E179: Trademark Protection and the Importance of Being Amazon Brand RegisteredSeptember 13, 2018 in Ecom-Crew-Podcast
It’s becoming increasingly difficult to sell on Amazon.
I know I share the same sentiment with many listeners of this podcast. These days, you need to position your brand in a way that it can effectively differentiate itself. You optimize your listings and add EBC to pull in higher conversion rates. So it’s downright frustrating and disheartening when you encounter imitators online who hijack and duplicate products for monetary gain but at the original creator’s expense.
That being said, it’s crucial to have your brand and your products protected by a trademark. And in today’s podcast, we not only get to pick the brains of a lawyer who assists clients with protecting their brands. He also has his own ecommerce business to boot.
Steven Weigler is someone who’s certainly seen both sides of the coin. A former prosecutor and technology law practitioner, he has been running an ecommerce business for a decade. He is also the founder of EmergeCounsel, a business legal services provider.
Steve sheds light on what a trademark is and identifies the different kinds that are out there. He also talks about the Amazon Brand Registry and a relatively new program within it called Transparency.
Here are some highlights from our discussion.
- Brand Registry is a way for Amazon to identify legitimate brands and help the sellers of these brands weed out imitators.
- Filing for a trademark yourself with the United States Patent and Trademark Office (USPTO) is not advisable because it is a tedious process that requires specific legal knowledge and expertise. Any error that could be incurred while doing it on your own will leave a mark and its effects can be potentially irreversible.
- Going down the DIY route will also end up being more costly than if you had an experienced lawyer doing it on your behalf.
On that note, EmergeCounsel has a business service package that’s right up this alley. For an $875 all-in fee (on top of USPTO charges) you can get the following:
- Strategic discussions about branding and trademark needs
- A comprehensive trademark search using multiple sources
- Suggestions for proper trademark categorization to minimize the costs and maximize a trademark’s protection
- Phone-in or in-person consultations as needed
- USPTO trademark application preparation
- Responding to technical official actions issued by the USPTO
- Filing all forms and paperwork throughout the process
- One year of defense monitoring alerting clients to any possible threat to their trademark
- Assistance and advisory on the registry process
- Discounted rates for Emerge counsels
For more information, you can get in touch with Steve via his email address: [email protected]
Other Useful Resources:
Thanks for listening to this episode! If you enjoyed listening and think this episode has been useful to you, please take a moment to leave us a review on iTunes.
If you have any questions or comments, feel free to leave them below. Happy selling!
Full Audio Transcript
Mike: Hey guys, before getting started on today’s podcast, I just want to make one more plea to leave a review for us on iTunes for the EcomCrew Podcast. Be honest, rate at one star, tell everybody you get no value out of it and it’s a huge waste of time. I understand but seriously getting reviews for the podcast is what helps us get results in the search engine and found and get our listenership up to get better guests and keep me motivated to do this. I’d really appreciate it and I keep on mentioning this.
Like I know I’m a hypocrite with this, which I hate doing because it’s hard to get me to leave reviews. We’re all busy. We’re like listening to this in the car, and I know it’s a pain in the butt. But if you’ve gotten any value out of this at all, anytime, I’d really appreciate you taking a minute to go over and leave a review on iTunes. It really does help a lot. I’m going to leave you guys alone with that now and on with the show.
This is Mike and welcome to episode number 179 of the EcomCrew Podcast. Today I have a cool guest on with me, a lawyer of all things, I kind of joke about this when I’m introducing him. I met this guy at Sellers Summit I don’t know, back in May, I guess it was. So five, six months ago, whatever it’s been now. We were sitting at a random table together and just kind of hit it off. And then I found out he was a lawyer. If he introduced himself as a lawyer, I would have ran away first, but he convinced me he was a nice guy before I had a chance to run. And he really is. I’m obviously being facetious.
But we’re going to be talking about something I think that’s really important when it comes to e-commerce, which is trademarks. And especially if you’re going to be selling on Amazon there, there’s more to trademark law there than there is even having your own Shopify store. Because trademarks now unlock a lot of features on Amazon that aren’t afforded to other people who don’t have trademarks. But even if you are just a non Amazon seller, I promise you having a trademark will be beneficial to you, well worth the money in the long run, especially when you go to sell, because it always helps with valuation.
So we’re going to be talking about that and a couple other things, including the transparency program, Brand Registry 2.0, and some other stuff. So, right on the other side of this break, I’m going to introduce Steve and we’ll get started with the interview.
Mike: Hey, everyone. Welcome to this episode of the EcomCrew Podcast. Today, I’m going to say something that I thought I would never say, I’m looking forward to having a lawyer on the podcast. Lawyers obviously can be very helpful with a lot of aspects in your business, but when a lawyer is coming after you and we’ve had some shady legal things happen to us with trademark trolls and other things in the past. So, I’m a little bit bitter about lawyers in some respects but I also have a couple lawyers that are really good friends of mine.
