New York, NY—Luxury brands may not want to sell on Amazon, but certain ones are likely to end up there anyway, through third-party sellers distributing gray-market goods. A recent analysis by luxury marketing consultants L2 found that 70% of in-demand jewelry and accessories brands turned up with unauthorized distribution in the Amazon Marketplace.
“Brands that have historically resisted partnering with Amazon have unintentionally created a vacuum for unauthorized third-party sellers to distribute branded merchandise on the e-tailer. The unauthorized distribution of goods causes brands to lose control of trade, pricing, and the customer experience,” says L2. “Analysis of Amazon Marketplace reveals that accessories brands are particularly susceptible to unauthorized distribution because of high margins, strong sales performance, and a lack of official representation on the platform.”
In a study conducted between July and September 2017, L2 examined six categories most likely to be listed by unauthorized sellers on Amazon. Those were: men’s watches, women’s watches, women’s jewelry, women’s handbags and purses, and men’s sunglasses. The category with the highest risk of gray market sales on Amazon was women’s watches, while women’s jewelry was the lowest. Men’s watches were the second-lowest.
Women's watches are at risk the most for gray-market sales through Amazon Marketplace. Men's watches, surprisingly, have a significantly lower risk, and women's jewelry, the least among six popular luxury accessories categories. Chart: L2.
The brands most likely to end up with gray-market exposure on Amazon are high-demand products with relatively high prices. Brands can mitigate that risk in a several ways, suggests L2: