Why seller monitoring matters, and the best way to act on gray-market sellers

As online marketplaces expand, the influence of third-party sellers (agents, distributors, resellers, gray-market sellers and others) is growing fast. According to a recent Amazon report, third-party sellers accounted for 60% of Amazon’s sales as of 2022. These sellers play an important role in helping brands enter new markets and reach more customers, but they also pose big challenges. Unauthorized sellers in particular can infringe a brand’s intellectual property (IP), and incorrect product information and reckless discounting put brand value at serious risk.

To overcome these challenges and hold your position online, effective seller monitoring and an IP protection strategy are essential. In this post, we look at why seller monitoring is needed, and in particular at strategies for detecting and acting on gray-market (unauthorized) sellers to protect brands and consumers.

Why seller monitoring matters: protecting brands and consumers by acting on unauthorized sales

Without continuous monitoring of unauthorized sales, a brand’s pricing strategy and image can be seriously damaged. Most gray-market sales are made by sellers who don’t have the brand’s permission to sell. They use the brand’s official product images without permission or undercut its normal price range with heavy discounts, hurting official sellers. If gray-market sales continue, they can lead over time to lower overall revenue and a shift in how consumers see the brand. An inconsistent customer experience can damage brand value, which is why monitoring gray-market sales is an important part of business strategy as well as brand protection.

1. Acting on gray-market sellers’ unauthorized use of brand IP

Gray-market sellers don’t have the brand’s permission to sell, and they’re mostly active on open marketplaces. On their product pages, they use the brand’s trademarks, logos, product images and designs as is, misappropriating its IP and potentially confusing both consumers and the brand about who the official seller is.

Beyond using the brand’s IP without permission, some add false information, risking misleading consumers. To prevent this, it’s important to spot gray-market sellers’ activity quickly and act on it appropriately.

2. Unauthorized sellers undermining your pricing, and how to control it

On marketplaces the brand runs officially, it can control prices. But on e-commerce sites in Korea and abroad that individual sellers can join, it gets harder and harder to hold a normal price range. When open-marketplace card discounts and membership discounts stack up, prices can keep falling. Systems that favor the lowest-price sellers to attract shoppers are another driver of falling prices. In this situation, official sellers can’t compete at the prices agreed in their contracts, which hurts online distribution as a whole. To protect official sellers and keep the brand price-competitive, brands need real-time price monitoring.

3. Securing market share by acting on gray-market sales

Gray-market sellers can be active on many marketplaces in Korea and abroad, so tracking their activity and identifying high-risk sellers is essential. With this data, you can get a full picture of the main marketplaces where unauthorized sellers operate, the products the market responds to and past sales records, giving you insight to expand your brand’s market share. And by acting on unauthorized sellers, you can grow steadily across markets and secure market share effectively.

4. Consumer protection

Unauthorized sellers are more likely to sell products of unclear origin. They may buy in bulk during a brand’s past sale and resell, or buy and resell counterfeits. This gives consumers an unsafe buying experience and can damage the brand’s image. To protect brands and consumers, it’s important to act firmly on gray-market sellers.

Tackling unauthorized sales with AI

To protect brands, consumers and product value, you need to monitor sellers, including unauthorized ones. There are many technologies and methods, but checking every online sales channel individually is inefficient. Some brands build dedicated teams or rely on consumer reports, but the most efficient approach is to monitor all online activity at once with an AI-based solution.

MarqVision’s online brand protection platform works with fast-growing brands in Korea and around the world. Trusted by Shinsegae International, F&F, CASETiFY, Lemaire and others, MarqVision’s AI offers a comprehensive solution that monitors counterfeit and gray-market activity on Korean and global marketplaces so you can build a response strategy. Build a strategy tailored to your brand, from high-risk sellers to revenue damage and analysis by country and product. Beyond brand protection, MarqVision helps brands grow successfully in global business and strengthen their competitiveness.

Check your brand’s gray-market situation today.

Further reading

• Gray-market sales:

  • Unauthorized sales of K-food and household goods directly harm consumer health and brand perception
  • Counterfeit K-pop merch and unlicensed sales: the highs and lows for fans
  • Consumer harm from buying unlicensed prescription drugs directly, and how to respond

• Brand protection:

  • Brand IP infringement: common cases and how to respond
  • Online brand protection: an essential strategy for brand growth
  • 10 brand protection trends to know in 2024