And I met Steven who’s going to be on the podcast today at Sellers Summit. He was one of the guests there at Sellers Summit in Florida at Steve Chou’s event. And we just happened to be sitting next to each other at lunch one day. It was just kind of a roundtable lunch thing. We just kind of sit down and we started talking and hit it off. I mean, Steve is definitely not your typical lawyer, just seemed like a really great guy. And we talked about a couple of things that I think will be really helpful to everyone that’s listening to this podcast.
Just a little bit of background on Steve. He’s a business and intellectual property trademark attorney who’s also developing his own brand for Amazon. I’m excited to talk to him about that as well. He’s passionate about helping other Amazon sellers because he’s a scrappy entrepreneur just like all of us. So he also has a service we’ll talk about towards the end, which is like a flat fee trademarking service for Amazon sellers. And I thought that the timing was perfect to get Steve on today because between EcomCrew Premium and our support box, it has to be one of the top three questions we get is about trademarks and Brand Registry.
And while I feel like I know a decent amount about trademark well because we have several trademarks ourselves, I’ve been through the process, I am nowhere near as astute on this as someone like Steve is going to be. So, with that introduction and I’ll let you start by saying, do you go by Steven or Steve?
Steve: Steve is fine.
Mike: Okay so either way.
Mike: Okay cool. So Steve, welcome to the podcast my friend.
Steve: Thanks so much. It’s good to be here. For the record, I don’t like hanging out with attorneys either. So anyway, yeah, just a teeny bit about my background. I started out actually as a criminal prosecutor. So, I learned a lot about tenacity. I did that in Miami, and I have a background also in technology law. But about 10 years ago, I started my own company that was really focused on predictive analytics. And when I started that, which is a services business, I had no idea number one, what a brand was. And number two, what a trademark was. But I learned quickly that brand and brand protection are the most crucial thing to build a successful business.
And when I mean successful business, I’m really talking about the ultimate goal a lot of times is to grow a company and potentially even sell the fruits of your labor meaning get to the potentially even to sell it to a larger entity. And one thing that is crucially important to them and everyone else is that you have a brand and that people understand what your brand is which is more of the marketing side which a lot of people including me sometimes think is the exciting side, but also that when you put that brand together that you have an element of brand protection. And trademark in trademark law is the area that focuses on the protection side.
Mike: Yeah, I couldn’t agree more and it also helps with valuation and not just getting — because it’s obviously a concern. But typically from what I’ve seen from talking to our friend Joe Valley over Quite Light Brokerage, I mean typically brands that have a trademark will fetch a higher multiple because of exactly what you just mentioned. So, and there’s also the aspect of it’s almost — I mean, I wouldn’t say it’s impossible to sell on Amazon these days without a trademark or Brand Registry because you can certainly be on Amazon, but I think it’s getting close to impossible to be an effective seller on Amazon without Brand Registry, without the ability to do enhanced brand content and an add video content, and have your brand protected with some help from brand from Brand Registry.
And there’s also another program we’re going to talk about, which helps further protect you, which is transparency. And with all the stuff that’s been going on with Amazon these days, which we’ve talked about extensively on this podcast, it’s tough to be in an environment where you have a successful product. And as soon as it becomes successful, someone tries knocking it off and there’s not much you can do about it. You don’t want to be in that position.
Steve: Right. And you have to look at it from Amazon’s position. So, if you — Amazon the last time I looked, Amazon represents over 50 million — is it 50 or 500 million? It’s like some extremely large number of goods. And so, with that they have no idea many of the time who is the correct brand owner. So if you have an issue where you built a brand, you put it on Amazon, you’re doing well selling it, and all of a sudden a knockoff shows up, you contact and you’re not part of the Brand Registry. You contact Amazon, their position is we’ll try and work it out with the other party, we don’t know, we have no idea.
And so that’s going to be — and I deal with this in my defensive trademark practice. A lot of times it’s like Amazon is not going to get involved. So that’s really why they created the Brand Registry is to say, hey, if you invest and really we’ll talk about this a little later but it’s not very expensive. If you invest money and you get proper brand protection through a USPTO trademark, then we will stand behind this product and we will take down any imitators within four hours.
So, the way it is, that’s why you’re absolutely right. Yeah I guess you could do it and without getting on the Brand Registry, but the difference is you’re going to get a knockoff, potentially get a knockoff if your product is successful and you have no recourse, or if you can get the brand taken down in four hours with a minimal investment on a trademark, which would you choose?
