Aaron Conant  0:18

Happy Wednesday, everybody. My name is Aaron Conant, I'm the Co-founder, Managing Director here at BWG Connect. We're a giant networking knowledge sharing group 1000s of brands who do exactly that we network to knowledge share together to stay on top of newest trends, strategies, pain points, whatever it might be that shaping growth in a digital space. I spend the majority of my time just talking digital strategy with brands I try to do 20 to 30 a week. That's everybody, from startups to Fortune 100 up every vertical. And it's through those conversations that we stay really topical on what's the biggest pain points and what are people trying to solve for. And when the same topics come up over and over again, we get a webinar like this, I'm also asking everybody, Hey, who's working for you and who's not. And that's where we get the resident experts as a whole. And so if anybody ever needs any kind of help with partner selection across the board, don't hesitate to reach out that we spend the most of our time doing during the days. And the rest of it is webinars like this, but we're gonna do close to 100 in person events. So also, if you're in a tier one city across the US, let us know, we'll probably be there multiple times with dinner over the course of the next year. So with that, I want to, I want to kick off the discussion today around brand control and controlling your brand, specifically, in the retail space and how important it is still an issue for tons of brands out there. And how do you maximize growth? How do you minimize cross channel impact? As far as pricing and a variety of other things, quality control, comes up all the time, we got some great friends, partner support is the network for I think, pretty close to five, almost six years now at Vorys eControl. Jessica, just great supporter, really appreciate everything you guys do. But I'll kind of kick it over to you want to do a brief intro on yourself and Vorys eControl. That'd be awesome. And then we will just kind of go around the horn quick with brief intros with everybody that's here on the panel today. Sound good?

Jessica Cunning  2:08

Sure. Absolutely. Thank you so much, Aaron. So hi, everyone. My name is Jessica Cunning. And I am joined by my partner Natalia Steele. And we're both lawyers. But I think we're pretty fun lawyers.

Aaron Conant  2:19

So true, Jessica so true.

Jessica Cunning  2:21

Thank you, Aaron. Thank you. But we are attorneys in a very unique practice group called Vorys eControl. And Vorys is a full service law firm. We're headquartered in Columbus, Ohio, but we have a really unique practice group. That's a subset of attorneys and non attorney professionals within our law firm. And this group really, for lack of a better term obsesses about how to help manufacturers control their digital channels in a legally compliant way. So if a particular brand wants to sell on Amazon 1P and they want to do that very successfully, we help craft a strategy from a distribution standpoint and an authorized seller standpoint to make that happen. If you want to sell 3P there, you know we want to make that happen for you as well. Regardless of whether that's through your own third party storefront or whether you're working with a third party seller. So I will kick it back over to Aaron, if you want to facilitate intros.

Aaron Conant  3:12

Yeah, no, get over. Dan, do you want to jump in and then we can go to Neil and I mean, Natalia you can jump in quick too. And then we'll, we'll jump into the conversation. Just a reminder to and I'll drop this in the chat that if you have questions along the way, please drop them in the chat or the q&a. We're going to try to answer as many of those real time as we can. So feel free to drop any of them in but then I'll kick it over to you.

Daniel Wright  3:35

Sure. Hi, I'm Dan Wright. I'm the president and CEO of Yard Butler. We are a brand committed to promoting the gardening lifestyle. We're a manufacturer of specialty lawn and garden tools, hose reels, metal fabricator products we manufacture down in Mexico and and sell to national retailers and online across country.

Aaron Conant  3:56

Awesome, Neil you want to jump in?

Neil Zuncic  3:58

Sure, my name is Neil Zuncic, I'm the eCommerce National Account Manager for PRN Pharmacal. We're a small veterinary pharmaceutical company based in Pensacola, Florida. We have a variety of different prescription and non prescription products that we sell online, namely our non prescription products through the Amazon channel working with Vorys.

Aaron Conant  4:22

Natalia, you want to jump in real quick to don't want to leave anybody out.

Natalia Steele  4:25

Yeah, no, not much to add to what Jessica said. I am a part of Vorys eControl group and my role is largely focused on enforcement of various programs that Jessica's team puts together so I'm the one who gets to yell at all of your unauthorized resellers. Thanks.

Aaron Conant  4:45

So Jessica, do you want to jump in? It looks like there's a few slides here and they'll kind of help guide the conversation as we go.

Jessica Cunning  4:51

Sure. So we invited two of our brand partners with Neil and Dan on the call today because we really feel like it's best for other brands to you from other brands, and not to hear from the lawyers that are really behind the scenes, because the brands are the ones that are on the front lines, they're the ones that are seeing the problem. They're first in the fire to try to figure it out. And we're here in the background to help work through it. So what we wanted to discuss with Dan and Neil today was working through what we call kind of the eControl client lifecycle, which is the control journey of starting in a state where perhaps there is just a myriad of unknown unauthorized sellers across your online channels, like think Amazon, Walmart, eBay, lots of different third party storefronts who don't know who they are, they're not sure how they got your product. But regardless, they're really disrupting the way that you intend to go to market on that particular marketplace. And this could be disruptions from a advertised pricing perspective, perhaps they're way below where you would like from an MSRP, or a minimum advertised price and that price, or perhaps it's from a quality disruption standpoint, they're pushing out expired product damage product, and you're just getting hammered and online product reviews. Maybe it's both. But regardless, you want it to stop. And so when we are working with a brand who's coming to us with those pain points, we kind of work them through this journey, which is like, Well, number one, what is the problem? What are we focusing on here? And then to what is the move forward strategy? And how do we get your internal stakeholders to align on it? Because ultimately, the control journey is a cross functional team of not just the president, but it's also the commerce lead the sales lead, and to a large extent, the customer service team on being involved. And so how do we bring all those people together and make sure that everyone is rowing in the same direction? The third piece is working through how do we design, a strategy that fits your organization's needs is going to accomplish your business objectives in light of just kind of the business realities that we have to account for. And so Neil and Dan are both great to be able to really kind of dive into like, how are their products distributed, and how did that impact the decisions that they made with respect to the strategies that they employed. That's where I spend most of my time at number three, then I get to kick it over to Natalia, and number four, and five, which is where you really get to see all the fruits of the labor come together, you get to execute and deploy that strategy, and be able to leverage the different controls that you've put in place to remove the various online disruptions that are occurring on Amazon, Walmart, eBay announced where, for purposes of this webinar, today, we're just talking about the United States, we can chat International, if that's of interest in the chat button, but just want to make it clear to you that my comments until these comments and meals and dance are with respect to the US at this point. And then last but not least, how to make sure that everyone's evaluating if it's working. So we want to make sure that we as outside counsel, as your outside attorneys are working towards accomplishing your commercial objectives, that we all want to make sure that we are staying on pace and really executing against what you want. And so how do we keep everyone on track and make sure that we're doing what we set out to do in the first place. So that's the eControl lifecycle. And Dan and Neil are going to really be offering their comments and thoughts and experiences on each part of this process. And so please, with any questions for them, or for us, put them in the chat, and we'll address them right then in there. So maybe, Dan, I'll kind of start with you for this one. And then we'll go over for Neil's perspective, but I think one of the things that business struggles with is that when they're looking across their brand and how it's being represented online, from and they're seeing these various disruptions, there's that moment in their head where they go, What do I do? Why is this happening? And so what do you have any thoughts or advice to offer brands about how to get your team to understand the why behind what they are observing on the internet.

Daniel Wright  8:55

Sure. So primarily, the the business problem that we're focused on was was Amazon was just crushing our retails they were they were suppressing them all the time. And it took us a while to realize it was a result of a variety of unauthorized resellers just buying and we've been in business for 60 years, we would sell anybody and people were just buying it at various discounts, whatever programs we had out there and throwing it up on Amazon at prices that were not sustainable, or eBay or Walmart or things like that. So our primary objective in moving forward with this program was to eliminate the channel conflict try and have consistent level pricing across all channels, brick and mortar, brick and mortar customers were pretty unhappy when they see really reduced retail prices on on Amazon and other online channels that made us appear significantly less competitive. And we just wanted to improve our margins by raising retails on Amazon. So that was the problem and our sales team recognized it but we would walk into into buyer meetings and buyers with literally just pull up our Amazon listings and say, Hey, you, we can't possibly buy this from you at this price. Because look at what it's selling for, we're not going to make enough margin. So it was it was fairly easy for us to identify as a team that we needed to start controlling our channels. This coincided with a focus or a refocus from by us on our online business, we realized that as a small brand, it's much easier for us to be effective on any online channels where we can have a larger impact, although I will say that we are now seeing that having control the online channels, we're getting more traction with our brick and mortar channel.

Jessica Cunning  10:41

And we always get questions about timing. So from the time that like your sales team started seeing that, oh, yikes, this is a problem. And the time that your team decided to affordably do something to address it. Was it months? Was it years? Was it weeks? Like what was that like for you time?

Daniel Wright  10:56

So it was it was about 12, 18 months? I mean, it was banging our head against this problem? You know, and we would have I had a lot of people in the company focused on this. We had the marketing team, we had the sales team focused on trying to identify who these unauthorized sellers were, it was a very frustrating process. And you get nowhere we would send our our own letters and notes and they'd be completely ignored. So it was about 12 to 18 months of really hammering on this problem. And then and then eventually we were introduced to you, Jessica at Vorys. And the skies opened up and things got a whole lot easier.

Jessica Cunning  11:35

Very flattering. Neil, what about your experience? And when When did when did PRN kind of recognize that there was an there was an issue? And how long did it take to get through to throw in the same direction?

Neil Zuncic  11:49

I'd say that it's probably was about three and a half years ago, when we realized that there was some concerns. And all the same things that Dan said we had these sellers that were driving the price lower on Amazon. And one of the challenges that we had in the animal health space was that we do sell through a variety of different e commerce sellers, yourchewy.com when you have your pet meds, a variety of others. And one of the other challenges, especially for our prescription products was that, you know, we need veterinarians to prescribe our products to sell our products. And when they were seeing this price disparity between what some sellers were selling our products for online versus what they needed to make in the hospital, there was a huge issue. We also have a premium product, and all of our products, prescription and non and we had some online sellers that had driven the price down to cost. And we wanted the ability for everyone to make more margin, we wanted the ability to for our products to be perceived as premium which they are. And that was a nip. That was definitely a detractor from wanting to do that. And again, it's very similar to Dan, we were introduced to Vorys. And we started working with you guys. And we're in much better shape now. But yeah, I mean, it's been a three year process. But I'm we're really happy about where we're at today. And it helped us with all those channels and helped us with the prescribing veterinarians, and helped us with eCommerce sellers that helped us with Amazon, they all kind of went together for us. And it really kind of harmonized to create a great environment for eCommerce, and brick and mortar, as Dan spoke to for PRN Pharmacal as well.

Natalia Steele  13:33

So Neil, and this journey, that was a few sounds like a few years, did the business first try certain things on its own until those no longer worked? Or was it more of a, we don't know what we're doing, we need to find an expert.

Neil Zuncic  13:49

I think that it was, you know, we thought about, you know, what can we do here? And then we started to consider, you know, how, what kind of teas do we have right now to make this happen? And, you know, we were selling wherever we could sell and one of the challenges was, you know, can we trust these sellers? Do we know who they are? Do we have a previous relationship with them? Are they representing our brand the way we want them to? And so, you know, we had conversations, and it got to the point, it became very clear that we were going to start to have we're going to have to have a higher level of conversation, obviously involving a legal entity to get us where we needed to go. And so, you know, you can do so much and you can have so many conversations, but at the end of the day, there's always going to be sellers that do what they want. And you know whether that's the best thing for PRN Pharmacal or someone else, you know, they're really doing what's best for their business. So definitely needed to take it a step further.

Jessica Cunning  14:44

How does your marketplace selling strategy kind of get factored into this problem analysis like did it make you think that Ooh, how we're currently doing this maybe needs to change or are we going to go all in and commit to how we're doing it? Can you both The to your Amazon strategy and how that factored into addressing the problem that the business decided to focus on.

Daniel Wright  15:05

Our internet strategy, we decided that we're going to focus significantly more on our online channels, as I said, because we have a lot more control. So it became very clear very quickly that Amazon is obviously the 800 pound gorilla. And and because they would go out and crawl every other site, they would suppress our offers on Amazon, if it wasn't consistent across all channels. So we realized pretty early that we had to also fix Walmart, and all the other channels, Home Depot, Wayfarer, all the other channels we sell on. So it quickly became apparent that we had to have a comprehensive strategy for how to deal with with eCommerce. And then that track back to our brick and mortar accounts, we sell to a lot of national distributors, harbor harbor distributors. And they sell to four or 5000 different customers, and that was, you know, our heads would explode. How are we going to get our hands around this? Because we were quite unsuccessful at at dealing with the individual dealers. So we needed to, as Neil said, take it up a notch and start working with a holistic, comprehensive strategy.

Jessica Cunning  15:22

And how were you selling your products on Amazon? At that time? Dan, how was Yard Butler selling was it 1P was it 3P?

Daniel Wright  16:22

we started with 1P years and years ago, we did that until it wasn't viable just because of Amazon's pricing policies, we move to 3P we were fulfilling those, you know, fulfilling that ourselves. And it was it was quite difficult. Now we basically weren't making any money in that channel. Because in order to maintain the volume, we would have to lower our own price. So we're competing against our brick and mortar customers. And it was it was a mess, honestly, just trying to trying to keep the volume up and and keep things going. So we have subsequently moved everything, but we moved everything to pretty much everything to 3P and in the last year. This is when we were introduced to you, Jessica, we started working with a distributor pattern, who is sort of managing that channel for us and leaving us free to kind of manage our brand rather than the channel mechanics of dealing with Amazon.

Jessica Cunning  17:18

Yeah, so just an online marketplace sales journey to that kind of ran in tandem with the control piece. But Neil, what about you guys? PRN? Like, how did you start on Amazon? And where did you end with respect to your selling strategy?

Neil Zuncic  17:32

You know, we weren't selling on Amazon previously. And we were finding on Amazon, that there was a there was a ton of sellers on there that were selling our products at a variety of different prices. And again, to maintain that premium brand, which we believe we are, we knew we needed to do something. And again, it was one of these, you know, low cost leader thing where everybody was trying to get two pennies, less than the other person. And we knew we needed to control that marketplace. So we actually came up with a comprehensive plan, we put a minimized advertising pricing policy in place at the same time, also a brand protection policy that Natalia helped us create. And we put that all into place at the same time when we started working with Amazon. So there was certainly some challenges there, you know, working through trying to eliminate some of these sellers that were obviously you know, not our own. And as part of that eCommerce overall strategy, you know, we needed to get those prices at map or above to maintain consistency with all of our eCommerce sellers. You know, we weren't able to do that when we had no control over Amazon and we did find after we made some changes that there were a variety of veterinary practices that had Amazon stores that were selling online and there were certainly some people that were disappointed that you know, we made that change and that they weren't going to be able to sell on Amazon any further. Our strategy changed with who our distributors were and also you know, our authorized sellers as well so I mean, we put a really comprehensive plan in place but I'm glad we did it the way we did was it's worked fantastic.

Aaron Conant  19:16

Just a quick question that like what about the argument I get this a lot like a sale is a sale right? I mean, that's where what I ran into on the brand side and I was in the OTC pharma but also the the pet health space as well you know and you have the traditional sales teams and everybody else well a sale is a sale or your distributors a sale a sale but that that it just breaks down, right?

Neil Zuncic  19:38

Yeah, I witnessed with friends and other people in the industry those exact same kind of that thought process and and I get where they're coming from but at the same time, you know, when you sell to whoever you also lose control over your your product and your brand and you know, you can't if you're concerned about someone Selling below in that policy or if you're concerned about someone selling competing against you on on Amazon, we also use pattern for our 3P fantastic organization. And I think that's the challenge is not that you lose the sale. But you know, sometimes you do lose the you lose the control. I think the other challenge is that there are distributors that buy and then turn around and sell online. So instead of you making the additional profit, assuming that you sell the distribution at a lower price than you would to any pharmacy seller, that they keep that additional profit as opposed to your business. I, to me, it doesn't make sense to give that to a distributor, when you could keep that product that you'd keep that margin for yourself and sell through the traditional plan that you put together.

