Should brands be freely sold on eBay? Part 2

Last month we discussed eBay’s petition on the issue of brands  restricting the sale of their products on the internet. I was totally clear that the public should be able to sell their pre-owned items without restriction but are brands entitled to block the sale of new (genuine) items?

The high profile case which effectively gave the brands control over  distribution of their products was Tesco’s battle with Levi Strauss.

In July 2002 the High Court upheld a ruling in November 2001 that Tesco was not allowed to sell cut price Levi jeans without permission from the US-based clothes giant.

The grocery chain was fighting for the right to import designer goods from around the world and sell them at an even greater discount to UK customers. Under the EU’s trademark rules, any company can import branded goods from another EU country for sale in the UK, even without the manufacturer’s agreement. But the permission of the manufacturer is usually required when importing from a non-EU country.

You can understand that the brands want to protect their valuable image rights and should have some degree of where and how their products are sold to maintain the ‘exclusivity’.

I can sympathise and, in general, agree with this view. If the public want to buy a cheap pair of jeans, Tesco has their own and other brands on sale. There is no cartel whereby jeans manufacturers artificially keep the price high and there is, for all intents and purposes, a free market.

However, if you particularly want to buy a pair of Levi’s jeans, that is your choice and you should be prepared to pay a premium for the marketing and general brand building costs.

So should these products be able to be sold on eBay? Well, yes, providing they have been sourced legitimately.

It is inevitable that the prices will be somewhat cheaper (although with postage costs maybe not appreciably so) as there are not the overheads associated with prime High Street sites and in any event, eBay now takes a sizable chunk of the sale price. However, these same savings are available to any on-line retailer so eBay is not offering any unfair advantage.

If you want to buy branded merchandise from eBay or any other e-commerce outlet then so be it. I don’t believe that it’s unfair competition and wish eBay luck with their fight to get the EU laws changed.

Tony Heywood – Gilcrest Services Ltd
Retail Troubleshooter
Business Turnaround and Recovery

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