Mike: Yeah, without question. I mean, I’m in the trademark camp. So, I think the best way to go about this, we typically try to keep these to 30 minutes or so is to spend the time in like a chronological order of kind of step by step what the different components are and how to get brand registered. And I want to interject a couple of questions that come up just again because we are so intimate with our audience all the time. They’re emailing us or we have obviously the EcomCrew Premium members that we’re talking to all the time as well.
And one of the questions that comes up more than anything else is just the different types of trademarks. If you could spend a couple of minutes just talking about the different types of trademark, a registered mark, a word mark, the different types of things, what Amazon accepts, what they don’t accept, and let’s start there and then talk about that real quick.
Steve: Sure. Let’s start with what a trademark is. A trademark is and in legal terminology is an indicator of a good or service. And so the trademark office’s mind is in what the consumer thinks. And so if the consumer — and let’s use an example of Oreo. So if you close your eyes and I tell you Oreo, you’re going to picture that round cookie with some white filling in it, I’m getting hungry. But you have a perception of that good which is an Oreo. That’s what — so the trademark Oreo is it gives you a consumer perception of what the good is.
So, trademarks can be one of four things. What Amazon wants to see is that you have a non stylized word mark. So it could be going back to the example of Oreo, it could be Oreo on the packaging, Oreo on the cookie, Oreo on the television commercial, Oreo in a newspaper article. Amazon wants to see the broadest form of protection which is called a non stylized mark. And so usually we capitalize those, so we’ll be O-R-E-O non stylized as and the good would be confectionery or cookie. A second kind of mark is a design mark, and that’s usually say Oreo and you can picture the cookie how there’s a design around it. That’s kind of a logo or an indicator with artwork. And so that’s called a stylized mark.
The third is you can protect trade dress. And so trade dress for example is think about the Coca Cola bottle how it has like that kind of teardrop look and feel to it. Well, that’s all protected through something called trade dress. So if you Amazon folks if you have a unique product that has a unique non practical design element it can be protected through trade dress. An example is Louis Vuitton bags are trade dress protected because they have that unique pattern that everyone can picture. That’s trade dress.
The fourth is sounds, which is interesting, but it doesn’t really relate to an Amazon on it necessarily. But when you watch HBO, think about the beginning of the HBO episode how they have that static and then it kind of clears out. That’s all protected. Mature brands take all those elements of trade dress, trademark, non stylized design and design marks and they weave them into brand protection. The goal of a trademark strategy is to start by thinking how can I do this at a lower scale on the cheap.
Mike: Got you. So let’s — it’s a softball question because that’s the only thing people ask all the time as well. What is that on the cheap and what does it cost bare bones to kind of get the trademark through that process as long as it doesn’t get pushed back because we can talk about that a little bit as well the process you’ll go through. But if it’s an easy trademark to get, what is it going to cost?
Steve: Sure. So, you can actually file it for a trademark yourself. I don’t recommend it. And we can go through war stories on why, but you got one bite at the apple really. And if you screw up your application, it’s a record that doesn’t go away. It’s like getting a DUI, like it just doesn’t — six years later, some of these you did your time or whatever, it’s still going to be in on the record. And so, a lot of the money I make is undoing trademarks. But you can do it yourself and the cost is $275 per category on that you pay to the USPTO. Another way of doing it is through like a Legal Zoom or something. The problem with that is there’s no — they’re just putting down what you told them.
So, I recommend that if you’re going to do it through Legal Zoom, just do it yourself, because you probably at least are going to sit down and strategize a little to fill out the application. And the application by the way, it can be anywhere from 15 pages to 50 pages. The third way and this is the way that experienced trademark attorneys do it is I offer a flat fee that cost about $875 all in. So, the first step is just like anything else, you have to have a strategy. So you have to have a brand and you want to — the idea is the maximum amount of protection for the minimum amount of price. So we have to sit down and figure out what your brand is, and how we’re going to cram all elements of that brand into one application into one category.
So, there’s 45 categories in the USPTO database and you have to put it into one. Each category cost $275, so you can’t do all of them and you don’t want to. So for example, if we were talking about plastic goods, so say you do a frisbee, and that’s plastic or it could be sporting goods. You’re going to put it into the category for plastic or the category for — what did I say, for supporting. Right, and so you would put it into that category but you wouldn’t say, but say your brand strategy is to add dog Frisbees, tennis balls, like a whole bunch of different things because you’re not going to just rest on your laurels, you’re going to continue building your brand.
So we have to talk about that and we have to get just the perfect definition of your goods. So when it comes time to add a good or increase your product line that we’ve covered that already in our brand protection strategy. So strategy comes first. The second is writing a stellar definition of the goods and services. In this case, most Amazon sellers have goods, not services, and putting it in the right category. The next step is a thorough, thorough, thorough search to make sure that your brand is not infringing on someone else’s brand. And I’ll use an example of what happened today with an Amazon client of mine.
