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The Low Down on Getting Trademarks to Private Label

The Online Seller's News, May 23, 2014, Volume 14, Issue No. 9

Tips, Tools, News and Resources for eBay, Amazon and Independent Online Sellers
by: Skip McGrath

In This Issue:

Musings from eBay, Amazon and The World Wide Web

  1. The Low Down on Getting Trademarks to Private Label
  2. Guest Article - FBA Orders Half as Likely to Get Negatives
  3. Amazon Throws Sellers a Curve Ball with New Restricted Categories
  4. Beware the IRS Tax Scam
  5. New Wholesale Sources for eBay and Amazon Sellers

"Doubt yourself and you doubt everything you see. Judge yourself and you see judges everywhere. But if you listen to the sound of your own voice, you can rise above doubt and judgment. And you can see forever." ~ Nancy Kerrigan


Musings from eBay, Amazon, and beyond

eBay sent out a press release last week that they were hacked and advised all eBay members to change their passwords. The press release said that PayPal was not affected because PayPal has a separate data location. However many eBay members use the same email address and password on PayPal as they do on eBay. Best practice is to use the same email address so buyers are not confused but ALWAYS use a different password for PayPal than you use for eBay.


Just finished reading an excellent book that I strongly recommend to all my readers who sell on eBay, Amazon or websites - $100 Startup - Reinvent the Way You Make a Living, Do What You Love, and Create a New Future by Chris Guillebeau . The book is not really about selling on eBay or Amazon, but you will find both inspiration and many great ideas for new ways to approach your business that can put money in your pocket. Chris Guillebeau (author of The Art of Non-Conformity) does something unique. Instead of showing how to grow, scale, leverage, and sell a new business--typical of much of the entrepreneurship literature--he focuses on "micro businesses": tiny, one- or two-person operations that stress value, maximize freedom and generate $50,000 or more per year. I strongly recommend all eBay and/or Amazon sellers read this excellent book.


Just a reminder in case you missed the last issue: We made a deal with a new printing company to lower our cost so, The Complete Amazon Marketing System is now available once more with free shipping. In addition The Complete Amazon Marketing System is now available for shipment to Canada and will soon be available for European buyers on www.SkipMcGrath.co.uk


I’d like to ask a quick question. Do you sell on eBay, Amazon or both? If you prefer one over the other why? To answer, head on over to my Facebook page and look for this question.


Lets get started with this month’s articles:

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1. The Low Down on Getting Trademarks to Private Label

One of the bonus reports you get with The Complete Amazon Marketing System is how to import and private label products. I have also covered those topics in less detail here in the newsletter. But I keep getting questions from readers about how to get a Trademark. Although I have written about that before the article was short on details, so I thought I would try and flesh it out a bit more for those of you who are interested.

The US Patent and Trademark Office (USTPO) issues trademarks. The fee to apply for a trademark is $350, which gets you both US and International registration. (The fee is non-refundable if the Trademark is not granted). You can apply directly for a Trademark and only pay the $350 filing fee at the USTPO website. When you get to that page, I suggest you watch the video that tells you how to go about it. It's a pretty long and detailed process and the video is 44 minutes long.

The other option is to get help. I used the services of My Corporation. They charge $149 and for this they do the following:

  • They prepare your trademark filing paperwork

  • Verification that your trademark is unique

  • Complete the transaction with the USPTO and send you the trademark documentation when it's complete

And on top of that they give really good customer service.

I know that $149 is a lot of money in addition to the filing fee, but they will make sure everything is done right. A normal trademark application takes about 8 to 9 months to apply and be granted. If you do it yourself and make a mistake on the paperwork it can take many more months to straighten it out. When I filed through My Corporation I got my trademark in exactly 8 months and one week.

So what exactly is a trademark?

A trademark is a brand name. A trademark, or service mark, includes any word, name (brand name), symbol, logo, device, or any combination, used or intended to be used to identify and distinguish the goods/services of one seller or provider from those of others, and to indicate the source of the goods/services. Once you have a trademark, you can use the ™ symbol on your product or product boxes and in your listing titles to show others that its protected.