Daniel Wright  20:47

Yeah, I would I would add to that, that you know, a sale is a sale is something I've been guilty of for years, right. That was certainly how we approach it, we go out, we sell anybody hay and we plow the fields. And now with the benefit of hindsight, it's clear, that's a very short term strategy, right, you can sell more in the very short run, but it ends up feeding back in sort of a negative feedback loop and becomes a race to the bottom. So there is there's a little bit of short term pain as you kind of stop off those different channels. You know, we definitely have seen a reduction in volume, but we've seen a significant increase in our in our margins. So selling less, but earning more, actually is not a bad business strategy.

Natalia Steele  21:31

Well, Daniel, on that point, you mentioned that you would have conversations with your business partners that would even refuse to put your product on their shelves because of that channel conflict with Amazon. So has that situation improved. Speaking of a sale is a sale, but has that conversation improved? And have you had better luck placing your product with brick and mortar resale resellers because of additional controls on online channels?

Daniel Wright  22:06

So that has been an unexpected benefit of the program. We've actually had brick and mortar retailers come to us and say wow, you know, it's it's great that you guys are doing this because they recognize that not only we are improving our margins, we are improving their margins, it means that our products are more competitive on their shelves. So, you know, the whole unauthorized seller or authorized seller program, I should say and map has led most of our customers to view us much more favorably as as a real brand that's willing to invest in our brand belief protected. And they recognize that that in that process, we are protecting them as well. So the answer is, yeah, we're being taken much more seriously. And I find that, you know, my sales presentations are, they're just more fun. I'm not competing, as you know, as a low price, commodity product, you know, we've got a lot of competition coming in from overseas, and to be able to go in and say, Hey, I'm the brand leader, we're that we're the best of this category, we've got the best products, and look at all these things that we do to protect and grow your business customer. And so that has been very positive development that I that I actually did not anticipate when we launched into this project.

Natalia Steele  23:19

That's all launch point. And this is both for Dan and Neil, those same customers that are now kind of singing your praises. Was there any consternation pushback from them? Why are you because as a part of the authorized seller program, you would put controls in place, right, you would tell certain channel partners, as Neil mentioned, that you can no longer play on the Amazon or, you know, you really need to scale back your online presence so that we're not competing cross channel. So was there that initial kind of pushback and unhappiness that has now sounds like changed and, you know, in the, in the attitude and the song that they're singing.

Neil Zuncic  24:01

I think, in our industry, you know, map and brand control has been is pretty consistent, especially with the largest pharma companies. So I don't think it was a surprise, especially for our distributors, was something that they probably figured was going to happen. And they're very used to those. I mean, there's all kinds of different brands that control policies and MAP policies. You know, we've been adamant about making sure that we stick to ours, which is important. But at the same time, yeah, I mean, there were some sellers, and there were some distributors and weren't happy about some of the decisions that we made. But at the end of the day, you know, I mean, we're not in business to make others happy. We're in business to be successful, and represent our brand and company the right way. So you know, whether they understood it right away or not, there are certainly some difficult conversations that took place but in the end, we're in a better position for it. So I would say it was absolutely worth it.

Daniel Wright  24:58

Wait a second. I would add to that, that yeah, we definitely dropped the number of customers, we've dropped the number of distributors. And it wasn't really even much of a conversation, we just decided that it didn't make sense. It also is not uniform. Some of our national distributors, like the buyers that we deal with, who are who are judged on their very short term sales, they don't particularly like it, right. So we've had to find ways at the National distributors to kind of go around that month and get ourselves on the do not, do not sell lists. So finding the right contacts within the national distributors that do support it. And as Neil said, it's it's true that all of these national distributors, and even the regional ones we still work with, they're not surprised right there. They expect to see and embrace brands that that have a strategy that walks away from the wild west.

Jessica Cunning  26:01

We often hear or we get questions about do you have contacts at so and so that I can reach out to because I don't really know where to go? Like, how did you practically navigate like finding the right people within the national distributors to get on the do not sell list and that sort of thing? Like was that a nightmare? Was it just kind of vary distributor by distributor?

Daniel Wright  26:22

It varies for us, you know, we would we would just we send out messages to every contact we had and hope that they were respond. In some distributors, the buyers were very helpful, and they got it and others they were less helpful. But we've been working with these guys for so long that we have a lot of names. So we just sort of blanketed the field with, hey, this seller is selling and they're not authorized. So this seller is selling and they're selling below MAP. And we would we would wait to to come back, wait to see what information came back and finally navigated to the magic person that that manages the do not sell us. For us. That's been the the magic enforcement piece is just knocking them out knocking their supply out. That's that's how we take care of the most recalcitrant unauthorized sellers.

Jessica Cunning  27:11

Yeah, and then just so critical for particularly for brands that distribute and the two step channel, regardless of what that two step distribution channel looks like, whether it's kind of more traditional, like you, Dan and Yard Butler, a little bit more nuanced for the pet category, like it is for you, Neil, but and that's common feedback, we hear from clients, there's this like, well, I need to use this do not sell list, but like, Who do I get it to? And because getting into that right person is so key. So Neil, do you have any, like recommendations or thoughts on how to make sure that brands are getting to the right people at their channel partners?

Neil Zuncic  27:42

Yeah, I think that, you know, first of all, we looked at partnership from a distributor standpoint, and we thought, you know, who just who displays the best level of partnership, we ended up with three. And I believe we had about maybe 10 to a dozen before that. They happen to be some of the bigger ones, but they were ones that we knew we could trust. And we knew that they were the ones that were going to maintain that do not sell us and then also give us advice on who we should work through or with. And we did the same thing with sellers. You know, we thought, okay, what kind of partnership level do we have with these folks? Do they represent our brands the right way? Were these one of the was this one of the sellers that that had us below cost at one point when they could do that. So we use those pieces, but we definitely leaned on distribution for recommendations, who they felt like were trustworthy, and they've had success with with these types of programs in the past. So I mean, obviously great relationship with these three distributors we work with now. And, you know, they obviously proved their partnership by helping us make decisions on, you know, who made sense to sell through as well.