They contacted me and they said for three years we’ve been selling — let’s just call it XYZ so I don’t disclose it, and when you look up XYZ and then they put kids. When you look up XYZ kids and there’s a famous brand that has trademarked everything under the sun under XYZ, so adding kids is still going to cause an issue of infringement. And if you would have done a thorough search — and the brand came out of Canada but then it moved to the United States. So you have to do a thorough worldwide search which we include in our packaging, in our flappy.
So again, first you position what it is, then you do a thorough search and we don’t do it on the USPTO website because although they have a search engine because it’s an author, it’s terrible. And I mean I was just meeting with the director of the USPTO, we were at a cocktail party together, and he admitted that just it’s behind most other countries, like it’s just very behind. So that’s not an adequate search engine. What we do is we use a Thomson Reuters trademark search.
And I pay gazillion dollars a month as a subscription. But we included in each one of our searches. It’s the same search that for example, Nabisco is going to do for Oreos because it’s just a thorough subscription based only available to attorneys and brand owners on search engine. And I’m going to tell you hey, this is possible in the United States, it’s not possible in Canada, it’s not — there’s a mark in China.
So you can look at hey, can I grow this brand because a lot of my Amazon sellers want to grow the brand outside the United States. So this is the time to know because if you’re sandwiched in between Canada and Mexico because the brand is taken there but it’s not taken in the United States, you might have a problem depending on what your business plan is. So again, the first is understand the objective, what the brand is, understand what the category is and where it is, do a thorough search and then prepare an outstanding application. And to prepare an outstanding application, again, it’s between 15 and 50 pages online.
And you have to get in the head of the examining attorneys because unlike copywriter or most anything else, it’s actually going to be reviewed by an attorney at the USPTO. And they have about two phone books, that’s an old fashioned term but two really big binders of regulations that they have to look at the mark through. And there’s a million reasons, not literally but there’s a lot of reasons that they can deny your trademark. And they’re under stringent requirements to turn to coders really. So what you have to do is kind of get into the head of what the examining attorney is going to think and overcome that at the beginning. Then you file with the USPTO, they sit on it for at least three to four months, because there’s only so many attorneys that can look at it so they have a backlog.
Then they look at it. And 85% of the time — I found this an amazing statistic; they’re going to have some kind of problem with it. 85% of applications get something called an Office Action. Most of them are not serious, but some of them are the kiss of death. So you want again, Michael, I cannot stress enough, you want to know all these issues at the get go, which is why you shouldn’t — it doesn’t have to be me, but you should consult with someone who’s a professional trademark attorney, like this is what they do because it’s like you’re six months into it, you already did a production line stamped with a brand and then you find out you have a brand problem, that’s bad.
Mike: And we’ve — just as a reference to kind of backup what you’re saying, we’ve done for e-commerce we’ve done five trademarks and two of them had push back. So we’re at a 40% fail – I want to say fail but we did ultimately get them through and adds so much additional time to that process instead of taking six to nine months to get it through on the first try. I mean those both took over a year.
Steve: Yes. Because again then you re-file or you don’t have to re-file, it’s the same application but you have to respond and then you’re still in a queue. And it really is, some of it is luck of the draw but a lot of it is strategy. And then if you like you reference you have more than one mark, well then it’s a strategy of how those marks are going to work together. And that’s part of what a trademark attorney helps do also. And how I put — my philosophy on all this is again, that’s all flat beat. So, if we’re going to hit issues, that’s included most of the time in my fee.
And we can cover what could happen where it just the situations that aren’t good for a brand holder that we have to charge extra which is something called likelihood of confusion where your mark confuses with some other mark according to the trademark office. Now, for example, if I — let’s go back to the frisbee example. I file under sporting goods for frisbees, and then somebody has dog treats or a dog line that is on a completely different category. And my brand was called Frisbee. I’m just trying to make this easy, and there’s this called frisbee is delicious for dogs. The trademark office could still find confusion. It’s a rather arbitrary ruling but that is very difficult to overcome, and you have to cite tons of examples why a consumer would not find that confusing. That’s called a substantive refusal and that’s issues.
The other substantive refusal is if the trademark office feels that your mark is too descriptive. So if I were doing I don’t know, Steve’s attorney services for attorney services, they would say well, you just described what it is you’re doing, attorney services. So good trademarks and this is something to think about at the get go, good trademarks are either very arbitrary, which means like Apple for computers is an arbitrary trademark, because an apple is an apple. Comparing it to computers, that’s random, like why — that’s called arbitrary. Another good kind of mark is called fanciful which means it has no real meaning. So Axon for oil is an excellent example because if you look up Axon it has no meaning.