So you can trademark an individual product, but that gets expensive if you have several products. For the purpose of private labeling products to sell on eBay or Amazon, I would suggest you trademark the words and logo like I did with my Smart Kitchen Brand (see below)


[Note – I should have the trademark symbol ™ after the word kitchen, but my trademark was not granted when I made the logo. It has now been granted and I plan to fix that when I print my next batch of boxes]

Although federal registration of a mark is not mandatory, it has several advantages, including notice to the public of the registrant's claim of ownership of the mark, legal presumption of ownership nationwide, and exclusive right to use the mark on or in connection with the goods/services listed in the registration. Also if you own the trademark, you can register as the brand holder on Amazon and keep people from poaching on your listings.

This happened to me just last week, when a seller in China listed an essentially identical product to mine, but his was not in the box marked with the Smart Kitchen logo. However it took more than just complaining to Amazon. Amazon made me order one of the items, take a picture and send it back and then they removed the other seller's listing and gave him a policy violation. Then I returned the item to Amazon for a full refund and they paid the shipping because the reason I gave was "not as described on website."

When you file your trademark application, the USTPO wants you to submit a "specimen" with your application. When I read that I wondered maybe they want my DNA. But it turns out that a specimen is nothing more than an example of how and where the trademark is to be used. In my case I just submitted the logo above.

Once a trademark is granted you have the option of using the ™ symbol or the Registered mark ®. The "™" notice can be placed on products anytime, up and until the mark is registered with the USPTO and shows that the trademark is protected under the common law. The ® notice can only be placed on a product after the mark is registered with the USPTO and shows that the trademark is protected under federal law.

This added layer of protection typically gives the owner access to the federal courts and additional remedies for infringement violations. The $350 fee you pay to the USTPO covers both the trademark and the registration, and if My Corporation does this for you they will take care of both, as it's actually two different processes. I recently got my TM approved but I am still waiting for my Registration.

There are two common reasons why trademark applications are turned down: Mistakes on the paperwork, or your name and/or logo is similar to another.

Although My Corporation will do a search for you (if you use them), it's best to do your own search first as you don't really want to start all over again if it comes back. Use this link to search names and names and logos on the USTPO website. This is a free service.

When I did my search, the closest thing that came back was this:

Now, had I been in the remodeling business, my Smart Kitchen logo would most likely not have been granted. But since I am selling kitchen gadgets that makes me different enough, that there would never be any confusion between my mark and theirs. So based on that, I went ahead and applied and it was granted.

Well there is your primer on getting a trademark. I know that is seems expensive but if you spread the cost over several products it's really not that much. I now have 3 products in the Smart Kitchen Brand and am looking for more. Once I get up to say ten products (which I hope to do), my cost per product to get the trademark protection will be $49.90 per product. I am also about to trademark a line of jewelry that I have found. There are over 50 different items in the line, so my cost on those will come out to around ten dollars a product. I make that back when I sell my first one.

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2. Guest Article - FBA Orders Half as Likely to Get Negatives

This is a guest article by Jonathan Tombes, Director of Sales and Marketing at Feedback Five. Feedback Five is a service that helps increase and improve your Amazon feedback scores. If you would like to try it, they have a special offer for my readers.

Study Results: FBA Orders Half as Likely to Get Negatives

The Fulfillment by Amazon (FBA) program has its benefits. More unit sales, for one, as Amazon CEO Jeff Bezos reported in his latest letter to shareholders. Another is a better seller reputation.

It's logical to link FBA and better feedback. And individual sellers may have their own positive experiences to share. Now an internal eComEngine study has looked at the big picture and shed some quantitative light on the question. The result is a stark finding, indeed: FBA orders receive half as much negative feedback as merchant-fulfilled network (MFN) orders.

Here is the test question we posed: Are FBA or MFN orders more likely to receive one, two or three stars?

