble up I have always hated hourly, I hate tracking my time so I don’t work hourly. I do a fixed fee, a flat rate, that way selfishly I don’t have to be looking at a clock. My clients always have the comfort of they know that whatever the issue is it’s going to cost X to be able to handle it and get solved. It’s just a win-win, and frankly, I think the legal profession as a whole is moving more towards certainty just because it’s gotten a lot more competitive. I think that’s a good thing, nobody, the days of, well let me just bill you for thinking about the thing that you might be asking me to think about, that’s well in the past, that is no longer the case so the legal space is much more competitive, and frankly, I think that’s good from a client perspective, for sure.
– That’s unbelievable from a client perspective
– You bring up a good point. There’s nothing worse than that open-ended, how long it’s going to take. I mean, I’ve had conversations with lawyers before where I get this wide range. Well, if we get this outcome, it’s this amount, but if we go, you know, if they start fighting it’s going to be five times that much. And we’re like
– Yeah and I think it kind of depends upon the nature of the work, right? So I do a lot of transactional work in terms of business formation, like, okay, cool. I know what that effort is and how long that’s going to take trademark registration same thing, copyright registration, the same thing. If we’re dealing with an account suspension or a listing issue, I mean, within it, there’s a known universe of outcomes that can result there. So I do have the luxury of being able to kind of say for this particular service, here’s how much it would cost. You know, if you’re doing litigation or something like that, I can understand that being well It depends. If we settle, it’s going to be this, we don’t settle, it’s going to be that, there is that aspect of things but even on matters where maybe I’m doing a cancellation proceeding I have a client that’s trying to get a trademark through and it’s being prohibited because there’s an existing mark that’s out there. It doesn’t seem like that’s actually being used anymore so we have to formally cancel it. That’s a judicial proceeding but it can kind of be chunked out into meaningful fees, such that, again, there’s some degree of certainty depending upon what happens. So all of that’s very possible. And frankly, again, I double down on it, a bunch of, older gray hair lawyers are probably just yelling at me right now but the legal profession is really moving that way and should be moving that way.
– One of the things that some do is, they always have to have or they need to get liability insurance. Does that? And this is a question we got on YouTube here. Does a commercial insurance policy, does that automatically protect you? Or is that something that you’re going to have to get some separately to do that?
– It kind of depends. And I mean, certainly, as it relates to insurance it’s one of those that and sales tax are kind of the dirty little secrets of Amazon that people, Oh I know I need insurance, but I don’t really have it, they’re not going to ask me for it here until I’ve got three consecutive months of $10,000 in sales. Yeah. As you think about insurance I think that you’re well served to get with a trusted insurance broker, right? To really understand your business, understand the e-comm space and they are out there. There’s a good, a good number of them out there that really understand Amazon, which is great but it’s going to depend upon the nature of the products that you’re selling. And I think about insurance as being, Amazon requires it, so we have to have it and that’s great. But also I think of insurance as being, it’s that pool of money that’s there just it’s that rainy day sort of scenario, right? That we can tap into if we absolutely need it. Right? When I think about liability, I think about liability in a couple of different layers, certainly being having a bucket of money that if it were ever called in because a product that I’ve sold is infringing or it’s injured somebody, that insurance money is going to keep my business from just crumbling in on itself, right? And I want that, that’s a good thing but I’m also really mindful of just making sure that even if I didn’t have that pool of money or that pool of money, wasn’t sufficient, that all of my personal assets are going to be removed from the field of play and that corporate structure that I’ve created is actually going to be there for me when I need it. One of the biggest mistakes I’ll see sellers make is they’ll rush into things. That’s kind of, that’s like you were saying, like, they’re so excited, they just want to get going and sell the products and get moving and they don’t form any entity at all, they’re just a sole proprietor. In fact, there’s a lot of people out there it’s that whole entrepreneur mindset of, I just move fast and break things, right? And then figure out the legal stuff later. That is the dumbest thing you can possibly do from a legal perspective. If you are selling physical products online, I don’t care if it’s Amazon or Shopify or some other, you spin up your own woo commerce website, whatever it is, right? You’re in the stream of commerce, right? And everybody who’s touched that product whether it’s the manufacturer, the distributor, the wholesaler, you, somebody else on the resale market whatever it is, is jointly and severally liable if that product injures somebody, right? And so understanding that, that regardless of how small of a role you’ve had in that entire stream, right? That you are on the hook for everything if somebody is injured or individually or collectively everybody’s pulled into a lawsuit I want to make sure that the only assets possibly at risk are the business assets that I have. Not my house, not my car, not my 401k, being a sole proprietor is not something that you want to do if you’re selling physical products online. So having a proper structure, being adequately insured for the products that you’re selling, right? If you’re selling knives, you’re going to have a different, you’re going to have a different level of insurance in something If you’re selling speaker brackets or the like. it matters the types of products that you’re selling, again, I think that’s one of those things that early days, just because something has a high BSR doesn’t necessarily mean that’s something that you want to get involved in, you’ve got to be smart about your product selection not only from a patent perspective or a copyright perspective or a trademark perspective but also know, is this thing gonna hurt somebody? Like, what’s the possibility that somebody takes these supplements that I don’t really know where they’re created or what the manufacturing process is. You ingest them and all of a sudden keels over dead, you kind of need to be smart in the types of things you bring to market. Just because makes the money, doesn’t mean that’s the business you should be in.
– And I remember thinking when I first started as I’ll just go, I’ll search this product, it was an electrical product. Got a sell, sell, sell. And I got an email from a customer saying, that they got hurt somehow, or it was damaged somehow. And that was like the come to Jesus moment. I was like, all right, if I’m going to continue with this I need to get going with it.
– You need to really be smart about it. And you need to understand, again, I think if you think about it and I’m not trying to be like Mr. Risk person, right? But I guess that’s what I am a lawyer. I see risk everywhere. But I think you need to think about risk from an operational perspective but also a legal perspective, right? If you’re going to sell electronics, great, there’s a lot of money that can be made in electronics. Understand your supply chain, understand what their process looks like, make sure that they’re certified, make sure that they’re, you know you’re inspecting their facilities. Make sure you really understand, yeah these are good solid products that are being brought to market. They’re not just randomly being assembled someplace. You don’t really know what’s in them, or how they work or how well they’re put together, there’s an operational aspect to this whole thing that I think a lot of you a lot of courses, a lot of gurus, a lot of YouTubers, a lot of whomever, just kind of gloss over. I just find something that’s number one BSR, go source it, bring it to market, make millions of dollars, go retire on a beach. It was a little more complicated than that. There’s a little more thinking that needs to happen around that risk points if nothing else
– For sure. Those though are great points that you bring up. And this is all stuff that every seller should be aware of right from the beginning, or at least get in touch with you. We can…
– We can at least start talking about it and get them thinking.
– For sure.
– Let shift gears and talk about suspensions because account suspension, that’s a whole another thing. That’s well, that’s another bad email to get in the morning when you wake up. What’s the most common reason for an account to be suspended on Amazon?
