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European competition regulators examine marketplace bans

By Chris Dawson October 8, 2016 - 10:23 pm

Consumers want to find the brands they love, at the best prices. However, hidden restrictions – which can keep prices artificially inflated – stop shoppers from getting the best deal. eBay’s research shows an overwhelming 88% of UK consumers expect to find their favourite brands through online marketplaces, and 65% expect to find the best prices on these sites as well.

However, restrictions – which are not made public to consumers – mean that shoppers often pay higher prices for items ranging from designer clothes and perfume, to kitchenware and stationery by restricting where they can be sold online. The consumers surveyed criticised the use of hidden restrictions by brands with 83% asking brands to be more open with them about the secret practice.

More importantly, here at Tamebay we know and have heard for many years that you as an online retailer are also impacted by brands who restrict online sales. We hear that some brands impose restrictions on you or your competitors such as bans on overseas sales, refuse to supply unless you also have a website or in some instances a bricks and mortar store. This directly affects the products you can sell on marketplaces and the profits you can make.

Apple, Samsung and Adidas – amongst the brands that don’t impose online sales restrictions – are recording strong sales on online marketplaces, such as eBay. Paul Todd, eBay’s Senior Vice President for EMEA, said that eBay was ‘open for business’ with huge opportunities for brands reaching customers across the world. He highlighted a zeitgeist list of the top selling brands on eBay that don’t impose these restrictions, ahead of Black Friday.

European competition regulators are currently examining the platform ban practice – used by some brands to prevent their products from being sold via online marketplaces. The European Commission has launched an investigation into the practice with a view to potentially making it illegal to restrict the sale of goods by small businesses in this way. Its final report is due to be published in early 2017.

More than three quarters (77%) of UK adults reported buying goods or services online in 2016. Price remains the number one priority – 80% of shoppers placed it in their top three concerns when it comes to the way they choose to make a purchase. This was followed by choice (59%) and convenience (46%) as the next most important considerations.

eBay’s Paul Todd, said: “We’re in an extremely competitive market. On big ticket days like Black Friday, we see increasing numbers of consumers heading online to bag the best deals – and we’re open for business, partnering with brands and sellers to boost that opportunity. We welcome the Commission’s review. Our sellers tell us that online sales restrictions allow brands to keep prices artificially high, restrict consumer choice and may breach EU competition rules.

2016’s Zeitgeist Brands

eBay has compiled a list of the most popular brands on eBay. All of these brands give resellers the freedom to sell their products online without imposing sales restrictions.

Apple

Apple still tops the list of consumer most wanted brands, with the iPhone the star attraction. But consumers are also looking for used and refurbished Apple tech to get the phone they want for less. When the iPhone 7 launched this month, Brits used eBay to search the sale price they’d get for their old model as they waited to trade up.

Samsung

Fans hotly await the arrival of the latest Samsung devices. Today, eBay has more than 410,000 listings available for ‘smartphone’ onsite.

Adidas (Lucky to be on the list as a reformed baddie)

The Adidas NMD trainer was one of the most searched items on eBay.co.uk in 2016. Limited edition trainers are huge business and are a real collector’s item for millennials. Kanye West’s collaboration with Adidas has been a particular success with a pair of Adidas Yeezy 750 Boost trainers recently selling for £1188 [original price £268].

Adidas weren’t always good guys though. In 2012 Adidas announced a marketplace ban for all their account customers saying that they wanted to “ensure that Adidas and Reebok will be presented in the right environment“. In 2014 Adidas ended the ban saying “We have decided to extend our e-commerce guidelines to also include open market places: if our retail partners adhere to our criteria, there will be no restriction for online sales in any channel!”

Disney

Disney tops the children’s fancy dress charts this year on eBay.co.uk – the company’s Frozen franchise first screened in 2013 but the Elsa costume was still the most wanted girls’ outfit this year.

Dyson

The British vacuum retailer is in huge demand, and has opened up refurbished item sales direct from its British factories to allow consumers to save. Refurbished technology allows consumers to save around 45% compared to new and is a rising trend in 2016.

Lego

Lego limited editions are extremely collectable and command high prices. A Millennium Falcon Ultimate Collectors 1st edition is currently on sale on eBay for £5,365 [original price in 2007 was £342.49] while a Lego Taj Mahal – one of the rarest items Lego have ever made – fetches around £2,100 today [original price in 2008 was £199.99]

Pokemon

In July 2016, Pokémon Go took the nation by storm, and eBay.co.uk saw a 45% increase in sales of Pokémon-related gear with something sold every 12 seconds.

Star Wars

Star Wars films also top the brand list when it comes to TV and screen – and Star Wars is the most successful fandom of the decade on eBay with a value of £444million.

  • Lu
    10 months ago

    True, there is a lot of LEGO sold on eBay but it’s mainly private sales and grey market resellers (with the exception of a handful of big sellers who according to Terpeak don’t really sell that much of it). Getting a merchant account at LEGO is near to impossible due to their requirements and an apparently long waiting list. Once you get the spot they still limit what you can order and sometimes deliver whatever they feel like sending. LEGO related websites are full of stories of people trying to make/making business with The LEGO Group. Better still. Even if you’re just a regular customer with deep pockets if they feel that you spend too much on their website they’ll ban you.
    End of rant.

  • jimbo
    10 months ago

    I have absolutely no problem with brands controlling how their products are initially sold on to the market. In fact I think it would be irresponsible for many brands not to exercise some control.

    Do eBay have genuine concern for small businesses ?
    Do eBay manipulate there own marketplace?
    Do eBay really care about the consumer?

  • Andrew Nunn
    10 months ago

    With Brexit on its way European Competition Regulators will have no influence here, so more hidden restrictions here we come!

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