Jessica Cunning  28:50

And it's interesting like hearing both of you, because I hear this a lot too, from brands that it's just like when they start kind of at this, at this journey, you they have a lot of channel partners, and it's about covering all of their many distributors, all of their hundreds of retailers with these authorized seller program terms. But then as the months go by, and they really start to see the benefits of control and kind of that migration away from revenue at all costs to really thinking about profit being the key KPI that it narrows the distributor number narrows the retailer's narrow, it's all about who can best represent our brand online because it's so transparent. And it's interesting hearing that you both kind of went through that exercise of cutting people. And I scary I know, when we talk with brands like we are we're not necessarily gonna have to cut everybody, but I know it can cause some internal pause and like these could be relationships that people had for many, many years that you realize they're just not serving you anymore. And this President Amazon world that we live in, and so any advice to brands that are kind of at that tipping point.

Neil Zuncic  29:56

I mean, I can speak to that. I mean, I know it's scary. And you mentioned it before, Jessica, but you know, at the same time, are you doing what's best for your business long term. And I know Daniel mentioned it before, when you're looking at that short term view versus the next 10 years or 15 years, you want to be in the right place. And so, you know, maybe a suggestion that I could make was, you know, we did institute that MAP policy right off the bat, which created additional margin and revenue for sellers and distributors, but also for parent farm accounts. So you do, you do tend to pad that a bit. But in the long run, you're doing this as a long term look as a fourth, and opposed to a short term view, I get it, it's scary, especially for a small company, I think I would probably, I'd probably be challenged by that decision as well had I own my own business.

Aaron Conant  30:50

Yeah jump in Dan. And then we've got a couple of questions that have popped in here, too, that I'd love to get to jump in, Dan would love to hear it.

Daniel Wright  30:57

I was just gonna say that there were, there was a lot of immediate positive feedback. So it was it was scary going in and dropping distributors, and resellers. But we started to get some immediate, some immediate feedback as to who were, who were, who was going to support us. And so that that made it easy it was it was sort of an iterative process as we went through it, and it became clearer and clearer who the who the right partners were going to be. And we saw the benefits fairly quickly, you know, just with and that measured by our ability to raise retail, so we could actually see products that were 15%, higher retails on Amazon within weeks. And that was that was pretty encouraging.

Neil Zuncic  31:40

I think I just want to add one more thing to from a prescription medication standpoint, if people need meds for the dogs or cats or horses, they're gonna go somewhere else to find those products. So we didn't really lose sales, it was more of a channel switch channel shift to another seller. So that might make you feel a little bit better is that if you have a product that people have to have, or really want to have, chances are they're going to go look for it, someone's somewhere else are pretty good. So don't look at it as a total loss.

Aaron Conant  32:09

So quickly, before we get to these two questions in the chat, because you made me think of something, Neil, you know, just I was on the we had quality concerns, which you probably do too, right, who's reselling it? And that basic question, then who is it? Maybe this is Jessica, like, Who do you see are the right people to bring into the room because I can see somebody on the digital sales team, saying, Hey, this is something we want to implement. But in reality, I mean, we've talked legal, we've talked quality, we've talked sales, we've talked marketing, like when people are trying, a lot of people are sitting on the line today going like this is especially John, which will John, we'll get to your question here, because it's exactly what we experienced. Who are the people you need to get in the room for total buy in? And then we'll jump to John's question and answer question as well.

Jessica Cunning  32:53

Sure, yeah, no, that's exactly what you want. You want sales, you want legal, if you have in house legal, you want the legal department being an internal champion, and being apprised of obviously working with outside counsel, who want eCommerce, you want Head of Customer Service, you want marketing, and all of those leads need to be on board with, you know, implementing the broader strategy, because ultimately, there's going to be something in this strategy that touches what they're in charge of doing within the organization. And so the earlier that they know about it, and the more involved they are, the more committed, they're making sure that it gets across the finish line and gets fully implemented in the right way. And so one of the things that we insist on doing is getting those people in either physical or virtual room and hashing it out to make sure that everyone is comfortable with the move forward strategy and having everyone that in there, hopefully air their grievances and work through the issues so that we can really just proceed after that meeting.

Aaron Conant  33:51

I forgot customer service. Great Call out. So John writes in here: "So far, all suggestions. Examples are exactly what our experience. We're about to begin the SDS control efforts in Europe. Can we get any insights or six their success issues regarding replicating these efforts in Europe as they have different rules or laws? And I know this was specifically around Amazon US." But I also know, Jessica like Darren over in the EU right now. And we actually have recordings probably, that we could send out, John, for sure. But if you want to give a quick rundown, yes, there are different rules, but there are ways of solving this in the Europe as well.

Jessica Cunning  34:31

Yeah that's really the short of it, John, so mean, you can get to the same commercial state and Europe as you can in the United States by executing a strategy. It's just the calf. There's a big difference. So in the United States, we call it an eControl program. It's controlling your authorized sellers. It's controlling unauthorized sellers with trademark infringement and other legal claims. And then being able to institute an event at the appropriate time with a minimum advertised price policy, if that's appropriate for your organization. That's not always MAP is not always part of it MAP is just kind of the icing on the cake. In certain instances, like, go over the ocean, that Europe, it's really more of like a hyped up version of your authorized seller program is making sure that you're creating that selective distribution network only certain sellers that meet your qualitative and quantitative criteria are allowed to sell your products. And to the extent that there are unauthorized sellers that are selling your products in contravention of those standards, then you're able to assert Country B country specific claims against them. So it's just a different path. But you can get to the same place. And we're happy to have you connect with our colleague who's based in London and our colleagues based in Germany to talk through that in more detail.

