talking trade: Bonnington Plastics


‘It is an eminently winnable battle’


Leading the fight against online ‘substitute sellers’, Bonnington Plastics aims to unite manufacturers to protect consumers from knock-off products as well as saving brands’ reputations


he online marketplace has become a battlefield as legitimate companies are forced to slash their prices, and even sell at a loss, to try and keep up with sellers seeking to piggyback on the success of established brands. Many British internet businesses have already become casualties in what commentators have described as the ‘Battle for the Buy Button’, in reference to the feature on the Amazon site enabling customers to purchase a product in a matter of clicks. However, British brand owners are leading the fightback against so called ‘substitute sellers’ and the early signs suggest that the tide is turning in their favour.


T


In 2013, it is estimated that more than 91,000 Kingfisher five litre pressure sprayers were sold on online sales platforms, such as Amazon and eBay. This doesn’t sound remarkable, until you realise that Bonnington Plastics, the company behind the Kingfisher garden and homeware brand, only imported 36,000 of them. So what about the other 55,000? An investigation launched by the company in response to complaints from its customers about online sellers advertising products at impossibly low prices discovered that more than 60% of products sold online under the Kingfisher brand were substitute products. Bonnington Plastics, like a growing number of British brand owners, found that its brand was being used by hundreds of other companies to sell those companies’ substitute goods, damaging the reputation of the company and depriving legitimate customers of sales.


Internet businesses built up over many years by hard-working, tech-savvy entrepreneurs are folding in the face of the sustained onslaught on their already-squeezed profit margins by companies bent on flooding the market with their own imports from the Far East. Others have resigned themselves to competing on an uneven playing field with businesses unhindered by rules, ethics and, more worryingly, health and safety testing requirements.


The substitute sellers advertise their own products under listings for more established


12 | www.gardencentreupdate.com


brands on sales platforms such as Amazon and eBay, thereby benefiting from the superior ranking and pulling power of bigger brands. By focusing on products which consumers usually search for by item description, rather than brand name, these unscrupulous sellers maximise their profits while limiting the risk of items being returned. The substitute sellers know all too well that consumers are unlikely to go to the trouble of returning an item that matches the description of the item they wanted if it works well enough.


how they too could go after the substitute sellers targeting their brands. The response was so overwhelmingly positive that Bonnington Plastics decided to arrange an event to bring companies together to develop a unified strategy to combat substitute selling and online intellectual property infringement. Representatives of 20 companies, whose products account for over £500 million of retail sales each year, met recently in Nottingham to discuss how to tackle what has been described as “the biggest threat to internet retail today.”


Either legitimate businesses like ours unite against these substitute sellers or there will be no future for any of us


The substitute sellers often deal in goods which are of an inferior quality and are therefore able to advertise them at such low prices that retailers selling genuine branded products cannot compete. The differences can be so subtle that the average consumer may be completely unaware that they are not getting what they ordered.


Many online retailers assume that their suppliers are offering better prices to their competitors, fundamentally damaging relationships built up over the years between brand owners and their customers. Unlike traditional counterfeiting, which many brand owners have fought with varying degrees of success since time immemorial, substitute selling is a relatively new phenomenon, so new in fact that many businesses and the lawyers that advise them are struggling to tackle the problem and stem the flow of lost sales.


A united front


In February 2015, an article in GCU’s sister magazine DIY Week caused a frenzy of activity amongst British brand owners, with the news that Bonnington Plastics had secured £80,000 in compensation against a group of prolific substitute sellers.


Businesses and brand owners from a wide range of market sectors contacted the company and its legal team to seek advice on


One business owner told the group: “These companies selling substitute products go to the same factories in the Far East and ask them to put a different logo on the product. That’s it. The artwork stays the same. The pictures stay the same. Even the internal product code. I’ve seen some products brought in by one company in the North West that had pictures of my staff on them!”


Almost every company represented at the seminar lamented the loss of customers due to the problems caused by substitute sellers, but many also expressed anger at the manner in which online sales platforms facilitate IP infringement and protect substitute sellers, with Amazon being regarded as the chief culprit.


Millions of pounds of lost sales Brand owners who had tried to take legal action had often been frustrated by the slow progress and exorbitant costs associated with the court process. Representatives of some companies said that they had lost patience with their solicitors, who appeared unable to tackle what is, even now, a fairly novel issue for the legal profession.


Many companies had resigned themselves to either fighting the problem with the limited means at their disposal or co-existing with the substitute sellers and watching the steady decline of the reputation of their brands and their profit margins.


GCU November 2015


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24