Do I Need an Authorisation Certificate From a Brand to Sell Online?

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Businesses that own well-known brands have faced a lot of challenges in striking the optimum balance between their online and offline sales. The e-commerce giants are offering significant discounts on branded products. As a result, sales from brick and mortar stores have continued to depreciate with the passage of time.

Large brands aren’t completely happy with e-commerce. All the discounting is cutting into their profits, plus they still need to honour the warranty, and they’re struggling to keep their existing brick-and-mortar network happy. But they can’t ignore online shopping either. Some 45 million Indians shop online regularly and it will only increase.

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So, as an online seller, what are the permissions you need to sell the goods of say, Spykar or Micromax? If you are in possession of their products, have acquired them legally, and have all the registrations necessary to sell on Flipkart or Amazon, can the brands stop you? Will they? Let’s find out.

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Do you require permission by law?

Not really. Who would have thought a company would not want its products to be sold? With the law staying out of it, it’s a matter to be settled between sellers, distributors and the brand. You may recall Toshiba and Lenovo warning consumers against buying heavily discounted products. Sandisk even said it was going to control its online distribution channel by only allowing authorised sellers to sell its products. Therefore, there are brands whose permission you need, but most would rather you just sell their products.

Do note, however, that the law does not take kindly to misrepresentation. Therefore, if you’re selling Sony products online and your website is dominated by Sony logos, which may lead a buyer to think that the seller is the company, authorised sellers or Sony itself would take exception. You would then need an authorisation certificate or risk a law suit. But if you’re buying original products from a Sony distributor, the law places no requirement on the seller to obtain an authorisation certificate. It’s up to the company itself.

CCI View
Recently, Sandisk had Snapdeal take the seller Ambitious Marketing off its platform as it was not an authorised seller. The matter then reached the Competition Commission of India (CCI), which ruled that it was prudent for brands to control the distribution channel and disallow sellers it had not authorised from selling its product. However, this may have been a problem with Ambitious Marketing, in particular, as the brand doesn’t seem to have a problem with any non-authorised sellers other than Ambitious Marketing. Even now you can find over 20 sellers of Sandisk products on Snapdeal.

Until now, there has been no other case where a brand has disallowed a seller from selling online. This indicates that brands do not require sellers to have an authorisation certificate (at least not yet) and so long as the online marketplace gives you permission to sell an item, you may go ahead and sell it.

If you want to sell branded products online, you can rest assured that you do not need any authorization. At present, no substantial steps have been taken by MNCs to stop standard sellers from selling their products on any of the major e-commerce sites. So, it is a safe passage for you right now.

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