Aaron Conant  35:43

Yeah. Awesome. Yeah. So for sure, we will connect you, John after the call. The next one, "How were you able to manage Walmart resellers? Or work with Walmart with a do not sell list?" Just work on Walmart as well?

Natalia Steele  36:01

Yeah, so let me jump in on this since I do most of this fighting, day to day. So if you have a direct relationship with Walmart, and Walmart wants your products on its shelves, then the discussion is different than if you don't have that relationship. If you have a relationship with Walmart, you can have a discussion with them about removing all three presidents and having essentially your Walmart direct relationship be the the only supplier relationship to the downline marketplace. Walmart sometimes receptive to those discussions, and sometimes it is not, when you find yourself in a situation where you don't sell directly to Walmart, and you see listings on walmart.com on your products. Most of the time, those are third party sellers who, who acquired new products elsewhere who got a data distribution channels, liquidation channels. And they're just drop shipping for Amazon or listing as third parties there. And really, it's not a question of do not sell us with Walmart. At that point, it is in question of figuring out who those third party sellers are, where they're getting your product and making sure that in your sales channels, the leaks are closed off so that these resellers cannot get their hands on your product and put it on Walmart. But Walmart is not I mean, no one is really intent on competing with Amazon and the online space. And so they are not going to be a great partner for you most of the time, you would really have to do the heavy lifting of figuring out where the leaks are in your distribution system and closing it all closing them off so that these third party sellers can't make their way onto the platform at all. I hope that answers your question, but happy to get into more detail.

Daniel Wright  37:57

I would add that by closing off the unauthorized sellers on Amazon, there was there's a great amount of overlap between that group and the group that was on Walmart, even though they often were operating under different names, it was the same entity.

Natalia Steele  38:11

And we even if you chase them off Amazon, they'll switch to Walmart. So what we have as a benefit we provide to our client, we have a very extensive database of resellers where all of those connections are already made. And so if we know that somebody's selling on Amazon, but also is operating on Walmart, when we target them, we demand that they stop selling your product both on Amazon, Walmart, eBay or any other online marketplaces. And we watch them, you know, to see if they jump around.

Aaron Conant  38:44

Yeah, awesome. So the next question is very interesting. Because I have a lot of people who will come during conversation, say, hey, they're just going to claim counterfeit, which I say, whoa, whoa, don't do it unless you know it for sure. Which gets into the next question. "Is there any potential exposure to a lawsuit or liability with resellers countersuing against this type of seller enforcement and activities?" And I know there is on that if you randomly claim counterfeit, and it's not right. Anyways, all right. I'll let you jump in.

Natalia Steele  39:16

Yeah, there's certainly a risk if your enforcement tactics veer into this gray area of accusing people of things that you don't know that they've done wrong. We have seen a number of lawsuits filed against brands who go on brand registry and removed try to remove resellers but just reporting of selling counterfeits if you do not know that the product is counterfeit. Please please please do not ever say that the damages that can be secured by reseller against you will include not only what they lose in sales of your products, but if their storefront is shut down by Amazon for alleged counterfeiting activity. You can be a In a world of hurt, and a lot of damages that result from their inability to sell any other products that they that they sell online. So please do not do that, as far as broader question of can enforcement lead to counter suits? Yes, people are litigious, especially if they're making a lot of money in your products online, they can count or they can take you to court and say, I'm not doing anything wrong. Prove to me that I am doing something wrong. And that is where having the proper legal foundation before you get into enforcement is critical. And that proper legal foundation is a set of policies, procedures, agreements that set up that authorized seller network, and separate the world into customers that you know, and you trust and those that you don't know. And you will set up a set of rules for those that you do know that you do control. And that's what gives you the ability to say that everybody else is doing something illegal unless you have that proper legal foundation in place. under US law, you can buy you can acquire and resell products, branded products. As soon as they leave the manufacturers hands without repercussions. That's what a lot of sales sellers will claim to you. It's a protection of the first sale doctrine. And you can create exceptions to that doctrine, again, through proper found Legal Foundation, and then their sales will become illegal. But if you're just going out there and accusing everybody of you know, doing something illegal without a proper legal foundation, then this yes, they can come after you with claims and lawsuits and make your life very difficult. I think the another part of this question relates to Amazon's views on enforcement and Amazon is agnostic, it actually will tell you that it will not take your MAP policy will not enforce anything for you. It's your job to clean up your distribution channels. And Amazon will allow anybody to list your products on its platform. So it's up to you to put proper controls in place and proper enforcement. So Amazon is not going to take an issue with you going after third party sellers. As long as again, you're not abusing Amazon tools, like brand registry, and you're not making improper reports through that through those tools. Because if you do then Amazon can restrict your brand's own ability to sell on the platform. And that's going to be a much worse consequence than having even a third party seller being present there.

Aaron Conant  42:31

Awesome. Yeah, there's no more questions that popped in the chat. I'll get back to you, Jessica, it looks like maybe there's a few more slides.