Broken out, the results from this large multi-year data set indicate that an MFN order is more than twice as likely as an FBA order to receive a one-star rating, and a little less than twice as likely to receive a two-star rating. And as for neutral feedback, an MFN order is about 60 percent more likely to receive a three-star rating. (See chart.)

The reasons why are not hard to find, although a seller's experience may be deceptive. It could go the other way. FBA orders would take a negative hit if hard-to-please Amazon Prime subscribers held too much sway, for instance, which was how it looked to Peter Valley when he first joined FBA. (See this excerpt from Amazon Autopilot.)

Over time, however, Valley's view changed, in the direction of our results. "Now that I have been with FBA for over two years," he writes in Feedback Mastery, "I can say that selling with FBA prevents the vast majority of negative feedback, and your feedback score should in fact go up after making the switch, not down."

The bottom line is that Amazon's superiority to most third-party merchants in fulfillment operations minimizes leading causes of negative feedback. Of course, if that were not the case, it is unlikely that Amazon would take responsibility for any negative feedback related to fulfillment or customer service on FBA orders.

While this study did not factor in the relative ease of negative removal between FBA and MFN orders, it reasonable to think that the FBA feedback advantage could be even higher. Our hypothesis is that Amazon strikes negative FBA feedback from FBA orders at a higher rate than buyers remove it from MFN orders upon seller request.

So what's the takeaway? That everyone should switch to FBA? No - each seller should weigh the program's pros and cons, including its financial impact on particular products. But this is a definite 'pro.' At least as seen in this population, over a span of multiple years FBA orders were seen to be decidedly resistant to negative and neutral feedback.

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3. Amazon Throws Sellers a Curve Ball with New Restricted Categories

I got the fright of my life last week. Amazon sent out a message to sellers that the Health, Beauty and Grocery Categories were now restricted categories requiring approval. And the message sounded like they applied to everyone -even those already selling in those categories like myself.

Various message boards and Facebook groups were on fire with worried posts from sellers like me who not only had been selling in those categories for a long time, but many of us who also had hundreds of items sitting in FBA warehouses that we were afraid we may have to recall.

Well it turned out that almost every seller already selling in the category got an email back from Amazon like this after they opened a support ticket:

The email said:

Greetings,

Thank you for contacting Amazon Seller Support.

I understand your concern is regarding the new requirement of Amazon's pre-approval to sell in Grocery, Health and Beauty category. I would like to inform you that you need to have the approval to sell in these categories.

For the above categories, a lot of duplicates and counterfeit items are available. Some of these can pose serious health risk to the buyers. I understand this may not be an issue in your case. I have gone through your account and can confirm that you are a prolific seller on our platform. You have met all the performance metrics and have a perfect seller rating of 100. As such it is understandable that your products are authentic.

As you are registered on our professional selling plan, you are eligible to apply for the category approval. Kindly go through the below help pages and apply for approval using the link at the bottom of these help pages.

https://sellercentral.amazon.com/gp/help/201511970

https://sellercentral.amazon.com/gp/help/201511980

https://sellercentral.amazon.com/gp/help/201513080

We would never want to disappoint a valued customer like you and we always endeavor to assist our customer with the best of our service, so we can ensure that we fulfill all of their needs. We at Amazon value our sellers' business as we value ours and are focused in making our policies and platforms seller friendly.

Reading this, I thought I would have to request approval all over again and start from scratch, but when I clicked on the three links provided, each of them was for one of the three categories and when I arrived at the page, I saw this message:

I got the same message for the other two categories. So it turned out to be a big scare and nothing else.

However, for those of you who are not selling in those categories, you will have to request approval. I noticed on many of the groups that when sellers did this, the approval came thorough fairly fast. But here is what it takes for Grocery. The process for Health and Beauty is quite similar:

Grocery & Gourmet Foods

Amazon limits the addition of new sellers in the Grocery & Gourmet Food category to ensure that customers are able to buy with confidence from all sellers on Amazon. The requirements for selling in the Grocery & Gourmet Food category reflect customer concerns about product quality, product branding, and consumer safety.

