Amazon MAP pricing and problems with FBA resellers using authorized distributors

Check out this story about an Amazon FBA reseller getting an account ban, despite carefully following Amazon’s own policies. This came via Amazon Seller Central forums, which points to shortcomings in Amazon’s “authorized distributor” policies and the inability of brands to establish Amazon MAP pricing. Here’s an excerpt:

We are not new sellers. We purchase all legitimate, authentic items with genuine serial numbers and transparency codes on every single one of our items.

– They are ALL purchased directly from the Brands Authorized distributors (we have invoices.)

– Before we list the product, we went through the whole brand approval thing Amazon makes sellers do, which we followed by sending them invoices from the authorized distributor and sometimes even sending them the serial numbers of a handful of our products. All have been approved to be sold on Amazon. …

… We even had a brand owner email us saying he bought one of our items in order to “see if its really authentic or not” after initially, going back and forth on how our pricing on their item is “far too low”. After we stated that we never signed any contract with them, they resulted in using an “authenticity” threat towards us. Keep in mind, this is NOT Amazon policy pinging us for the items being unfairly low, this is just random buyers messaging us on Amazon telling us we NEED to change the pricing.

In short, the FBA reseller followed Amazon’s rules and still received an account ban. Despite being authorized by a legitimate distributor and using Amazon Transparency, the brand(s) objected to the reseller undercutting the official Minimum Advertised Price (MAP) on Amazon. But the brand was apparently able to to get the reseller shut down anyway, apparently through an authenticity complaint … despite Transparency stickers being applied!

The core dispute was really between the brands and their distributors, who are either unable or unwilling to dictate to the reseller to follow the brand’s MAP. Because the brands can’t get Amazon MAP pricing compliance through that route, and Amazon doesn’t obey brands’ MAP, the brands turned to Amazon to bring down the brand hammer on other grounds.

Amazon “Authorized Distributor” free for all

A weak link in this convoluted system Amazon has set up is the “authorized distributor” requirement for gated brands. Amazon does not have a database; the bots and/or some Amazon staff basically accept nearly anything that comes over the transom including “invoices” from other retailers or the brand’s own online store.

You can see this in action on YouTube and TikTok with Amazon retail arbitrage/online arbitrage “gurus” teaching new Amazon sellers step by step how to use Target receipts to get ungated for a certain brand. The typical method: buy 10 of the cheapest item of that brand on Target, use the receipt to get ungated on Amazon, then cancel or return the order. Here’s one such video:

The Target ungating method doesn’t always work, and the sellers can get busted later when brands complain. But it works often enough to be used as a reliable method for newbie sellers seeking easy street “passive income” on Amazon. Meanwhile, the damage is done to those resellers trying to follow Amazon’s rules.

Amazon’s policies, poor policy enforcement, and nearly nonexistent bars for entry (for sellers and distributors) have turned the marketplace into a free for all, with white hat resellers mixed in with black hats and ignorant new sellers. The brands don’t have patience to figure it out, and angrily go after any seller that they don’t like, regardless of whether they are following the rules.