Jessica Cunning  42:38

So we have about 15 more minutes left. So eControl program execution, just kind of like taking a step back, you have that foundation that Natalia just mentioned that you have to have the right communications out to your intended distribution partners, you have to have the legal claim set up against unauthorized sellers to overcome that first sale doctrine. And there's kind of this period of time where everything is going alive, you're getting the strategy up and running. What from a timing perspective, the time that you've finally got the strategy implemented and executed externally and internally, and the time that you started to see business results? What was that for, Neil. Like how many weeks or months? Because that's always a common question is timing. Client's timing.

Neil Zuncic  43:22

I think probably, you know, I've been pretty aggressive with working with Natalia, and then Tyler, also and you, Jessica, I want to say probably like, four or five months. And, you know, we didn't just chase after people that were on Amazon, there were all kinds of external websites that were selling our products online that were not authorized that we didn't know who they were. And we were able to you were able to help us get that corrected as well. Also, along with adding them to the do not sell us with the three distributors that we've got. But yeah, probably, I mean, I'd say max for me, probably six months. And, you know, some of it was not enforcing with voids, but some of it was relationships I had with sellers was like, Look, you know, we can't have you selling these products anymore. You're not an authorized seller. And in some cases, it was that easy. And others not so much. But yeah, probably, you know, about six months. Okay.

Jessica Cunning  44:22

What about you, Dan?

Daniel Wright  44:23

So, very similar about the same timeframe, I would start with a shout out actually Jessica to you and and Vorys, you guys, the program was laid out so clearly and so methodically that we are able to implement things very, very quickly. I was surprised from from our first call to having a program go live, I think was about two months. I think it was just very, very fast. And and very shortly after that, we started the enforcement process. And I would say you know, we've been working with you guys since the beginning of the year. We've gone from from probably 50 to 60 unauthorized sellers and we're down now, down to probably four or five. And even though those have raised their, their, their pricing, so they're not as disruptive as they were. So the process was was surprisingly fast to surprising to me. And again, shout out to you guys, I think it's because your process, you guys would have done this many times you knew exactly where our pain points were going to be. And as suggestions even to the extent you are provided us the letters of correspondence we needed to be able to to interact with various parties in the process. So it was it was relatively painless, at least in terms of the implementation, and quite fast.

Jessica Cunning  45:44

What about distributor data too because that's the question that we get a bit is like as part of this exercise, pushing on distributors to better understand where your products go, after you initially sell them to the distributor, can you guys speak to whether that's something that you request or whether it's something you require whether it's something that you've never needed?

Neil Zuncic  46:04

It's not something that we request, it's not always a. It's not something that's expected, it is something that we request, and we haven't had issues with that. And to be honest with you, the times we've gotten that information. It's been exactly what we expected. The do not sell list has worked. The Vorys enforcement has worked. And I mean, very rarely do we come across a seller or products being sold somewhere that we're not aware of. I mean, I'm not perfect, but I think today I had 94% Buy Box on Amazon. To me, that's really good. And, you know, I know that the other 6% I'm working with Tyler and Natalia to try and get them shut down as well. So, yeah, I mean, I think we're in a good spot.

Daniel Wright  46:54

For us, it hasn't been, we also have not had that much need to reach out to our distributors about specific accounts, it's that do not sell list, they have been willing to acknowledge that they sell to those customers and are willing to say that they're no longer going to sell those customers. So actually getting in your, your database, Jessica and Natalia is far cheaper than than anything we could come up with. So every time we come up with a name, and present that to the Enforcement Team, you guys already know who it is, you know who all the contacts are. So so that part has been very easy. A lot of the work is already been done in your database. So we're not, you know, we really don't have to spend that much time interacting with it with the distributor, which is actually great, right? These are not particularly want to have with distributors, I'd rather talk about our program and our benefits, not not sort of the negative enforcement stuff.

Jessica Cunning  47:49

No. And that's really helpful, because that's kind of a common misconception is that you have to get complete sell through data from all your distributors to make this happen. And it's really not the case. Yeah. Well, in our remaining time, is there any thoughts about project management? Like, I know that we get questions about like, do I need to hire somebody to like figure this out? And to run this and run point with Vorys? And like, trace it all down? Or is it something that the eCommerce team owns? Is it something that sales owns is something that legal loans and so it's curious if you guys can both speak to how staff this and whether you made any external hires to facilitate it.

Daniel Wright  48:27

In fact, we reduced our teams, you guys started doing you know, so much more so much more efficient. So just in the process, I brought in everybody and I had everybody from all the different departments in every single implementation meeting, so that so that I could make sure that the parts have overlapped and interlock. So it was you know, the process has been has been quite, quite painless and quite easy.

Neil Zuncic  48:56

I think for for our organization, it's really owned by by me. And then we do have a brand control expert that we share with one of our sister companies that also works with Vorys. And they kind of split time managing brand control, do not sell list, a few ancillary things, but it wasn't a full time job from the way we looked at it. And I do own those relationships. I know Natalia, I'm on calls with you every other week. Jessica, I see you pretty frequently as well. And, you know, I'm able to manage through most of it on my own. To be honest, I do have a great brand control person that helps me a lot with a lot of different things as far as enforcement, monitoring, etc, who's always on the voice calls with me every two weeks, but yeah, I No need to hire an executive or anything like that. I mean, it's pretty simple to manage with a little bit of help.

Aaron Conant  49:55

Yeah, jump jump in. And we have one more question to make sure we get to you.

Daniel Wright  49:58

Yeah, I was just gonna say that we we're working with pattern and pattern has their software that predicts software. So actually, our distributor pattern is working directly with for us to identify these accounts. So we show up to our enforcement meetings. And voice is telling us who is who is infringing. And that's what I meant by we require fewer people to actually pay attention to that, because we've got in place a system that's doing it. From our standpoint automatically.

