Amazon Marketplace sellers who deal in new, used, and refurbished Nintendo products woke up to a peculiar notice yesterday: without warning, Amazon was telling third-party sellers that they could no longer list Nintendo products of any kind without seeking approval. The policy change seems to affect both Nintendo games and Nintendo hardware like 3DS handhelds. The process, common in e-commerce, is known as brand gating, but it’s unclear exactly when the deal was struck or what the terms are.
The deal, which appears similar to the ones Amazon struck with Apple and other brands in the past, has the effect of kicking off all but the largest third-party sellers from an e-commerce platform, ostensibly as a tool for counting down on counterfeit products. (Nike is another big-name Amazon partner in this regard.) But dozens of legitimate third-party Nintendo sellers now say they’re being cut off from the most lucrative US marketplace for selling online goods without any explanation and without any guidelines for how to proceed.
According to an email provided to The Verge from a Nintendo seller on Amazon, the company says, “As part of our ongoing efforts to provide the best possible customer experience, we are implementing approval requirements for Nintendo products... Effective on 2019-10-31, you will need approval to list the affected products. If you do not obtain approval to sell these products prior to 2019-10-31, your listings for these products will be removed.” The policy went into effect the same day the notice was issued, giving sellers no time to prepare.
That was not the case last fall when Amazon struck a deal with Apple and gave sellers a few months’ heads-up. There is also no clear indication which products are affected in this Nintendo deal. It seems to primarily be targeting old games, but some sellers say they’re able to list products as refurbished or new in some cases and keep the listing active. As Ars Technica reports, “counterfeit retro Nintendo cartridges have been an open secret among Amazon sellers for some time.” The publication spoke to a Nintendo seller who says a standard order of roughly two dozen old Pokémon games, even from a major retailer like GameStop, might arrive with 12 or so bootleg cartridges. It may be that this Amazon deal is designed to cut down on that practice.
Yet making matters more confusing is a complete lack of communication from Amazon and Nintendo. Neither company has responded to a request for comment, and neither has issued any form of confirmation about the new rules or reasoning behind the policy change. It’s not clear how the approval process works or whether there are ways around it by applying for Amazon’s refurbished product program, called Amazon Renewed.
For Apple sellers of a certain size, the Amazon deal exempted them so long as they meet relatively high inventory requirements that involve purchasing at least $2.5 million products over the course of the prior 90 days. For all other products, Amazon says, “Supply invoices showing a minimum a total value of $50,000 in qualifying refurbished purchases in the previous 90 days from the date of the application.” But again, it’s not clear if this is what Amazon means by seeking approval or if Amazon Renewed would bypass the approval process if you’re only selling used and refurbished Nintendo games or hardware.
The effects of brand gating can be devastating for sellers of brands that have discontinued products and products that involve technical upkeep, like consumer electronics. Small Apple sellers on Amazon, for instance, that focused on refurbished MacBooks and iPods saw their businesses disappear overnight when the deadline for the Apple deal arrived back in January of this year. A majority of those sellers, very few of which can reasonably meet the Renewed requirements, were forced to start using their personal websites, eBay, Etsy, and other marketplaces. Some told The Verge Amazon was responsible for a bulk of their business.
Over the summer, the Amazon-Apple deal became a fixture of regulatory concern, when the Federal Trade Commission began interviewing Apple resellers about the effects of the Amazon deal. A formal investigation has yet to open, but Amazon’s handling of third-party sellers on its Marketplace, which is larger than its entire internal retail division by revenue, has become a focus in the federal government’s antitrust investigations into Big Tech. Amazon Marketplace, and how Amazon uses sales data it gleans from third-party sellers to develop its in-house products for its private label brands, is also at the center of a European antitrust investigation into the company.