Do I Have To Be An Authorized Dealer To Resell Another Company’s Products?

In general, you are free to resell any lawfully purchased item and you are not required to purchase from an authorized source or be otherwise sanctioned by the maker, but doing so ensures the best chances that you are dealing in legitimate product. If the products turn out to be counterfeit you are responsible for that unless you have a written indemnification from the seller, which case depending may be worthless. Further, if what you have amounts to a grey-market good because it is “materially different” from what your target market would otherwise expect, this is also a form of trademark infringement. An example of this would be some electronics you purchase on close-out that are all Apple brand legitimate, but made for the Russian market and therefore have different components and no warranty. This, of course, is not what your US market would expect to buy and is materially different enough to cause a legal issue.

Further, if you are using third-party platforms to distribute your products such as Amazon, Alibaba, eBay, etc. know that many brand owners abuse the system and seek to mitigate unauthorized channels by claiming infringement even when no such trademark infringement exists. These platforms have no choice but to respond which usually means that your listings are shut down, sometimes your accounts are closed and really with no recourse regards to the platform as you operate there on their terms not yours. While you may have a legal action against the complaining party many small operators will never pursue such a claim because of the expense and effort involved, which these large players are well aware.

Lastly, you should never assume you can use the copyright protected images of the manufacturer to promote the sale of their products. You need a license for that or just create your own images.

In recent months, intellectual property lawyers have been seeing a lot of cases where big manufacturers are using the “material differences test” as an excuse to squeeze out competitive selling channels and many courts are finding ways to side with their reasoning. I suspect there will be a lot more in the coming future, so whenever in doubt get some solid advice before you just jump in and start making an investment.

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