And so the trademark office and everyone member of your audience should be thinking about fanciful or distinctive marks. You can do descriptive marks and they’re held at the get go, like meaning everyone is going to know what you do, but they’re hard to get through. Anyway, but there are ways and that’s what trademark attorneys help with. So those are the two. Every other kind of refusal is included in a flat fee. And there’s so many, there’s so many different types of refusals. My advice is don’t do that yourself. Sometimes the trademark office — unless the trademark office is telling you exactly how to do it. But a lot of times they’re going to be saying, you’re going to see on the bottom line, you might want to consult with an attorney and then definitely call and pick up the phone and get an attorney involved.
So then it publishes. So once you get past the USPTO examining attorney, it publishes and the general public has 30 days to look at the publication and say if they have an objection to it. Now I guarantee you no one is looking at these publications except really big companies and they hire attorneys. Some attorneys, that’s all they do is look at marks coming out to see if they have objections to it. And they make your lives absolutely miserable. I’m going through it with a client right now, an ammunition company that the mark made it through the trademark office. I didn’t see it, I didn’t see this coming, and all of a sudden this huge mega law firm is fighting that our brand infringes on their brand. I don’t see it, but we got to deal with it. And that again involves a lot of strategy.
Mike: And we want to start with ColorIt, so we’re definitely familiar with that process. It was a pain in the butt.
Steve: Yeah. And the strategy a lot of times is don’t act scared. And so because it is intimidating when you have a mega company, a branding company coming after you, but your attorney or you should know the situation just as well as they do. So then the next thing is that once it publishes, then the trademark office still has nine weeks to issue the registration. So if you add all that time together, a good application that’s well thought out, that you’ve dotted your I’s crossed your T’s, gone through the process, and worked with an attorney should take seven to eight months.
And that’s another benefit of number one working on a flat fee package. But number two where everything is included because the ultimate goal is to shorten the amount of time that it takes to get the trademark because Amazon will not put you on the brand registry until that trademark is — actually have a registration number.
Mike: So if you’re driving down the road, pull over and get this done now because it takes a while. If you haven’t already got this process going or got a trademark, it’s super important. We’re going to – I think the next part here is to talk about why. So let’s talk about the why like what you get as a brand registered business with Amazon and Brand Registry to point out what benefits do they give you?
Steve: Well, there’s two huge benefits. I mean from my perspective. Number one and we went through this scenario is they’re going to protect you. Brand protection is very expensive. So, if somebody has infringed on your mark, sure you can send a letter and that’s actually included for my Amazon clients. If they have a cease and desist letter that they needed written, I’m not going to charge. It’s part of the flat fee. I’m going in there for them. So you could write a cease and desist letter, but then they’re not necessarily going to listen. Amazon will enforce your mark; they’ll take down the infringing mark. And my assumption is that you have a lot of Amazon power sellers and that this is a major channel for their commerce.
If Amazon is stepping up to the play and saying, I’ll enforce the trademark for you just let us know, that’s an exponential benefit that Amazon has provided. And they won’t do it if you don’t have — you’re not on the Brand Registry. The second thing is and I think Michael you can probably speak more to this is they’re going to enhance your descriptions and allow you to broadcast a product a lot more comprehensively and fully if you’re on the Brand Registry. And I can go through Amazon, this is the darker side I am sometimes I’m with just being an expert in my field is I sometimes go through, and I can pick the ones that are on the Brand Registry and aren’t on the Brand Registry just by looking at the descriptions, because Amazon will allow much more flush, including I believe the ISDN numbers are descriptive numbers that you can have if you’re not a Brand Registry.
Mike: I’m not sure about that. But I know you end up with — you can get enhanced brand content, which is all the additional imagery and texts down below the listing which I mean it’s one of these things I can’t even imagine having listings without them anymore, because they make such a huge difference in our conversion rate in a positive way. And you’re also allowed to add video to your listings which also makes a huge positive difference. So, for me it’s definitely really important but also like we talked about earlier and what you just mentioned is protecting your brand and having Amazon boo people off.
But I have heard recently actually like I don’t know like literally this week two people have had this issue happen and they’ve — and Amazon basically told them, and I’m paraphrasing here, that they can’t control the distribution channels and they wouldn’t remove the people that were selling on their listing, the hijackers or whatever. We gave them some advice that ultimately allowed them to get them out of there, but I’m just wondering if you’ve seen more pushback from Amazon recently on this.
Steve: Well yeah. I mean listen because I do a lot of Amazon — not a lot but I do some Amazon takedown work also, dealing with Amazon is sometimes can be very challenging — not so much challenging inconsistent here. So it depends and so sometimes you have to try multiple channels. But a lot of times when — so for example if you hit that issue and I were the one who helped you get on the Brand Registry, we would probably do some kind of escalation through a proposed course of action and kind of get into their language and there’s just a way to kind of get to yes with Amazon on these issues. But I like you have seen that with established brands and that have trademarks.