Sellers must meet the requirements listed below in order to sell products in the Grocery & Gourmet Food category. Please take the time to read this list of requirements and consult our Help pages if you have questions about specific policies. Once you have reviewed the category requirements, you can apply for approval by clicking the Request Approval button at the bottom of the page.

Seller Requirements

You must be registered as a seller on the Professional Selling plan.

You must meet the following seller performance targets:

Order defect rate: < 1%

Pre-fulfillment cancel rate: < 2.5%

Late shipment rate: < 4%

You must provide us with acceptable documentation and other information we request about the products you intend to sell. After you request approval to sell in the Grocery & Gourmet Food category, we will contact you with additional information.

You are not required to have your own company website, but if you have one it will be helpful to us to review it during the application process.

Product Requirements

All Grocery & Gourmet Food products must be listed using the manufacturer's UPC code. For more information on UPC requirements, see Product UPCs and GTINs. If you do not have UPCs, review Amazon Brand Registry information for how to list products without UPCs.

All Grocery & Gourmet Food products must be sold in New condition. Used listings are not permitted. For more information, see the Condition Guidelines.

Next Step

If you are able to meet all of the requirements listed above, please click the Request Approval button below. By clicking the button you are confirming that you have reviewed the requirements above and that you want to apply to sell in the Grocery & Gourmet Food category. We will contact you to request additional required information, after you submit your request to sell.

Notice the areas I highlighted in yellow. What happens is, after you apply, Amazon comes back and asks you to provide copies of invoices from wholesalers you have been purchasing from to prove where you are getting the goods. Since many of you are doing Retail Arbitrage - buying items on clearance from stores, this could be an issue.

Upon further enquiry, it turns out they don't have to be real wholesale sources which is good because many grocery (and H&B) sellers get their products from places like Wal-Mart, Target, Sam's Club and Costco. Now this presents a problem because those places only provide a register receipt and those do not typically have your name on them, which is one of the things Amazon wants to see.

Of course if you are going to sell in these categories you can just go ahead and purchase the goods from actual wholesale sources and then you have the receipts and invoices you need.

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4. Beware the IRS Tax Scam

This is another guest article by Diane Kennedy, a CPA who runs a site for online sellers needing help with taxes - www.TaxLoopholes.Com. Diane is also the author of Tax Loopholes for eBay Sellers: Pay Less Tax and Make More Money . It is a little out of date, but about 90% of it still applies today. Although it was written for eBay sellers, almost all the information applies to Amazon sellers as well.

Here is Diane's article. And if you think this cannot happen to you, it happened to a friend of mine who coughed up over $1,100 to this scam.

"Yesterday we received a call from our client Julie. She was in full panic mode as a result of a phone conversation with the "IRS" and we couldn't blame her. Late Friday afternoon the phone rang and on the other end of the call was a person who identified himself as calling with the IRS. They indicated their IRS employee ID number and proceeded to tell Julie that they were calling because of issues with a previous year's taxes. There was an urgent matter involved with Julie's old taxes and potential liens were about to be placed on Julie's home as well as garnishment of wages. It was extremely convincing because the "IRS agent" on the other end of the call was able to verify Julie's SSN on the phone as well as her date of birth. So what exactly did they want? Immediate payment. According to the IRS agent, Julie needed to make immediate payment over the phone in order to stop the tax lien and garnishment of wages.

Thank goodness for Julie's quick thinking, she sensed that something was not right with this call. She politely asked for their number and said she would call them back. She hung up the phone and called us immediately. After discussing the issue with Julie, we were confident that this is was just another scam. Fortunately for Julie she did not provide any information to the caller. Unfortunately for a lot of other taxpayers, this is a scam that has been sweeping the country.

In fact, we just recently received the Internal Revenue Service warning to consumers about a sophisticated phone scam targeting taxpayers throughout the country.

Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver's license. In some cases, the caller becomes hostile and insulting. Some taxpayers have reported callers with heavy accents and may be hard to understand.

