Online retailers are always searching for creative approaches to offer a wide selection of products at competitive prices to online shoppers. One strategy sellers and business owners employ to achieve this objective is parallel importing.
In the context of the Amazon marketplace, Amazon sellers utilize parallel imported products to broaden their range of products, penetrate a new customer base, and extend market reach. By engaging in parallel importing on Amazon, sellers can enhance the availability of their products and offer competitive pricing.
What is Parallel Importing? | Amazon Parallel Imports
In essence, parallel importing refers to reselling imported goods in a domestic market acquired through the unofficial distribution channels of a brand from a particular country.
For instance, imagine a reseller in the United States who stumbles upon a particular brand of shoes being sold at a reduced price in a foreign market. To make the most of this price difference, the reseller can resort to parallel trade by contacting parallel importers or suppliers in the overseas market and then selling them directly in the United States.
Parallel imports extend beyond shoes and can encompass a wide range of products, including electronics, books, magazines, software & computer games, accessories, and even cars. These products are authentic and have been legitimately obtained from a supplier in other countries.
Parallel importing is a usual occurrence on the Amazon marketplace. It likewise follows the same concept as described above. However, Amazon’s distinct guidelines make parallel importing on Amazon unique from the typical process.
Amazon expects sellers to comply with policies and obtain proper authorization for parallel import products listed on its marketplaces. Failure to do so may lead to consequences such as account suspension or other actions taken by Amazon to uphold the rights of trademark owners and maintain a fair marketplace.
Basic Legal Concepts and Guidelines Concerning Parallel Importation
The legality of parallel importing on Amazon can vary depending on the specific country and its governing statutes. In many countries, parallel importation is generally legal as long as the imported products are genuine, not counterfeit or pirated.
Sellers need to understand the legal framework and regulations in each country they operate in, including but not limited to intellectual property rights, customs and import regulations, and even brand rights.
If you intend to implement parallel importing to improve your Amazon listings, you need to be mindful of the following:
Intellectual Property Rights
The World Trade Organization defines intellectual property rights as “rights given to persons over the creations of their minds.” These IPRs are intended to safeguard and encourage the development, distribution, and exchange of goods. They also ensure fair competition and consumer protection.
When participating in parallel importation, you must verify that you are not infringing on the brand owners’ trademarks, copyrights, or any other intellectual property rights. Always validate that you have the authorization to resell legally imported products.
Exhaustion regimes are an important concept related to parallel imports. Based on the World Trade Organization’s agreement on Trade-Related Intellectual Property Rights (TRIPS), countries have the freedom to choose from three regimes: national, regional, or international exhaustion.
Before delving into the three regimes, it is essential to first clarify the concept of exhaustion. Exhaustion means that once the product is sold, the patent-holders rights are exhausted, and they are stripped of control over the new owner’s private use of the product.
In the national regime, the rights of a protected product are exhausted within the country where it is sold. The regional regime allows patented goods to be freely traded within a specific economic area.
Lastly, international exhaustion means that parallel imports are allowed worldwide. Once a product is sold in any market, it is considered freely traded and subject to national regulations when imported and sold.
Customs and Import Regulations
Apart from IPRs and exhaustion regimes, you should also comply with customs and import regulations when engaging in parallel imports. Each country has its own customs and import regulations, including but not limited to paying applicable import duties, taxes and adhering to labeling or packaging requirements.
You should be mindful of these regulations to avoid any delays, additional costs, or legal issues regarding your parallel import products.
Amazon Parallel Import Guidelines
In addition to customs regulation and IPRs, Amazon likewise placed its own policies to regulate parallel imports. You should comply with the policies to avoid warning notifications or account suspension.
These policies may vary depending on the specific country and Amazon marketplace. Therefore, sellers must familiarize themselves with the rules and guidelines specific to their target market to ensure compliance and also customer satisfaction.
For instance, the warranty and terms of repairs of official representative agencies and manufacturers do not apply to parallel imported items (with the exception of some products) in Amazon Japan.
In the case of Amazon UK, Amazon highlighted that reselling an imported product legally imported into the United Kingdom to a buyer in Italy is not an IP-infringing parallel import.
It is also worth noting that although parallel importation may be legal in a particular region, Amazon sellers must recognize any preceding contractual agreements or exclusive distribution arrangements between brands and authorized branded goods distributors. Amazon sellers must check with authorized distribution channels to prevent warning notifications or account suspension.
When delving into parallel imports, it is vital for sellers to thoroughly research and understand the legal landscape, intellectual property rights, regulations, and parallel import restrictions in each country they operate. Seeking legal advice or guidance for a particular jurisdiction can help ensure compliance with the laws and regulations relevant to parallel importation on Amazon.
What Should You Do if You Receive a Notice for Parallel Importing?
Amazon strongly encourages sellers to contact the rights holder to ask permission and obtain a retraction. If the rights owner is unresponsive, you can make an appeal to Amazon along with accompanying evidence, including invoices showing that you sourced from an authorized distributor of the rights owner may be one type of such evidence.
What to do if You Receive a Warning or Suspension?
If you receive any notice of suspension or warning due to a report of intellectual property rights infringement, you have several options for appeal or dispute. Amazon has outlined the following:
⚫ If you receive a warning for a product you have never listed on Amazon, you can respond to the notification and inform Amazon that you have never listed such a product. Amazon will then review the situation to determine if an error has occurred.
⚫ If such a product in question is indeed listed under your Amazon seller account, you can reach out to the rights owner who filed the complaint and request them to retract it. Once Amazon receives the retraction, they will reinstate your listing. To find the contact details of the rights owner, refer to the warning notification you received.
⚫ If you believe the warning or suspension notice is a mistake, you should promptly respond to the notification and explain why you think an error has been made. You can also provide any supporting evidence, such as invoices or Order IDs, that prove the authenticity of your product. Amazon will then reassess the notice and potentially reinstate your product listing.
In order to familiarize yourself with Amazon’s intellectual property policies in general, you can refer to their intellectual property program policies for more information.
Improving Your Amazon Listing
Parallel importing serves as an alternative avenue for Amazon sellers to improve the product variations of their Amazon listings. You can provide consumers with a wide range of products through parallel imports, including items deemed exclusive, limited edition, or on early release to specific markets.
Aside from improving inventory variations, parallel imports also allow sellers to exploit price disparities between different markets. Thus, allowing them to offer customers more competitively priced listings.
To enhance your pricing strategy, consider using a reliable Amazon repricer. Advanced repricing software, such as AI repricers, can help you improve your listing prices without engaging in an Amazon price war that can harm your profit margin.