And so again, I just found the statistic, they have 562 million products on Amazon. And they’re moving quickly, and so one thing also I know about Amazon is right now the Brand Registry is optional, but the Brand Registry is not going to be optional is what my intelligence — not my personal intelligence, but what people are telling me on through Amazon, when I go to my trade shows because they just were at the International Trademark Association Conference, and they had a big booth. Both this and maybe this is a good transition in transparency, these are not going to be optional in the future.
And so I guess you have to look at it as an Amazon seller, brand protection is great for anybody that’s selling a good or service, you need it. But for an Amazon seller, if this is your channel and it’s an amazing channel, then you have to do what you anticipate they’re going to do. And I think the push is that if you’re not on the Brand Registry — because they’re trying to consolidate. This is too many goods for them. And so they’re trying to consolidate their place so they don’t have to deal with this. They don’t get paid extra to get these emails about trademark infringement. And so they’re going to make — my understanding is their push is to make you do it. And so do you want to be nine months out when they decide to consolidate. I’m not saying it’s going to happen, I know as much as the next person.
Mike: And I think it makes sense because if you think about it, from the perspective of things they’re trying to protect to make their platform a better place, if you make it so people have to wait nine months before they can sell on Amazon basically, if it’s a brand new company that rules a lot of people out. Most people, a lot of people aren’t going to be willing or able to go through that process. And it’s not just nine months; I mean you have to have sold in e-commerce before. So like if you aren’t selling in e-commerce to start with on Amazon, that means you probably need to set up your own store or something to have it to begin with.
And it really keeps the guy like in his pajamas or underwear in his mom’s basement from starting up an Amazon business selling one skew for random products which is good and bad in different [inaudible 00:33:56]. I think it might be good for the platform overall, it’s bad from EcomCrew’s perspective because we show a lot of people how to do this. So it would be one of these things where it’s a double edged sword for us. But I can definitely see an argument and a reason why Amazon would go that direction in the future.
Steve: Right. And I think there is hope. None of us would have anticipated this 10 years ago. It’s something that just has kind of taken off and it’s awesome, what a great platform. But at the same time, I think this is the issues if again we try and get into that examining attorney side. As an Amazon seller, think about Amazon’s position. They’ve created this, they’re asking for a minimal spend, they don’t want to be a party for trademark infringement. And so they’re going to go in the direction of taking more measures to make sure that you’re registered that it’s your brand. They don’t want to get in the middle.
So I think it’s probably going to happen. I don’t know, again my guess is as good as the next person is on that. And that’s getting into transparency too, that’s a step in that direction where — have you covered that in your packet?
Mike: We actually haven’t talked about transparency I don’t believe on the podcast. So it’s a great thing to kind of end the show on here today. I mean I’ll do a spoiler alert thing here that we’ve decided at this point not to do it just because I think that it’s too many additional pieces in the supply chain puzzle. It’s already difficult to deal with that as it is plus Amazon is going to be charging extra for it which I find to be a little bit insulting in some ways. I think it’s crazy that they’re charging to help you protect yourself against what’s like actually in their best interest which is to protect their platform.
But at the same time, like I do — the reality is if we had an issue with one our products and the only way for us to fix it would be to enroll in transparency and do it, we would definitely do it because at the end of the day, you need to protect your business. And if it’s the only way to protect yourself from hijackers and counterfeit goods, I think you’re forced to do it. So, now that I’ve mentioned all that, and no one knows what the heck I’m talking about if they never heard of transparency, I’ll let you explain it, what the program is.
Steve: Sure. And Amazon is — this is another thing that might not be optional, and it might be many years down the road that it’s not optional. But right now they’re actually rolling it out. If you enquire, they’ll give it to you for free for six months. But Michael is right, they’re going to charge up to five cents per label and they’re going to have labels that are very much like universal product codes on that tell everything about that particular product when you would wave a specialized tool over it. So it’d say where it’s manufactured, that it’s on the Brand Registry, the name of the product, what the ingredients are, that it’s this particular skew, everything about that product in a little code called the transparency code.
And you would buy and give to your packagers a label for every one of your products. So say your product rollout is 10,000 products, you would have to buy 10,000 labels at five cents apiece roughly speaking. And each one would be custom labeled and when it comes into Amazon, they would waive their specialized one over each product before they inventory it. Then when it goes out, they also wave it so they know that product has been sold. So, that’s their way of making sure that that product is coming from that manufacturer or that seller, and that they’ve received it, they’ve inventoried it, that it has this expiration date if it does, if it’s not shelf stable forever, and that it’s going out and just as Michael said, it helps them a lot with their own processes and procedures.