– You know, it’s interesting accounts suspension seemed to kind of come into two buckets. There’s the initial kind of deactivation or suspension because Amazon’s trying to verify you, right? That was a real big problem last year. It seemed to me that, in early 2020 Amazon realized, listen we just can’t hand out accounts to everybody, we need to make sure that people aren’t gaming the system. We need to make sure that those who sign up for an account can actually verify who they are. Right? And so they started There’s the dreaded utility bill suspension. I need a utility bill. Right? And so that that carried on throughout all 2020, a lot of folks with virtual addresses that were really struggling with that of saying, well, I don’t have a utility bill because I’ve got a virtual address, and I go where my laptop takes me. And so working through that process Amazon’s actually kind of fixed it a good bit. Now, as you create a new account, it’s a live webchat with somebody where you spin up you get video interviewed by somebody, it’s like literally walking into a bank, you’re presenting your documents, and somebody saying, yes, you are who you are, there’s your bank account. Amazon’s really done a nice job of kind of fixing that process, creating security and certainty around the platform that people with accounts should have accounts. And they’ve streamlined that process but there’s still a lot of people stuck with that utility bill issue, kind of from last year. I was on with some folks having difficulties in the UK about that, just earlier today. So there’s kind of the, you know, I just got up and running and I immediately got suspended sorts of the issue but then there’s also once you’re two markets, it has to be, kind of an intellectual property infringement issue. It’s somebody that has chosen to sell a patented item and they didn’t even know what a patent was, right? And so now they’re being accused of patent infringement. It could be somebody that, I’ve seen things when the kind of the gift arena, like a bachelorette party, party favor type things that all copyrightable sorts of materials, someone’s selling them, they didn’t have proper permission, didn’t even think about copyright, but now they’re being accused of copyright infringement and their listings being taken down. So it has to do with a lack of understanding of, the type of intellectual property issue whether it’s patent, copyright, or trademark, inadvertently infringing that, more often it’s inadvertently infringing that. And then unringing the bell when they’ve done that. I actually think there’s a lot of really bad advice out there around plans of action. You know, you can Google a plan of action and you’ll find a million templates and scripts. I would suggest to folks not to use any of those. I think the best plan of action if you find yourself in a spot where your listing has been suspended it is something that you author yourself, right? Or you can hire a professional obviously to help you with it, but it is not a templated sort of thing. Amazon has seen all of those, they’re familiar with them and they will immediately flush them out of the queue, they will not take you seriously. A good plan of action is going to do a couple of things. One, you’re going to acknowledge the root cause. Why did you end up in this situation in the first place and be honest, fess up? If you screwed up, say I screwed up, I didn’t know anything about patents. Clearly, it seems to me I’ve sold a patented item. Oops, sorry about that. They then want you to explain, well what did you do to fix the problem? Right? How did you correct it? What actions did you take immediately to address this? The root cause that got you here? And then why is it never going to happen in the future? Again, you’re not going to want to use a templated script for that. You’re going to want to come up with meaningful sorts of actions, things that you’re actually going to implement in your business to do and offer those up to Amazon and kind of work through that process. I will tell you people who have had listing suspended this is even, a couple of months ago I used a trademarked term in one of my listing titles. Now, admittedly, it was a horrible trademark and it shouldn’t have been trademarked. I even thought about trying to cancel the trademark because it shouldn’t have issued in the first place but I thought that’s a little bit much. Let’s just, again work the problem in the simplest easiest way. And I just, I did that very analysis, the root cause of me being here was, I used a trademarked term in my listing title. The immediate thing that I did was I removed it. Right? And the thing, why is it never going to happen again? I’m always if there is even the specter of a possibility that I’m using a Trademark term, I’m going to go to uspto.com, I’m going to search it, I’m going to make sure that it’s not there and it’s free and clear and boom, I’m gone listings back up and running. Like it’s that easy, but you have to put meaningful plans of actions together, not just scripts that you find on the internet or in some forum. More than likely those aren’t going to work for you.
– Good stuff. I mean, that’s exactly what we need to do.
– All right. So I got a question. Who triggers these suspensions typically? is Amazon internally triggering these or are they responding to complaints? And that’s what triggers them?
