Net Enforcers Tackle Unauthorized Internet Sales For Suppliers

By Amy Gilroy On Sep 29 2003 - 6:00am

A year-old company that helps suppliers stop unauthorized Internet sales has signed up a host of leading car audio players including Alpine, Crutchfield, Mitek and Blaupunkt.

Net Enforcers VP Adam Cohen said his company can shut off hundreds of unauthorized sellers for each client. "Within the first week we are able to take products off some of the more popular sites." He said the company is particularly effective in working with Internet auction sites that allow the sale of new goods. "We've already stopped thousands of unauthorized sellers of car stereo goods on eBay," he said.

"What's happening is you'll have some guys who want to start a stereo shop online. They set up an eBay store, claiming the merchandise is manufacturer-warranteed, and 99 percent of the time it's not because it's purchased outside the channel," said Cohen, adding that the seller will often copy the manufacturer's logo, product write-ups and product photos, effectively disguising himself as an authorized dealer.

"When there are problems seven months later, and the customer gets burned, he's not mad at eBay, but at the manufacturer," said Cohen.

New product sales on eBay have become a topic of concern to many suppliers and retailers.

Many believe it is encouraging transshipping and unauthorized sales. Sony general manager Bill Lee said of the general downturn in car audio, "There's definitely some connection to Buy It Now," referring to eBay's program.

Ray Windsor, Eclipse marketing and sales VP, said it continues to be "an ignored problem."

But some industry members are taking action. Crutchfield sought NetEnforcers' help because eBay users were "stealing content from our Web site — stealing copy and images that are copyrighted materials without our consent — for the use of selling," said senior VP of business development, Dan Hodgson. The most frequent problem areas on the Web are eBay and Yahoo Shopping, he said.

Other suppliers, such as Eclipse, say they have complained to eBay, but to no avail.

EBay said it responds to supplier gripes through a program called Verified Rights Owners program (VERO). First, a company must enroll in VERO and then notify VERO of an authorized sale. EBay will then remove the item from its site, said a spokesman. In fairness, the seller then has 14 days to respond to the complaint after the product has been removed, he said.

"Fixed price formulas" are a growing percentage of eBay's business, amounting to 27 or 28 percent of its gross merchandise sales in the second quarter, said the spokesman. On a typical day, $62 million in sales are exchanged on eBay.

He said complaints are frequently lodged through VERO. "When you have 16 million items on the site and almost two million coming up every day, you get a lot of activity in VERO," the spokesman said. EBay would not divulge car audio sales, specifically.

Net Enforcers says most of its business is from car stereo clients, however, it is also expanding into home audio and computer software.