28 September 2022

Eufora Battles the Gray Market

Amidst pandemics, inflation and production shortages, the Gray Market and Diversion in the hair care industry seem to have been upstaged lately. But these problems are still rampant, especially in e-commerce. And “purposefully defiant” Eufora CEO and Co-Founder Beth Bewley continues in her battle against it.

We caught a post on Facebook recently. A mass of letters “returned to sender” and a rant – civilized but still a rant – by Beth Bewley, Eufora CEO and Co-Founder, concerning her frustration in dealing with the Gray Market when it comes to professional hair products. And rightly so.

Estetica USA did deal with this issue on a larger scale in an article published several years ago. Yet in the meantime e-commerce has been growing exponentially. And a pandemic during which people were under lockdown in their homes for extended periods of time left them with few alternatives. Such factors can only serve to exacerbate such an issue. It continues to be an issue that concerns not only Eufora, but essentially every professional brand that should be sold only in salons or via brand specific e-commerce websites.

Beth Bewley’s battle

Estetica felt it was important to publish Beth’s eloquent viewpoint and remonstrance in its entirety. This issue affects so many in the industry and it is important to bring it into the spotlight again. Here is her statement:.

Gray market product sales (often referred to as diversion) existed long before e-commerce became our predominant sales channel. Still today the problem extends beyond the internet and its fragmented sales channels. Rampant deviation exists within professional brands and their selection of preferred or “certified” sales channels. This makes it difficult for the consumer has no idea about authorized versus unauthorized sellers. Indeed, in some cases they may not even care.

Yet, most acknowledge that buying a product from an unauthorized reseller is a gamble. Yes, a shopper may find a listing for their favorite product at a bargain price. But they often find the deal is no steal! If they actually receive a legitimate product, they may not realize it was “stolen” – diverted from an original authorized reseller (such as a salon or distributor). There is also the very real possibility that the product is counterfeit, discontinued, expired, or worse. A bottle may not even contain the brand’s actual product or it may be contaminated or both. We have seen it all!

I am not against Amazon. However, I am against their practice of allowing anyone to sell anything. It doesn’t matter to them whether an authorized reseller or a diverter is selling stolen, aged or even contaminated product. Amazon has the means and technology to protect brands (and consumers) from gray market sales on their website. Yet they have chosen not to stop those sales, potentially putting customers at risk. It’s particularly disheartening for those companies, like Eufora, who want to protect and defend reputable brand sellers. In fact, in order to do so on Amazon, you must enter into an agreement with them to run your brand sales through an Amazon partner brand store on their website. Without that partnership, Amazon remains open to any seller.

As a company, we have made a conscious decision not to partner with Amazon. This makes maintaining the integrity of our brand sales channels more difficult. Yet choosing to partner (or not) with a major online seller is not the issue we struggle with most often. The issue we fight every day is trying to protect the livelihoods of our Salon Professionals and their clients. There are always unauthorized and unscrupulous online sellers who obtain products, then undercut prices and often quality. This may potentially threaten the well-being of the consumer. And the future of honest Salon Professionals trying to run a viable and integral business is also at stake. 

Photo: Clay Banks

Eufora entered into 2022 with over 400 unauthorized Eufora resellers operating on Amazon. Through the diligent efforts of our diversion team we have been able to cut that number in half. Cease and Desist letters are sent to unauthorized resellers as soon as they are discovered. These letters advise them that Eufora does seek out and prosecute those who acquire and/or sell Eufora products without authorization. Unfortunately, many of those letters end up in a dead letter bin or returned to us. Why? Because of the false contact information attached to those Amazon accounts. Some days it seems that, for every one we shut down, two more enter the marketplace.

It is a never-ending battle, but we will continue to fight.

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