– A little bit of both. So, it’s really interesting. Amazon gets a lot of salt thrown its way for kind of brand enforcement and counterfeiting and the like, right? But they’ve done a really good job. I think they learned kind of from eBay and other earlier marketplaces where infringement and counterfeiting just ran rampant on the platform, it really devalued the overall value of the site. Right? So Amazon’s trying to figure out, well how do we make sure that doesn’t happen to us? Right? And so with brand registry kind of the transition from brand registry, 1.0 to 2.0, which required a registered trademark, that was certainly Amazon, kind of upping the ante in terms of, being serious around brand enforcement, right? They’re really going to go all-in for companies small sellers and the like that have intellectual property protected Visa via trademark registration, right? They’ve also created their transparency program, which I think is a really interesting program in terms of what I think operationally kind of gating a listing in a lot of ways that only products as they’re shipped inbound that had those special codes on them are being put into inventory. If the product is trying to be listed against an ACE and they don’t have those codes, they’re just flushed out to remove, they never make it. It’s a really nice way to make sure that good authentic products are making their way to the ultimate end consumer. There’s also the Project Zero Initiative that they have which is basically an algorithm and AI that runs around on the platform, looking for infringement, dealing with it before it even, someone has to complain. So, as you think about these complaints that are kind of fired off, it is a mix of Amazon kind of policing itself either directly or through one of these programs. It’s also, especially the larger the brand. There’s a number of services that they’ll employ that literally just go and look at marketplaces and file complaints. Sometimes, they’re well-founded, other times they’re a little bit sloppy and you can find yourself caught up in a complaint where you really shouldn’t have been. You know, everything in between, but it’s a mix. And it’s something that you’ve got to be, have a plan of action for if it happens to you because it will happen to you. I mean, if you are selling any degree of anything any meaningful volume on the platform, certainly people are going to be looking at you and if they can find hope and a chink in your armor, they’re going to come after you.
– For sure. And everybody, like, if you’re importing from China, that transparency program, it was a good roll-out on Amazon’s part. We just simply, it’s just like a QR code right? That they just add to the product?
– Natural code. Yep. And individually, you know, issued by Amazon, each one unique, you put it on the packaging and they did a real, I always think it’s really interesting to pay attention to what Amazon’s pushing. Right? And I know they made a real big PR effort around transparency. They were happy to, I know I got multiple emails about, Hey I’m your transparency rep. And I’d love to talk to you and we’re happy to we’ll put the codes on the products for you. I mean, they were so all over it that it made you think, you know what? I really need to investigate this because if Amazon’s saying this is a really big deal this is something that’s meaningful to us. It certainly makes it worthwhile to investigate that for your business for sure.
– Yeah. And you’re right. It does kind of like secretly gate the listing because if they don’t have it, anybody can send their item in and now you’ve got hijackers.
– Exactly. I mean, it’s certainly, it’s not a hundred percent effective but it’s really largely effective. And I think if you are experiencing any sort of what I’m going to call counterfeiting issues on the platform I think a mix of brand registry, transparency, Project Zero if you have a patent, one of the really interesting programs that Amazon’s come out with, is that neutral patent evaluation process. Instead of actually going off and suing people to enforce your patent rights, you can participate in this program, put up a little bit of money, have Amazon Covenant Neutral Arbitrator then say, “Hey, listen, you’ve been accused of this.” “Come to the neutral patent evaluation process.” “If you think you’re in the right participate.” “If you win, you get your money back.” “If you don’t, well you lose and your money is forfeited” “and your listing comes down.” Again at a smaller price tag than actually going out and litigating. It’s a nice head nod towards, giving sellers who have rights that need to be enforced an effective mechanism by which to do that, and also it’s a fair enough shake for people who are accused of wrongdoing to say, “well, listen I don’t really think I’m doing anything wrong” “but you know for a cost” “that’s significantly less than a lawyer” “certainly less than legal fees, I can go,” “I can have this play out in real-time.” It’s a nice kind of, it’s not perfect, but again, it’s a nice head nod towards Amazon, trying to balance the equities on the platform between people who have rights and people who are accused of wrongdoing.
– Yup. And Dustin, I talk to sellers all the time and it’s like, Oh I don’t want to sell on Amazon because then my price goes low or people hijacked my listing. And these are actions Amazon’s taking.