Now, I have heard the same thing that Michael has heard about. This is Amazon’s first and they’re first in this rollout, and people are having some issues with it. I think it’s probably a good thing to keep on everyone’s radar in my philosophy that Amazon is not doing it as something that’s always going to be optional. They’re right now trying to sell to the marketplace that that this is a good idea and that it’s cheap and it might be depending on your business plan. But ultimately, this might be something your listeners are going to have to deal with.
Mike: Yeah, and then one thing I want to make clear that I think you made it clear but I just wanted to reiterate it. These labels, so if you were to buy 10,000 of these labels, they’re unique serialized. So I mean each one is unique like a fingerprint and will never be used again. So you’re uniquely labeling every single one of your items so no one else could possibly ever hijack one of your listings again because unless they had one of the transparency serials that were issued to you, they would never be able to list on your listing if you had transparency active for that ASIN. And if a customer purchases one of your items and makes a return, they’d have to return the exact serialized transparency barcode so they couldn’t game that system.
Some people return fake — buy a real good and return a fake good. This type of scam happens on Amazon all the time. So those are the benefits but the downside as we’ve kind of already covered is it’s a nickel a piece. And if you’re selling iPhones at $700 then it’s probably worth it to you, but if you’re sewing gel pens like we are at $25 a set, a nickel eats into your profit margin slowly but surely, because Amazon continues to add nickel and dime fees where storage fees go up by a nickel or they add a photo value fee like they did to our books for a buck 80. And all these different types of fees over time, your net profit margin continues to decrease because of these fees.
And that’s just another fee that I didn’t want to get involved in, plus the manufacturer when we talked to a couple of them just to see that the products we had the most problems with, they want to charge us too. Obviously it’s not — you can’t build this into the packaging, you have to have somebody over there peeling and sticking labels on every single product. So they want to charge for both the materials of doing that and the labor, a penny apiece or a penny and a half a piece. It’s not that much but again it adds up. So now you’re at like six and a half cents per unit by the time you add that in, and again on lower margin products that can be significant.
Steve: Right. And I think looking at the bigger picture, Amazon is — technology is moving very quickly and this is Amazon’s first attempt at this. I’m not sure it’s a good idea to be a first mover like why, whereas the Brand Registry is a different story. But in this I think there’s going to be probably be some technologies that are going to make this whole process a lot easier unless again, if this works into your business play or you’re having a lot of issues with infringement or a lot of issues with returns and you’re willing to be a first mover, then you have a unique situation. And just like any other strategy, you need to talk it more.
But that was my initial impression is like really you have to put this on every product and you’re going to have to then put into your supply chain management that you’re going to have to work in with your manufacturer that they’re going to have to put it on. That’s just another hassle, but again it does solve some issues. I haven’t heard enough, I don’t have enough of a database to know if it works for everyone. I’ve heard varying things about the success of Amazon to police their own program.
Mike: And I would imagine and maybe this is just naïve, but I would imagine if you were in transparency that they’re locking things down, like it would be like on total lockdown at that point because I mean you just think about from like a zeros and one perspective from like a computer logic standpoint. It’s like if you have a valid transparency barcode on the package, it’s for sale, and if it isn’t there you cannot sell it. I think it would be as simple as that. But again, that could be naive.
Steve: Yeah. I mean, there’s a lot of unknowns, but I think I’m glad we brought it up because again, I don’t think Amazon is bringing this out to make it optional in ten years. I think this is going to be they’re trying to consolidate their marketplace as opposed to reach out to more than 500 million products. And so they’re just trying to — they’re saying yeah, this might be the price of entry, and we just all have to be ready for it at least understand the rationale.
Mike: Yeah, makes a lot of sense. And I think last thoughts here just to end on this; it’s been a kind of a common theme through here, at the end you were just saying like, Amazon is looking to consolidate the marketplace. So just to know the thing to be keeping in mind if you are a brand and a seller and you rely on Amazon too much, this is one of these things where another reason to be thinking about that. Because if they’re looking to consolidate, that means there’s going to be winners and losers and you ultimately don’t want to be a loser, and if you are you don’t want to have all your eggs in one basket.
So that’s one of things we talk about a lot on here is you’d be thinking about the bigger picture. So Steve, I really can’t thank you enough for coming on here. It’s been I think a good knowledge bomb especially for people who don’t have trademarks yet and don’t even know where to start. So, with that in mind, and I do think that the service that you offer is incredibly economical. I mean I haven’t personally used you yet. I know a couple of people that have and they said some good things about you. I can tell you that we spent way the heck more money than $875 getting a lawyer to do this.
Steve: A lot of people do.