"This scam has hit taxpayers in nearly every state in the country. We want to educate taxpayers so they can help protect themselves. Rest assured, we do not and will not ask for credit card numbers over the phone, nor request a pre-paid debit card or wire transfer," says IRS Acting Commissioner Danny Werfel. "If someone unexpectedly calls claiming to be from the IRS and threatens police arrest, deportation or license revocation if you don't pay immediately, that is a sign that it really isn't the IRS calling."

According to the IRS, here are some other common characteristics of this new scam:

  • Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves

  • Scammers may be able to recite the last four digits of a victim's Social Security Number

  • Scammers spoof the IRS toll-free number on caller ID to make it appear that it's the IRS calling

  • Scammers sometimes send bogus IRS emails to some victims to support their bogus calls

  • Victims hear background noise of other calls being conducted to mimic a call site

  • After threatening victims with jail time or driver's license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim. So how do you know if the caller is a scam? Well, for starters, the IRS does not make their initial contact by phone. Before you talk to anyone at the IRS, you will generally receive a letter by mail indicating the issue or potential audit. If a call is necessary, that letter will indicate your contact person's name at the IRS office

If you get a phone call from someone claiming to be from the IRS, here is what you should do:

  • Take down their information and politely hang up. Do not provide them with any information

  • Call your CPA or tax advisor. They should be able to quickly help you identify if a call is legit or related to a specific issue or year in question

  • If you know you owe taxes or you think you might owe taxes, call the IRS at 1.800.829.1040. The IRS employees at that line can help you with a payment issue--if there really is such an issue

  • If you know you don't owe taxes or have no reason to think that you owe any taxes (for example, you've never received a bill or the caller made some bogus threats as described above), then call and report the incident to the Treasury Inspector General for Tax Administration at 1.800.366.4484

Again, the IRS does not initiate contact with taxpayers by telephone or email to request personal or financial information. Unfortunately (or fortunately) the IRS currently doesn't have a policy to communicate electronically with taxpayers. This includes any type of electronic communication such as emails and text messages (can you imagine getting text messages from the IRS while you are at a Friday night baseball game?). The first IRS contact with taxpayers on a tax issue will generally occur via US mail. So be cautious of this and other types of scams. It may not be a bad idea to share this information with other family and friends who may be a target.

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5. New Wholesale Sources for eBay and Amazon Sellers

I read last week that there is a new baby boom going on -so maybe a few baby & toddler suppliers are in order.

Blauen, Fine Linens for the Baby, has custom designed and hand tailored exquisite linens for infants and toddlers.

OK - Let's look at some other products

Ruby Imports sells a very large line of fashion jewelry from all the top sellers.

Wholesale Gourmet Foods is a large wholesale distributor of hundreds of wholesale food products.

Precision Products sells a large line of beauty scissors and other beauty products as well as a line of knives and other miniature tools.

Yarn Tree is a wholesale supplier of yarn, knitting tools, needles and supplies. The website is a retail site, but scroll to the bottom of the page and you will see links to wholesale information.

Many of you are doing retail arbitrage where you buy items at retail stores such as Rite-Aid, Target, Wal-Mart, etc. Well one way to save money on products for resale is to use coupons. Here are three excellent coupon sites:http://www.shopathome.comwww.coupons.com http://www.couponmom.com/

The Tin Roof Kitchen & Home Company makes a beautiful line of handcrafted cutting boards. There is a link on the website to become a dealer.

The Exart's Company slogan is "Happy homes and smiling gardens." They sell a line of licensed garden products and gifts.

QMT Windchimes is a premier domestic manufacturer of Corinthian Bells® and other high quality, hand-tuned wind chimes. Their handmade wind chimes ship from a factory in Manassas Park, Virginia.

Anglo American Tools is an importer and wholesaler of British and European made tools. Scroll to the bottom of the home page and click the button that says Become a Distributor.

The Newark Co . is a large distributor of Xcelite small hand tools. They also represent other brands as well.

Well that’s all for now - See you in early June.

Skip McGrath
The Online Seller's News

P.S. If you missed the last issue, click here to read it.








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