– These are actions that you can take. And I just missed that in terms of I don’t want to sell on Amazon. Why would you not want to sell on Amazon? It is the world’s biggest mall with tons of people running through it every hour of every day. Right? I think if you understand the reality of, listen, as you do well on the platform, you know business is war, right? Like, I mean, I don’t care if it’s on Amazon or otherwise people are going to come after you, right? Competitors are gonna come after you for market share, right? Customers are gonna come after you because they didn’t like the product. And they’re going to leave the bad review. Your suppliers are going to look for angles to come after you. Maybe Amazon even says, Ooh, man this is really doing great in the algorithm, let’s spin up our own competition here. I mean, that’s just, guys, if you don’t want to do that, then you know you don’t want to be in business, business is war, that’s the reality. But if you play the game and you understand, listen I can avail myself of brand registry, I’ve got transparency that I can participate in, I can do Project Zero, I’ve got a neutral patent valuation process. I can effectively monitor, my copyrighted product photos, on the platform and other platforms as well. There’s a lot of legal mechanisms that if you can just, put them in a playbook you can really do a great job of enforcing your rights. Yeah. It’s effort. But, frankly, if you’ve got people kind of coming after you you’re doing something right, So a little bit of effort worthwhile.
– That’s a great take. Yeah. It’s perfect. It’s perfect. I mean, that’s spot on. If we talked to another seller that he was selling a couple of units in a couple of 100, 200 a month and then he got really good and then started to sell like five, 600. And then all of a sudden he got hit with a claim and it’s because the big guys saw him.
– Yeah. Yeah, exactly. Yeah. I mean, you’re ringing a bell when you have any degree of success but you’ve got to be ready for it. And again, if you have your ducks in a row, not only from here are the tools at my disposal in terms of enforcing my rights but here’s what I’m doing proactively in my business to secure my rights. It’s amazing to me the number of people who just, take stock images and throw them into a listing without really understanding where they came from or what if they have the rights, appropriate rights to be able to do that or even worse just copying and pasting from somebody else’s thinking that they’re not going to notice. It’s really amazing to me. And I will tell you copyright is one of the easiest things to enforce online. I invite everybody, take your keyword, take your brand name, plugging into eBay, plug it into Alibaba tonight, and see what pops. I promise you, you’re going to find your product photos there. Do something about it. Just do something about it. It’s my record is like, literally, it’s like 19 minutes from the time I filed a complaint with Amazon to when the product photos were taken down, and it has nothing to do with me near the quality of me being a lawyer. It’s literally, it’s the Digital Millennium Copyright Act. It is a mechanism that Amazon has agreed to, to say, listen, to absolve ourselves of Copyright infringement, we’re going to create a process, we’re going to respond to complaints very promptly. And 19 minutes later from me submitting a complaint I’ve got somebody’s product photos taken down off the site. Not because I’m a great lawyer but because Amazon self-interested, and there’s a process and a procedure that allows them to absolve themselves from liability. So Digital Millennium Copyright Act, and 19 minutes later we got product photos down.
– You got it. I mean, that brand registry, you just simply report the claim and you’ll see what kind of infringement it is.
– Mind you, these are Amazon’s own statistics. 94% of the time for brand registered sellers are taking action on behalf of that seller. I mean, to me, if 94, in college, that’s an A, you get a 94 that’s an A, that’s a good score. I want that. And so, you know, if you’re not, if you’re out there and you’re not brand registered and you’re still kind of thinking about, well do I really need to do this? Like to me, it’s not even an optional thing anymore, like any degree of success in the platform not just from a brand enforcement perspective, but you think from a usability perspective, I, again I think this is one of the things we do ourselves. Well, if we put ourselves in the shoes of our customers, right? I bought so many items over Christmas, on my mobile, right? From a video ad that was served up to me, as I’m up on Amazon, I didn’t get into the listings. It was that video ad with that product spinning around and sparkles or whatever coming out of it. You’re like, Oh that’s great, I’m just going to buy that one. Boom, I’m gone to be competitive on the platform. You’ve got to have access to all of those additional, you know, enhancements and features that brand registry gives you, otherwise, you’re going to be left in the dust. There’s not, there’s just not the chance for success that there was a couple of years ago.