Neil Zuncic  50:23

Yeah, same system here. It's fantastic, makes it so easy. Yeah.

Aaron Conant  50:28

Yeah, we'll probably do 10 events with pattern this year. So if anybody wants connections over to them, just let us know. There they are. They're absolutely fantastic. Also brings in this, how do you think about keeping 45 resellers versus going down to just one exclusive? On 3P? Is there a benefit to keeping trusted sellers? A few versus just one?

Daniel Wright  50:55

Well, on the bringing with pattern, I think they you know, our deal with them is that they're going to be exclusive on Amazon. They want to win the buy box and their their proprietary software and algorithms work when they're controlling the buy box kind of systematically. And so we found that we found that works, it's just it's easier for us to be able to manage or not manage, as the case may be to that channel. And in fact, we're aggressively adding as many different marketplaces to pattern as they're willing to onboard.

Neil Zuncic  51:31

I'd say the same for me, I mean, and I'm not being paid by pattern to talk about them. But we've enjoyed our relationship with them as well. And, you know, they're our exclusive seller on Amazon. They're the number 1P seller 3P seller on Amazon right now in the world, I believe. And we've had a lot of success doing it that go in that direction and going with just one, I think that the challenge could pop up that you do have those five resellers that get competitive at some point, how do they make themselves stand out, if they're all selling the same products, and they're all competing for the same sale, I think that's where you run into issues where people might try to get aggressive and violate policies, MAP policies, etc. So that would be my caution for you. For something like that.

Aaron Conant  52:17

In really quick, just what I see a lot is they have a, an exclusive reseller, like a pattern or somebody else like a pattern. And then there's three or four others that are out there. But as long as they're not getting the buy box, and as long as they're not making MAP, then is it worth the time, the effort, the money to go try to walk them over the head when they're really getting zero business anyways. And so a lot of times companies, they have an exclusive reseller, and they get rid of the top 15. But then the last few that aren't really moving any volume. It's just not worth it. And so sometimes it's not like a strategic decision that we're going to have allow four to five, it's just, hey, we've got one and there's these extra ones we don't want to go tackle.

Natalia Steele  53:00

But it's there's another perspective on this very quickly, we do have some clients that choose to have more than one reseller on Amazon for reasons that are very specific to their product category. So for example, if they have products that are hard to ship, or you know, they have a category of products that require special handling, they will have their main catalog sitting with a really exclusive reseller, but then they'll have two or three others that are either backup inventory providers. So if their first one can't make a sale, that's the only time they will sell but they're really good partners, and they won't be competing otherwise, or they have a slice of a catalog that the exclusive just can't handle or doesn't want to handle, you know, large bathtubs, for example, you know, things like that, that are hard to ship that will come out of another seller's inventory, because they're really good at handling it. Those are the  kinds of situations where I've seen more than one seller work on online marketplaces. But otherwise, as Aaron said, they're just end up competing with each other. And you end up having a lot of really uncomfortable conversations that in the end are not a benefit to your organization or to theirs.

Aaron Conant  54:18

So Jessica, you want to bring us home here in the last minute or so. This has been so much fun. Yeah, no, thanks, Dan and Neil and Natalia for sure. This has been a great conversation.

Jessica Cunning  54:27

No, it has been a great conversation. Thank you guys so much for offering your perspectives on just things to keep in mind and tips and tricks along the control journey. Final final question for Dan and Neil. If you had like one piece of advice to offer brands who are just thinking about embarking on this initiative, what would it be?

Daniel Wright  54:47

I call you. Go call Jessica have had the conversation. It's it's worth it. The process is easy. It's that would be like my number one advice.

Neil Zuncic  54:57

I was gonna say the exact same thing. I mean, you have nothing to call by luck and nothing to lose by Jessica because see what your options are and see how you feel about the plan that they propose to you. You have Daniel and I that that can both sit here and tell you that it really works. And, you know, Vorys does a great job. And Jessica's excellent and very easy to work with. So give her a call and see what you can work out.

Jessica Cunning  55:18

Well, thank you. I wasn't expecting that response.

Neil Zuncic  55:24

Well, it's true. I mean, if you if you're serious about getting this stuff figured out, they can make it really easy. Thank you. I agree.

Aaron Conant  55:32

So with that, Jessica, any, you know, last 30 seconds here, before we wrap it up? Anything you want to throw out there? How do they get in touch? I mean, we can email everybody an intro.

Jessica Cunning  55:43

Feel free to email. I mean, the last thing I was kind of throw out there for people's considerations. Like as you're kind of thinking about this, I think that there's this natural progression of control and then growth. And Neil and Dan both spoke to you have to get control, you may have to continue to consider whittling down your distribution, you have to be able to control both authorized and unauthorized. And that is really the key to be able to unlock the growth potential on online channels. And if you're looking to grow your online sales, you're looking to dominate Amazon when the buy box, whatever strategy you are, I just encourage you to really think about the control piece first that has to come number one, growth is number two. Yeah.

Aaron Conant  56:21

Awesome. Well, then Neil, Natalia, Jessica, thanks so much for your time today. Thanks, everybody for dialing in. Thanks for all the great questions that came in. Obviously, we'll send our follow up connecting email as for me, I'd love to have a conversation with you as well for an email for me. With that, we're going to wrap up this webinar here. Thanks again, everybody for your time today. Hope everybody has a fantastic Wednesday. great rest of your week. Take care. Stay safe. We'll see you at another event. Thanks again, everybody.