Mike: Yeah, we have a lawyer that we had help us with a trademark troll issue years ago that I’ve come to really know and trust. So I mean we already have a relationship in their email and we just let them do it. But I see these bills and I just want to like throw up in my mouth. So I mean I think you’re basically paying $600 extra to have someone that knows what the heck they’re doing, go through and hold your hand, help you through the process. And my rationale would be like even if you help them on average get a trademark approved even just one month faster, it’s worth 600 bucks, like not to even mention all the other pitfalls and hassles that — so to me it’s an incredibly good value. And with that I want to give you an opportunity real quick to just let people know how they get ahold of you and talk about this.
Steve: Sure. So one thing I do also offer is I wanted — it’s important for me to get to know every one of my clients and what their brand strategy is and so I offer at no cost. If you wanted me to do what’s called a knockout search to find out are you even in the ballpark on your brand or is it going to be issues like for example the baby product I talked about, just email me at [email protected], and it’s 1888 emerge zero is the telephone number. And then our website is — and you can link to the total team for Amazon sellers through it, is www.emergecounsel.com. But again we want to get to know you; we want to get to know where you’re going with your brand.
And the reason for my relatively low price structure is number one, technology is in the legal field has made incredible gains which allows me to really just charge for using my brain and a lot of the things that attorneys used to charge for or maybe still are, are very automated and we don’t need to charge for any more. So that’s what kind of — and I consider myself a technology innovator. The second thing is I want to grow with you and I want to grow with the client. And also — so I do offer many other services. And so I do have a very holistic practice and I’ve been there myself. So that’s kind of my business strategy on that.
Mike: Excellent. And one of the things I was hoping to talk to you about today was your Amazon business but we’ve run out of time. So maybe we can get you back on some other time and talk about how you’ve gotten started as Amazon seller, because I know you’re earlier on in the process. And I love hearing people who are just getting started. And it’s actually been a while since we’ve talked, so maybe you are further down the line that I think at this point. But just hearing someone else who’s been through that journey so maybe sometime we can get you back on the podcast and talk about that.
Steve: That sounds fantastic. It’s very exciting for me.
Mike: Awesome. Thank you so much Steve.
Steve: Take care now. Bye.
Mike: Hey guys. Before officially wrapping up this episode, I just want to mention that I got an email from Steve right after recording this and he basically said hey, look, you were doing such a great job with the interview. I didn’t want to interrupt the flow but one thing I didn’t mention was that it’s basically $600 more to you Steve versus trying to file this on your own. And actually the $875 fee that he charges is on top of whatever the USPTO charges, the US Patent and Trademark Office. So, I still think it’s an amazing deal and kind of what I was saying in the interview was that we pay significantly more when we do this on our own with our lawyer.
I’m probably going to use Steve for my next trademark. I’ve heard good things about him from the people who were there at Seller’s Summit and other things like that. And it’s certainly a fraction of the cost of what we’ve been paying another lawyer to do this for us. So other thing he said in his email here, and I just wanted to read it all, the $875 includes strategic discussions about branding and trademark needs, a comprehensive trademark search using multiple sources, suggestions for proper trademark categorization to minimize the cost and maximize the trademark’s protection, phone in or in person consultations as needed, USPTO trademark application preparation, responding to technical official actions issued by the USPTO, filing all forms and paperwork throughout the process, one year of defense monitoring alerting our clients to any possible threat to their trademark, assistance and advisory on the registry process, and discounted rates for Emerge Counsel’s other customized legal services.
So that’s what the $875 does. Wrapping all that up into English, basically, it means that for 875 bucks, you’re going to have a lawyer on your side filing all the trademark paperwork and getting it through as quickly as possible on top of the fees which are somewhere between $225 and $425, depending on the category and the number of categories you’re going into. But the typical fee from the USPTO to get this done is $275. So again, I’m paying embarrassingly more than $875 so I know that it’s a great deal and Stephen seems like a great guy. So, I want to just throw that out there, make the correction and that’s about it. So let’s hit the official end of the podcast now.
And that’s a wrap folks. If you guys have any questions for Steve or me about this episode, you can go to EcomCrew.com/179. Before signing up, I want to take one moment to remind you guys about EcomCrew Premium which is our new subscription service that gets you access to all of our courses, Dave and I via email at any time, a monthly webinar, Q&A, open Q&A where you can ask any questions that you have, and a behind the scenes of our brand, what we call under the hood of our brands where we show you the exact products and ads and everything that we’re doing. You can sign up for just one month or for an annual plan. You can do that at EcomCrew Premium, sorry EcomCrew.com/premium. And besides that, guys, I want to wish you a great rest of the week. And Until the next episode, happy selling and we’ll talk to you then.
Michael started his first business when he was 18 and is a serial entrepreneur. He got his start in the online world way back in 2004 as an affiliate marketer. From there he grew as an SEO expert and has transitioned into ecommerce, running several sites that bring in a total of 7-figures of revenue each year.