– Yeah. And you’re going to take this seriously. You’ve got to get a Brand registered. You mentioned Alibaba like international. And I kind of, when I head that way real quick, I’m not the only one, there’s a lot of sellers getting emails from companies or law firms in China saying that the brand that I own is going to be trademarked in China and I’m likely to lose out on that. Is there any fidelity to that? Is that real?
– So first and foremost, be a little bit suspicious of anybody kind of proactively reaching out to do you a favor, right? There’s a lot of, traditional law firms that don’t do that. Is what I’ll say. So, take it with a grain of salt, but the bigger point is that trademark rights are local, right? So when you, you know, it doesn’t it’s like I was telling you, I was saying to you before you registered your brand name you had rights in a geographic pocket, you didn’t need to register. As soon as you register in the United States, you have the entire United States as your geographic sphere of influence. Right? But that doesn’t mean that you’re free and clear in Europe. That doesn’t mean that you are free and clear in Asia or Australia. One of the things that I have seen actually with some asset purchase sales here recently there are companies in China that are watching the amazon.com space for popular brands and registering brand names in China, presumably to stop the export of goods because they were infringing of Marx in China. That is a thing that happens. Right now, there are ways that you can counter it with local council and kind of get around it but it does seem to be kind of a common play in terms of a little bit of legal extortion I guess, as it were right? Like if you pay me and get a license fee you can make me go away and you can continue to export your products. So it is certainly something that as you have a global business whether you’re selling globally, or certainly whether you’re importing from another country, it is something to be mindful of, It’s something to be aware of. And it’s something that should be done sooner rather than later, in terms of making sure that your rights are protected in those markets whether it’s just the production of goods or the actual distribution, certainly something to be mindful of.
– That’s good to know. That’s good to know. And then another point to that is the images. Like I remember when I first sourced my product, changed the color, a different design. And literally like five months later, the same image was on Alibaba and they were selling the same product. Like, how the heck did that get there? Is there any, what can I do there?
– Yeah. So the cool thing is, again that Digital Millennium Copyright Act that I was mentioning with regards to Amazon applies to all e-com platforms, Alibaba as well. So Alibaba has a mechanism by which you can report infringement complaints. It sounds counterintuitive because China has such a horrible reputation for IP rights but it really is an effective way to say, listen, I am the rights owner of this particular photo, here’s my registration number, here’s the microsite that seems to have my product photo on there. I want you to remove it. A very similar process to what Amazon has. It’s a little bit more involved, a little bit. The bar is a little bit higher in terms of the evidence that you need to provide, but I’ve helped a number of clients, get photos removed off of Alibaba, through that platform. So it’s not something that, you can send a cease and desist letter, my guess is, unless it comes from a proper Chinese firm, a supplier on Alibaba’s not really gonna pay it much mind. And so really leveraging I think whether it’s Amazon, Alibaba, eBay whatever platform that you’re kind of concerned about, try to use the mechanism that that platform provides to you as best as possible, as opposed to just kind of throwing letters around. If there is an IP rights process or protocol in place where you can go and submit complaints on the platform, use it. I’ve done complaints on Etsy, I’ve done complaints on eBay, Alibaba, Amazon. I mean, everybody has one, use that, work through that process, but really in order to be able to do so, you’ve got to have your ducks in a row. One of the biggest misses I see with caught with product photos, in particular, are not having the proper rights in them. So number one, copyright is really counterintuitive, right? Just because you pay for something doesn’t mean you own it just because there’s been an exchange of money in those JPEG files or those PDFs or those AI’s or how are their delivered come over to you that did not transfer the copyright.